England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		10 October 2013

MRS JUSTICE SWIFT:

1. Biffa Waste Services Ltd (to whom I shall refer for ease as "the defendant") appeals against a case management decision made by His Honour Judge Million in the Willesden County Court on 25 April 2013. Permission to appeal was given by the single judge. PRIVATE 

Factual and Procedural Background

2. On 29 July 2009 a collision occurred when Mr Ali Dinler ("the first claimant"), driving his Volkswagen car, braked suddenly and the defendant's driver, who was driving a refuse lorry, collided with the back of the Volkswagen. The first claimant, and four other claimants who say that they were passengers in the car at the time of the collision, commenced proceedings, alleging negligence against the defendant's driver for failing to stop in time when the first claimant braked suddenly in order to avoid colliding with the car in front, which, it was said, had braked without warning. All five claimants claim damages for personal injuries and the first claimant also claims special damages amounting to just under £10,000.
3. In its Defence the defendant admitted the collision, but denied negligence. It pleaded that the collision had occurred when, as the lorry driver was driving through green traffic lights, the first claimant applied his brakes without warning or good reason, thereby giving the lorry driver no opportunity to avoid the accident. The defendant disputed that there had been five people in the first claimant's car, contending that there were only three men (including the first claimant) in the car at the time. Although fraud was not explicitly pleaded in the Defence, it was clear that the defendant had suspicions that the claims may not be bona fide.
4. The claim was allocated to the fast track.
5. On 30 October 2012 District Judge Steel considered the matter on the papers and gave standard fast track directions ("the directions"). The following directions are relevant to this appeal:

"(5) Evidence of fact will be dealt with as follows:

(a) By 4pm on 19^th February 2013 all parties must serve on all other parties copies of the signed statements of themselves and of all witnesses on whom they intend to rely…

(b) Oral evidence will not be permitted at trial from a witness whose statement has not been served in accordance with this order or has been served late except with permission from the Court.

…

(9) Not more than seven nor less than three clear days before the trial the claimants must file at court and serve an indexed and paginated bundle of documents..."

Paragraph (9) went on to provide that there should be consultation between the parties before the bundle was filed. The order continued:

(10) The trial will be listed as follows:

(a) By 4pm on 27^th March 2013 pre-trial check lists must be sent to the court."

6. Shortly after those directions had been given, the trial was listed for 25 April 2013, with an estimated length of hearing of one day.
7. The claimants failed to file their pre-trial check list (also known as the "listing questionnaire") by the due date. Nor did they pay the pre-trial check list and hearing fees. Accordingly, on 12 April 2013, the papers in the case were put before Deputy District Judge Cohen. He ordered that:

"Unless claimants do file pre-trial check list and pay listing and hearing fee by 4pm on 23^rd April, claim be struck out".

8. The claimants filed and served the pre-trial check list on the afternoon of 23 April 2013, 27 days after the date on which it had originally been due and about two hours within the deadline set by the Deputy District Judge. However, the listing and hearing fees were not received by the Court Office until 24 April, i.e. after the deadline. Pursuant to the Deputy District Judge's order, therefore, the claim stood automatically struck out. No explanation has ever been advanced for the failure to comply with the District Judge's order for service of the pre-trial check list or the Deputy District Judge's order for payment of court fees.
9. There had been other breaches by the claimants of the order of District Judge Steel. They were as follows:

(a) the witness statements of the first claimant (the driver of the car) and the fifth claimant (his wife), which had been due on 19 February 2013, were not served until 23 April 2013, 63 days late and only one clear day before trial;

(b) the other three witness statements were also served late, although there was a dispute between the parties as to how late. The claimants' solicitors maintained through their counsel that they had sent the unsigned statements to the defendant's solicitors with a covering letter on 3 April 2013, i.e. 44 days late. However, the defendant's solicitors said that they did not receive any witness statements at that time. They said that they received all five statements at the same time on 23 April 2013, i.e. 63 days late and one clear day before trial;

(c) the claimants' solicitors failed to make any attempt to agree the contents of the trial bundle with the defendant's solicitors. They filed and served the trial bundle on 24 April 2013, the day before trial; it comprised 540 pages and contained a good deal of irrelevant and unnecessary material.

