England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr Justice Holland)

		Royal Courts of Justice Strand London WC2 Friday 18th May, 2001

1. LORD JUSTICE ALDOUS: This is an appeal with leave of this court against the order of Holland J of 19th January 2001 which allowed the defendants' appeal and dismissed the action with costs. To understand the reasons why the judge took that draconian step, it is necessary to set out in some detail the course that these proceedings took.
2. On 28th February 1999 the Sunday Sun published on its front page material which was prima facie defamatory of Mr Colin Austin, the claimant. A similar story was published in the Sunderland Echo on 1st March 1994. Although Mr Austin consulted solicitors, no proceedings were taken until nearly a year later. In a letter dated 22nd January 2001 written to the judge, Mr Austin's solicitors gave an explanation for that delay:

"... it seems that the substantial reason for the delay in issuing proceedings was the need to wait for the outcome of House of Lords Case of Reynolds v Times Newspapers Ltd which was heard in late 1999 concerning the defence of qualified privilege in the context of a publication in a newspaper. Counsel's advice was that we ought to wait for the outcome of that matter before making a final decision to proceed and following the conclusion of the case we received Counsel's advice in early December of 1999 which enabled us to commence the action."

3. Thus it was not until 10th February 2000 that solicitors acting on behalf of Mr Austin wrote to the editor of the Sunday Sun a letter before action. That letter was passed to solicitors instructed by the proprietors of the paper, Newcastle Chronicle & Journal Ltd. They wrote to Mr Austin's solicitors on 21st February 2000 stating that they acted for the publishers of the Sunday Sun and were investigating the matters referred to in the letter. No doubt because the limitation period was about to expire, Mr Austin's solicitors issued a claim form on 25th February 2000. It named as the defendant the editor of the Sunday Sun and claimed damages limited to £50,000 for libel and an injunction. It was served by being faxed to the editor on 1st March. It follows that the claim form was issued right at the end of the limitation period and was subsequently served within the time allowed by the CPR.
4. By a letter dated 7th March 2000 solicitors acting for the Sunday Sun wrote to the claimant's solicitors drawing attention to the fact that the defendant in the action was named as "the editor" of the Sunday Sun. They went on to suggest that the editor was not the correct defendant given that he was neither the author of the article, the publisher of the Sunday Sun, nor the printer. The letter continued:

"In these circumstances, therefore, we invite you to amend your Claim Form so as to identify correctly your intended Defendant. If you agree to our request, we will not oppose your Application.

We also invite you to withhold service of the Particulars of Claim until the proper identity of the Defendant has been established.

In the light of the foregoing, we will not be filing the Acknowledgement of Service until the Particulars of Claim are served."

5. It seems that Mr Austin's solicitors telephoned the Sun's solicitors on 9th March seeking information as to who they thought was the proper defendant. The result was that Mr Ditchburn, who was the solicitor who had the conduct of the case on behalf of Mr Austin, told the Sun's solicitors that he would amend the claim form to name Newcastle Chronicle & Journal Ltd as defendants and asked for an extra seven days in which to serve the particulars of claim. The evidence is that consent was given, and therefore it was expected that the amended claim form and particulars of claim would be served by 16th March.
6. By letter dated 20th March 2000 Mr Austin's solicitors sent to the Sunday Sun's solicitors an application notice seeking leave to amend the title of the proceedings to name Newcastle Chronicle & Journal as defendants. As requested the solicitors for the Sunday Sun signed it on 5th April and returned it together with a letter dated 6th April. That letter stated:

"We now return the Application Notice, duly signed and dated and we look forward to receiving a copy of the amended Claim Form in due course."

7. In a letter dated 10th May 2000 Mr Austin's solicitors stated:

"I enclose herewith particulars of claim by way of service. Please acknowledge safe receipt."

8. Unfortunately the documents enclosed related to the action which had been taken by Mr Austin against the Sunderland Echo. By a letter dated 2nd June 2000 that mistake was pointed out to Mr Austin's solicitors. It went on to point out that it was their view that Mr Austin's solicitors had failed to serve an amended claim form and particulars of claim within the appropriate timescale. Mr Austin's solicitors replied on 8th June but did not at that time serve an amended particulars of claim. The letter of 8th June stated:

"We must say that we are some what at a loss to understand how it is you have not received particulars relevant to the action against the Sunday Sun which we believe were correctly lodged with the Court for sealing.

