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
		20/01/2014

Mr Justice Turner:

INTRODUCTION

1. This case provides yet another example of a litigant treating an order of the court as if compliance were an optional indulgence.

BACKGROUND

2. This is a claim in respect of alleged breaches of a confidentiality agreement and passing off.
3. Part of the claimant's case is that the defendant company, which was incorporated under the laws of Brunei, is legally extinct and, in any event, not entitled to litigate in the jurisdiction of England and Wales.

PROCEDURAL HISTORY

4. The full procedural history of this litigation is labyrinthine. No purpose would be served by rehearsing the details.
5. On 11 October 2013, the matter came before Walker J. at a hearing which the claimant did not attend.
6. Walker J. ordered:

"5. For the avoidance of doubt, the hearing of the claimant's application notice…is adjourned to the hearing before the judge on 30 January 2014 and in that regard:

(1) The claimant shall file and serve a witness statement or statements dealing with the matters of fact and a skeleton argument on matters of law addressing the following issues no later than 4pm on 25 October 2013: (i) the existence [of] the defendant company in claims HQ11X02186 and HQ12X02165, and (ii) the entitlement of the defendant to litigate in this jurisdiction;

(2) In response, the defendant shall file and serve a witness statement or statements dealing with matters of fact and a skeleton argument on matters of law by 4pm on 29 November 2013…

6. Both sides must take all reasonable steps to ensure that the hearing on 30 January 2014 will be able to deal effectively with all case management matters that may arise…"

7. In the event, the claimant failed to file or serve any witness statements or skeleton arguments in accordance with these orders. At first, counsel for the claimant told me that his client had indeed served a compliant witness statement but, owing to the lateness of his instructions and the fact that his instructing solicitors had not brought the file to court, he had not seen it. When, following a short adjournment, the statement to which he was referring was eventually retrieved it was found to be a very curious document which counsel promptly and realistically conceded was not at all what the court had ordered should be filed and served.
8. The document in question was a witness statement from Mr Key, a director of the claimant company. Paragraph 2 of this statement provided:

"I have been advised that we are unable to make progress this matter (sic.) and fully comply with the obligations of clause 1 of the 7 October Order sealed on 10 October 2013, of Master Kay QC, because, information required from the Registry for International Business companies in Brunei Darussalam in regard to PPC International Ltd will not be disclosed by the Registrar before he receives…"

There then followed a list of documents which the claimant asserts the defendant must disclose before it can establish its case on the issue to which the court's order related.

9. There is an issue as to whether the claimant has already seen some of these documents but it is one which I do not need to resolve.
10. Overlooking for a moment the fact that this witness statement refers to a different order made by a different court than that in respect of which this application is made, it cannot, in any event, be said to deal with the matters of fact which Walker J. had ordered that it should. The instructions upon which counsel had originally based his assertion that it complied with the order of Walker J. had, putting it kindly, failed to strike an appropriate balance between realism and optimism.
11. The following points are abundantly clear:

(i) The claimant should have informed the court of its alleged inability to provide the evidence before the order to serve and file a witness statement containing such was ever made;

(ii) If the fact that the claimant would be unable to comply with the order only came to light after it had been made then the claimant should have made an application to extend the time for compliance as soon as practicable and, in any event, before the deadline for compliance had passed;

(iii) The claimant should have made a formal and prompt application for specific disclosure of the categories of document sought and not simply incorporated a wish list of such documents in the body of a witness statement in the forlorn hope that the court would thereafter make an order of its own motion.