10. The defendant's solicitors had written to the claimants' solicitors on 7 March 2013 threatening to strike out the claim if the witness statements were not provided. They received no response. In the event, they did not carry out their threat.

The hearing on 25 April 2013

11. It appears that the trial of this case was originally listed before a Recorder at Willesden County Court. However, for reasons that are unclear, the Recorder was not available on the morning of trial. The case was therefore moved into His Honour Judge Million's list. It is clear from discussions that took place at the hearing that he also had another trial in his list which was likely to take only a short time.
12. The case was called on before His Honour Judge Million. By that time, Mr Jeremy Dable, counsel for the claimants, had been informed by the defendant's counsel, Mr Jonathan Lewis, of the automatic strike out. Mr Dable indicated to the judge his intention of making an application for relief from the automatic strike out consequent upon late payment of court fees. He also indicated that he would be seeking permission to rely on the oral evidence from claimants' witnesses, despite non-compliance with the directions for service of their statements. No formal application for relief from sanctions had been made in advance of the hearing. Nor was there any formal application before the court for permission to rely on the witness evidence despite the fact that permission was clearly required in the light of the delays that had occurred. Mr Dable drew the judge's attention to the option of adjourning the case so as to enable formal applications to be made, although his preferred option was to deal with his applications informally so that the trial could proceed that day.
13. Mr Lewis made clear that he opposed the claimants' application for relief from automatic strike out and that he was applying (further or in the alternative) for their claims to be struck out by reason of their non-compliance with the District Judge's directions. Again, no formal application had been made in advance. The informal application which was made was based primarily on the lateness of the witness statements, together with the other breaches that I have mentioned.
14. Mr Lewis contended that, given the nature of the claim, prompt receipt of the witness evidence was of particular significance to the defendant. It was necessary for the defendant to assess in the light of the witness evidence whether it should amend its pleadings to include allegations of fraud, contending in effect that the accident had been a sham. The late service of the witness statements, particularly that of the first claimant, had made it impossible for the defendant to decide whether to make any necessary amendments in time for the amended allegations to be dealt with at trial.
15. At first, Mr Dable conceded that, given the late service of the witness statements, the defendant might require an adjournment to amend its Defence to plead fraud, so that it would not be possible for the trial to proceed. However, later in the hearing, he suggested that it would have been open to the defendant to plead allegations of fraud at an earlier stage. He argued that the averment contained in the Defence that two of the claimants had not been in the vehicle at the time of the collision in effect amounted to an allegation of fraud. In addition, the defendant had indicated that it intended to rely on evidence of a similar accident which had occurred at or near the same location as the collision which was the subject of the present claim and which had also involved one of the defendant's vehicles. He submitted that it had not been necessary for the defendant to await receipt of the witness statements before pleading allegations of fraud.
16. Mr Lewis responded by contending that the defendant had been fully entitled to await the witness statements before amending to plead allegations of fraud. Had the witness statements been served in accordance with the District Judge's directions, the defendant would have been able to do this in time for the trial to go ahead as listed. As it was, a fair trial would be impossible on the pleadings as they stood. Mr Lewis pointed to the fact that there had been a number of separate failures to comply with court orders. The claimants' solicitors had advanced no explanation of any kind for their failures to comply. No extensions of time had been sought or agreed. He argued that, taking into account the number of breaches and the fact that there had already been an automatic strike out, the case should not be permitted to proceed further.
17. Mr Dable told the judge that the claimants' solicitors had experienced difficulties obtaining information from the claimants about their financial losses. He acknowledged that they should have informed the defendant and the court of those difficulties and should have applied for extensions of time as necessary. However, he submitted that, since the witness statements had been served, it would be a draconian step to strike out the claims. He argued that the overriding objective could be met by imposing a costs penalty on the claimants.

