England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
(PLYMOUTH REGISTRY) HHJ OVEREND

		Royal Courts of Justice Strand, London, WC2A 2LL Friday 20th July 2001

LORD JUSTICE LATHAM:

1. In this appeal the late and unlamented provisions of Ord. 17 r. 11 of the former County Court Rules have risen from the grave to haunt the courts again. They arise in a solicitors negligence action in which a preliminary issue was tried as to whether or not the automatic directions provisions of Ord. 17 r. 11 had been ousted. HHJ Overend held that the procedures adopted in the original action brought on the appellants behalf by the respondent were incompatible with the automatic directions, and that accordingly the automatic strike out provision in Ord. 17 r. 11(9) did not apply.
2. On the 17^th March 1990 the appellant had been the pillion passenger on a motor cycle driven by a friend, Mark Ellis; the motorcycle collided with a car. Sadly Mark Ellis was killed. The claim was brought promptly on the 9^th October 1991 against the estate of Mark Ellis alone. On the 10^th December 1991, judgment in default of defence was entered against the estate as 1^st defendant, which was set aside by consent on the 24^th January 1992 when the 1^st defendant was given leave to file a defence and the appellant was given leave to add the driver of the car as 2^nd defendant and to amend the statement of claim appropriately. Third party proceedings claiming contribution, but also damages on behalf of his estate were then commenced by the 1^st defendant against the 2^nd defendant. On the 9^th March 1992 the court, of its own motion, issued a Form N233 which was expressed to be:

"Notice to Parties of day fixed for pre-trial review or for giving directions. Ord. 9 r.s 3(4) and (5): Ord. 13 r. 3: Ord. 17 r. 10."

3. The notice continued:

"The hearing will be informal and in private, its purpose is to:

(a) Make sure that all the parties and the court understand what the case is about:

(b) See if there is any possibility of settling the dispute, and if not, decide how it is going to be heard, how long the hearing will last:

(c) Decide what documents or other evidence is needed from both sides.

…….

If there is any particular order that you wish the court to make you must, if possible, apply for it at this hearing and give at least two days warning to the court and every other party. If you apply at a later date you may have to pay the costs of that application unless you can satisfy the court that it was necessary."

4. The notice fixed the hearing date for the 13^th April 1992. On that date, District Judge Child ordered:

"1. That the plaintiffs reply if served is to be filed by 14 days of today of today (sic)

2. Mutual discovery of lists between the plaintiff and Defendant and third party after close of pleadings.

3. Inspection 7 days thereafter.

4. Each party have leave to call one expert medical witness and one other expert witness whose reports should be disclosed to all parties not less than 28 days before trial.

