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Cite as: [2000] EWHC Technology 169, 78 Con LR 162, [2000] EWHC 169 (TCC)

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Dew Pitchmastic Plc v. Birse Construction Ltd [2000] EWHC Technology 169 (2nd February, 2000)

Case Number: 1998 TCC 590

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY & CONSTRUCTION COURT

HIS HONOUR JUDGE HUMPHREY LLOYD QC

B E T W E E N:

DEW PITCHMASTIC PLC

Claimant

and

BIRSE CONSTRUCTION LIMITED

Defendant

Case Number: 1998 TCC 590
Date of Judgment: 2 February 2000

This was an application by the defendant for permission to call expert evidence, the original permission having lapsed as a result of the defendant's failure to comply with previous orders and agreements. For reasons which appear from the judgment, applying the the overriding objective in the CPR, permission was refused.

Richard Harding appeared on behalf of the claimant, instructed by Nabarro Nathanson.
Andrew Goddard appeared on behalf of the defendant, instructed by Masons.

JUDGMENT

1. This is an application by the defendant for leave to serve its experts' reports out of time. The case commenced in December 1988. The defence was filed in February 1999 together with a counterclaim, but the full extent of the counterclaim did not become apparent until further and better particulars were served in November 1999 as a result of an order made in October 1999. They were of some considerable length.

2. The nature of the case is that the claimant, Pitchmastic, wishes to recover the value of work that it did for the defendant, Birse, together with a claim for damages or for the recovery of loss or expense for delay and prolongation. That claim is matched by a counterclaim by Birse in which it alleged that Pitchmastic caused it delay which, in turn, has rendered it or is likely to render it liable to many other subcontractors.

3. This scenario is a very familiar one, and although the claim for delay may not be precisely back-to-back to the claim by Birse for delay, I think I may treat them as such for all practical purposes. The claim itself for the value of the work done is not now be as material as the other claim for delay in the light of possible or actual agreements between the parties.

4. A case management conference was held at the beginning of May 1999 at which a number of orders were made. Statements of witnesses of fact were to be served by 30 July.

5. Permission was given for expert evidence in the fields of quantity surveying, planning and programming, but conditional upon an agreement of the statement of issues and the assumed actual or agreed facts upon which expert evidence was required, before the experts held discussions or prepared a report, for meetings to take place by 17 September between the experts and for reports to be exchanged by 1 October 1999. The order was basically in the standard form adopted in this court which continued to be appropriate after the introduction of the Civil Procedure Rules which had taken place a week or so earlier than the case management conference. The case is therefore to be considered under the CPR. It is worth emphasising that the purpose and structure of the order is consistent with the overriding objective of the CPR which in essence is to ensure that litigation is conducted, in so far as it is practicable, in an efficient and cost-effective manner. Thus as regards evidence such as that from experts, it is essential that the parties put their cards on the table as early as possible so that the true issues for decision therefore emerge and are capable of being narrowed. By the time the action comes to trial it should thus be confined to the points only on which factual or opinion evidence is really needed.

6. At the case management conference a trial date was also fixed for 28 February 2000 with a time estimate of 16 days. The procedural timetable was in fact to be completed by the autumn of 1999 with a pre-trial review set for 12 October 1999. There was therefore plenty of room to accommodate any slippage. Again, a feature of the orders made in this court is the recognition that timetables will not be observed. There may have been an under-estimate of the amount of time required or there may be a wish to settle and not in to incur costs during the negotiations or they may be an unexpected event or, even, as Mr Goddard rightly pointed out in the course of his submissions, the parties may have better things to do so that they do not give their full attention to compliance with the timetable. For that reason a timetable of this kind allows the parties to be flexible, and to reach agreements and accommodations with each other, provided the court is informed. Permission to apply is given on the CMC or PTR which provides for recourse to the court where it is not possible to reach agreement. That happened in this case because the parties were not able to serve the witness statements of fact by the time contemplated. An application was to have been made at the end of July, but it was not needed because by agreement time was extended until 11 August.

7. The pre-trial review took place on 18 October 1999. By that time there had been considerable further slippage because the witness statements had still not been delivered. So a new timetable was set. Witness statements were to be delivered by 29 November, experts on valuation questions were to meet as soon as practicable in order to complete discussions on matters that could be agreed after the arrival of the witness statements and not later than 8 December. The time for exchange of experts' reports was extended until 16 December. The time for statements of matters agreed and not agreed between experts was extended until 12 January 2000. The pre-trial review was adjourned until 21 January 2000.

8. That new timetable left very little time for further slippage. That did not mean to say there was not room for accommodation as became apparent.