The judge's judgment

18. In an ex tempore judgment the judge gave relief from the sanction of strike out for non-payment of fees within the time specified by the Deputy District Judge's 'Unless order' and declined to strike out the claim. He gave permission for the claimants to rely on oral evidence from their witnesses, despite the late service of their statements. He described the decision he had had to take as "a very close call". He referred also to the fact that the case was "old" and had been listed for trial about six months earlier. He referred to the failings of the claimants' solicitors and the apparent delays by the claimants in providing information to their solicitors. He noted the difficulty in which the defendant had been placed by late service of witness statements. Nevertheless, he considered that an order that the claimants should pay on an indemnity basis the costs of and occasioned by the adjournment of the trial would "do sufficient justice" in the circumstances.

The relevant rules

19. On 1 April 2013 the so-called "Jackson Reforms" came into effect bringing with them what is intended to be a significant change in the courts' attitude to non-compliance with the rules and with court orders so as to ensure that cases are conducted at proportionate cost to the parties and do not expend more than a proportionate amount of the court's time and resources. To that end significant changes were made to the definition of the overriding objective in CPR 1.1 which now requires cases to be dealt with both "justly" and "at proportionate cost" and providing that dealing justly includes "enforcing compliance with rules, practice directions and orders".
20. In addition, CPR 3.9, the provision dealing with relief from sanctions, has undergone extensive amendment. Previously, it had required the court to consider all the circumstances of the case, including a long check list of considerations mainly associated with the individual case under consideration. That check list has now gone. It has been replaced by the following:

"(1) 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 a 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."

21. The new provision refers back to the amended overriding objective and makes clear that, in considering whether or not to grant relief from sanction, a judge must consider, not only the immediate case before him or her, but also the wider issue of court time and resources.
22. The introduction of the Jackson Reforms was preceded by the delivery of a unique series of Implementation Lectures delivered by members of the senior judiciary, explaining the nature of the impending changes and the philosophy which lay behind them. In addition, there was a programme of training in the Jackson Reforms for every full-time judge sitting on civil work. Furthermore, even before 1 April 2013, there were judgments of the Court of Appeal which heralded the new approach. The prime example was the judgment of Jackson LJ in Fred Perry (Holdings) Ltd v Brands Plaza Trading Ltd [2012] All England Reports 77, at paragraphs [2] and [3]:

"[2] Non-compliance with the Civil Procedure Rules and orders of the court on the scale that has occurred in this case cannot possibly be tolerated. Any further grant of indulgence to the defendants in this case would be a denial of justice to the claimants and a denial of justice to other litigants whose cases await resolution by the court.

(3)... I should however draw attention to the forthcoming amendments to rule 3.9. There is a concern that relief against sanctions is being granted too readily at the present time. Such a culture of delay and non-compliance is injurious to the civil justice system and to litigants generally."

Since then a number of judgments of the High Court have emphasised the greater weight to be placed on enforcing compliance with rules and orders.

23. In Fons HF v Corporal Ltd [2013] EWHC 1278 (Ch) in which judgment was given on 9 May 2013, the issue arose as to whether, and if so to what extent, the court should grant an extension of time for the filing of witness statements. His Honour Judge Pelling QC, sitting as a judge of the High Court, stated:

"I have come very close to refusing an extension to either of the parties. As I have explained the amended Civil Procedure Rules now require the court to pay close attention to the failure of parties to comply with rules, directions and orders. A failure to comply with a rule, direction or order is of itself a clear breach of the overriding objective and is likely to result in severe sanctions... However all parties and the wider litigation world should be aware that all courts at all levels are now required to take a very much stricter view of the failure by parties to comply with directions, particularly where the failure to comply is likely to lead to a waste of the limited resources made available to those with cases to litigate."

In granting the extension, His Honour Judge Pelling indicated that he had taken into account that the amendments to the CPR were new and that the period that had elapsed since the final extension had expired was "relatively short". There had been dialogue between the parties during the period and extensions of time had been agreed.

