The ripples caused by the Mitchell decision continue to spread out across the 2014 legal landscape.
The following are just some of the highlights from a busy February and March:
M A Lloyd & Sons Ltd (T/A KPM Marine) –v- PPC International Ltd (T/A Professional Powercraft) (2014) – QBD – Turner J -20/01/14  EWHC 41 (QB)
In this matter the defendant applied for an extension of time for the provision of a witness statement.
In the proceedings an order had been made for the claimant to provide a statement together with a skeleton argument by 25 October 2013 on matters of law in support of the submission that the defendant was “legally extinct” with no entitlement to litigate with the defendant to provide a statement in reply by December 2013. Absent the claimant’s statement or skeleton the defendant issued its application but thereafter agreed to the claimant’s proposed revised timetable. The claimant did not attend the defendant’s application hearing but produced a draft statement setting out difficulties encountered obtaining documents.
At the hearing Turner J found that it was (i) abundantly clear that the claimant should have advised the court of its alleged inability to provide evidence before the order had been made,(ii) in the event that the claimant became aware that it was in difficulty after the order had been made the claimant ought to have applied for an extension of time before the deadline for compliance had passed, (iii) the claimant ought to have applied promptly for specific disclosure rather than simply providing a “wish list” of documents in the body of a statement.
The judge stated that as the matter stood the claimant was precluded from calling at trial any intended witness in respect of the issues that had been identified in the order unless the claimant could persuade the court to grant relief from sanction. The judge referring to Mitchell was entirely satisfied that there was no prospects of relief being granted further referencing the robust approach to late service of statements in Durran and in Karbhari.
The fact that the defendant had agreed to the claimant’s proposed revised timetable did not assist the claimant, the defendant’s response to the claimant’s default being described by the judge as “unduly timid” and the court declined to endorse the revised time table stating the proper approach was to make an order debarring the claimant from raising any issue at trial relating either to the existence of the Defendant or its entitlement to litigate in the UK. The claimant’s decision not to attend had, in the view of the judge, resulted in a disproportionate amount of court time being taken up, the judge cautioned that a party could not simply assume it could absent itself confident in the assumption that r23.11 afforded a comfortable fall back position if the court’s order was not to its liking.
Webb Resolutions Ltd –v- E-Surv Ltd (2014) – QBD – Turner J -20/01/14  EWHC 49 (QB)
On the same day as dealing with M A Lloyd (above) Turner J also considered an application to set aside an order extending time and granting permission for an appeal.
The dispute involved a claim for loss arising from an alleged negligent property valuation which had been resolved by consent including provision of payment of the claimant’s costs by the defendant. The costs were the subject of a detailed assessment following which the defendant sought to appeal the outcome. Permission to appeal was refused on 29 July 2013 though the appellant’s solicitors asserted that the order was not received by them until 10 October 2013. An application was then issued seeking an extension of time to make a renewed application for permission 22 November 2013. The application dealt with by a single judge following oral submissions and in the absence of the claimant, was successful and the claimant/respondent issued the instant application.
The claimant sought to set aside the order relying on r 23. 11(2).
Turner J understood why the claimant had not sought to make representations at the hearing in issue referring to Jolly v Jay but stated that the power of the court to revisit the decision of a single judge on a renewed application for permission should be exercised sparingly. In this case however the judge considered the single judge had been under the mistaken impression as to when the time for the application began; further it was held that the single judge had failed to appreciate the decision in Mitchell and the need for very prompt action. Applying the test set out in Mitchell the judge found that the delay was not trivial and there was no good reason for the delay accordingly the order extending time was set aside and permission to appeal refused.
Michael Anthony Burt –v- Linford Christie (2014) – QBD (Birmingham) – Lumb DJ -10/02/14
This was a matter where the late service of a budget was considered by the court in a road traffic accident claim. The court had issued a pre-allocation questionnaire form to be completed by the parties; there was no express reference to the need for the exchange and filing of a budget.
The defendant completed the questionnaire and proposed directions but no budget; it was ordered that there be a costs and case management conference and the judge pointed out that the defendant had not provided his budget. The defendant claimed that he did not have to file a budget until 7 days before the first case management hearing, which was listed for 24 January 2014. The defendant served a copy of his budget on the claimant by fax 17 January 2014 however the court did not receive the budget until 20 January 2014 referring to CPR r 3.13. the defendant was late and the court was required to consider whether the sanction imposed by CPR r.3.14 should apply reducing the budget to applicable court fees only.