9. The witness statement from Masons, Birse's solicitor, which was served in support of the defendants' application was regrettably lacking about the real reasons for the delay behind the Birse's application, and it fell short of the candour required on such an application. The relevant facts are to be found largely from the exhibits and the witness statement furnished by Pitchmastic's solicitors in opposition to the application and by instructions which Mr Goddard, counsel for Birse, had to obtain during the course of his submissions in order to provide me with the dates.

10. It appears that Birse had not instructed its quantity surveying expert, Mr Farrow of Tretts, until about 8 October 1999 (i.e. some ten days before the pre-trial review). Given the calibre of Birse's solicitors I have to assume that he was told of the new timetable which had to be observed as soon as it had been established at the PTR. In the event, he was not able to continue and he withdrew in order to carry out other work overseas so that Birse had to look for another expert from Tretts.

11. The names of the Pitchmastic's experts were communicated to Birse on 2 November 1999, i.e. Mr Walmsley and Mr Crane, and the name of the Birse's planning expert followed not long after on 17 November 1999. The name of the replacement expert for quantity surveying, Mr Lumley, was furnished in early December.

12. By that time there had been correspondence between the parties' solicitors in which it was proposed by Nabarros that the time for service of the witness statements should be further delayed and that the time for the experts' reports should also be put back, in this instance until 23 December. Masons agreed to that proposal and an order was made by consent on 6 December 1999 giving effect to that agreement.

13. Where a party agrees to new dates it must be assumed that it has taken into account all the reasons known to it, or which could have been known to it, which might affect compliance with those dates for otherwise there is little point in reaching such an agreement. This obvious proposition is reinforced under Rule 1.4 of the CPR by the explicit duty to cooperate. Cooperation means that any matters that would affect compliance with a proposed date to be agreed or ordered must be disclosed for otherwise they will be treated as having been taken into account before the agreement or order is made. If they are disclosed then it will be clear whether the agreement is absolute or conditional. As far as I am aware, no intimation was made by Masons on behalf of Birse that there would be any difficulty in complying with the timetable to which they agreed and which was ordered.

14. It is to be assumed that where a replacement, such as Mr Lumley, comes into the picture, he, like the original quantity surveying expert, will produce his report by the required dates. Otherwise, he could not accept the obligation to act as an expert, especially since under the CPR he owes obligations to the court. By the same token, he ought not to have been instructed to act as an expert unless he was capable of complying with those dates. Therefore some of the grounds advanced by Birse on this application are untenable. The very fact that Mr Lumley replaced Mr Farrow is completely irrelevant because the agreement to deliver his report by 23 December was made after he took over. and must also have been taken into account. In any event I am not persuaded that it changed or that it could have been under-estimated.

15. Witness statements were exchanged on 8 December 1999. It is, of course, very important that witness statements should be exchanged before experts' reports in a case of this kind so that those responsible for expressing views on planning and quantity surveying matters have the benefit of seeing what is said by those with first hand knowledge of what actually took place. The studies carried out and opinions expressed by experts are not academic in nature; they must be based solely on what actually happened or, if there are disputes about what happened, upon assumptions in favour of one party or the other, or both, as to what might have happened: see the condition attaching to the permission given in May 1999.

16. Within a very short space of time Nabarros wrote on 13 December 1999 saying that their experts were not going to be able to complete their reports in respect of Birse's counterclaim due to voluminous recent disclosure on the part of Birse. Apparently they had to look at 24 lever arch files. Accordingly, Nabarros suggested that the experts' report in respect of Pitchmastic's claim should be exchanged on 23 December and the reports in respect of Birse's counterclaim some two weeks later but prior to the PTR which was now fixed for 28 January 2000. They also sent an enormous list of issues. It is a list which should obviously have been much prepared earlier. It was not of course solely the responsibility of the claimant's solicitors to do so. The order of May 1999 required the issues to be agreed so cooperation as provided by Rule 1.4 was required for its fulfilment. I do not consider that by this stage such a list was indispensable to the preparation of reports; if it had been thought important I am sure that Nabarros and Masons would acted much earlier as they are both highly experienced in the work of this court. However, Masons clutched at this straw and said that given the late arrival of the lists 'it is unlikely that our experts will be in a position to complete their reports before the New Year'. Why that should have been so, I do not know. Certainly it was not made clear on 6 December, when there was an agreement but when there was no list of issues, that the reports could only be prepared if the list of issues was available. That excuse can be put to one side. On 15 December Masons therefore suggested that reports should be exchanged around mid-January and certainly before the pre-trial review. That was on the same day that a meeting took place between the experts. At that meeting it appeared that the position was not quite as suggested by Masons and that the experts retained by Birse apparently were going to be in considerable difficulties in meeting a mid-January date. According to a letter of Nabarros of 16 December, another date was put forward, perhaps wishfully, of mid-February.

