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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Sealand Housing Corporation & Ors v Great Future International Ltd & Ors [2002] EWCA Civ 1184 (24 May 2002)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1184.html
Cite as: [2002] EWCA Civ 1184
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ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
The Strand London Friday, 24th May 2002 |
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B e f o r e :
LADY JUSTICE ARDEN
MR JUSTICE DOUGLAS BROWN
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| SEALAND HOUSING CORPORATION & ORS | ||
| and: | ||
| GREAT FUTURE INTERNATIONAL LTD & ORS | Respondents |
____________________
Mr Leslie Kosmin QC and Mr James Potts (instructed by Eversheds) appeared on behalf of the Respondents.
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Crown Copyright ©
- LORD JUSTICE RIX: This is an appeal by Sealand Housing Corporation and Messrs Barry and Stuart Hansen, the appellants, from the case management conference order of Lightman J made on 10th May 2002, whereby in the face of defaults to a previous timetabling order that he had made on 5th March 2002, he laid out a new timetable down to trial of an inquiry as to damages and as part of that timetable, under paragraph 6 of his 10th May order, required the appellants to serve and file three expert reports, one dealing with share valuation, one dealing with property valuation and one dealing with Chinese law, by 4 pm on 27th May, in default of which they would be debarred from defending the inquiry.
- The judge was led to this order in part on the basis of his findings at trial of liability, that the appellants had been guilty of fraud, perjury and forgery and had dishonestly attempted, by all means at their disposal, to delay the proceedings down to that date, and in part out of his concern that they were embarked upon a similar dishonest process of destroying the date for the inquiry which had been set for a five- to ten-day period within July of this year.
- The fact that it was only one day before the expiry of his previous order, as extended by the respondents to 30th April, that the appellants informed the respondents of their difficulty about compliance, while at the same time saying that they had no idea as to when they could comply, meant that the judge had good reason to be sceptical about the good faith of the appellants, even though they were now represented by counsel, whereas at the trial on liability they had been litigants in person.
- On this appeal, Mr Peter Leaver QC, who has not appeared in these proceedings before, has helpfully been able to inform the court and the respondents as to the prospects for the three outstanding expert reports. He has told the court that the Chinese law report will be served in final form by 4 pm on next Monday, 27th May; that the share valuation report, albeit not in final form, will be served by 4 pm on next Friday, 31st May, with a final report, one week after that, on 6th June; and that the same is true of the property valuation report, that is to say, a report but not a final report by 4 pm on 31st May and a final report by 6th June. In the light of that information, it is fair to say that the heat has gone out of this appeal.
- It is not formally consented to by Mr Kosmin QC, who appears for the respondents, but he has equally helpfully been able to assist the court by suggesting a new timetable, which he submits would be acceptable to the respondents in the light of the information given by Mr Leaver.
- In these circumstances, I do not think it is necessary to give an extensive judgment. I would merely comment as follows: I have some sympathy, indeed considerable sympathy, for the difficulties faced by the judge in seeking to ensure that this inquiry was brought to its starting line in July of this year. He could certainly be forgiven, in the light of the history of events down to 10th May, for thinking that he was dealing with recalcitrant litigants, who would in fact do what they could to destroy that trial date. In those circumstances, one can to some extent understand the severity of the sanctions which he imposed upon his order.
- I say that because his order was not simply one that had to take account of the time for service of expert reports but had to deal with that as part of a complex timetable involving the possibility of further expert reports from the respondents in answer to the appellants' reports as well as further pleadings and further disclosure.
- Nevertheless, in general, I would say this: that prima facie the proportionate sanction for a failure to serve an expert report in time is the sanction of the party in default not being able to rely upon such an expert report. Since the judge's sanction of barring the appellants from defending the inquiry was for relevant purposes tied into the service of the expert reports, I would for myself, even in the context of this difficult case, regard that sanction as disproportionate.
- The case of a late expert's report can in this context be distinguished from a late pleading or late disclosure or other such matters, which by their nature can simply prevent any fair hearing from taking place at all. It seems to me that, given the fact that counsel at the hearing of 10th May was concerned to assure the judge that the appellants did intend to maintain the trial date, the judge could well have anticipated the considerations set out under CPR 3.9, which he would have been bound to consider one by one if it was a case of relief against sanctions.
