Section 1140 CA 2006 permits service on a director of a UK registered company at their ‘registered address’ for any purpose:
- whether or not the dispute relates to their activities as a director; and
- up to the end of 14 days following registration of a notice to change address at Companies House.
This decision places a clear obligation on the directors of companies incorporated in England and Wales to monitor all mail addressed to them in a personal capacity, no matter where they reside. It will especially important to monitor mail received at an old address after a new address has been registered with Companies House.
The claimant solicitor firm (C) previously acted for the defendant (D), who had failed to pay C's invoices. C sent a letter before claim to D. D failed either to respond to the letter before claim or file an acknowledgment of service.
This led to a successful default judgment application. Although D was resident in Switzerland, service of the default judgment was effected in the UK under s1140 CA 2006 ‘at addresses used by the defendant for companies of which D was then or is a director’.
Following the default judgment, D asked the court:
- to set aside the judgment on the basis that service was ineffective; and
- for relief from sanctions.
D argued that service of the default judgment in the UK this was unfair, and that whilst the Civil Procedure Rules permit claim forms and other documents to be served on companies pursuant to the CA 2006, it should not be interpreted as applying to service on an individual in their capacity as an individual, rather than as a director of the company.
Kerr J refused to set aside the default judgment on the grounds of invalid service: there is no limitation on the purpose for which service under s1140 CA 2006 can be effected and there is no reason to imply a limitation in respect of default judgments.
A director, especially one resident abroad, who incorporates a company in this jurisdiction makes use of that privilege and must therefore accept the risks of doing so. This is proportionate and not unfair. The benefit of incorporation came with this burden.
Further, the obligation to monitor mail for 14 days following registration of a notice of change of address at Companies House is not overly onerous. Kerr J took the view that failure to do so was equivalent to receiving a letter and not opening the envelope to check its contents. It was therefore an insufficient argument for invalid service.
KEY LEGAL POINTS
This decision reinforces the decision in PJSE Bank ‘Finance and Credit’ v Zhevago  EWHC 2522 (Ch), which held that service was valid under s1140 CA 2006 when made on a company director at an address within the jurisdiction that is registered with Companies House, even when the director is not physically in the jurisdiction at the time of effecting service.
It is also important to note that although CPR 6.3(2), which refers to service on a company under CA 2006, is not mirrored in CPR 6.3 by any express reference to service on individual directors under that Act, this does not mean that service on them under s1140 is not permitted.
It is therefore important for a director to have processes in place to diligently monitor for mail sent to them at their registered address which is:
- addressed to them personally (especially where they do not reside in the jurisdiction); and
- received within the 14 day period following registering a notice of change of address.
If you need to serve court documents on an individual who is a director of an English company, this decision is an extremely useful tool in aiding service, both where you don't have a recent personal address for that individual, and, importantly, where such an individual resides outside the jurisdiction.