It is correct to say that we are suing another paper the North East Press Limited in an entirely separate set of proceedings.

We agree that the claim form needs amending and we have lodged with the Court amended claim forms for sealing in the circumstances we suggest that we proceed with this matter on the basis that we serve the amended claim form together with the correct set of particulars with you allowing you time thereafter to file your defence in the normal way and if you require further time in the circumstances no doubt you will let us know.

This would remove any arguments about whether or not there has been effective service we trust you will agree."

9. On 15th June the defendants' solicitors wrote:

"We acknowledge your letter of 8th June, the contents of which are noted."

10. It is noteworthy that they did not suggest the procedure suggested in the letter of 8th June was not acceptable.
11. By letter dated 21st July, which was received by the Sunday Sun's solicitors on 25th July, the amended claim form and particulars of claim were served. On 27th July the Sunday Sun's solicitors wrote to Mr Austin's solicitors stating that they were unable to accept service as it was in clear breach of the Civil Procedure Rules. The reason given was that the times laid down in CPR 7.6 had expired. CPR 7.6 relates to the extension of time for serving a claim form. As will appear later, that objection was misconceived as it is now accepted that the claim form was served within the four-month period allowed. By a letter dated 8th August 2000 Mr Austin's solicitors requested the Sun's solicitors to reconsider their position so as to avoid the necessity of having to make a formal application to the court. That was refused with the result that the solicitors acting for Mr Austin applied to the court.
12. By notice dated 10th August Mr Austin's solicitors sought leave to amend the name on the original claim form and, in so far as it might be necessary, an extension of time to serve the particulars of claim and to amend it. On the same day the District Judge gave Mr Austin leave to amend the claim form. The application in so far as it related to the particulars of claim was adjourned to 25th August. However it seems that by agreement that hearing was adjourned. The result was that at the adjourned hearing the District Judge would consider (1) whether the order allowing amendment of the claim form should be revoked; (2) whether the time for service of the amended claim form and particulars of claim should be extended. Those matters came before District Judge Loomba on 13th September 2000. He had the advantage of submissions made by Mr Austin's solicitor and counsel instructed on behalf of the Sunday Sun. He ordered that Mr Austin should file into the court office and serve an amended claim form and an amended particulars of claim by 4.00pm on 20th September 2000. The defendant should file into the court office and serve a defence by 4.00pm on 18th October 2000. He gave a direction for a reply if necessary, and ordered that the defendants' costs should be paid by Mr Austin assessed at the sum of £1,000.
13. The District Judge in his judgment pointed out that the claim form had been issued and served within the four-month limitation period, albeit naming an inappropriate defendant. He stated that once proceedings had been served upon a defendant - albeit in this case an incorrectly named defendant - within the necessary four-month period, then the principles in Vinos v Marks and Spencer Plc, Court of Appeal, 8th June 2000 (unreported) did not apply. He concluded that the claimant did need leave to amend the particulars of claim. No doubt the reason being that no particulars of claim had been served which would need amendment. He went on:

"Although the Particulars of Claim should be served within the four-month period, there is no absolute bar, if service if not effected, and the Court retains the general discretion to extend time for service of the Particulars under Part 3.9 of the CPR.

No evidence has been lodged to support the Claimant's application. I find that this was due to incompetence on behalf of the Claimant's Solicitors, but such incompetence should not serve as an absolute bar of the exercise of the Court's discretion if so required. I am not prepared to allow what I must call an incompetent muddle by the Claimant's solicitors to prevent the Claimant making his claim."