- However, in the light of the new timetable which has been developed between counsel in the course of this appeal, it is probably unnecessary to say more than that this appeal, for my part, should be allowed, to the extent of setting aside the sanction that the appellants be debarred from defending the inquiry and laying down a new timetable as follows:
- So far as the expert reports are concerned, my order would be that the Chinese law report be served by 4 pm on 27th May in final form; that the share valuation report be served in as complete a form as possible by 4 pm on 31st May; and that any amendment or supplemental detail to that report be finally served or that a complete report be finally served by 6th June; that the same order as I have just indicated in relation to the share valuation report be made in the case of the property valuation report as well; that the sanction for non-compliance with those orders be that, to the extent of that non-compliance, the appellants be not permitted to rely upon the report or reports in question; that as to the rest of the timetabling down to the inquiry, the respondents' Reply be served by 4 pm on the 28th day from service of the Defence, that is to say, 28 days from 15th May; that any expert report on share valuation or on Chinese law from the respondents be served within 21 days of the final report in each case from the appellants; in the case of Chinese law, that will be 21 days from 27th May, and in the case of the share valuation that will be 21 days from either 31st May or 6th June, or any day within that period which represents the finality of the appellants' share valuation report; that any further disclosure required from the appellants arising out of the respondents' Reply be served within seven days of that Reply; that any witness statements be served by 14th June; that the experts, to the extent that they exist on both sides of any discipline, meet to discuss their reports and agree areas of agreement or disagreement and the completion of a statement as to such areas of agreement or disagreement by at latest Friday, 5th July.
- That timetable will permit a trial of ten days, which is Mr Kosmin's present estimate, even if it starts at the earliest date at which it could start within the window allowed, that is to say on 8th July.
- Therefore, I would make that timetable in replacement of the timetable in the judge's order of 10th May and allow the appeal to the extent that I have indicated.
- LADY JUSTICE ARDEN: I agree with the judgment of my Lord Lord Justice Rix that this appeal should be allowed on the terms he has indicated for the reasons he has given.
- As matters appear today, the appellants are really at what has been termed the last chance saloon, so far as the matters dealt with by the order are concerned, and the order will mean what it says. The judge's direction that this case is to commence within the five-day window starting on 8th July stands.
- I just add two minor points dealt with in Mr Kosmin's submissions. Firstly, he suggested that it would be possible for Mr Brooke, the property valuer, to use a subordinate member of the firm or a member of the firm who has offices in Shanghai for the purposes of the report that is to be served on 31st May with respect to property valuation. Mr Leaver has not had an opportunity of dealing with that point.
- While obviously I hope that it would be considered by Mr Brooke, so far as I am concerned, I do not intend any part of the order today to deal with that aspect of the matter, which must be left open to the judge if a point is to be taken on that.
- So far as meetings of the experts are concerned, I would also like to add that no consideration has been given to the precise form of the meeting that has to be held. Again, I think this is a matter for the trial judge. Obviously it is intended that there should be meetings of experts in the same discipline, but it may not be necessary for them all to meet. That is a matter which has not been dealt with today. I mention this because in the time available it may be possible for them to meet electronically or over the telephone, rather than face to face.
- However, in the result I agree with my Lord Lord Justice Rix.
- LORD JUSTICE DOUGLAS BROWN: I agree that the appeal should be allowed for the reasons given by my Lord Lord~Justice Rix.
- LORD JUSTICE RIX: I would be very grateful if the parties would agree a form of order reflecting that decision of the court. Are there any matters arising out of our judgment which counsel want to mention? Perhaps they would do so after the short adjournment, when we will deal with the second appeal, at a time not before 2.15.
- MR LEAVER: My Lord, I anticipate being very much shorter on that than I was on the appeal this morning. I would hope that, if we sit at 2.15, your Lordships will not be delayed too long this afternoon.
- One other thing that occurred to me is that in trying to pronounce a Chinese word, I had completely forgetten your Lordship's expertise in that matter. I perhaps should have drawn attention to the name so that your Lordship could have assisted me.
- LORD JUSTICE RIX: I think you are thinking of Russian, rather than Chinese.
(NB: LINKED WITH CASE NO. A3/2002/1077)