The case of Raayan Al Iraq Co. Ltd –v- Trans Victory Machine Inc  EWHC 2696 (Comm) was mentioned in an earlier post. The full transcript is now available and provides useful reading for those applying for retrospective extensions of time when there are minor breaches of the rules.
THE FACTS OF RAAYAN
The claimant applied for an extension of time for service of the particulars of claim. They were due on the 23rd July 2013; they were served on the 25th July 2013. The purpose of the application was to regularise the position.
THE DEFAULT: SERVICE OF PARTICULARS OF CLAIM TWO DAYS LATE
The claimant appreciated that the particulars were served out of time and asked the defendant to agree. The defendant would not. The claimant then wrote to the court, explaining the reason for the default and asking that an extension be granted on paper. The defendant objected to the application being dealt with on paper.
Mr Justice Smith listed the matter for hearing. The defendant objected to the extension being granted arguing that the new CPR 3.9 meant that much stricter rules applied and the action should be struck out.
The judge considered the provisions of the revised CPR 3.9. He stated:
“16. I am unable to accept that it is no longer the case that the position is as was observed by Lord Justice Brooke in Price v Price  EWCA Civ 888 Paragraph45 that while it is important that the court maintain a disciplinary framework, including compliance with the CPR, that does not mean that there should be “a disproportionate response” or that defendants should be given an “unjustified windfall” where the dictates of justice and the overriding objective indicate the contrary”
The judge referred, expressly to the Jackson report:
“Nor do I accept that the change in the Rule or a change in the attitude or approach of the courts to applications of this kind means that relief from sanctions will be refused even where injustice would result. Indeed, Sir Rupert Jackson specifically said in his report that he had considered and rejected the suggestion that non-compliance with deadlines would no longer be tolerated except in exceptional circumstances. He concluded that he did not advocate what he called such an “extreme course…or any approach of that nature.”
THE “OLD” CPR 3.9 CRITERIA
The judge also considered (and indeed was addressed by the Defendant) on the old CPR 3.9 checklist. He observed:
1. The delay of two days did not affect the justice between the parties. The only impact on court resources was the need to deal with the application.
2. The application for relief was made promptly.
3. The failure to comply was not intentional.
4. There was a good explanation. There was a slip on the part of the claimant’s solicitors. That slip was explained and apologised for.
“It is regrettable but by no means egregious”.
5. Although the defendants complained about the absence of a pre-action letter the matter was being dealt with by experienced insurers who would in all probably be horrified by the type of letter the defendant now suggested was necessary.
The judge observed in relation to the other factors.
“I have already commented and reject upon and rejected the connotation of impropriety. It does seem to me unfortunate that the matter was put in that way. It is also said that if the claimants’ position is aggravated because of the need to start fresh proceedings the claimants would be in a position to consider a claim against Hill Dickinson or Websters or both. I find unappealing the thought of the cost of litigation from this incident being extended by secondary litigation involved in apportioning the blame for two days’ delay between the claimant’s two different advisors and an evaluation of the strength of the time bar point on a hypothetical than an actual basis.
The next consideration under the old version of the Rules was whether the failure to comply was caused by the party or his legal representative? I have said sufficient about that. The next consideration is whether a trial date or likely trial date would be affected manifestly? That does not arise.”
The judge also rejected an argument that granting the extension of time involved “stripping the defendant of a contractual time bar”. The application meant granting an extension of time for the claimant to take advantage of an action that had already been issued.
GRANTING THE EXTENSION
The judge observed:
“This seems to me the clearest case of granting the claimants’ extension. This is not because the court is unconcerned to ensure that Rules and orders are observed because it is unrealistic to think that no litigation solicitor (inaudible) or that justice always requires that indulgence should be refused. In this case a solicitor erred. The error should have been inconsequential. The overriding objective demands that relief be granted and I grant it.”
THE AGONY AND THE IRONY: THE NEW CPR 3.9 CAN INCREASE COSTS AND DELAY
Finally the judge observed that there was a central irony in the change to the new CPR 3.9.
“It is ironic that, but for changes to the Rules and the Sir Rupert Jackson report designed to save costs, this matter, I have no doubt, would have been dealt with without a hearing and with minimum expense. As it is, costs of something over £21,000 have been incurred by the defendant including about £10,000 by way of counsel’s fees. I understand that, mercifully, the claimant’s costs have been much more moderate. The defendants’ attempts to exploit the error in the way that they have are, to my mind, regrettable. I consider that an oral hearing was unnecessary. Nothing was argued that could not have been presented in a reasonably short letter to the court. Certainly there was no need for the extended timetable and delay to the litigation that the defendants had sought. I very much hope that changes designed to reduce costs will not have the effect of detracting from the sensible cooperation between solicitors which have, for years, characterised litigation in this court and, I dare say in other courts, otherwise the fault of those solicitors who have delayed andcaused unnecessary expense in litigation through delay would find manifestation in aggravating the costs on a more routine litigation. Most cargo claims are dealt with on the basis of sensible and proper cooperation between the cargo interest insurers and (inaudible) clubs. If the points of the kind taken by the defendants result from a change in the Rules, far from the changes at reducing costs and delays in litigation of this kind the changes will, regrettably, aggravate them. I grant the application.”
(I am often asked but should record that the transcript makes no mention of the order made in relation to the costs of the application).
Any discussion of CPR 3.9 at this stage can only be provisional. The Court of Appeal is due to hear the appeal in Mitchell –v- News Group Newspapers on the 7th November. However the Raayan judgment does illustrate a potential irony of the new 3.9 in that much time and effort can be (and at the moment is) being devoted to dealing with relatively small errors of procedure which is increasing delay and costs rather than reducing them. How the Court of Appeal deals with that dilemma remains to be seen.
The earlier discussion of this case can be found at https://civillitigationbrief.wordpress.com/2013/08/28/extension-of-time-granted-defendants-objection-regrettable/
Discussions of relief from sanction applications can be found at:
LINKS TO CASES
The case is not available yet on Bailli but is available to subscribers to Lawtel.