5. The third party do attend the trial and take full part therein as the judge shall direct and be bound to the result."

5. On the 23^rd October 1992, the appellant applied for a trial of a preliminary issue, in effect asking for a split trial of the issues of liability and quantum, and on the 9^th November 1992 applied for an interim payment. On the 30^th November 1992, the 2^nd defendant indicated in a without prejudice letter that although they had not made a formal admission of liability at that stage liability would not be in issue as against the appellant. The application for a split trial was therefore withdrawn. On the 1^st December 1992, a consent order was made for the interim payment, and formally recorded the withdrawal of the appellant's application for a split trial. There were negotiations thereafter which led to a payment into court which was not accepted.
6. No further steps were taken until the autumn of 1994. New solicitors had by then been instructed on the appellant's behalf. They took the view that the action had been struck out as a result of the application of Ord. 17 r. 11(9), even though no formal notification had been given by the court. An application was therefore made to the court to reinstate the action which was heard by District Judge Crosse on the 28^th October 1994. From the notes of the hearing which have been made available to us, it would appear that the parties agreed that the action had been struck out pursuant to this rule in July 1993. After hearing full argument, the District Judge refused the appellants application to reinstate the action and ordered that the money which had been paid into court should be paid out to the defendants together with interest.
7. In these proceedings, the appellant submits that the concession made on his behalf at that hearing was correct and that, although the date upon which the action was struck out was not properly computed, which was immaterial for the purposes of the present action, he was deprived by reason of the respondents negligence of his opportunity to pursue his claim. The respondent argues that the procedural orders made in 1992 ousted the automatic directions provisions of the County Court Rules. The issue is said to be important in the present action because the present action is based simply upon a failure to comply with the automatic directions. If automatic directions were ousted, then different considerations as to the particulars of negligence and the date upon which the action accrued would arise; and any amendments to plead the case in a different way could be precluded by the provisions of the Limitation Act.
8. In his judgment, the judge concluded that the automatic directions regime had been ousted for three reasons. First, he concluded that the order made by District Judge Child on the 13^th April 1992 was an order which included directions relating to the 3^rd party proceedings, which are proceedings expressly excluded from the provisions of Ord. 17 r. 11. Secondly, he considered that the order in relation to experts reports was incompatible with the automatic directions regime. Thirdly, he concluded that the application for a split trial on the 23^rd October 1992 itself ousted the automatic directions regime. Accordingly, he held that the original action had not been automatically struck out pursuant to the provisions of Order 17 Rule 11(9).
9. It is a very unhappy consequence of the way this litigation has progressed that the appellant, who clearly had a cast iron case for substantial damages for the personal injuries which he sustained in the road traffic accident in 1990 is still waiting for his money. It is ironical that the cause of the delay since 1994 arises because of the uncertainties caused by the ill thought out provisions of Ord. 17 r. 11 which were intended to cut down delays in litigation, particularly personal injury litigation. One thing, however, is clear. The rules were intended to ensure that solicitors progressed actions on behalf of their clients expeditiously. This action was prima facie an action to which the automatic directions applied. The respondents delay created the risk that, in the uncertainties that undoubtedly then existed as to the way the rule operated, the appellant's claim would be caught by the automatic strike out provisions, or would be struck out in any event on ordinary principles. That risk materialised. In these circumstances, it may seem surprising that the court is being asked to deal with a preliminary issue. The appellant had also made application to the court for leave to amend the claim in the event that the court concluded that the action had not been struck out. For reasons which are unclear, the judge ordered that the preliminary issue be determined before the application to amend.
10. Whatever uncertainties there may have been about the scope and application of Ord. 17 r. (11) at the time of the original action, this court provided guidance in a judgment reported as Bannister –v- SGB plc and Others [1998] 1 WLR 1123 and [1997] 4 All ER 129. In those proceedings the court chose 19 appeals and 2 applications out of more than 100 appeals and applications which were pending before the Court of Appeal. The judgment of the court sought to cover as many of the problems which had arisen in practice as it could. One of the problems was to determine in what circumstances the automatic directions in Ord. 17 r. 11 (3) would be ousted. The rule itself only provided, on its face, a limited, and to some extent confusing, answer to the question. Rule 2 provides:

"In an action to which this rule applies:

(a) Except where a pre-trial review is ordered pursuant to a direction given under paragraph 4(a) the foregoing provisions of this order shall not apply and directions shall take affect automatically in accordance with the following paragraphs of this rule.

(b) Where the court gives directions with regard to any matter arising in the course of proceedings, directions taking effect automatically under this rule shall have affect subject to any directions given by the court."

11. Rule 11 (4) provides:

"Nothing in paragraph (3) [the automatic directions] shall:

(a) Prevent the court from giving, of its own motion on the application of any part of it, such further or different directions or orders as may in the circumstances be appropriate (including an order that a pre-trial review be held or fixing a date for the hearing or dismissing the proceedings or striking out any claim made therein); or

(b) Prevent the making of an order for the transfer of the proceedings to the High Court or other County Court;

and r. 3 shall apply where an application is made under this paragraph as it applies to applications made on a pre-trial review"

12. It is therefore only where a pre-trial review has been ordered that the rule expressly excludes automatic directions. In many cases, however, directions were made by courts other than on a pre-trial review, which were incompatible with the automatic directions timetable. The court dealt with this problem in its judgment in Bannister as follows:

"Once automatic directions start to apply, how may they be ousted other than by an express manual direction to that effect?

14.1 Once the pleadings are deemed to be closed in an action to which Ord. 17 r. 11 applies, automatic directions will apply unless they are ousted. It is now well established that the thrust of those parts of the rule which recognise that directions given by the court might exclude the automatic directions is to keep the automatic directions applicable unless the court otherwise directs. But it is clear that the automatic directions cease to apply in two situations.

14.2 First if any new directions are repugnant to the concept contained in r. 11(3)(d) as in Downer & Downer Ltd –v- Brough [1996] 1 WLR 575, where the directions ordered listing for trial on "the joint" application of the parties.

14.3 Second, if any new directions simply cannot co-exist with automatic directions (as in Protim Services Ltd –v- Newcomb [1996] 1WLR 575 the case heard with Downer in which under the new directions a timetable for the exchange of witness statements expired only a day or so before the guillotine date, and a trial date was directed to be fixed in terms which were inconsistent with the automatic directions, namely "the action be listed for trial for hearing before a judge on a date to be fixed on application certified in readiness for hearing and subject to agreed time estimates".

