England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MANCHESTER DISTRICT REGISTRY

		Manchester Civil Justice Centre 1 Bridge Street West Manchester M60 9DJ
		6th January 2016

APPROVED JUDGMENT

HIS HONOUR JUDGE HODGE QC:

1. This is my extemporary judgment in proceedings which, as presently constituted and according to the claim form that was issued on 4^th June 2014, have been brought by Marcus A Addison and four others (as claimants) against the Royal Bank of Scotland PLC and Adam & Company PLC (as defendants), claim number A30MA444.
2. This is the pre-trial review of a trial listed to take place over four days before me, commencing on 8^th February 2016; in other words, the trial is due to start just over four weeks from today. The claim is one (as expressed in the claim form) for damages for breach of contract and/or negligence and/or breach of fiduciary duty and/or for further or other relief, plus interest and costs. According to the case summary, the claimants seek restitution of a sum of £1.6 million for failure of consideration and damages.
3. There is an issue as to the identities of the appropriate claimants and the defendant to these proceedings. Although there are five named claimants in the claim form and two named defendants, the particulars of claim are expressed to be served on behalf of only three of the five claimants and to be directed to only one defendant, the Royal Bank of Scotland International Limited, which is neither of the defendants named in the claim form. The mismatch between the parties identified in the claim form and in the subsequent statements of case is something that has been flagged up in correspondence between the parties’' solicitors, JMW Solicitors LLP (for the claimant) and DMH Stallard (for the defendant) for some time, and the point was specifically identified in a skeleton argument prepared for the defendants by Mr Christopher Knowles (of counsel) for the purposes of a hearing (which in the event proved abortive) before District Judge Bever on 13^th October 2015.
4. Towards the end of this hearing, Mr Knowles raised the issue again and, without opposition from either counsel, I propose to incorporate within my order a provision that this claim will be struck out without further order unless the claimants apply to amend the parties to the proceedings by no later than four o’'clock on Wednesday 27^th January 2016. Clearly, it is appropriate that the proceedings should be properly constituted as to parties before they proceed any further, particularly given that almost 18 months have elapsed since the claim form was first issued. The proceedings have been continuing as between only three of the named claimants and a company which is not either of the two named defendants and the matter needs to be addressed. There was no objection to three weeks being allowed to enable the claimants properly to formulate evidence in support of their application to substitute the defendant named in the statements of case for the two financial institutions identified in the claim form if that is possible procedurally (as to which I express no view).
5. Turning to the matter which is before the court, as I have mentioned this is the pre-trial review for a case that is listed for trial before me on Monday 7^th February. Notice of the trial date was given as long ago as 29^th May 2015, although there is indication in a witness statement from Mr Mark Jones, a partner in the claimants’' solicitors, JMW LLP Solicitors, that it was not until a few days before his witness statement of 29^th September 2015 that his firm was notified that the trial of the action had been listed for 8^th February. In her witness statement in answer, Ms Kelly Joanne Mills of DMH Stallard, the solicitors for the defendant, states (at paragraph 8.1) that the trial had been listed to take place on 8^th February 2016 since 28^th May 2015, although she notes that Mr Jones states that he only became aware of the trial date a few days before making his statement. That sub-paragraph was not challenged in Mr Jones’'s subsequent evidence; and it is certainly clear from the court file that notice of the trial date, together with notice of the pre-trial review and also notice to pay the trial fee, was sent out to all relevant parties’' solicitors on 29^th May 2015. Therefore the parties should have known about this trial from that time.
6. On 29^th September 2015 the claimants made an application for specific disclosure and an adjustment to the trial timetable. Shortly before that, the claimants had also issued an application for an extension of time for service of witness statements. In accordance with a procedural order made by District Judge Matharu on 18^th May 2015 (and sealed on 28^th May 2015), the parties had been required to exchange statements of witnesses of fact by four o’'clock on 18^th September. On 1^st October 2015, on the without notice application of the claimants, District Judge Bever had extended the time for service of witness statements to 4pm on 23^rd October 2015. That requirement has never been the subject of any subsequent variation by court order; and the only application made to the court for an extension of time envisaged that the time for exchange of witness statements would in fact be extended until 23^rd October 2015, which is the date provided by District Judge Bever’'s order of 1^st October 2015.
7. Notwithstanding that, the position is that although the defendant says that it has been ready since September to exchange witness statements, witness statements have not yet been exchanged and indeed there is some indication that the claimants have not yet obtained their witness statements. I say that because in paragraph 1.06 of the expert forensic accountant’'s report of Mr Richard Cameron Williams for the claimants, dated 6^th November 2015, he states that his understanding of the facts is based upon discussions which he has had with Mr Alan Addison and Mr Richard Ingle which will form the basis of witness statements that will be served subsequent to his report. During the course of this pre-trial review, I was told by Mr Budworth that the claimant expected to call four witnesses of fact. The defendant will be relying upon two witnesses of fact so far as Mr Knowles was aware (although he had not checked the position recently); and both parties would be relying upon the evidence of expert forensic accountants.
8. The position is that there is formally before the court no application for an extension of time for witness statements and therefore they are long since overdue. I have referred to the claimants’' application for specific disclosure. That was issued on 29^th September and the application notice estimated that the hearing would last an hour. It was listed for hearing fairly promptly on 13^th October 2015 before District Judge Bever. It was listed before him for an hour. On that day, counsel attended for both parties. The District Judge recorded that the parties had agreed a revision to the court timetable, that the only outstanding case management direction sought related to the date for exchange of written evidence, and that the parties had agreed the time estimate set out below in relation to the balance of the application. On that basis, it was ordered that the time estimate for the specific disclosure application being inadequate, the application was to be re-listed for the next available date after 14 days, with an estimated length of hearing of two hours, plus 30 minutes reading time. The parties were required to file counsel’'s joint availability dates by 4pm on 14^th October. Time for service of the claimants’' expert evidence was extended to 4pm on 6^th November and for the defendant’'s expert evidence to 4pm on 4^th December. There were subsequent adjustments to the timetable for without prejudice discussions between experts and the filing of their supplementary statements.
