STRIKING OUT A PLEADING WHEN IT DOES NOT COMPLY WITH THE RULES

In Jones -v- Longley [2016] EWHC 1309 (Ch) Master Matthews considered the criteria for striking out a pleading, in this case a counterclaim.  There are important observations on the needs for pleadings to comply with the rules; on the fact that there are no special rules for litigants in person and the criteria to be applied when a court is considering striking out an action or a statement of case.

“Looking at the matter in the round, I ask myself, why should the Court grant a further indulgence to parties who have shown no signs of understanding what is wrong with their statement of case, who have shown no apparent interest in obtaining professional help to resolve the difficulty, who need permission to make the counterclaim so far as it involves third parties, but have not applied for it, and whose case, so far as it can be gleaned at all, is at best weak?”

KEY POINTS

  • A pleading should comply with the rules and Practice Directions in being concise, and comprehensible.
  • Where an initial counterclaim did not comply with the rules the court gave the defendant a further chance to rectify the pleading.
  • Having produced  a second counterclaim that did not comply the court decided that the pleading should be struck out pursuant to CPR 3.4.
  • There was no special rule for litigants in person, the same principles applied to all litigants.
  • The court would approach the issue of striking out by considering the Denton criteria, except that the proportionality of the sanction also had to be considered.
  • The defendant had been given one chance to rectify their pleadings but failed to produce a document that complied with the rules the court. In this case it was not reasonable to give the defendant a third chance.

THE CASE

The action concerned a dispute between executors. The claimant issued an application to dismiss the defendant as executor. However given the circumstances of the case the Master decided it was more equitable to remove the claimant as executor.

The defendant, however, had made a counterclaim. The initial counterclaim ran to some 17 (single spaced) pages together with a supporting document of 18 pages.

THE STYLE OF THE FIRST COUNTERCLAIM

The following part of the judgment gives the flavour:

  1. Unfortunately, the style of the witness statement and of the counterclaim in the original version is both pedantic and prolix, meandering and lacking in particularity in important places. There are no headings or paragraph numbers, and, although there are separate paragraphs, they are often very long. The counterclaim thus pleaded did not comply with the procedural rules, practice directions and other guidance (which so far as relevant are set out in paras 15-18 below). As a result it was not possible to get a clear or precise hold of the substance of the claims which the First Defendant was seeking to make against the Claimant.”

THE COURT ORDER

Consequently the Master made an order

“By 4 pm on 30 September 2015, the First Defendant shall file and serve on the Claimant a brief statement of case summarising his counterclaim, which shall comply with the requirements of part 16 of the Civil Procedure Rules 1998 and its Practice Direction, and with the requirements of Chapter 2 and Appendix 2 of the Chancery Guide.”

THE SECOND STATEMENT OF CASE

 

  1. On 29 September 2015, the First Defendant filed and served a fresh statement of case in purported compliance with my direction of 31 July 2015. In the first paragraph on page 2 it stated that it was “filed and served on behalf of the Beneficiaries (the three Defendants)”. (I should say that there are statements to similar effect in other documents filed by the First Defendant.) This statement of case was some 23 pages long, again single-spaced, and again without individual paragraph numbers. It comprised an “Introduction to Statement of Case” (1.5 pages), a “Statement of Case” (8.5 pages) and an “Elaborative context for CC” (12.5 pages). There were however some cross-headings and numbering of sections of the document. There were also a further 32 pages of further documents exhibited (without any coversheet, or index) to this pleading.
  2. Looking simply at the first part (1.5 pages) of the new document, the first paragraph is simply scene-setting. The second and third set out in summary form the nature of (apparently) three separate causes of action: one against the Claimant and his former law firm Stuckey Carr & Co for breach of duty alleged to be owed to the deceased, a second against them for breach of duty alleged to be owed to the Defendants as beneficiaries of the estate in its administration, and a third against them for alleged negligence in their behaviour including the commencement of the proceedings for the removal of the First Defendant as executor. The fourth paragraph gives or refers to some particulars of the breaches of duty alleged. The fifth paragraph addresses preliminary questions of quantification of loss, and the final paragraph deals with issues concerning the pre-action protocol for professional negligence.
  3. It is not possible to incorporate the whole document into this judgment. I will however give some extracts by way of example. The following is from this first part of the document, comprising the fourth paragraph referred to above:
“The Claimant and his legal representatives repeatedly endeavoured to deter/limit the Court’s examination of the extensive chronological documentation filed in 2014/15 by the First defendant as witness Statements and Exhibits DCL Annex 01-DCL Annex 08 and DCL1-DCL9, even though this chronologically documented and highlighted substantive issues comprising over five years of negligence by the Claimant and his firm, the documentation amounting to only about one page per day over the entire period. It has been difficult for the Defendants to summarise all of that material in five pages, so this Statement of Case refers to that documentation with this summary supported by DCL Exhibit CC1 [this is the third part of the document] which elaborates on each section in the Statement of Case per se. There are so many instances of waste and false statements on the part of the Claimant and his firm that only a sample can be included here, and by necessity that must omit some detail. To enumerate all substantive points without the supporting evidence risks being counterproductive and merely prompting denial.”

