England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
HQ10X00745

		Royal Courts of Justice Strand, London, WC2A 2LL
		08/12/2015

Lord Justice Lewison:

1. This appeal from Hickinbottom J raises, in an acute form, the width of the discretion given to a first instance judge when deciding whether or not to strike out a claim for failure to comply with procedural rules, and the grounds upon which an appeal court can or should interfere with that exercise of discretion.
2. I take the background facts from the judge's judgment. On the evening of 28 February 2007, the three claimants were driving in a car in Willesden Lane, North London, when they were overtaken and forced to stop by a police car. Police officers dressed in black and holding rifles with tracing lights got out and approached them. The officers smashed windows in their car, pulled the claimants out and forced them to the ground where they were handcuffed. The claimants contend that there was no lawful justification for the use of any force against them, so that their detention and all force used against them was unlawful. In any event, they say that the amount of force used was excessive.
3. The claimants instructed Hersi & Co, Solicitors, to represent them; and this claim was issued on their behalf by that firm on 25 February 2010. In his Defence, the Commissioner of Police (who is responsible for all of the relevant police officers) contended that the officers' actions were lawful, because they had a reasonable – if, as is now accepted, mistaken – belief that there was an assault rifle in the boot of the car. That belief arose, it is said, primarily as the result of CCTV footage that was available to the police, which led them to believe the rifle had been put there. The Commissioner also says that the amount of force used was no more than reasonable.
4. The procedural history of the claim has been protracted, and beset by delays. Not all of them have been attributable to the claimants or their solicitors, but many of them have. On 28 March 2011, the matter came before Deputy Master Rose, who allocated it to the multi-track. He also refused the Commissioner's application to strike out the claim, and ordered the claimants to restore the matter for further directions after the exchange of evidence for which his order provided. However, preparations were delayed whilst the Commissioner pursued an appeal against the refusal to strike out, which was ultimately dismissed by Cranston J on 24 November 2011. He ordered the Commissioner to pay the claimants' costs of the appeal to be assessed if not agreed. No formal steps towards assessing those costs have ever been taken. As the judge observed, none of that eight month delay was the fault of the claimants.
5. The next step in the proceedings should have been a case management conference ("CMC"). For reasons that remain unexplained the claimants' solicitors, whose job it was to arrange that CMC, took 14 months to do so. The claimant's solicitors' attempts to lay the blame at the feet of the Commissioner's legal department did not impress the judge; and he concluded that the delay remained unexplained and that it was clear that the claimants' solicitors "were doing less than they could or should have done to move the claim on towards trial".
6. The CMC was eventually listed for 21 May 2013. However, unfortunately, the claimants' solicitors failed to inform the Commissioner's legal department of this date, as they should have done; and the Commissioner's Counsel was in the event unavailable. The CMC was consequently moved to 4 June before Master Cook, who then duly gave directions. He directed that liability be tried as a preliminary issue, with a trial window of 1 October to 31 December 2013, with a seven-day time estimate; and he gave detailed listing directions, including orders that (i) the claimant's solicitors apply to the Queen's Bench Listing Office for a listing appointment (paragraph 3(a)); (ii) the parties each file pre-trial checklists as directed by the Queen's Bench Listing Office (paragraph 3(f)); and (iii) no more than seven days and no less than three days before the trial, the claimants were ordered to file an indexed and paginated bundle of documents that complied with the requirements of CPR rule 39.5 and CPR 39 PD39A (paragraph 4).
7. There was some slippage in this timetable, although the Commissioner does not blame the claimants for any of that particular delay. The listing appointment in fact took place on 15 October 2013 when, no one attending on behalf of the claimants, the trial was fixed without reference to the claimants' dates of availability, in what was effectively a short trial window: it was ordered that the trial would begin between 6 and 12 May 2014. The judge recorded that the provision of a short window of that kind is not unusual in Queen's Bench listing: nearer the time, and after the hearing fee has been paid, the actual start date is fixed within that period. 6 May 2014 was a Tuesday, Monday 5 May being a Bank Holiday.
8. Notification that the trial period would begin on 6 May 2014 was sent to the parties on 17 October 2013. That notice confirmed that pre-trial checklists would be sent to the parties at least eight weeks before the trial date and, pursuant to the Civil Proceedings Fees Order 2008, on the filing of the checklist, the claimants would be required to pay the trial fee of £1,200, namely £110 for the checklist, and £1,090 for the hearing fee. On 18 February 2014, the court sent out pre-trial checklists with an accompanying notice indicating that they were required to be completed and returned on or before 31 March 2014. The claimants' solicitors did not suggest that that notice was not received. The checklist noted possible sanctions for failure to return the checklist, the existence of which was highlighted on the face of the notice.
9. In accordance with the notice, on 31 March, Ms Fowler, who had conduct of the action on behalf of the Commissioner, filed the Commissioner's pre-trial checklist. Before doing so, she sent a draft trial timetable by fax to the claimants' solicitors, and telephoned them to ensure that it had been received. She was told that the fax was not working that day, and so she sent it through by email. However, no claimants' pre-trial checklist or listing questionnaire was ever received by Ms Fowler, or indeed referred to in the fairly scant correspondence she received from the claimants' solicitors. Mr Hersi, the claimants' solicitor, said that he had sent the claimant's checklist to the court under cover of a letter of 2 April. Neither the letter nor the check-list has ever been found. Although the judge described Mr Hersi's evidence on this topic at [12] as "far from satisfactory" and at [35] as "rather dubious" he nevertheless accepted it.
10. By the week before the opening of the trial window Ms Fowler had heard nothing at all from the claimants about preparation, including the drafting of a trial bundle index, preparation of a trial bundle or arrangements for playing the available video evidence in court. She sent a chasing letter to the claimants' solicitors on 29 April, when she also telephoned the court. She was told that the listing fee had not been paid, nor the pre-trial checklist filed; but the court were contacting the claimants' solicitors and would give them written notice to pay the court fee within two days, in default of which the action would be referred to a judge to be struck out.
11. The claimants were now late in filing the pre-trial check list which should have been filed by 31 March 2014, and had also failed to pay the fee as required by the rules or to apply for fee remission.
12. CPR Part 3.7 provides for sanctions for the non-payment of court fees. It applies both to non-payment of the fee payable on filing a pre-trial checklist and also non-payment of the hearing fee. The procedure in such a case is laid down by CPR Part 3.7 as follows:

"(2) The court will serve a notice on the claimant requiring payment of the fee specified in the relevant Fees Order if, at the time the fee is due, the claimant has not paid it or made an application for full or part remission.

(3) The notice will specify the date by which the claimant must pay the fee.

(4) If the claimant does not -

(a) pay the fee; or

(b) make an application for full or part remission of the fee,

by the date specified in the notice –

(i) the claim will automatically be struck out without further order of the court; and

(ii) the claimant will be liable for the costs which the defendant has incurred unless the court orders otherwise."

13. In essence, therefore, the sanction is not triggered unless and until the court gives the notice required by Part 3.7 (2), and even then the defaulter is given one last chance to pay. Although the court did try to serve such a notice Stewart J decided at a hearing on 6 May that no such notice had in fact been served. He therefore ruled that the claim had not been automatically struck out. 6 May was, of course, the first day of the trial window; but no attempt was made on that day to try to ensure that the trial started within what was left of that window. Instead the trial date was vacated. Mr Thomas, for the Commissioner, relied heavily on that fact, arguing that if a claimant loses a trial date through his own default he should not ordinarily be given a second chance.
14. Stewart J ordered the claimants to pay the Commissioner's costs which he assessed summarily at £11,500. He made no order for set off of those costs against the costs which the Commissioner had been ordered to pay the claimants by the order of Cranston J. The claimants paid those costs on the last day for payment. A further costs order was made against them by Blake J on 15 December 2014, which the claimants have not paid. At the hearing before Stewart J Mr Thomas told the judge that if the claimants' claim had not been struck out automatically, the Commissioner would nevertheless apply for it to be struck out on the ground that the claimants had failed to comply with rules, orders or practice directions. The Commissioner issued such an application on 13 June 2014. The failures relied on were failing to (i) pay the court fee in breach of paragraphs 2.1-2.3 of schedule 1 to the Civil Proceedings Fees Order 2008 and the Queen's Bench Listing Officers' Notice dated 18 February 2014; (ii) file a pre-trial checklist, in breach of Master Cook's Order of 4 June 2013, and the Queen's Bench Listing Officers Notice dated 18 February 2014; and (iii) prepare trial bundles in breach of CPR rule39.5 and the Order of Master Cook of 4 June 2013.
15. It was that application that came before Hickinbottom J on 30 October 2014. The judge's jurisdiction to strike out the claim arose under CPR Part 3.4 (2) (c) which provides:

"(2) The court may strike out a statement of case if it appears to the court –

…

(c) that there has been a failure to comply with a rule, practice direction or court order."