9. In the event, for reasons which are not entirely clear (although what is clear is that the claimants had notified the court of their counsel’'s availability on 13^th October) the court was unable to fix an adjourned hearing date of the specific disclosure application until 16^th November 2015. The adjourned application was listed for two o’'clock this Monday, 4^th January, in the event before District Judge Obodai. On 3^rd December 2015, the defendant issued an application to extend the time for service of its expert report until 28 days after the date of exchange of witness evidence and also for an order requiring the claimants to disclose all information and documents made available to their expert. That application was given a time estimate of one hour and was listed for 4^th January 2016 on the footing that it would not add to the length (two hours) already allotted to that hearing.
10. In the event, the matter came on before District Judge Obodai at two o’'clock on 4^th January as listed but submissions were not complete until ten to four on that day. The District Judge had indicated at the outset of the hearing that she could not sit beyond 4pm, which was entirely understandable given the two-hour listing before her. Given that submissions were not concluded until ten to four, and given the extensive nature of those submissions, which from the court file cover some eleven pages of manuscript notes from the District Judge, she naturally felt unable to deliver judgment in the ten minutes left before four o’'clock on the Monday. She therefore reserved judgment. It is not known when that judgment will be handed down. Shortly before coming into court this morning at 10.30, I was handed a draft form of order for this hearing. That provided that the trial date of 8^th February should be vacated and that the defendant’'s application of 3^rd December should be listed for hearing as soon as possible, with an estimated length of hearing of one hour. The draft order provided that all further case directions should be adjourned to the hearing in which District Judge Obodai hands down judgment on the claimants’' application for specific disclosure. It also provided that the costs of this pre-trial review should be costs in the case.
11. At the outset of this hearing, I informed counsel, Mr Martin Budworth, for the claimants, and Mr Christopher Knowles, for the defendant, that in the absence of any application to vacate the trial I should proceed to make procedural directions calculated to ensure that the trial could proceed on the listed trial date of Monday 8^th February, which had been there since the end of May last year. I proposed, to that end, that witness statements should be filed and served by four o’'clock on 8^th January 2016, that the defendant’'s expert report should be filed and served by four o’'clock on 15^th January, that there should be a without prejudice meeting of experts by four o’'clock on 22^nd January, and that they should file and serve their supplemental reports by four o’'clock on 29^th January. On that basis, trial bundles would be filed and served by four o’'clock on Monday 1^st February and skeleton arguments would be exchanged and filed by four o’'clock on Wednesday 3^rd February.
12. I also proposed that directions should be given for the conduct of the trial, allowing an equal time to both sides. I indicated that the claimants’' evidence should be concluded by one o’'clock on the second day (Tuesday 9^th February), the defendant’'s evidence by four o’'clock on the third day (Wednesday 10^th February), and that speeches should take place on Thursday 11^th February, with judgment being handed down on Friday 12^th February. I observed that four days are now being allowed for the hearing against the original three-day estimate, and that my directions for the conduct of the trial would in fact allow an additional day for judgment on the Friday. I made the point that I would be sitting in Liverpool the following week and therefore the trial, including judgment, would have to be concluded by the end of the fifth day of the four-day trial.
13. Mr Budworth acknowledged that there was no formal application before the court for an adjournment of the trial date but, nevertheless, he indicated that he would wish there to be an adjournment of the trial. He emphasised that there had been joint confidence up to the hearing on Monday that a hearing on that day would prove sufficient to enable the specific disclosure application properly to be addressed in a way which would enable the trial date to be met. He indicated that given that there was uncertainty as to when the District Judge would be able to hand down judgment, that hope was no longer capable of fulfilment. He submitted that the length of the hearing before the District Judge had been some indication of the potential importance to the parties of the documents sought from the defendant. He submitted that there had been nothing apparently wrong with the issue of the application when it had originally been made at the end of September.
14. He accepted that the caution as to the length of hearing expressed by District Judge Bever on 13^th October had, in the event, been vindicated by the fact that submissions alone had occupied 50 minutes longer than the original estimated hearing length. He submitted that the reason for that was that the detailed nature of the defendant’'s resistance to the specific disclosure application had only emerged when he had received Mr Knowles’'s skeleton argument for the purposes of the 13^th October hearing. He indicated that both parties had confidently expected that a two-hour re-listing would be sufficient. I intervened to observe that the defendant’'s position would appear to have been that a one-hour hearing would have been sufficient given that the defendant had issued its own application, with an estimated length of an hour, on 3^rd December 2015 and had been given a hearing date of 4^th January on the footing that it would not extend the time of the hearing before the District Judge already listed on that day.
15. Mr Budworth submitted that there would be too much potential collateral damage to the ability of the claimants properly to put their case if the court did not allow an adjournment of the trial date to accommodate the judgment and consequential steps required in relation to specific disclosure. Mr Budworth emphasised that both parties were represented by reputable commercial solicitors and that their views as to the conduct of the case should be reflected in an adjournment of the trial. He emphasised that both parties regretted the fact that the progress to trial had been derailed; but he submitted that, in the circumstances, the vacation of the existing trial date was unavoidable. At this point, I intervened to indicate that a relevant consideration might also be whether the existing trial listing of five days was going to be capable of accommodating four witnesses of fact for the claimant, two for the defendant, and also two expert forensic accounting witnesses. The view of both counsel was that it would be “"very tight”"; and that whilst it would be preferable to maintain the existing trial date, that would be a very risky course. That, essentially, was the position ultimately reached.