THE CLAIMANT’S APPLICATION

The claimant applied to strike out the counterclaim under CPR 3.4

“9. [ … ] The ‘Counterclaim’ is [a] dense document; it is lengthy and prolix; it is not set out in separate consecutively numbered paragraphs which contain no more than one allegation; it does not deal with the case on a point by point basis and adopts what I would suggest are contentious headings. It is simply not in a form to enable a point by point response to be pleaded.
10. Further ‘the Counterclaim’ is incoherent and insufficiently particularised .
10.1 It appears to advance claims by the First Defendant in his capacity as executor in respect of causes of action which are alleged to have accrued to the Deceased against the firm Stuckey Carr & Co;
10.2 It also appears to advance claims by the First Defendant in his capacity as beneficiary in respect of causes of action alleged to lie against the Claimant personally as former executor;
10.3 It also appears to advance claims by the First Defendant in his capacity as executor in respect of causes of action which are alleged to lie against Stuckey Carr & Co as solicitors retained by the Claimant and the First Defendant as executors.
The distinction between these various claims is not articulated clearly and is very difficult to follow. The identity of the proposed defendants is unclear.

SHOULD A LITIGANT IN PERSON BE TREATED DIFFERENTLY

The Master considered the issue of the defendant being a litigant in person.

  1. Many, perhaps most, of the problems which I have identified stem from the fact that the First Defendant is not a qualified lawyer, and appears to have no experience of this kind of litigation. So far as I am aware, no explanation has been given as to why the First Defendant has chosen to act in person throughout this litigation (cf para 3 of his witness statement of 7 December 2015, where the First Defendant says that the defendants “may well seek legal representation to professionally plead the Counterclaim in court”). I accept of course that (1) he is not obliged to explain himself, and (2) he has every right to act for himself if he wishes. However, it is desirable to stress that there are not in our system two sets of rules, one for those who employ lawyers, and one for those who do not. There is only one set of rules, which applies to everyone, legally represented or not. The courts cannot and do not modify the rules for those who are not represented: see eg Elliott v Stobart Group [2015] EWCA Civ 449, [39].
  2. It may be that, at the margins, and where the courts are properly exercising discretion, the courts will allow a little more leeway to litigants in person than to those who have professional lawyers: cf Tinkler v Elliott [2012] EWCA Civ 1289, [32]. And there are occasionally legal procedural rules where the elements needed for the application of a rule may be impacted by the absence of knowledge or experience of legal processes. But such cases are by their nature rare. The general proposition is that there are no special rules for litigants in person as compared with those litigants who are represented. So I judge the position in this application by reference to the ordinary procedural rules applicable to everyone.
  3. Significantly, what is being considered in this application is not the original counterclaim made by First Defendant. Instead, it is the revised version produced by First Defendant after comments by the Court and specific criticisms by the Claimant. The First Defendant knew what was wrong with the statement of case he had produced. He had a second chance, either to take professional advice, or at least to consider the specific rules to which his attention was expressly drawn by the order of the Court, and to produce a compliant statement of case (which of course he could submit to a professional lawyer for his opinion before actually filing and serving it). I do not know whether the First Defendant in fact took any advantage of these opportunities, but it is right to record that he had them: cf Kim v Park [2011] EWHC 1781, [40], cited by the Claimant.
  4. I do not doubt the First Defendant when he told me at the hearing in January that he thought his revised counterclaim was coherent. He wrote, he said, in the manner of a forensic psychologist, and was surprised that the Claimant’s lawyers were unable to understand. But, with respect, the test is not whether he as a former forensic psychologist finds it coherent, but whether the Court does. It is however right to record that the First Defendant said at the hearing that if the counterclaim was not compliant and the Claimant could not extract a cause of action from it, then he was sorry about that.