14. He went on to refuse permission to appeal and to make the order to which I have referred.
15. Against that order the defendants appealed. A crucial point of the defendants' case was the submission that the claim form had not been served within the four-month period provided for in the rules, and that no extension was possible having regard to the provisions of CPR 7.5 and 7.6.
16. The judge in his judgment of 24th January 2001 held that the claim form had been validly issued on 25th February and that there had been service of it within the time allowed by the rules. All that thereafter remained to be done was amendment, and that as no point was taken on that he concluded that there was no basis upon which the District Judge could be said to be wrong in the decision he had reached on that matter.
17. The judge then considered the position of the particulars of claim. He pointed out that there was a duty upon the claimant under CPR 7.4 to serve particulars of claim within 14 days of the service of the claim form. It was accepted that that had not been done. Therefore the applicant had to apply for an extension of time under CPR 3.1. The judge pointed out that the action was one for defamation. He said:

"Unless prosecuted with urgency it has no value to public or parties, hence the imposition by Parliament of the markedly short year long limitation period. For reasons that have been belatedly explained, the Claimant had utilised nearly all of that period before starting proceedings - it behoved him to prosecute his claim thereafter with particular urgency and any extension of time for the service of Particulars of Claim could not readily be excused. In the event - and without any excuse or even explanation - the Claimant had delayed for effectively a further 6 months before putting in train steps aimed at service. Reviewing this state of affairs in the light of the overriding objective, just dealing demanded rejection of any application for extension of time for service of these Particulars of Claim. The District Judge was, with respect, wrong to not to confront this issue; had he done so he would undoubtedly have refused leave to serve out of time.

11. I may add that this view of the operation of the overriding objective does not just depend upon the implication of an effective ad hoc extension of the limitation period by 50%, it is also influenced by so much of CPR 1.1(2) as empowers the Court to assess the fulfilment of the objective by reference to the potential for allotting to a case `an appropriate share of the court's resources'. The Claimant is now seemingly pursuing by way of action 002000 A2 the vindication of his character; further use of the court's resources to conduct a parallel action, 002000 A3, is not easy to justify, in particular when it is done with such delay and diffidence. When challenged, Mr Baird said that he thought that his client did want to bring this further action to trial but I am quite unable to discern any evidence supportive of that view. Essentially 002000 A3 is now a stale, diffident and ultimately pointless duplication of 002000 A2."

18. The actions to which the judge was there referring were these proceedings and the action against the Sunderland Echo.
19. From a witness statement which has been placed before us, made by Mr Baird, the person who now has conduct of the case on behalf of Mr Austin, it appears that the action against the Sunderland Echo was settled prior to the hearing before Holland J. It was settled upon terms that Mr Austin took out a payment that had been made into court and took the opportunity that was provided to him by the paper to give his side of the story. Unfortunately that was not brought to the attention of the judge. It is not clear why, but it seems likely that the parties were not aware of the importance that the judge would place on the fact that another action was continuing which would provide a forum whereby Mr Austin could vindicate his reputation.
20. Before coming to the issues in this case it is appropriate to set out the observations of Lord Woolf MR on the effect of and approach to the introduction of the Civil Procedure Rules in Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926. Lord Woolf in Biguzzi said at page 1932:

"The courts have learnt, in consequence of the periods of excessive delay which took place before April 1999, that the ability of the courts to control delay was unduly restricted by such decisions as Birkett v James [1978] AC 297. In more recent decisions the courts sought to introduce a degree of flexibility into the situation because otherwise the approach which was being adopted by litigants generally of disregarding time limits for taking certain actions under the rules would continue.

Under the CPR the position is fundamentally different. As rule 1.1 makes clear the CPR are `a new procedural code with the overriding objective of enabling the court to deal with cases justly.' The problem with the position prior to the introduction of the CPR was that often the court had to take draconian steps, such as striking out the proceedings, in order to stop a general culture of failing to prosecute proceedings expeditiously. The prime example of that was contained in Ord 17, r 11(9) of the County Court Rules 1981 (SI 1981 No 1687 (L.20)), which involved the automatic striking out of cases where the appropriate step of seeking a hearing date was not taken by the strike out date. That led to litigation which was fought furiously on both sides: on behalf of claimants to preserve their claim, and on behalf of defendants to bring the litigation to an end irrespective of the justice of the case because of a failure to comply with the rules of the court.