14.4 …… once automatic directions have been ousted, they will not reapply automatically. It is easy to recognise how unfair this would be if one contemplates a situation in which an order ousting automatic directions was successfully reversed on appeal, with the result that automatic directions were reinstated retrospectively with a guillotine date having already come and gone. There are certainly circumstances, in our view, where the court can manually reapply equivalent directions, including the automatic strikeout sanction, but such an order would have to spell out expressly the trigger date and the guillotine date anew.

14.5 If a new order simply grants an extension of time fulfilling one of the obligations referred to in r. 11(3)(a), (b) or (c), that is not of itself going to disapply the automatic direction (including the obligation as to request a hearing date with the draconian consequences for failure). However if a direction of the court makes compliance impossible, or if an order of the court is simply inconsistent with the automatic directions continuing to apply, the approach which the Court of Appeal has not been attempt to remould or suspend their implementation for a period of time, or something of that nature, but to declare they do not apply. Where directions are given which might impinge on the automatic directions, it is preferable for the order to deal expressly with the operation of the automatic directions, so that peoples minds can be concentrated on the question whether they are to be disapplied or not. ….."

13. In considering, therefore, whether any procedural steps have ousted automatic directions, the critical question, it seems to me, is whether or not the directions that have been ordered clearly show that the court has taken control of the action by imposing a different regime, affecting, in particular, the ability of the plaintiff to keep the action within the timetables required by the provisions of r. 11(3)(d) and r. 11(8) as to requesting a fixed day for the hearing, and therefore the operation of r. 11(9), are providing for an automatic strikeout of the action in the event of no such request being made.
14. Rule 11(3)(d) provides that when the pleadings are deemed to be closed, unless the day has already been fixed for trial, the plaintiff shall within six months request the proper officer to fix a day for the hearing. Rule 11(8) provides that when a plaintiff makes such a request, he shall file a note which should if possible be agreed by the parties, giving an estimate of the length of the trial and the number of witnesses to be called. Finally, by r. 11(9) if no such request is made within 15 months of the day on which pleadings are deemed to be closed, the action would be automatically struck out.
15. The first reason given by the judge for holding that the automatic directions had been ousted was that the directions given by District Judge Child were composite directions, including directions in the third party proceedings, to which the automatic directions provisions expressly do not apply. As the directions were composite, the argument goes that they must be manual directions for the third party proceedings, and accordingly manual directions for the main action. I can see that there may well be circumstances in which composite directions will be such as to be incompatible with automatic directions, because the needs of the action, including the third party, are too complex for those provisions to operate. But as this court said in Bannister at paragraph 3.10:

"The third party or similar proceedings are parasitic on the original action and require manual directions to be shaped to the requirements of the timetable in the main action …. The plaintiff must remember that automatic directions will continue to apply to the main action, unless these are overridden by new manual directions …."

16. It seems to me that the mere fact they are composite directions does not mean that they oust the automatic directions. The question in each case will be whether or not the composite directions, in so far as they affect the main action, are directions which are reconcilable with automatic directions. In the present case, the variations to the dates of discovery and inspection cannot properly be said to be irreconcilable with the automatic directions, they are merely amendments pursuant to r. 11(2)(b). Equally, the order that the third party take part in the trial cannot in any way be said to be irreconcilable with automatic directions. There were no directions involving the third party proceedings which meant that those proceedings could not possibly have been completed within the automatic directions timetable..
17. The only direction which could be said to affect the discipline of the automatic directions regime is the direction in relation to expert witnesses. It is to be noted that no direction was given in relation to non-expert witnesses, nor to the admissibility of sketch plans, or police accident report books. Silence as to those matters suggests that the court and the parties had in mind that the automatic directions provisions would apply. The provision as to expert reports, does however come into apparent conflict with the automatic directions. Automatic directions clearly envisage, when read together with r. 11 (8) that all steps have been taken in relation to the disclosure of evidence, including expert evidence, prior to the request for a hearing date, so that the plaintiff can give an estimate of the length of trial and the number of witnesses to be called. The direction made meant that the plaintiff would not be in a position to state how many expert witnesses were going to be called, or to estimate the length of trial necessary to deal with expert issues, until 28 days before trial, necessarily, at some date after the date has been fixed for trial.
18. Mr Mansfield, QC on behalf of the appellants submits however that that requirement in no way prevents the appellant from making a valid request for a hearing date and accordingly the automatic directions timetable can be adhered to. He refers to the judgment of this court in Ashworth –v- McKay Foods Ltd [1996] 1 WLR 542. In that case the plaintiff had failed effectively to comply with any of the automatic directions, and in particular had failed to disclose any expert evidence or witness statements, but nonetheless, within time, made a request for a hearing date under r. 11(3)(d). The court held that even though the plaintiff had been in breach of the directions, could not file a note setting out the length of the hearing, the number of witnesses other than by guesswork and would have to seek leave of the court to call evidence either expert or otherwise, nonetheless the request for the hearing date was valid, and was not an abuse of the process of the court.
19. It seems to me that if, as this court held in Ashworth, a request for a hearing date is valid even when no evidence has been disclosed, it must follow that an order which defers disclosure of expert reports until after a request for a hearing date will have to be made cannot be said to be irreconcilable with the operation of the automatic directions. In effect, the District Judge had given leave in advance for that evidence to be given although not disclosed at what would otherwise have been the appropriate time. The important point is that it does not prevent the action as a whole being progressed towards a trial within the time scale envisaged by automatic directions. I do not therefore consider that the order of District Judge Child ousted the application of automatic directions in this case.
20. The third ground upon which the judge concluded that the automatic directions had been ousted also raises a difficult question. The judge took the view that the application for a split trial was an application for the trial of liability as a preliminary issue. He considered that this court in Bannister had established, even if obiter, that not only an order for the trial of a preliminary issue, but also the application for such an order ipso facto ousts automatic directions. The relevant passages in the judgment of this court are as follows:

"17.1 In our view the existence of an order for the trial of a preliminary issue, together with any directions that may have been given for the trial of that issue, would be inconsistent with the continuing application of automatic directions to any part of the action, whether or not that issue is subsequently tried. The trial of a preliminary issue, a limitation issue, for example will need its own set of manual directions. The court may direct a timetable for discovery and/or the exchange of witness statements or affidavits limited to that issue. Alternatively it may simply direct the trial of that issue without discovery or witnesses. In either event it would be absurd to contemplate the continued application of automatic directions of the action as a whole.

….

17.4 Although this matter was not argued on this basis, we think that the absurdity of requiring full discovery, witness statements and requesting a hearing of the full trial is as obvious once an application issued for an order for the trial of a preliminary issue as it is when the order itself is made. Accordingly in our view the application itself ousts the automatic directions.

17.5 In our judgment, for these reasons an application for, and, a fortiori an order for the trial of a preliminary issue has the same effect as an application for interlocutory or summary judgment or an order for a stay. Such steps or orders are wholly inconsistent with the continuing application of the automatic directions regime to any part of the action ….."

21. As can be seen from paragraph 17.4, this particular issue had not been raised in argument, and was not necessary for the determination of any issues in the selected cases before the court. Nonetheless it is clear that this was not a purely parenthetical passage. It was repeated when the court gave its specific reasons in relation to each of the individual cases. And it is wholly consistent with the court's view as to the effect of other applications such as applications for summary judgment. The rationale, as explained by the court is that once such an application is made, it would be inappropriate to spend the time and money in proceedings with preparation for full trial, and accordingly the timetable required by the automatic directions is necessarily interrupted, requiring manual directions thereafter in order to restructure the action.
22. I confess to some unease as to this conclusion, logical though it may appear to be. And in Cockerill –v- Tambrans Ltd [1998] 1 WLR 1379, this court refused to extend the principle to an application made shortly before the guillotine date for an order that manual directions be substituted for automatic directions.
23. My unease is that in some circumstances, the making of an application for the trial of a preliminary issue, and in particular for an order for a split trial, may have no effect on the ability of the parties to progress the case sensibly towards trial. Such an application could also be used to defeat the operation of a guillotine, as was argued in Cockerill, if the making of the application ipso facto ousts automatic directions. In the present case, the application was withdrawn, which was formally recorded on the 1^st December 1992. The only substantive order made at that hearing was for an interim payment. No one suggested that the timetable had been disrupted. The District Judge gave no directions as to the further progress of the action, which one would have expected if it was considered that any new directions were required. In my judgment, the only proper conclusion is that the court treated the withdrawal of the application as nullifying the application, so that the action could proceed subject to the existing directions, namely automatic directions, save as amended by the order of the 13^th April 1992. This court recognised in Bannister at 12.8 that a request to fix a date could be withdrawn, and therefore nullified. I see no reason why the court should not be entitled to treat, for procedural purposes, any withdrawn application as a nullity in the sense of not affecting the procedural status of the case. Each of the parties was entitled to apply for manual directions if it considered that the existing automatic directions were no longer appropriate, but none did.
24. I would therefore allow the appeal. The automatic directions continued to apply to the action which was accordingly struck out under r.11(9) on the 7^th May 1993.

MR JUSTICE ASTILL: I agree.

LORD JUSTICE WALLER: I also agree

ORDER: Appeal allowed. (Order does not form part of approved Judgment)