The district judge held that whilst the original form (N149C) had made no reference to costs budgets at all the later version of the form made express provision for a date for filing costs budgets, thus being consistent with the wording of the final version of r.3.13 however the combination of the final wording and the sending out of the “wrong” form had created an ambiguity which at led the defendant into error or had at least contributed to the error. It was considered unfair to conclude that the defendant’s failure amounted to a breach of r.3.13 however by filing the form less than 7 days before the case management hearing the defendant had failed to accord with the unambiguous rules of the court. Filing a costs budget one or two days late did not fall in to the category of a trivial breach held the district judge referring to Mitchell when refusing the defendant relief from sanction.
Bank of Ireland –v- Philip Pank Partnership (2014) – QBD (TCC) – Stuart-Smith J -12/02/14  EWHC 284 (TCC)
No doubt keen to explore just how far the judiciary is prepared to go with regard to penalising “irregularities” in budgets the defendant applied for an order that the claimant was in breach of CPR r.3.13 on the ground that the budget served did not contain a full statement of truth.
The budget had been prepared by an external draftsman in the form of precedent H annexed to CPR PD 3E, the solicitor was advised that the budget was ready to sign and relying on this advice the solicitor did not notice that the budget did not include the full statement of truth. The budget was duly signed, served and filed 7 days before the CMC. An identical form was subsequently served with the full statement of truth included.
The defendant submitted that as the original budget was in breach of CPR r3.13 relief from sanction was required, emphasising the importance of statements of truth.
Stuart-Smith J stated that there was nothing in the CPR or any relevant practice direction that required each and every failure to comply as rendering the budget a nullity stating the following the argument through even an omitted word or spelling mistake would make the budget a nullity achieving nothing except to bring the law generally into disrepute. The judge acknowledged the importance of statements of truth but found that the purpose of a budget was for solicitors to certify the reasonableness of the budget. The notion that a document that contained the words “statement of truth” and was signed by a partner might nevertheless be a complete nullity was unsustainable. In any event the judge added that relief would have been granted as the breach was trivial, a failure of form rather than substance – Mitchell followed.
It will not go unobserved that the wording for the statement of truth on budgets has recently been amended.
Lakatamia Shipping Co Ltd v NOBU SU and 6 Ors (2014) – QBD (Comm) – Hamblen J -13/02/14  EWHC 275 (Comm)
Another matter wherein an application was issued seeking relief from sanction imposed by the court for failure to comply with an unless order.
The matter involved a claim for some $45 million wherein an unless order had been made for disclosure by the defendant on or by 17 January 2014 with failure to result in the defence and counter claim being struck out.
The order did not specify a time however the Commercial Court guide states that in the absence of any specific provision in the order the latest time for compliance is 16:30 on the relevant day. The defendant believed that the deadline was 17:00 and when the list was not ready until 16:40 offered to exchange at 16:45. The opponent suggested there was argument to suggest the exchange was out of time and advised that they would get back to the defendant, when they did not, the defendant served the list at 17:16.
The court was required to determine (i) the nature of the non-compliance and whether it could be considered trivial (ii) whether there was good reason why the default occurred.
Hamblen J held that the delay was minutes not hours; the defendant had narrowly missed the deadline a circumstance the Court of Appeal expressly contemplated as being de minimis in Mitchell.
The application was granted.
Chartwell Estate Agents Ltd –v- Fergies Properties SA & Anor (2014) – QBD – Globe J -18/02/14  EWHC 438 (QB)
The matter involved an application by the claimant for an extension of time to serve witness statements on the ground that the defendants had failed to provide disclosure despite repeated requests as the claimant was unable to complete the statements without the documents. The defendant disputed the relevance of the documents sought by the claimant.
The defendant later offered disclosure without seeking determination of the issue of the document’s relevance however the defendant refused the claimant’s request for an extension of time. Several weeks after the ordered exchange date the claimant applied for permission to serve the statements out of time.
Globe J held that an important factor in the matter was that there was nothing to prevent the trial window being maintained referring to previous cases Durrant and M A Lloyd wherein the defaults had affected the trial dates and that whilst the claimant’s failure to apply for specific disclosure and for an extension of time was not trivial per Mitchell the trial date remained and the parties were able to exchange statements almost immediately. The judge considered that refusing relief through a robust application of r 3.9 would effectively ended the claimant’s claim which was too severe a consequence and an unjust result.