12. Notwithstanding the claimant's default, on 9 December 2013 the defendant applied (i) for an extension of time to comply with paragraph 5(2) of the order of Walker J. for the defendant to serve a witness statement in relation to the matters defined in the order and (ii) for permission for the parties to adduce expert evidence on the law of Brunei. It was this application which came before me on 16 January 2014.
13. At 11.26am on that day the claimant's solicitors emailed the defendant's solicitors with a proposed consent order "with a revised timetable". They did not attend the hearing despite the fact that their proposed order was not agreed. They did, however, attend with counsel on the following morning thereby forestalling the handing down of my judgment which had been reserved on the preceding day. Counsel explained to me that the claimant had assumed that the court would make some order that did not stray too adventurously from the path upon which the parties were in broad consensus and that it would have cost too much for the claimant to come to court to argue over the difference. This assumption was unwarranted.
14. Of course, the court has power under CPR 23.11 to re-list an application where it has previously proceeded in the absence of one of the parties but this is a power which is likely to be exercised sparingly in the light of the specific regard which the court must now have for the need, where reasonably practicable, to allot to any given case an appropriate share of the court's resources. This case provides a working example of the consequences of a party choosing not to attend a hearing and hoping for the best. As a result of the claimant's decision not to attend on 16 January 2014, the judgment which was to be handed down on the following day had to be re-drafted and handed down on 19 January 2014 to take into account the fresh submissions raised by counsel for the claimant. I had to hear argument over two days rather than one. Thus an amount of court time which is disproportionate to that which would reasonably have been required has already been taken up. A party cannot simply assume that, where outstanding issues have not been conclusively resolved in advance of a hearing, it can absent itself confident in the assumption that if the court were to make an order to which it takes subsequent objection then CPR 23.11 will afford a comfortable fall back position. Absence in these circumstances may very well turn out to be a false economy.

THE LAW

15. CPR 32.10 provides:

"32.10 Consequence of failure to serve witness statement or summary

If a witness statement or a witness summary for use at trial is not served in respect of an intended witness within the time specified by the court, then the witness may not be called to give oral evidence unless the court gives permission."

16. In this case, by 16 January 2014 (the date of the hearing before me) nearly three months had elapsed since the deadline had passed for compliance with the order of Walker J. relating to the filing and service of witness statements by the claimant. The claimant had not applied for an extension of time to comply with the order.
17. Accordingly, as the matter presently stands, the claimant is precluded by the operation of CPR 32.10 from calling at trial any intended witness or witnesses in respect of the issues identified in paragraph 5 of the order of Walker J. Indeed. one possible interpretation of CPR 32.10 is that the party in default is not permitted to call the intended witness to give oral evidence on any matter unless the court gives permission even if the witness statement not served in time is intended to relate only to a distinct part of the evidence relied upon and his other evidence is contained within in other witness statements which have been served in time. I heard no submissions on this point and do not intend to resolve it. Suffice it to say that, in the circumstances of this particular case, I would not, all other things being equal, expect Mr Key to be precluded from giving evidence on material matters outside the scope of the order of Walker J. provided that such evidence is set out in witness statements which have been served in compliance with the orders of the court. However, I do not adjudicate on the issue as to whether or not the deployment of Mr Key's oral evidence on such other matters would further be dependant upon the future permission of the court. This may be a matter which the court will be invited to consider at the next hearing.
18. Since the burden of proof in respect of the two issues as defined falls on the claimant then, in the absence of evidence, its contentions in respect thereof must fail unless the court were to be persuaded to grant relief from sanctions.
19. CPR 3.9 provides:

"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."

20. Counsel for he claimant intimated that his client intended to issue an application for relief from sanctions in time for it to be heard at the next interim hearing in this matter on 30 January 2014. However, I am entirely satisfied on the evidence before me that there is no realistic prospect that such relief would ever be granted. The proper approach to applications for relief from sanctions was considered by the Court of Appeal in Andrew Mitchell MP v News Group Newspapers Limited [2013] EWCA Civ 1537:

"40 We hope that it may be useful to give some guidance as to how the new approach should be applied in practice. 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. The principle "de minimis non curat lex" (the law is not concerned with trivial things) applies here as it applies in most areas of the law. Thus, the court will usually grant relief if there has been no more than an insignificant failure to comply with an order: for example, where there has been a failure of form rather than substance; or where the party has narrowly missed the deadline imposed by the order, but has otherwise fully complied with its terms. We acknowledge that even the question of whether a default is insignificant may give rise to dispute and therefore to contested applications. But that possibility cannot be entirely excluded from any regime which does not impose rigid rules from which no departure, however minor, is permitted.