16. Clearly the word "may" shows that the court is exercising a discretion. It was rightly common ground before the judge (and was before us) that the exercise of this discretion differs from the exercise of the discretion to grant relief against sanctions under CPR 3.9. There are at least two reasons for that. First, in a case under CPR 3.9 the sanction has already been imposed, whereas in a case under CPR 3.4 (2) it has yet to be imposed. Second, and leading on from the first point, the proportionality of the sanction is not (or ought not to be) in issue in a case under CPR 3.9 because proportionality will have been considered at the stage when the sanction was imposed. By contrast in a case under CPR 3.4 (2) proportionality of the sanction is likely to loom large in the argument: Walsham Chalet Park Ltd v Tallington Lakes Ltd [2014] EWCA Civ 1607, [2015] Costs LO 157 at [44].
17. The judge, while recognising the differences between an application under CPR 3.9 and an application under CPR 3.4 (2), accepted Mr Thomas's invitation to consider the matter by reference to the decision of this court in Denton v T H White Limited [2004] EWCA Civ 906, [2014] 1 WLR 3926. In that case this court laid down the approach to be followed in deciding whether or not to grant relief against sanctions. The majority of the court (Lord Dyson MR and Vos LJ) said at [24] that a judge should approach the question in three stages:

i) Identify and assess the seriousness of the failure to comply;

ii) Consider why the default occurred;

iii) Evaluate all the circumstances of the case so as to enable the court to deal justly with the application, including the need for litigation to be conducted efficiently and the need to enforce compliance with rules, practice directions and orders.

18. The judge rejected the argument advanced on behalf of the claimants that the court's failure to give notice under CPR 3.7 had, in effect, deprived the claimants of the opportunity to pay the fee. He said at [32]:

"… that simply underscores their ability to pay, and makes the more blameworthy their failure to pay earlier. The requirement to pay court fees is mandatory, not aspirational. Fees are required to be paid when they are due, and not only after the relevant party receives from the court the equivalent of a red demand for money from a utilities company."

19. He also rejected the argument that there was a good reason for the non-payment of the fee. He regarded the non-payment of the fee as the reason why the trial date was lost. Thus he concluded at [37]:

"…the failure to pay the fee was a serious breach by the Claimants, with particularly serious procedural consequences, namely that the trial date was inevitably lost."

20. In accordance with Denton the judge then went on to consider "all the circumstances". The first matter that he took into account was the claimants' conduct of the case, of which he had already been very critical. He then accepted that although there was CCTV evidence which went to some issues in the case, there was other evidence which would have to come from police witnesses whose memories would have faded. (I interpose to say that, as Moore-Bick LJ suggested in argument, it seems probable that police witnesses would have a near contemporaneous note of the events of that night which they would have routinely recorded in their notebooks and from which their memories could be refreshed). The judge then took into account the effect of the delay on the claimants themselves, one of whom had a psychiatric condition. The last specific factor that he took into account was the strength of the underlying claim which he considered at [41]. That was perhaps an unfortunate phrase to use in the light of the decision of the Supreme Court in Global Torch Ltd v Apex Global Management Ltd (No 2) [2014] UKSC 64, [2014] 1 WLR 4495 at [29] but what the judge clearly meant was that he could not say that the claim was bound to fail or bound to succeed. Mr Thomas did not argue that he was wrong to do so.
21. The judge then came to his overall conclusion which he expressed as follows:

"[42] Whilst I do not consider that I am greatly helped by any reference to other cases which necessarily turn upon their own and very different facts, I do also have to take into account the need to enforce the rules of the court and to allocate only proportionate resources to any claim, as now underscored by the overriding objective and in cases such as Denton.

