“THE LEAST MANAGEABLE CASE I HAVE EVER TRIED TO MANAGE”: CASE MANAGEMENT UPHELD BY THE COURT OF APPEAL

This was the description given by His Honour Judge Mackie QC when he was considering, and refusing, an application by the defendant to strike the action out. The decisions he made were upheld by the Court of Appeal In Walsham Chalet Park Group -v- Tallington Lakes Ltd [2014] EWCA Civ 1607.

THE CASE

The action related to an agreement to sell and market caravans. There was a claim for £500,000 and a counterclaim for £200,000. The defendant made an application to strike out the claim on the grounds that the claimant had failed to comply with the timetable, give disclosure and serve a schedule of account.

There was a history of prolonged interlocutory sparring, applications and appeals. There were allegations of judicial bias (which were roundly rejected by the Court of Appeal).  On an application to strike out the judge declined to strike out the case and made further directions.  The defendant appealed.

KEY POINTS

1. If a party does not take a point under CPR 32.10 in relation to witness statements the judge is not bound to take the point for them. Further that point cannot later be raised at the appeal stage.

2. A party who indicates that their opponent can “take their time” in relation to disclosure is in some difficulties in later seeking to strike out for late disclosure.

3. Case managing the matter to trial  and not striking the action out was, on the facts of this case, a reasonable case management decision.

THE LATE SERVICE OF WITNESS STATEMENTS

At the appeal stage the defendant argued that  CPR 32.10 meant that parties needed permission to adduce witness evidence late and that the action should have been struck out on that ground. That was rejected by the Court of Appeal.

  1. In relation to that, I reject at once the defendant’s arguments based on the effect of CPR rule 32.10. The case below was not put on the basis of that rule and it is too late to advance such a case on appeal. The applications to the judge were for a strike-out, which fell to be considered under CPR rule 3.4. A strike-out was said to be justified by a fundamental failure to comply with the court-ordered timetable, and for that purpose the failure to meet the deadline for service of witness statements was run together with the failure to meet the deadlines for disclosure and for service of a schedule of account. No point was taken to the effect that by virtue of rule 32.10 the failure to serve witness statements in time affected the ability of the claimant to call witnesses at the trial or that this would leave the claimant with no case and should lead in turn to a strike-out or summary judgment. If a point of that kind had been taken, it would have led to express consideration of whether relief from the sanction under rule 32.10 should be granted to the claimant in respect of the failure to serve witness statements in time and, if relief from sanction was refused, to consideration of the claimant’s position at trial if it was unable to rely on witness evidence, which is itself an issue on which the claimant might have wished to adduce evidence in addition to making submissions. It would also have been necessary to consider whether relief from sanction should be granted to the defendant, which was also in default as regards service of witness statements for trial, albeit it could argue that it was unable to finalise witness statements pending receipt of the claimant’s disclosure. Mr Morgan referred to statements served previously by the defendant in connection with an interlocutory application but in my view they did not constitute compliance with the orders of 25 January and 23 April 2013, which were concerned with the exchange of witness statements for use specifically at trial.
  2. A further relevant factor is that the defendant’s own application of 22 January 2014 requested that if the claim was not struck out the court should set a revised timetable for, among other matters, the exchange of witness statements. That had the effect of turning attention away from rule 32.10 and inviting an extension of time for service of witness statements by both parties. In practice, having refused the strike-out application, the judge set a revised timetable as requested. With the setting of a revised timetable, any issue under rule 32.10 arising out of non-compliance with the previous timetable fell away. To put the matter another way, if relief from sanction for non-compliance with the previous timetable was required, it was granted in practice to both parties by the extension of time inherent in the new timetable, though nobody was thinking in those terms at the time.
  3. I do not accept that it was incumbent on the judge in the circumstances to take a point on rule 32.10 that was not taken by the parties; and given the way the case was actually put before the judge, and the different considerations that would have arisen if the case had been put on the basis of rule 32.10, it is plainly too late to put the case in terms of that rule for the first time on appeal.