17. As has been rightly pointed out, Nabarros then in turn seemed to have clutched at a straw in the sense that they took advantage of that revelation and decided to revert to the timetable agreed at the beginning of December. They said they intended exchanging reports on 23 December 1999. This is characterised as a volte face and a matter which I can take into account. However, it does not seem to me that in the period between the time when the proposal was made and the time when it was withdrawn some three days later any steps were taken by Birse, its advisers or its experts on the strength of Nabarro's intimation that they might be prepared to consider deferring delivery of the reports on the counterclaim ones until mid-January. There was then no agreement to deliver any reports in mid-January and, in any event, the proposal was for reports on claim by the end of December and on counterclaim by mid-January. There was no agreement to vary the existing timetable so the position has to be governed by the order giving effect to the agreement between the parties.

18. Pitchmastic was ready and able to serve its reports by 23 December 1999. It is said by Mr Goddard that I really ought not to concern myself with the quality of the reports, but at the same time it is said that the reports were not as full and as complete as they ought to have been. For example, Pitchmastic's planning expert did not carry out a critical path analysis to justify its case or to dispose, so far as he could, of the Birse's counterclaim. That may be, but if Birse's reports had been available in accordance with the agreed timetable it would have been possible for work to be done by both sets of experts in January and before the PTR which might have overcome that type of difficulty.

19. What then happened? One might have thought that in the middle of December Masons, on behalf of Birse, would immediately have made an application for an extension of time for service of reports, as soon as it was apparent that Nabarros intended to rely on the existing timetable. That did not occur. Indeed a whole month passed before the application with which I am dealing was actually made. It was dated by Masons on 17 January. It was received here on 19 January and issued about that time, in other words it was made only some ten days before the PTR. It sought an extension of time right up to the end of last week (28 January), although in the end Birse were able to put two reports in the document exchange on 26 January.

20. Had Birse's solicitors done what they ought to have done an immediate application to the court could almost certainly have been heard before Christmas either by myself or by the vacation judge which would have resolved the question. Instead, it has had to be dealt with at the PTR, which itself was now only a month before a four week trial. This is an unacceptable way of conducting litigation.

21. As a result of an application to the court, an opportunity was given, by my direction, for the experts to continue to meet so that if this application were granted there would be some mitigation of the time lost.

22. The application is made on the basis that the reports are now ready and, indeed, as I ordered last Friday, they have been considered by both parties. I directed that should be done because it emerged from the course of the submissions made at the pre-trial review that the essential issue was, notwithstanding the manifest defaults on the part of the Birse and its advisers (non-compliances with the agreed timetable, failure to instruct experts on time, failure to get experts to agree to comply with the timetables, failure to inform the other party of what was happening, failure promptly to make an application to the court and unexplained delay in making the application), the acid question is nevertheless: is this trial still feasible on 28 February? Would it be fair to Pitchmastic to have to deal with Birse's reports at the this stage? Is there likely to be material prejudice to (in this case) Pitchmastic, and, if permission to call expert evidence is not given, to Birse?

23. Mr Goddard submits that to refuse permission - the original permission has lapsed since it was dependent on a condition which have not been met - would be a disproportionate sanction. On the other hand, Mr Harding submits that, having now considered the experts' reports proffered by Birse, there will be material prejudice. He relies on three sample matters. First, he refers to the fact that in a consideration of the general programming, reliance is being placed upon a particular document which was not even tabled at the meeting which took place between all experts in the middle of December, and has emerged for the first time. It is said also that it contradicts part of Birse's case, but I am not concerned with deviations in the case of each party (with one exception). There may well be deviations. The question, however, is what is the effect of the content of a particular expert's report?

24. It is clear that the introduction of a document of this kind, not previously discussed (as it should have been) in December, and emanating, it appears, from Birse, or based upon information which comes from Birse - hence the expert was not able to produce it in December - is likely to require Pitchmastic's experts to investigate and consider it at short notice, the trial now only being a few weeks' away.

25. Secondly, it is said that Birse's case in respect of two sub-contractors, Essex Electrical and Mellor & Bromley (taken as typical examples), is not, as it were, developed in its experts' reports. One has here to recognise that in cases of this kind the experts generally deal with matters which really ought to be the subject of factual evidence. By the same token if that is to be the course acceptable to the parties, as indeed it appears to be here, one would expect from an expert's report - particularly one delivered late - a full and comprehensive analysis of the grounds upon which Birse found themselves liable to a sub-contractor as a result of faults on the part of Pitchmastic, so that there is a clear statement of the expert's opinion as to why Birse were liable to the sub-contractor and as to the chain of causation, both leading to an identification of the amounts lost by Birse (in so far as they relate to amounts actually expended) or potentially lost (in so far as they relate to amounts paid to the sub-contractor by agreement or in settlement of its claims). Mr Harding says, in my view with good reason, that one does not find any analyses of that kind in Birse's reports. He therefore says, rightly, that the reports are incomplete and that therefore it is only to be expected that there will have to be further meetings (indeed, some have taken place at which progress has been made) to try to paper over the cracks, or to fill them up, and generally to make good what ought to have been done some time ago. In turn, this is going to be time consuming. The time of Pitchmastic's experts is limited and therefore it will mean there is a real danger that by the time the trial starts on 28 February, Pitchmastic will not know the case that they have to meet and there will not be a clear agenda for trial. I agree with these submissions.