[43] On its merits, I have not found this an easy application. In my judgment, the behaviour of the Claimants' solicitors is worthy of real criticism: I agree with Mr Thomas that at times they appear to have failed to understand the rudimentary requirements of being a litigation solicitor, including their duties to the court and their obligation to comply with rules and orders and promptly so. On the other hand, this case is now all but ready for trial; and, as I have indicated, this case is not an insubstantial one. The assessment of the Claimants' solicitor – no doubt rough and ready, and no doubt contentious – is that the claim might be worth in excess of £400,000. In any event, in the circumstances of the incident that led to this action, it is clear that the substantive claim is a serious one.

[44] Although I have found this to be a fine judgment, in my view the balance is in favour of the case not being struck out now but being allowed to proceed, albeit on terms."

22. Mr Thomas submitted that the judge was wrong in his appreciation that the case was "all but ready for trial"; but I do not consider that we are in a position to disagree with the judge on that point. Moreover, even if there was more to be done the judge gave further directions for trial which could all have been backed by "unless" orders.
23. Mr Thomas' main point was, as I have already said, that the loss of the trial date was particularly serious and that, where the loss had been caused by the claimants' own default without good reason, those factors outweighed the countervailing reasons that the judge considered tipped the balance into allowing the claim to proceed on terms. If the general delay in progressing the case is added to the relevant factors, it can be seen that the judge's decision was outside the range of reasonable case management decisions. Mr Thomas posed the question: if a case is not struck out on facts like these, when will it ever be?
24. Let me say at once that if I had been the first instance judge I would have accepted Mr Thomas's submissions. I would have given more weight to the lamentable history of delay in progressing this case, the apparent incompetence of the claimants' solicitors, and the loss of the trial date. But that is not the question for an appeal court.
25. Mr Thomas's submissions did not include a submission that the judge overlooked any relevant factor, or that he took into account irrelevant factors. Nor did he suggest that the judge misdirected himself in law. Rather, his submissions were directed to the weight that the judge attributed to the various factors that he did take into account in exercising his discretion. That is not a promising start to an attack on an exercise of discretion. What it amounts to is a submission that the judge's decision was perverse.
26. In Mitchell v News Group Newspapers Ltd [[2013] EWCA Civ 1537, [2014] 1 WLR 795 at [52] this court said:

"We start by reiterating a point that has been made before, namely that this court will not lightly interfere with a case management decision. In Mannion v Ginty [2012] EWCA Civ 1667 at [18] Lewison LJ said: "it has been said more than once in this court, it is vital for the Court of Appeal to uphold robust fair case management decisions made by first instance judges.""

27. The first instance judge's decision in that case was to refuse relief against sanctions and her refusal was upheld by this court. But the same approach applies equally to decisions by first instance judges to grant relief against sanctions. In Chartwell Estate Agents Ltd v Fergies Properties SA [2014] EWCA Civ 506, [2014] 3 Costs LR 588 Davis LJ said at [63]:

"… the enjoinder that the Court of Appeal will not lightly interfere with a case management decision and will support robust and fair case management decisions should not be taken as applying, when CPR 3.9 is in point, only to decisions where relief from sanction has been refused. It does not. It likewise applies to robust and fair case management decisions where relief from sanction has been granted."

28. In my judgment the same approach applies to decisions by first instance judges to strike out, or to decline to strike out, claims under CPR 3.4 (2) (c). In a case in which, as the judge himself said, the balance was a "fine" one, an appeal court should respect the balance struck by the first instance judge. As I have said I would have found that the balance tipped the other way; but that is precisely because in cases where the balance is a fine one reasonable people can disagree. It is impossible to characterise the judge's decision as perverse.
29. In Chartwell Davis LJ also said that if parties understand the approach that this court will take to discretionary interlocutory decisions of first instance judges then satellite appeals should be avoided. I echo that hope. It is a depressing fact that this satellite appeal has added a further year to the overall delay in bringing this claim to trial.
30. I would dismiss the appeal.

Lord Justice Kitchin:

31. I agree.

Lord Justice Moore-Bick, Vice President of the Court of Appeal Civil Division:

32. I also agree.