THE MITCHELL PRINCIPLES APPLIED TO THIS CASE

  1. The judge treated the principles in Mitchell as “relevant and important” even though the question in this case was whether to impose the sanction of a strike-out for non-compliance with a court order, not whether to grant relief under CPR rule 3.9 from an existing sanction. In my judgment, that was the correct approach. The factors referred to in rule 3.9, including in particular the need to enforce compliance with court orders, are reflected in the overriding objective in rule 1.1 to which the court must seek to give effect in exercising its power in relation to an application under rule 3.4 to strike out for non-compliance with a court order. The Mitchell principles, as now restated in Denton, have a direct bearing on such an issue. It must be stressed, however, that the ultimate question for the court in deciding whether to impose the sanction of strike-out is materially different from that in deciding whether to grant relief from a sanction that has already been imposed. In a strike-out application under rule 3.4 the proportionality of the sanction itself is in issue, whereas an application under rule 3.9 for relief from sanction has to proceed on the basis that the sanction was properly imposed (see Mitchell, paragraphs 44-45). The importance of that distinction is particularly obvious where the sanction being sought is as fundamental as a strike-out. Mr Buckpitt drew our attention to the recent decision of the Supreme Court in HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al Saud v Apex Global Management Ltd [2014] UKSC 64, at paragraph 16, where Lord Neuberger quoted with evident approval the observation of the first instance judge that “the striking out of a statement of case is one of the most powerful weapons in the court’s case management armoury and should not be deployed unless its consequences can be justified”.
  2. Subject to that important qualification, I turn to consider the application of the Mitchell principles to this case. Mr Morgan rightly concentrated on the three-stage approach articulated in the Denton restatement of the Mitchell principles: although the judge, deciding this case long before Denton, did not deal with the matter in that structured way, his reasoning can readily be accommodated within it.
  3. As to the first two stages, I think it clear that the claimant was in serious breach of the court-ordered timetable and that, despite the excuses advanced, there was no good reason for the breach, at least as regards the delay in disclosure and service of a schedule of account; and it seems to me that the judge proceeded on that basis.
  4. As to the third stage, namely consideration of all the circumstances of the case, the position was more complex. The relevant circumstances included the fact that the defendant had also been in breach of the court’s orders. It had been late (though not seriously late) in serving its own list of documents and had subsequently failed to provide copies of its disclosed documents despite requests to do so. It had not produced a counter-schedule of account in response to the claimant’s (admittedly late) schedule. It had not served its witness statements, and whilst it was entitled to wait for receipt of the claimant’s disclosure before finalising its witness statements, it had done nothing further even after disclosure. I bear in mind Mr Morgan’s explanation that by the time that the claimant made disclosure he was heavily committed on another matter, but the fact remains that there were defaults on the defendant’s side and that these matters had to be the subject of further specific directions in the orders of 6 December 2013 and 7 February 2014. Importantly, the defendant was also in continuing breach of the costs order of 23 April 2013. Mr Morgan took issue with the judge’s description of the defendant’s breaches as “serious” but in my view the judge was entitled to make that overall assessment of them.
  5. An overlapping consideration was that, as the judge found, the defendant had made no efforts constructively to take the case forward. The most obvious example of that was Mr Morgan’s email of 11 June 2013 indicating that the defendant would not apply for a strike-out or unless order in respect of the claimant’s late disclosure but that the claimant could “take as much time as you like” (see paragraph 10 above). As I have said, the message conveyed to the claimant was that the timing of disclosure was not a matter of concern to the defendant. That was plainly a consideration militating strongly against a strike-out when the defendant later turned round and sought one. Indeed, the defendant’s conduct in applying for a strike-out rather than working constructively towards trial following the claimant’s disclosure and service of a schedule of account smacks of the opportunism and lack of cooperation that were roundly criticised by the court in Denton (at paragraphs 40-43). The judge also referred more generally to “the whole acrimonious history of this sorry piece of litigation for which, as I see it, the defendant is more to blame than the claimant”. Having been in charge of the case management throughout, he was well placed to form that assessment, and I see no reason to doubt its accuracy.

LOSS OF THE TRIAL DATE

  1. It is true that the January 2014 trial date was lost and that the loss of a trial date can be a weighty consideration in considering the seriousness of a breach. I am not persuaded that the trial date would have been lost if the defendant had acted promptly following the claimant’s disclosure and service of a schedule of account, though again I bear in mind Mr Morgan’s explanation that at that time he was heavily committed on another matter. The fact is, however, that the judge had due regard to the fact that the trial date had been lost, whilst expressing the view that in the particular circumstances this impacted more on the claimant than on the defendant. He was plainly concerned about the loss of the trial date but he showed a commendable determination to bring this difficult case to fruition by way of trial as soon as possible.
  2. In the light of those considerations, I am satisfied that the judge approached the issues before him correctly and was entitled to dismiss the defendant’s applications for a strike-out. I reject Mr Morgan’s submission that if the judge considered that both parties had been in serious breach he should have struck out both the claim and the counterclaim. The only relevant strike-out applications before the judge were those made by the defendant, and for the reasons I have given he was entitled to dismiss them. The question of striking out the counterclaim did not arise for consideration. In any event the judge’s decision to allow the case to proceed to trial was a proportionate response to the history with which he was faced.

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