BL-2021-000228 - [2025] EWHC 2222 (Ch)

The starting point is that the second defendant has the right to be sued within the initial statutory period of limitation and served within the period of the validity of the claim form. Any departure from that position must be justified. The initial period of validity expired on 11 August 2021.

The first hurdle for the claimants is to satisfy the court that they had a good reason for needing the Extensions. In the absence of a good reason the court may, but is not likely to, grant an extension.

The three Extension Orders, extended time beyond a point at which the second defendant had at least arguable limitation defences to some of the claims made so they must show that they took reasonable steps (but not all reasonable steps) to serve within time. As explained in Brittany Ferries the potential expiry of a limitation defence is a factor of considerable importance in exercising the discretion afforded by CPR 7.6(2) in accordance with the overriding objective.

In accordance with what was said by Carr LJ at [69] of Brittany Ferries my task is to “evaluate the reason [for the need for the extensions of time] and then put that reason into a wider context, which requires consideration of the overriding objective and the balance of hardship to the parties.”

At the hearing before Deputy Master Arkush the parties reached agreement that time would be extended by one year to 1 September 2022. That date was well within any possible expiry of a six year limitation period. The date was presumably settled upon because of the information provided to DMH in March 2021 that service would take at least 12 months. The parties also reached agreement that service might be either in accordance with CPR 6.40(3)(a) or (c).

From the date of the Arkush Order onwards there were available to the claimants two routes to effecting service – relying on the FPS and the KSA authorities or taking matters into their own control and serving in accordance with the law of KSA, by engaging an agent of some sort as described in Phipps 1 and as they eventually did. Engaging an agent might also have speeded up service by the KSA authorities, as appears ultimately to have happened in the case of the second defendant. This case may therefore be distinguished from Crossroads Corporate, where the only permissible method of service was through the FPS and the German Central Authorities. I do not consider that Deputy Master Arkush’s remark about service not being agreed to be by alternative faster means has any relevant bearing on the position agreed by the parties which gave the claimants two available routes to effect service.

As recorded in the Arkush Order, the claimants agreed that they would make a payment of costs as a condition of the claim continuing. That they later obtained further time to make the payment as a result of the applications dealt with by Deputy Master Francis does not mean that it was not reasonable, in parallel with those applications, to take steps to be ready with the service documents or otherwise progress service. It cannot be right for the claimants to say that, because they needed time to pay the defendants, they were entitled not to progress service during that same period; compare the rejection of an argument that awaiting funding gave a good reason for not serving in Cecil.

If translations had been commissioned promptly after the hearing on 29 August 2021 and obtained within the one-week period referred to in Phipps 1 the correct paperwork could have been ready to be sent to the FPS during the second half of January 2022 rather than 6 months later.

In parallel, having had confirmation on 27 September 2021 that the anticipated period for service through the FPS and KSA authorities was longer than the agreed extension, it was reasonable for the claimants to have taken steps to progress service with the assistance of an agent in the KSA. They cannot say that because two possible routes of service were agreed they were entitled to follow one route only, particularly as they knew that route was unlikely to be successful in time.

Once 1 September 2022 was approaching and the First Extension Application seeking an extension for 15 months was in contemplation, it must have been apparent that service through the FPS might not be effective even in that timeframe, the papers having only recently reached the FPS. Accordingly, even if they should not have done so in September 2021, they certainly should have taken matters into their own control and instructed an agent in the KSA by this stage. The longer time went on without the KSA authorities certifying successful service on the defendants the less reasonable it was for the claimants to simply rely upon the hope that the FPS would achieve service without some further step being taken by the claimants. By the time of the Second Extension Application, nearly eighteen months had passed since the correct pack of documents had been sent to the FPS. By the time of the Third Extension Application, it was approaching 2 years. The claimants were informed that service on the first defendant had failed on 26 April 2024, as was explained in the Third Extension Application. The claimants only finally took the step that led to service in August 2024.