24. There have been a number of further decisions to which I was referred: see in particular Baker v Hallam [2013] EWHC 2668; Andrew Mitchell MP v News Group Newspapers Ltd [2013] EWHC 2355; Rayan Al Iraq Co Ltd v Trans Victory Marine Inc (of which I have a digest from Lawtel dated 23 August 2013); and Wyche v Careforce Group plc, (again a digest of a judgment given in the Commercial Court on 25 July 2013). I have considered those cases, all of which turn, as does this one, on their particular facts.

The appeal

25. The defendant's Appellant's Notice states that it wishes to appeal against the grant by the judge of relief from sanction in relation to the order of District Judge Cohen. In his submissions, Mr Lewis explained that, since the judge had not dealt separately in his order with the defendant's application to strike out, he had been unable to appeal that decision. However, at the appeal hearing as before the judge, Mr Lewis relied on the breaches of the order of District Judge Steel in support of his argument that relief should not have been granted in this case.
26. In approaching the appeal, I bear in mind that the decision whether or not to grant relief from sanctions is an exercise of discretion, involving as it should do the balancing of a number of factors which militate on one side of the argument or the other. I bear in mind also that an appeal court should interfere with the exercise of discretion by the first instance judge only if that judge has made an error of principle or is plainly wrong. The judgments in the cases to which I have referred make repeated reference to the fact that, even within the new stricter regime, there remains room for the exercise of flexibility and discretion on the part of judges in the light of the circumstances of the particular case under consideration.

Submissions of the parties

27. In essence, the defendant repeated the submissions made before the judge as to the seriousness of the breaches of the court orders on the part of the claimants. Mr Lewis argued that these were not complex matters which had required a great deal of ingenuity and skill to comply with them; they were basic breaches and disregard of court orders. He argued that the judge had failed in his judgment to give proper consideration either to the facts of the case or to the principles to which he should have regard when making his decision. He indicated that there had been no regard in particular to the issue of proportionality or to the effect on the court of the behaviour exhibited by the claimants.
28. For the claimants, Mr Dable suggested that the appeal was in reality no more than a request to put the same facts and arguments in front of a different tribunal in the hope of achieving an outcome different from that at the hearing before His Honour Judge Million. He submitted that the judge had given full consideration to all the circumstances and that there was no reason to believe that he had not appreciated either the principles to be applied or the factual background. He drew attention to the wide discretion which is enjoyed by a judge when determining a decision made in the case management context and he referred to a number of the cases which I have already mentioned in support of that submission. He submitted that the decision of the first instance judge had been well within his judicial discretion and had been correct in that the breach, in particular the late payment of court fees, had been at the very lowest end of the scale of failures to comply. He submitted that strike out would in the circumstances be far too draconian a sanction and that the judge had rightly concluded that the costs penalty would in the circumstances be sufficient.