(1) Summit Navigation Ltd (2) Marin Taknik Denizcilik Ve Danismanlik San Tic Ltd STI –v- (1) Generali Romania Asigurare Reasigurare SA (2) Ardaf SA Insurance & Reinsurance Co (2014) – QBD (Comm) – Leggatt J -21/02/14  EWHC 398 (Comm)
A consent order had been made within proceedings for the Claimant shipowner (S) to provide security for costs by way of delivery of a bond by 4pm, December 5, 2013, failing which the action was to be stayed. Due to an inability on the part of S’s brokers to obtain the underwriter’s signature in time S was unable to comply with the order. At 9.28am the following day the defendants informed S that the action was now stayed. Even though S obtained the required signature at 10.01 am and S was ready to proceed with the exchange of the bond the opponent maintained its position and advised that any application for relief from sanctions would be resisted.
S applied for the stay to be lifted, the Defendants applied for the action to be stayed.
Leggatt J considered the stay imposed by the consent order was a “sanction” therefore any application was for relief from “sanction” however considered that the consent order was not to be equated to an “unless” order requiring the claim to be struck out for non-compliance. It could not have been reasonably intended in the instant case that as a consequence of missing the deadline the action would be brought to a permanent end and that the only reasonable view was that the stay was intended to be temporary. An order for security for costs was a “special form of order” unlike a sanction for failure to file a budget on time as per Mitchell. In the instant matter the delay was trivial in any event the delay was as a result of a third party who were not responsible for the conduct of the action. The judge considered the refusal to lift the stay was unreasonable and disregarded the duty of the parties and their representatives to co-operate with each other in the conduct of the proceedings and the need for the litigation to be conducted efficiently and at a proportionate cost.
In the judgment Leggatt J states “The reliance placed on Mitchell in this case has had the very consequences which the new approach enunciated by the COA in Mitchell is intended to avoid” going on to refer to the lecture given by the Master of the Rolls and approved in Mitchell that it was not the aim of the reforms to turn rules and compliance in to “trip wires” not to render compliance “an end in itself” and expressing the hope that he had discouraged others from adopting similar tactics.
The application to lift the stay was granted the application for the stay refused the defendant ordered to pay the costs of both.
Steven Gerald Clarke –v- Barclays Bank PLC & Lamberts Surveyors (2014) – Ch D – R Hollington QC -27/02/14  EWHC 505 (Ch)
The bank and surveyor had appealed against a decision allowing the claimant to rely upon the report of a second expert.
The claimant had served his original expert’s report but failed to disclose, for several months, the fact that his expert had withdrawn from the case.
The court whilst stating it would have had sympathy with the claimant’s situation had he applied promptly for directions, considered the inference that the claimant withheld the information to see if he could settle the case on favourable terms before he disclosed his difficulty thus undermining his position was irresistible.
It was considered that the bank and surveyor were seriously prejudiced by reason of the later notification having, as directed, responded to the original report with the claimant now aware of their experts’ position. Further in the event permission was granted the trial would have to be adjourned.
Taking all of the matters in to account it was considered that the claimant’s conduct amounted to a serious abuse of process of the court. It was considered that the deputy master who had granted permission had failed to apply the important guidance given in Mitchell.
The appeal was allowed notwithstanding it was acknowledged that the expert evidence was critical to the claimant and that he would be seriously prejudiced.
Samir Ramzi Samara v (1) MBI Partners UK Ltd (2) Ajwa RMTI Co (2014) – QBD – Silber J – 04/03/14  EWHC 563 (QB)
In this matter the defendant unsuccessfully applied to set aside a default judgment.
Judgment entered in default in February 2012 and whilst the defendant gave notice of intention to apply to set aside the application was not issued until May 2013 when the claimant attempted to enforce the judgment. At the hearing to set aside the master concluded that the defendant had dealt with the matter that did not accord with the overriding objective and with no reason for the excessive delay the application was refused.
The Defendant appealed to the judge who held that whilst neither the implementation lectures nor the Jackson report dealt specifically with the approach to be taken to r13.3 the new regime had universal application to all the rules and was based and underpinned by the changes to the overriding objective. The judge stated that it was clear that the need for promptness had even greater significance under the new regime and that relief would be granted “much more sparingly”. Whilst accepting that relief could be granted where the delay was trivial or if there was good reason as per Mitchell, no explanation had been provided; the defendant could not show that the 16-month delay had been trivial or that there was good reason for it; the judge considered even under the old regime the appeal would not have succeeded thus the appeal was dismissed.