16. I indicated that there were two possible courses of action. The first would be to vacate the trial date here and now. The second would be to adopt the procedural and case management directions I had indicated at the outset of the hearing and to await the outcome, and timing, of the District Judge’'s disposal of the specific disclosure application before actually vacating the trial date. The hope would be that the District Judge would hand down judgment sufficiently soon to enable it to be complied with in time for the trial still to proceed on Monday 8^th February. The difficulty with that course was that it was now apparent that there were serious concerns about whether even five days would be capable of accommodating a full and proper trial of the issues, and there was also the outstanding point about the correct identity of the parties, in particular of the defendant.
17. The alternative course of giving procedural directions and dealing with any application to vacate the trial at a future date (should it prove necessary) was something that did not commend itself to either party given the uncertainties, both as to the timing of the District Judge’'s handing down of judgment, the consequences of such judgment, and the risk that the existing five-day trial listing would prove inadequate in terms of time in any event.
18. I have to approach the informal application to vacate the trial date by reference to the overriding objective in the Civil Procedure Rules of enabling the court to deal with cases justly and at proportionate cost. That includes, so far as is practicable, ensuring that the parties are on an equal footing, saving expense, dealing with the case in ways which are proportionate, ensuring that it is dealt with expeditiously and fairly, enforcing compliance with rules, practice directions and court orders, and also allotting to the case an appropriate share of the court’'s resources, whilst taking into account the need to allot resources to other cases.
19. The last mentioned of those factors has a particular resonance in the present case. This matter has been listed before a section 9 judge for a four-day trial, with an extra day being allowed for judgment time, since the end of May last year. Although originally listed behind another case, that other case has now settled and this is the only case in my list. There is no surplus work in the other Specialist Chancery Judge’'s list during that week. Therefore, subject to any matters that may come into the list between now and 8^th February, the court’'s resources will potentially be wasted if the trial is vacated. That is a matter of considerable concern to the court given the scarce nature of judicial resources, particularly in this District Registry. That concern was clearly apparent to both counsel from my observations right from the beginning of this hearing.
20. How has this state of affairs come about? It seems to me that it has come about because of a comprehensive failure of the parties to adhere to the duty imposed upon them by CPR 1.3 of helping the court to further the overriding objective. The fact is that there has never been any attempt to expedite the hearing of the specific disclosure application by, for example, seeking to have it put before a section 9 Specialist Judge in the Applications List, even when it must have become apparent that the matter would only come before a District Judge two days before the Pre-Trial Review, and only some five weeks before the trial date. Even when the defendant came to issue its own application of 3^rd December, it simply took the view that that too could be listed before a District Judge with a time estimate of an hour, which could be accommodated at the same time as the hearing of the adjourned specific disclosure application. That state of affairs should never have been allowed to come to pass.
21. However, I do have to bear in mind that the court’'s resources are only one element of the factors relevant to the furtherance of the overriding objective and that, at the end of the day, I have to seek to deal with the case justly and at proportionate cost. It seems to me that the overriding objective requires that I should, contrary to all my own wishes, vacate this trial at the present time. It may prove possible to allot the time freed up to other cases. Adjourning it now will avoid costs being incurred unnecessarily in the immediate run-up to trial, which may be wasted, or require to be duplicated, if a subsequent application to vacate the trial becomes apparent.
22. I am also concerned that the existing trial listing may prove inadequate. I did raise the question whether I should either assign a new trial date to the case now or should make immediate directions for the case to be re-listed upon filing of revised availability dates for counsel and witnesses. Both counsel initially indicated that the case should be capable of being accommodated within six days; but when I pointed out that even that would allow only two days for each side to cross-examine the opposing party’'s witnesses, Mr Knowles recognised that cross-examining four witnesses when he does not even have their witness statements before him might be an ambitious undertaking if cross-examination had to be compressed within four days. I am satisfied that the better course is to direct that the trial should be re-listed only after exchange of witness statements.
23. What I propose to do, in furtherance of the overriding objective, is to make an order in the following terms: First, I will require an undertaking from the claimants to issue an application to adjourn the trial and pay the appropriate fee. Such an application should have been made some considerable time ago. I will vacate the existing trial date listed for 8^th February; but I will do so only on condition (imposed pursuant to CPR 3.1 (3) (a)) that the trial fee that has already been paid of £1,090 will be forfeited to the Court Service and that a further trial fee will fall to be paid when the matter is re-listed. I will direct that the trial is not to be re-listed until after exchange of witness statements of witnesses of fact; and I will direct that dates of availability of counsel and witnesses should be filed with Chancery Listing by the claimants’' solicitors no later than 14 days after exchange of witness statements, together with a revised time estimate for the trial. I will direct that the defendant’'s application of 3^rd December is to be listed for hearing as soon as possible before District Judge Obodai when she comes to hand down judgment on the existing application for specific disclosure heard on 4^th January 2015, and with an estimated length of hearing of one hour. I will further direct that all further case directions are to be given by the District Judge at that hearing. In the light of that, on reflection I think actually the re-listed hearing should be listed for two hours rather than one to ensure that all matters can properly be addressed without the need for any further reserved judgment or any further adjournment.
24. Both parties are agreed that there should be no order as to the costs of and occasioned by this pre-trial review. In the event it has proved abortive; there will have to be a further pre-trial review to be listed before the trial judge about four weeks before the re-listed trial, with an estimated length of hearing of one hour. The order should include permission for the pre-trial review to be vacated if both parties agree and have lodged an appropriate trial timetable in advance of the pre-trial review.