26. In terms of case management, this situation is unacceptable. The purpose of the orders that were made, and the reason for leaving it to the parties to adjust and to depart from them, is based upon the supposition, to which I have earlier referred, that the case and preparation for trial will nevertheless be conducted in an effective and cost-efficient manner, that the issues will be identified well before trial, there will be a real opportunity to explore the possibility of settlement, and if a trial is inevitable it will concentrate only on the points that matter.

27. Mr Harding has convinced me that what has so far been done by Birse is not going to achieve those objectives in the time now available without a considerable amount of work by Pitchmastic's experts and others. Mr Crane has only got about three and a half days left before the trial and Mr Walmsley has only five days. Mr Goddard seems to think that experts should clear their diaries before a trial. I reject that submission. Had Birse and its advisers complied with their obligation there would have been what remained of January (about three working weeks) for the experts to have had potentially fruitful discussions before the PTR and to have prepared their final reports immediately after that. That time, which was not long, became no longer available.

28. Mr Goddard, however, submits that some of the criteria to which I have referred will not be met, if permission is not granted, because the trial will inevitably be lengthened and will not be cost-effective. I cannot see how the trial will inevitably be lengthened if permission is not given to Birse to call expert evidence. It is perfectly true that counsel in the position of Mr Goddard, if he were instructed for the trial, may find it less easy to present a case and to cross-examine Pitchmastic's witnesses without the benefit of an expert's report readily at hand with which to confront a witness. But the essence of Birse's case is a complaint that Pitchmastic was in delay. That is essentially a factual question. The facts which will have to be examined are matters which can be investigated, and will have to be investigated, whether or not an expert were called to express an opinion, which in the light of cross-examination, would only be whether the answers given affects his original assessment of the validity of Birse's claim.

29. As I emphasised earlier experts express opinions on the facts. They are not supposed to supplant the witnesses of fact. I do not see at the moment why the absence of expert evidence should therefore prejudice Birse in the way suggested by Mr Goddard. Nor do I see why the trial should necessarily be one which would not be conducted efficiently if permission were not granted for Birse to call expert evidence. In any event a trial timetable will be set within which each party will have to work.

30. Mr Goddard says it would be a disproportionate sanction. I do not think it is a disproportionate sanction; it is an inevitable consequence of the original order made which said that permission to call expert evidence was conditional upon compliance with the court's orders. Obviously in most cases a mere failure to comply with a time limit would not preclude a party from getting further time provided that there were no other adverse factors. But it must not be thought that a specific sanction must be attached when the permission is itself conditional. Case management under the CPR requires compliance with the rationale of the timetable set by the court for otherwise one or more of the elements of the over-riding objective will not be met.

31. Furthermore, as I have already indicated, if the sanction were disproportionate it is a sanction to which Birse itself acceded because by reaching an agreement at the beginning of December to deliver the reports by that date, it bound itself to do so. If it was unable to do so for good reason, and if it does not obtain permission for more time to do so because, as I find, Pitchmastic will be prejudiced as a result, then that is an effective sanction on the part of the court, against a party which has failed to comply with the court's orders and with his own agreements and is not conducting litigation in accordance with the CPR in a sensible and effective manner. A party cannot be allowed to get away with thinking that it can comply with the timetable as and when it is ready to do so. Here Birse and its solicitors have done just that, as evidenced both by the timing of the application and the delivery of its reports which plainly were only done when it suited Birse. In any event, I do not consider that in the light of the quality, such as I perceived it, of Birse's experts' reports, that Birse will necessarily be at a disadvantage in not being able to call the expert evidence which it might wish to call.

32. In my judgment, having weighed up the potential prejudice to Birse against the potential hardship to Pitchmastic, I have come firmly to the conclusion that for the reasons given by Mr Harding and as I have set out, a party in the position of the claimant ought not to be required effectively to have to drop everything else in order to accommodate itself to defaults on the part of the defendant. Accordingly, it seems to me that Pitchmastic has made out its case and has demonstrated sufficient prejudice for non-compliance with the orders and the agreements, to warrant dismissal of this application. Therefore I dismiss the application.