Discussion and conclusions

29. What occurred in this case was a wholesale and flagrant disregard by the claimants' solicitors of the directions made by the District Judge. In the case of the failure to comply with the directions for serving witness statements, the delays were very significant in the context of the fairly tight timetable leading to trial and resulted in the wholly unacceptable situation that the witness statement of the driver of the car and his wife (and possibly all five witness statements) were received by the defendant only one clear day before trial. It seems to me reasonable that the defendant should have wanted to examine the witness evidence before taking the step of amending its pleadings. Be that as it may, however, it was entirely foreseeable that, if the witness statements were disclosed so near to trial, the hearing might have to be aborted for some reason resulting from their late receipt by the defendant.
30. The trial bundle – all 540 pages of it – was delivered even later and without any prior consultation with the defendant's solicitors as to the documents they wanted included. The initial direction for the filing of the pre-trial check list was ignored. No explanation for the delays was given to the defendant or the court at the time and no applications for extensions of time were made. Even when made the subject of an 'Unless order', the claimants' solicitors left service of the pre-trial check list until the final hours before the time limit expired and missed by a short time the deadline for payment of the necessary court fees. That is, of course, a risk that a party runs if it postpones compliance to a time very close to the expiration of a deadline.
31. The claimants' solicitors had made no formal application for permission to adduce oral evidence, despite their failure to comply with the order for service of witness statements, and had provided no properly evidenced explanation for that failure. The picture that emerges is one of a complete lack of recognition on the part of the claimants' solicitors of the need to comply with court rules and orders.
32. It seems from what the judge was told by the claimants' counsel that the fault for the delays may not have been entirely that of the claimants' solicitors and that the first claimant at least may have been dilatory in complying with requests for information about financial losses. Given the limited extent of the special damages claimed - only three items by the first claimant and none by the others – it is difficult to see why those problems occurred or why they should have caused delay in service of the witness statements at least of the other four claimants.
33. The effect of the late service of witness statements was that the trial which could otherwise have proceeded on 25 April had to be adjourned with consequent waste of court time and resources, including the services of an interpreter who had attended.
34. The hearing before the judge proceeded somewhat unsatisfactorily. It was acknowledged that the claimants would have to seek relief from the sanction of automatic strike out. However, the judge's attention was not directed by either party to CPR 3.9, either in its previous or amended forms, or to the principles that he should apply when considering the application or, indeed, to the need for evidence of support of such an application. There was no reference either to the amended overriding objective or to the change in culture governing the conduct of civil litigation in general and the determination of applications for relief from sanctions in particular.
35. The judge faced a number of other difficulties; first, the listing difficulties that had occurred on the day of the hearing. There was the fact that he had another, albeit short, case in his list. The option of adjourning the hearing, which had been raised by Mr Dable, so that the parties could make formal applications and could argue the issues in full, was arguably disproportionate in a fast-track case. The judge would no doubt have had in mind the fact that, if the determination went in favour of the claimants, another trial date would then be required. As a result, consideration of the important issues in this case proceeded in a somewhat informal and attenuated fashion and the judge's judgment must be viewed against that background.
36. However, the judgment has a number of serious defects. First, the judge failed to direct himself on the principles which he should apply when determining the application for relief from sanctions. In particular, there is no indication at all that he had in mind the need to enforce compliance with rules, directions and court orders or the need for proportionality. Those needs are clearly referred to in the amended overriding objective which underpins the conduct of civil litigation and is intended to provide the basic principles for judicial decision-making in civil cases. Second, the judgment revealed no exercise of balancing the various factors. The judge enumerated many of the factors that told against the claimants (the number and seriousness of their failures; the age of the case – the accident was in July 2009 and proceedings were not commenced until May 2012; the fact that the trial date was lost) without identifying any single factor that militated in their favour. The only explanation for his eventual decision was that he considered that an adverse costs order "would in the circumstances do sufficient justice".
37. The claimants' late payment of court fees may, as the claimants' counsel submitted, be considered as falling at the lower end of the spectrum of non-compliance. Having said that, I do not accept the submission made by Mr Dable that the claimants' failure to comply with the District Judge's initial directions order, which resulted in the making of the 'Unless order', caused no prejudice either to the parties or to the court. On the contrary, the claimants' failure to comply necessitated the papers being put by court staff before a Deputy District Judge for decision as part of his boxwork and the drawing up and serving of the 'Unless order', thus occupying time and resources. The time spent processing a single 'Unless order' may be short but, when multiplied by thousands, adds greatly to the work of the courts.
38. In any event, the judge in this case was not considering the late payment of fees in isolation. He was obliged to take into account "all the circumstances of the case", which included the earlier breaches which I have already enumerated. He was obliged to have regard also to the waste of court time and of resources occasioned by the lost trial date and the lack of any properly evidenced explanation for the failures.
39. Taking all those matters into account and having regard, as he plainly should have done, to the amendments introduced into the CPR on 1 April 2013 with their emphasis on compliance with the rules and court orders and on the need to ensure that cases are conducted at proportionate cost to the parties and do not expend more than a proportionate amount of the court's time and resources, I am satisfied that this was clearly a case in which relief from sanctions should have been refused and that the judge erred in granting such relief. The judge himself observed in his judgment that his decision was "a very close call". It seems to me that if he had had regard to the principles to which I have referred his decision would inevitably been different.
40. The appeal is therefore allowed.