41 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. For example, if the reason why a document was not filed with the court was that the party or his solicitor suffered from a debilitating illness or was involved in an accident, then, depending on the circumstances, that may constitute a good reason. Later developments in the course of the litigation process are likely to be a good reason if they show that the period for compliance originally imposed was unreasonable, although the period seemed to be reasonable at the time and could not realistically have been the subject of an appeal. But mere overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason. We understand that solicitors may be under pressure and have too much work. It may be that this is what occurred in the present case. But that will rarely be a good reason. Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all. This may seem harsh especially at a time when some solicitors are facing serious financial pressures. But 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. We should add that applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event?

46 The new more robust approach that we have outlined above will mean that from now on relief from sanctions should be granted more sparingly than previously."

21. In the light of the Mitchell decision, the courts have taken a consistently robust approach to the late service of witness statements (see Durrant v Chief Constable of Avon & Somerset Constabulary [2013] EWCA Civ 1624 and Karbhari v Ahmed [2013] EWHC 4042 QB).
22. The delay in this case of nearly three months is serious and the resultant breach cannot be categorised as trivial. Indeed counsel for the claimant realistically conceded that the breach was not trivial.
23. Furthermore, there is no evidence before the court of any good reason for the delay. It was not open to the claimant to allow weeks and weeks to pass without taking positive steps to comply with the order on the basis that further disclosure, for which no formal application had been made, was awaited.
24. It is to be noted in this context that Practice Direction 23A provides:

"2.7 Every application should be made as soon as it becomes apparent that it is necessary or desirable to make it."

25. The fact that, at the eleventh hour, the claimant's solicitors have volunteered a proposed consent order extending the time for service of witness statements falls far short of salvaging their position.
26. CPR 3.8(3) provides:

"Where a rule, practice direction or court order-

(a) requires a party to do something within a specified time; and

(b) specifies the consequences of failure to comply,

the time for doing the act in question may not be extended by agreement between the parties

27. CPR 32.10 specifies the consequences of failure to serve a witness statement. It follows that even if the parties had purported to reach a concluded agreement on an extension of time this would not have been effective unless the court were to be persuaded formally to endorse it. This court is under a duty under CPR 1.4 not simply to adjudicate passively upon the applications of the parties or to rubber stamp their reciprocal procedural indulgences but actively to manage cases. To this end, the court has power under CPR 3.3 to make orders of its own initiative.

CONCLUSION

28. Under the new regime, courts should be proactive to achieve the overriding objective as recently re-formulated. In this case, the defendant did not make any application to the court specifically in respect of the claimant's default in complying with the order of Walker J. but asked only for little more than a new timetable and the court's indulgence in respect of what it perceived to be its own default. This approach was, in my view, unduly timid.
29. It is to be noted that the order of Walker J. was expressly worded to provide for the sequential disclosure of witness statements and skeletons and that the obligations placed upon the defendant were to be "in response" to compliance by the claimant with its own obligations in this regard. I therefore doubt very much whether the defendant was in default of the order relating to the filing and service of witness statements at all. The obligation upon it was to respond and there was nothing to respond to.
30. It follows that if I had been minded to approach this matter on the basis of the defendant's application for permission to file a witness statement I would not have applied the principles of CPR 3.9 but would have treated the application as a freestanding one to be considered on its own merits.
31. However, for the reasons given above I decline to take the course which the defendant has advocated. The deadline by which the claimant ought to have filed and served a compliant witness statement has long since passed. The breach is not trivial and the reason given is not a good one. Accordingly, I take the view that, in the circumstances of this case, the proper approach of the court is to make an order of its own initiative debarring the claimant from raising any issue at trial relating either to the existence of the defendant company or its entitlement to litigate in this jurisdiction as defined in the order of Walker J.