Dany Lions Ltd v Bristol Cars Ltd (2014) – QBD – Andrews J -05/03/14
An application by the defendant company for permission to amend its defence; the Defendant had argued that the claim was an abuse of process and should be struck out and claimed that the lateness of the application had arisen out of the Claimant’s disclosure and an exchange of correspondence which had shed light on the relevant documentation which the defendant submitted, enhanced the prospects of successfully striking out the claim. Further the defendant contented that the claimant would suffer “no real prejudice” if the application was allowed whereas the defendant would be seriously prejudiced if unable to pursue the amended argument.
The judge held that on an application for late amendments, it was not “good enough” to argue that no prejudice would be suffered by an opponent save as to costs adding the courts “were much less forgiving than in the past”. The judge stated that the matter also had to be considered in light of Mitchell; finding there to be deficiencies and no good explanation why the claim sought was late when the defendant had been in possession of the documents for months. The application was refused.
Associated Electrical Industries Ltd v Alstom UK (2014) – QBD (Comm) – Andrew Smith J -05/03/14  EWHC 430 (Comm)
The defendant had applied to strike out the claim on the ground of late service of the particulars of claim resulting in the claimant applying for an extension of time to serve the pleading.
Referring to Mitchell the judge held that the period of non-compliance, 20 days was not trivial; the claimant had not provided justification for the lateness of the particulars and ought to have made a timely request to the defendant for an extension. Giving consideration to the overriding objective the claim was struck out.
The full judgment is worth consideration as no punches were pulled by Andrew Smith J, who remember had received criticism from the COA following his decision in Raayan al Iraq, when providing his view of the Mitchell decision, effectively stating that he had been driven to reach an unjust decision in striking out the claim.
Emakpose-Patrick v Lowell Portfolio Ltd (2014) – Ch D – Morgan J – 07/03/14
An application made to extend the time to seek permission to appeal a bankruptcy order; the debtor had unsuccessfully applied to annul the petition and the application for extension was issued some two months later. Morgan J considered that the petitioning creditor had taken all necessary steps to be ready for the bankruptcy hearing and the debtor’s absence was her own fault. The application was “quite badly” out of time; in any event if the appeal was allowed it was evident that costs would greatly exceed the sum claimed. The debtor had only provided a bare dental and had not engaged in the case against her; on the evidence available prospects of her defence succeeding were “not high”. Morgan J had real concern that, given the amendment to r 3.9 and the case of Mitchell, the delay and costs of the case would be out of all proportion; the debtor had caused a wholly undue level of expense in the judge’s view and the overall justice of the case and the need for litigation to be conducted efficiently, even having regard to the debtor’s status as a litigant in person, meant that there should be no extension of time.
Vivek Rattan –v- UBS AG, London Branch (2014) – QBD (Comm) – Males J -12/03/14  EWHC 665 (Comm)
A short but entertaining decision arising from the claimant’s contention that by reason of the defendant’s delay in providing a budget it should be treated pursuant to CPR 3.14 as a budget comprising only of applicable court fees and required an application for relief from sanction, this not withstanding the Males J’s hope “that there might have been an outbreak of common sense” expressed at the CMC.
The delay in question amounted to 1 day, the budget being provided six days before the CMC, not seven.
Reference was made to the letter from the claimant’s solicitors which included “the parties are obliged to file costs budgets by 28 February 2014, which we are currently intended to do. Please confirm by return that you will file your costs budget on 28 February 2014, or alternatively provide your proposals as to any equivalent procedure”.
The defendant responded confirming their agreement that “budgets should be filed by 28 February 2014”
Males J at paragraph 9 of his judgment “The unsophisticated reader might think that this was the clearest possible agreement that a costs budget exchanged on 28 February 2014 would be on time” The claimant’s attempt to argue that such a reader would have failed to grasp the true subtlety of the correspondence was dismissed as “manifest nonsense”.
It was had been made clear that the claimant’s contention was considered “completely without merit”; Mr Justice Males wanted to give reasons in writing, not because of any doubt as to the outcome, but in order to reinforce the message that the Commercial Court will £firmly discourage the taking of futile and time wasting procedural points”. He added that he thought the message would have already been clear from the judgment of Leggatt J in Summit Navigation (see above).
The Claimant was ordered to pay the defendant’s costs of the argument on the indemnity basis summarily assessed in the amount of £4,500.00 to reflect the time taken up at the CMC by the issue.
This update originally featured in Litigation Funding magazine.