THE JUDGE: Are there any other directions I should make or matters I should address?

MR BUDWORTH: I have a note of all of that and we will draw an order to this effect, save that we will also need to incorporate your lordship’'s order about the application to regularise the proceedings.

THE JUDGE: Yes, yes.

MR BUDWORTH: On the unless terms by 27^th January.

THE JUDGE: Yes.

MR BUDWORTH: Which I already have a note of.

THE JUDGE: Yes.

MR BUDWORTH: Otherwise, nothing from our point of view.

THE JUDGE: Mr Knowles?

MR KNOWLES: Nothing to add for us.

THE JUDGE: Have you got anything else?

MR KNOWLES: No.

THE JUDGE: I am concerned, as you appreciate, about vacating this trial. In future, if applications need to be made which may affect the trial date, they should, at least in the first instance, be issued in the Applications List before a section 9 Specialist Judge and then hopefully they can be accelerated, rather than leaving things as they were on this occasion. I mean that is the purpose of the Applications List. It may be that I could not have substantively dealt with it in the Applications List, although with an estimate of two hours that should have been possible, but at least directions can be given to get the matter on reasonably quickly.

MR BUDWORTH: Indeed.

THE JUDGE: Yes, if there is nothing else, can I return to Mr Budworth the application bundle for this hearing, and I am going to return the file to District Judge Obodai. She did speak to me this morning about the case and said that she was going to try and get the judgment out as quickly as possible, although her enthusiasm for doing that may be somewhat abated when she discovers the trial date is not going to go ahead on 8^th February. I do not need to point out to the parties that this is clearly a matter that should be sought to be resolved through some form of alternative dispute resolution procedure, particularly the way in which the matter has progressed in the past. Rarely have I got 18 months into a case and we have not even sorted the parties out properly. Right! That is the court file on this and I will need to keep it but could you make a note that Mr Budworth has the carriage of the order?

A FEMALE SPEAKER: Will the order be sent to Chancery?

THE JUDGE: To Chancery Listing, yes, indeed. Mr Budworth will have the address.

MR BUDWORTH: Thank you.

[Hearing ends]