Under the CPR the keeping of time limits laid down by the CPR, or by the court itself, is in fact more important than it was. Perhaps the clearest reflection of that is to be found in the overriding objectives contained in Part 1 of the CPR. It also to be found in the power that the court now has to strike out a case under rule 3.4."

21. After citing from rule 3.4 Lord Woolf went on:

"Under the court's duty to manage cases, delays such as have occurred in this case, should, it is hoped, no longer happen. The court's management powers should ensure that this does not occur. But if the court exercises those powers with circumspection, it is also essential that parties do not regard timetables laid down. If they do so, then the court must make sure that the default does not go unmarked. If the court were to ignore delays which occur, then undoubtedly there will be a return to the previous culture of regarding time limits as being unimportant."

22. Lord Woolf went on to point out that there were alternative remedies open to the court in dealing with cases of delay. He also rejected counsel's criticisms of the judge in that case who had refused to look back at the old cases. He said at 1932B:

"However I do not accept the criticisms of the judge with regard to his approach to the previous authorities. Indeed far from criticising the judge, I would commend his approach. The amount of time which the deputy district judge had to spend in his judgment examining the old authorities indicates the disadvantage of having to look back, as the judge said, `over your shoulder' at those authorities."

23. Of course when exercising the discretion to extend time given under CPR 3.1, many of the matters that needed to be considered when considering applications for extension of time that arose before the introduction of those rules have to be weighed - such as detriment to the person seeking the indulgence and to other parties, the need to dispose of actions, including actions for defamation with expedition, and the principle enshrined in our common law and in the European Convention on Human Rights that a party should be afforded the right to determination of his claim by an independent tribunal. However, there is added emphasis in the CPR for the court to pay attention to the need for the proper administration of justice and importantly to do justice between the parties. Any rigidity which had crept in before the introduction of the CPR has now been lost.
24. Mr Timothy Atkinson, counsel for Mr Austin, criticised the judgment of the judge for failing to give full weight to the exercise of the discretion by the District Judge and for failing to take into account a number of important matters, such as the question of whether the defendant had been prejudiced. He also criticised the paragraphs of the judgment (which I have already set out) which contained the judge's reasons for allowing the appeal. True, defamation actions needed to be prosecuted with diligence. True, the claim form was issued at the end of the limitation period, but the rules provided four months for its service. Thus it need not have been served until the end of June. To suggest that the claimant had "not put in train steps aimed at service" was wrong. The first attempt was made on 10th May when the wrong document was sent. On 8th June the matter was again addressed. Thereafter Mr Austin's solicitors received the unhelpful letter of 15th June. At that time the relevant document was with the court. Thus he submitted the true position was that the parties had their eyes on the claim form, but the question before the court was whether the particulars of claim could be served in an extended time.
25. Mr Atkinson also drew attention to the judge's reliance upon the existence of the action against the Sunderland Echo. The judge had concluded that it would not be appropriate to allow this action to continue as it would result in duplication of the court's resources. Mr Atkinson submitted that the latter reason was based upon a false premise. In any case, to suggest that the action claiming damages and an injunction for defamation against the defendants would be of no value to Mr Austin was incorrect.
26. Mr Atkinson submitted that the judge should have taken into account the merit of the action, the relative prejudice to the claimant and the defendants, and the need that a claimant shall, if possible, have his claim determined by an impartial tribunal. He submitted that in this case there was no challenge to the prima facie merit of the claim, in that there was no substantive reply to the letter before action of 10th February. Further, it was not suggested that the delay had caused the defendants any prejudice, whereas dismissal of the action would undoubtedly cause prejudice to the claimant.
27. Mr Barca, counsel for the defendants, placed considerable emphasis on the need for expedition in defamation actions. He drew to our attention in his skeleton argument a number of statements in judgments to that effect, including statements made in Grovit v Doctor [1997] 1 WLR 640. He stressed the ephemeral nature of most media publications, as was referred to by the Neil Committee:

"Memories fade, journalists and their sources scatter and become, not infrequently, untraceable."

