Wednesday Law Report: Order for substitute service granted

10 February 1999

Abbey National plc v Frost (formerly practising as Harold Weston Frost & Co) (Solicitors Indemnity Fund intervening)

Court of Appeal (Lord Justice Nourse, Lord Justice Henry and Lord Justice Robert Walker) 4 February 1999

IN AN action for negligence against a solicitor an order for substituted service under RSC Order 65, rule 4 might be made on the Solicitors Indemnity Fund if the solicitor's whereabouts were unknown, and there was no likelihood that the writ would reach him or come to his knowledge.

The defendant was a solicitor in sole practice who had acted for the plaintiff building society and its borrower in relation to a loan secured on a leasehold flat. The purchase was in truth a sub-purchase, and in October 1992, the borrower having defaulted in making the mortgage payments, the plaintiff resold the flat for less than half the amount of the loan.

The plaintiff commenced proceedings against the defendant, alleging negligence and breach of fiduciary duty. The defendant had by that time been struck off the roll of solicitors for conduct unconnected with the plaintiff's claim. Apart from a belief that the defendant was living in Thailand, nothing was known about his current whereabouts. The plaintiff was granted an order for substituted service pursuant to RSC Order 65, rule 4 on the Solicitors Indemnity Fund (SIF).

The SIF's application to have the order for substituted service set aside was refused by the master, and the SIF appealed to the judge, relying on Porter v Freudenberg [1915] 1 KB 857 as establishing a general rule that substituted service would not be ordered where the defendant's whereabouts were unknown and where there was no likelihood that the writ would reach him or come to his knowledge. The judge allowed the appeal, and the plaintiff appealed.

Rupert Jackson QC and Andrew Goodman (Curtis & Parkinson, Nottingham) for the plaintiff; Richard Seymour QC and Matthew Jackson (Wansbroughs Willey Hargrave) for the SIF.

Lord Justice Nourse said that at the time that Porter v Freudenberg was decided, an order for substituted service could only be made under the rules then in force if the plaintiff was unable, from any cause, to effect prompt personal service.

By way of supplement to the rules, the King's Bench masters had settled and adopted a number of principles according to which their discretion would usually be exercised, one of which was that substituted service should not generally be ordered if the writ was not likely to reach the defendant or come to his knowledge.

In the circumstances of Porter v Freudenberg it was natural for the court to have expressed itself in the form of a general rule: however, expressions of opinion, no matter how eminent their source, should always be read in the light of the particular facts which occasioned them. The views expressed in that case could not be treated as having narrowed the discretion under what was now Order 65, rule 4(1) in relation to other facts.

Furthermore, under the rule in force in 1915, the court's discretion to make such order as might seem just arose after the precondition that the plaintiff should have been unable to effect prompt personal service had been fulfilled: the second precondition derived only from a principle of discretion adopted by the masters, and it would have been incorrect to treat it as incorporated in the rule itself.

In the present case, the master had been correct in holding that, given that the purpose of the SIF was to safeguard the lay public and to protect the interests of members of the public resorting to solicitors, it was perfectly proper in suitable cases for an order for substituted service to be made on the SIF. A case was not rendered unsuitable for substituted service simply because the defendant solicitor's whereabouts were unknown and there was no likelihood that the writ would reach him or come to his knowledge.

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