QUEEN'S BENCH DIVISION
Rolls Building, Fetter Lane, London, EC4A 1NL
B e f o r e :
| Lakatamia Shipping Co Ltd
|- and -
(1) Nobu Su
(2) TMT Company Limited
(3) TMT Asia Limited
(4) Taiwan Maritime Transportation Company Limited
(5) TMT Company Limited (Panama) SA
(6) TMT Company Limited, Liberia
(7) Iron Monger I Limited
N.G. Casey (instructed by Hill Dickinson LLP) for the Claimant/Respondent
Hearing dates: 10 February 2014
Crown Copyright ©
Mr Justice Hamblen:
"Paragraph (5) of the Order of Andrew Smith J dated 18 November 2013 ... is hereby varied to provide that unless standard disclosure is provided on or by 17 January 2014 the Defendants' defence and counterclaim shall be struck out..."
"On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders."
"39. The leading authority is the Mitchell case. This requires a "robust" approach to be taken. As explained at , "the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner. If departures are tolerated, then the relaxed approach to civil litigation which the Jackson reforms were intended to change will continue".
40. Under CPR 3.9 the "paramount" considerations are now "the need (i) for litigation to be conducted efficiently and at proportionate cost and (ii) to enforce compliance with rules, practice directions and court orders" .
41. Whilst "regard should be had to all the circumstances of the case…the other circumstances should be given less weight" than the two "paramount" considerations .
42. The "starting point" is that "the sanction has been properly imposed and complies with the overriding objective" . "An application for relief from a sanction presupposes that the sanction has in principle been properly imposed. If a party wishes to contend that it was not appropriate to make the order, that should be by way of appeal or, exceptionally, by asking the court which imposed the order to vary or revoke it under CPR 3.1(7)" .
43. In considering whether relief should be granted, "it will usually be appropriate to start by considering the nature of the non-compliance with the relevant rule, practice direction or court order. If this can properly be regarded as trivial, the court will usually grant relief provided that an application is made promptly." .
44. "If the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the court to grant relief. The court will want to consider why the default occurred. If there is a good reason for it, the court will be likely to decide that relief should be granted." . "Good reasons are likely to arise from circumstances outside the control of the party in default" .
45. In summary, the importance of the "paramount" considerations means that as a general rule relief will not be granted unless (i) the non-compliance was trivial or (ii) there was good reason for the default. Although all the circumstances of the case are relevant, they are of less weight than the "paramount" considerations. Compelling circumstances are therefore likely to be required if relief is to be granted for a non-trivial default for which there is no good reason".
(1) The nature of the non-compliance and whether it can be characterised as trivial
"…the court will usually grant relief if there has been no more than an insignificant failure to comply with an order: for example…where the party has narrowly missed the deadline imposed, but has otherwise complied with the order"
130. I was referred to two authorities – Realkredit Danmark v York Montagu reported in Westlaw at  WL 104421 and Re Atrium  EWHC 2882.
131. Realkredit involved the dismissal of a claim for failure to comply with an "unless order" for discovery. A list was provided within the relevant time but it was alleged to be deficient. At first instance it was held that the list was woefully inadequate. There was no evidence that satisfied the judge that it had been undertaken in careful fashion and large gaps remained. Accordingly he held there was a failure to comply with the "unless order" and struck the case out. The Court of Appeal allowed the appeal. A number of passages from the judgment of Toulson LJ show the basis of the decision:
"There was nothing unclear about the order made in this case, in that it required service of a list of documents. But a list was served so, prima facie, the order was complied with". Interestingly there is no reported case of an action being struck out as a result of a list being incomplete. But there is in the much litigated field of Further and Better Particulars where, in Reiss v Woolf  2 QB 557, at pages 559–560, the Court of Appeal approved a passage from the judgment of Devlin J who said:
"So construed, 'default' refers to default in the delivery of a document within the specified time. I do not, of course, mean that any document with writing on it will do. It must be a document made in good faith and which can fairly be entitled 'particulars'. It must not be illusory; … That is the test, in my judgment, and not as the plaintiff contends, whether each demand for particulars has been substantially met."
…In the present case the court was only concerned with whether the unless order had been complied with. The lenders had conceded that the valuers' affidavits would have justified the making of an order for specific discovery. But no such order was sought or made. Had the judge been asked to make such an order he would have had to consider in relation to each category of documents identified in the application the arguments about relevance and necessity which are deployed at length in the skeleton arguments for this appeal and were deployed before the judge.…
Applying the language of Reiss v Woolf, I think the lenders' list could fairly be described as a list. It was not illusory. It would still be a list even if a subsequent application for specific discovery had elicited further documents. So I think the judge was persuaded to adopt the wrong approach and applied the wrong test to the valuers' application to dismiss the claim and therefore his decision cannot stand. This was not simply an exercise of the judge's discretion. In my judgment if he had approached the question he had to decide in the way I think he should have done he would have decided that the lenders had complied with the unless order.
I do not think that the conclusion I have reached will mean that unless orders for discovery are worthless. In many cases where they are made no list is served at all. Both counsel conceded, rightly in my judgment, that a court could infer lack of good faith where it was obvious from patent deficiencies in the list that it had been prepared in apparent but not real compliance with the obligation to give discovery."
132. Re Atrium involved an unless order in relation to an unless order requiring the liquidators to conduct a search for documents falling within CPR 31.6 by a specified date. In the course of his judgment Birss J referred to a classification of the authorities by Counsel which he did not, in the end find helpful. In paragraph 30 he referred to the decision in Realkredit and pointed out it had been followed in two subsequent Court of Appeal cases. In paragraph 31 he explained Realkredit thus:
"There the Court held that since a list had been served, prima facie the relevant order had been complied with. The remedy, if a party is dissatisfied with a list already provided, was an application for further disclosure. The question of compliance with the court order was not simply an exercise of the court's discretion. In the case before the court the list provided could not be called illusory."
(2) Whether there is a good reason why the default occurred
"On an application for relief from any sanction imposed for failure to comply with any rule, practice direction or court order the court will consider all the circumstances including—
(a) the interests of the administration of justice;
(b) whether the application for relief has been made promptly;
(c) whether the failure to comply was intentional;
(d) whether there is a good explanation for the failure;
(e) the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant pre-action protocol;
(f) whether the failure to comply was caused by the party or his legal representatives;
(g) whether the trial date or the likely trial date can still be met if relief is granted;
(h) the effect which the failure to comply had on each party; and
(i) the effect which the granting of relief would have on each party."
"87. Given the change in the wording of the Rule I doubt that it is generally appropriate to go through the exercise of considering the previous list of potentially relevant circumstances. No doubt if there is a particular identified circumstance that tells in favour of or against relief then it may be relied upon, but the most relevant circumstances are likely to be the two identified in Mitchell, namely the nature of the non-compliance and the reason for it."
(a) The interests of the administration of justice are served by insisting on compliance with court orders, as Mitchell makes clear. However, this is a general point which can be made in all cases. There is no specific further consequence for the administration of justice which arises in this case, as might be so, for example, if the trial or other hearing dates were affected.
(b) The application was made promptly.
(c) The failure to comply was not intentional.
(d) There is an understandable explanation for the failure, although it is not a good reason in the light of the guidance provided in the Mitchell case.
(e) There has been prior non-compliance.
(f) The failure to comply was caused by the Defendants' solicitors' mistake.
(g) The trial date can still be met if relief is granted.
(h) The failure to comply has not caused any prejudice to either party.
(i) The granting of relief would not cause prejudice to the Claimant. It would enable the Defendants to defend the substantial claims made on their merits.