28. That statement of course is right. But it is not suggested in this particular case that the journalists or their sources have scattered, nor that there has been any prejudice.
29. I accept that there is a need for quick resolution of such cases as defamation cases. That of course is true of a number of causes of action. Memories fade and witnesses disappear. Clearly the nature of the action, and in this case the fact that it is a defamation action, needs to be taken into account when exercising the discretion given by CPR 3.1.
30. Mr Barca defended the judge's judgment. He submitted that there had been no adequate explanation for the delay in starting the proceedings, and in the absence of any statement by Mr Austin that he wanted to get on with the action the judge was entitled to conclude that he had no such interest. He also drew to our attention statements made by judges in Smith v Probyn, 25th February 2000 (unreported), Hinks v Channel 4 Television, 3rd March 2000 (unreported), and Vinos v Marks and Spencer, Court of Appeal, 8th June 2000 (unreported). He submitted that those statements supported his submission that the court should be slow to extend time in the circumstances of this case.
31. In my view those cases have no relevance to the facts of this case where the court is considering an exercise of the discretion under CPR 3.1. It is well-settled that the court will not interfere with a judge's discretion unless he has failed to take into account matters that he should have done or has taken into account matters which were not relevant or he was plainly wrong. In this case I believe the judge did fall into error when exercising his discretion. First, he relied upon the existence of the Sunderland Echo proceedings. For reasons which I need not explore, the judge was not told that that action no longer existed. Second, he failed to take into account the relative prejudice to the parties. It follows that the court has to reconsider the matter and decide whether the District Judge was right to extend the time or whether the judge was right to refuse to do so with the result that the action should be dismissed.
32. The court's power to extend time under CPR 3.1 has to be exercised to achieve the overriding objectives of the CPR. Thus, the court must endeavour to achieve justice while at the same time ensuring that the case is dealt with expeditiously and fairly and is allotted an appropriate share of the court's resources. Where, as in this case, the proceedings are issued at the end of the limitation period, it behoves a litigation to make haste, particularly in defamation cases.
33. However, as was pointed out in Johnson, justice must be done. As Kennedy LJ said in that case:

"Even before the implementation of the new Civil Procedure Rules stress was laid upon the importance of time limits. In Mortgage Corporation v Sandoes (1996) TLR 751, the court set out considerations which are relevant when deciding whether or not to extend time. The overriding principle is that justice must be done and it was there pointed out that when considering whether to grant an extension of time to a party in default it is necessary to look at all the circumstances of the case. In Costello v Somerset County Council (1993) 1 WLR 256 Sir Thomas Bingham MR said at 264H-

`Save in special cases or exceptionally circumstances it can rarely be appropriate, on an overall assessment of what justice requires, to deny the plaintiff an extension (where the denial will stifle his action) because of a procedural default which, even if unjustifiable, has caused the defendant no prejudice for which he cannot be compensated by an award of costs.'

The same principle must apply if the parties are reversed. In the recent case of Arbuthnot Latham Bank v Trafalgar Holdings (1998) 1 WLR 1426 at 1430, Lord Woolf MR warned that litigants and their legal advisers must recognise that delay which occurs from now on will be assessed not only from the point of view of the prejudice caused to the particulars litigants whose case it is, but also in relation to the effect it can have on other litigants who are wishing to have their cases heard, and the prejudice which is caused to the due administration of civil justice."