It must also have been apparent when the First Extension Application was made that any application for an extension beyond 13 November 2023 would be beyond the primary limitation period for at least some of the claimants’ causes of action. It was incumbent upon the claimants to mention in their evidence in support of the First Extension Application that there was at least an argument that a limitation period would expire in relation to some of the claims before the expiry of the period of extension for which application was made. That further limitation arguments might become available to the defendants in early 2024 meant that the evidence in support of the Second Extension Application seeking an extension to 1 July 2024 should have referred to these additional limitation points.

While there are claims against the second defendant which may not now be statute barred it is certainly arguable that there are claims which are now out of time. I do not accept that claimants’ submission to the effect that the limitation point was material only at the hearing before Deputy Master Arkush. On that occasion the extension that was agreed between the parties was to a date that was unarguably within the limitation period for all claims against the defendants. It is only the subsequent Extension Applications that have sought to extend time arguably beyond the expiry of relevant limitation periods.

It is not for me on this occasion to resolve for certain what, if any, claims are now statute barred. It is enough, in deciding whether to allow an extension of time, that it is a factor of considerable importance there are debatable limitations issues and that the second defendant might be deprived of a limitation defence: see City & General (Holborn).

Although Murray 2 accepts that potential limitation defences and the fact that the Additional Costs were outstanding were not drawn to the attention of the Court on any of the three Extension Applications it is said that there was no intention not to provide full and frank disclosure.

No explanation has been offered by or on behalf of Mr Ashdown why Ashdown 4 did not fully explain the costs position as it stood at the date of that witness statement, including that the Additional Costs had been outstanding for some seven months. In the context of the previous criticisms made by the Deputy Masters and the condition as to payment of costs that was agreed in the Arkush Order, to fail to set matters out unambiguously was not excusable.

So far as concerns limitation, I have rejected the claimants’ submission that limitation was not material on the Extension Applications, as opposed to before Deputy Master Arkush. It first became material when the First Extension Application for an extension to 1 December 2023 was requested and the position evolved as time went on so that further arguable limitation defences would become available to the second defendant in the period over which the Second Extension Application sought the extension. Again these were matters that should have been set out with clarity in the evidence in support of the Extension Applications.

So far as it is said that there was a failure to give full and frank disclosure about the timeline of steps taken to effect service, I conclude that the steps that were taken were reported. It is the step of instructing an agent in the KSA that was not taken and which I have concluded should have been taken that was not mentioned in the evidence and instead the evidence referred to matters being outside the control of the claimants, which was not in reality the case.

My conclusion is that the claimants had no good reason not to have served by the time the First Extension Application was made. This is not a case where service was out of the claimants’ control. They could not only have taken more expeditious steps to deliver the correct paperwork to the FPS but they could have instructed an agent in KSA much earlier and within the period of the validity of the claim form. If I am wrong about that, such good reason as they may have had had was less good by the time of the Second Extension Application and without doubt not good by the time of the Third Extension Application.

For the reasons I have already set out I do not consider that the claimants took reasonable steps to serve the claim within the extended time agreed and recorded in the Arkush Order expiring on 1 September 2022.

Arguable limitation defences are now available to the second defendant, so factors in favour of allowing the Extension Orders to stand would have to take the case “out of the ordinary.”

To the extent that, in the circumstances, I have a discretionary power to allow the Extension Orders to stand, it is necessary for me to determine whether the factors in favour of that course take the case out of the ordinary. I must exercise that power in accordance with the overriding objective. I must:

On analysis the claimants did not have a good reason for being unable to serve by 1 September 2022 and they had not taken reasonable steps to serve the claim form by that date. In circumstances where the second defendant’s limitation defence to at least some of the claims against it will be prejudiced, the First Extension Order will be set aside. To the extent that any consideration of the overriding objective should lead to any different conclusion, particularly in the circumstances of the claimants’ non-disclosure, I am not persuaded that it does. The claimants’ position becomes successively less meritorious with the Second and then the Third Extension Orders and they too will be set aside. The three Extension Orders and service of the claim form should be set aside as against the second defendant.