34. In the present case it has never been suggested that the delays caused the defendants prejudice. To the contrary, they knew in outline the case put against them from the letter of 10th February. They have never complained of prejudice.
35. Further, in the circumstances of this case I do not believe that other parties have been prejudiced. The muddle created by the defendants' solicitors was apparent to the District Judge. He was in a position to decide whether other parties had been prejudiced. He did not suggest that they had been. No doubt the delay prevented Mr Austin vindicating his reputation as early as it could have been. But that is a matter in respect of which he has to look to his solicitors. No doubt delay as a generality offends against the proper administration of justice. But in this case the rules provide for a four-month period for service of the particulars of claim, and the actual service was not far outside that period.
36. The history that I have set out shows a fog that has been generated by the solicitors. The solicitors for the defendants believed and submitted that the claim form had not been served. They were wrong. That was not finally buried until the judgment of the judge. The solicitors for the defendants do not appear to have understood what was required of them. But in my view it would be wrong to heap their mistakes onto the back of Mr Austin, and to infer that he was not interested in moving the action forward. There is nothing in the papers before me to suggest that that was his view.
37. Taking that into account, taking into account the delay that occurred and how it occurred and the lack of prejudice, I believe that the District Judge came to the right conclusion. I therefore would allow this appeal.
38. LORD JUSTICE JUDGE: Subject to any defence, the article in the Sunday Sun was seriously defamatory of Mr Austin. It is normally anticipated that a victim of defamation will pursue, and will want energetically to pursue, the vindication of his good name. That is why the limitation period in actions for defamation is limited to one year. Next, to date, in the absence of any relevant response to the letter before action or any pleading, we do not know, although we may very well be able to guess, at the defence. Thirdly, none of the material available to us suggests that the delay with which we are concerned has caused the slightest prejudice to the defendants.
39. I outline those considerations at the outset to emphasise that none of these factors, nor their cumulative effect, can be decisive in this case. Nor are they individually or cumulatively decisive because it appears that they were thought to be decisive in another case, particularly any case decided before the implementation of the new Civil Procedure Rules.
40. Each decision is fact-specific and, as Lord Woolf MR in Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926, itself a striking-out case, indicated, references to earlier authorities and the decisions in other cases, whether before or after the introduction of the Civil Procedure Rules, are liable to obscure, rather than illuminate, the argument and subsequent decision.
41. In exercising his discretion in this particular case, Holland J considered that it would be wrong to allow the case to proceed when there was in existence a parallel case arising from a defamatory publication which made the present proceedings stale, different (I assume there is a typing error where the text in the judgment says "diffident") and ultimately pointless duplication. Whether that would be a factor does not matter for present purposes because we know, but the judge did not, that those proceedings had been concluded by a settlement, following a payment into court and an arrangement by which Mr Austin was allowed the opportunity to have his version of the facts published in the relevant newspaper. Whether or not that amounted to vindication, it means that the present action stood alone and was not a duplication of another action. Accordingly, one of the major factors taken into account by the judge in reaching his conclusion proved not to be substantiated.
42. Examining this error in the context of the passages in the judgment where the judge dealt with it, it also looks as though it played some part in his conclusion that he could find no evidence to support the view that the claimant wanted to bring the case to trial. There I disagree. Once the proceedings began, as they did, in time, the history given by Lord Justice Aldous demonstrates that the claimant's solicitors were trying to get on with the litigation; but muddling along, making neither haste nor speed, each step forward - when one was taken at all - ending up as one pace back. Without attempting any reformulation of legal principles, as a matter of fact, in this case the unavailing activities of his solicitors do not justify any inference adverse to the claimant personally, and in particular do not lead to the conclusion that he personally was less enthusiastic than appropriate in the pursuit of the litigation.
43. In those circumstances, Holland J's decision is properly open to reconsideration in this court. I agree with the conclusion expressed by Lord Justice Aldous and the reasons for it.
44. In my judgment, the appeal should be allowed.
45. MR JUSTICE CRESSWELL: I agree with both judgments and add the following.
46. In fairness to the judge it should again be emphasised that he was not given material information as to the status of action 2000 A2 against North East Press Ltd. Had the judge been given the material information that that action was no longer proceeding following a settlement, his decision might well have been different. He certainly would not have said at the end of his judgment:

"Essentially 2000 A3 is now ... an ultimately pointless duplication of 2000 A2."

47. The present case will require rigorous case management from now on. A case management conference should, in my view, be held at the earliest available date (once the directions given by this Court have been complied with). I stress that henceforth the claimant must comply strictly and fully with the timetable set by the Civil Procedure Rules and all specific directions herein.
48. I also would allow the appeal.
ORDER: Appeal allowed with costs; the time for service of the particulars of claim be extended until 4.00pm on 24th May; time for service of the defence extended until 21 days after service of the particulars of claim; the costs here and before Holland J to be paid by the defendants; permission to appeal to the House of Lords refused. (Order not part of approved judgment)