THE APPROPRIATE CRITERIA IN CONSIDERING A STRIKE OUT APPLICATION

  1. In accordance with CPR rule 3.4(2), in my judgment there has been a serious failure to comply with the relevant rules and practice directions, and also therefore with the court order of 30 July 2015, as I have already said (see para 29). More importantly, in my judgment this counterclaim as it stands is likely to obstruct the just disposal of the proceedings. The wealth of verbiage and over-elaboration is embarassing. It is largely impossible to plead to, even if some allegations emerge from the mass of detail just about clearly enough to be able to form the object of a defence by the Claimant. I am thinking for example of the allegation of failure to pursue the Hong Kong bank in relation to the face-value of the bank passbook, in section 5 of the counterclaim, at pages 7-9. But most of the counterclaim is not as clear as this. I readily accept the argument of the Claimant that it is not possible to plead to it in practice. I also accept that that is why the Claimant has not so far attempted to plead to it.
  2. I can illustrate the importance of the First Defendant’s failures by reference to a not dissimilar case, decided a few years ago. In Towler v Wills[2010] EWHC 1209, [17]-[18], the defendant made an application to strike out the amended particulars of claim under the power in rule 3.4. Teare J described the particulars as “perhaps concise, but they are not clear or coherent.”
  3. In relation to the application itself, he said:
“17. In dealing with the first point made on behalf of the Defendant it is necessary to consider whether the Amended Particulars of Claim and the Further Information are unreasonably vague or incoherent. I have come to the conclusion that they are and on that account are an abuse of the process of the Court and obstruct the just disposal of the case.
18. The purpose of a pleading or statement of case is to inform the other party what the case is that is being brought against him. It is necessary that the other party understands the case which is being brought against him so that he may plead to it in response, disclose those of his documents which are relevant to that case and prepare witness statements which support his defence. If the case which is brought against him is vague or incoherent he will not, or may not, be able to do any of those things. Time and costs will, or may, be wasted if the defendant seeks to respond to a vague and incoherent case. It is also necessary for the Court to understand the case which is brought so that it may fairly and expeditiously decide the case and in a manner which saves unnecessary expense. For these reasons it is necessary that a party’s pleaded case is a concise and clear statement of the facts on which he relies; see Spencer v Barclays’ Bank 30 October 2009 per Mr. Bompas QC at paragraph 35. [ … ]”
  1. The judge accordingly struck the claim out. I note in passing that the fourth to sixth sentences of paragraph 18 (from “Time and costs” to the end) were cited with approval by Sir David Eady in Khosravi v British American Tobacco [2016] EWHC 123, [15], another case of an application under rule 3.4. The judge in that case struck out that claim too.
  2. Once more I remind myself that I must try to give effect to the overriding objective in CPR rule 1.1, of dealing with cases justly and at proportionate cost. CPR rule 1.2 sets out a number of elements included in this idea:
“(a) ensuring that the parties are on an equal footing;
(b) saving expense;
(c) dealing with the case in ways which are proportionate –
(i) to the amount of money involved;
(ii) to the importance of the case;
(iii) to the complexity of the issues; and
(iv) to the financial position of each party;
(d) ensuring that it is dealt with expeditiously and fairly;
(e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases; and
(f) enforcing compliance with rules, practice directions and orders.”
  1. Looking at these in the present case, I note that the Claimant is represented by solicitors and counsel, whereas the Defendants are represented (apparently by choice) by the First Defendant, who is not a lawyer, yet is highly educated and very articulate, but also very opinionated. It is not clear how much this case is worth. The value of the house for probate was £595,000, and the claim (whatever it actually is) is certainly not for anything like the whole value. The First Defendant says the bank account claim could be worth as much as £200,000, including accrued interest. To my mind it would only be worth a fraction of that at best. I do not see much financial value in the remainder of the complaints. Overall, in money terms, this is a modest claim by modern High Court standards, where claims under £500,000 in value are usually transferred out to the county court. However, I have little doubt that the Defendants see the counterclaim as important to them because of the frustration and sense of inability to get on with their lives that (as they would say) the hold-ups in the administration of their father’s estate have caused. I also accept that the counterclaim is important to the Claimant because of reputational damage that may flow from the Defendants’ success (though some damage is less than it might have been because the Claimant is now retired).
  2. Although in the present position it is difficult to be sure, I do not consider that the kinds of claims which the Defendants seek to advance are particularly difficult in law, though the factual details may not be straightforward. I am not in a position to make an accurate assessment of the parties’ financial means. All are individuals. The Claimant is a retired solicitor, and presumably has the benefit of professional indemnity insurance. The First Defendant says he is semi-retired, and presumably has a pension from his civil servant days. I do not know much about the other Defendants. None of them however has had to pay lawyers’ fees, at least on a regular basis. The Defendants do of course share one third each in the estate of the deceased.
  3. A question arises as to whether the principles developed for cases of application for relief from sanctions (as in the well-known Denton and Mitchellcases) should be applied also to cases of application for an order striking out a statement of case. This was not addressed in the submissions before me, but I am aware that in Walsham Chalet Part Ltd v Tallington Lakes Ltd [2014] EWCA Civ 1607, the Court of Appeal discussed this point. At [44] Richards LJ (with whom McCombe and Sharp LJJ agreed) said:

“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…”

  1. Bearing in mind what the Court of Appeal there said, I am in no doubt that in this case the breach of the rules and therefore also my order of 30 July 2015 was of the most serious kind, because it renders a fair trial impossible so long as it remains unremedied. There is no good reason for the breach. The Defendants have chosen to act in person, and the First Defendant, for all his intelligence and articulacy, is not able to draft the counterclaim in terms that can be pleaded to. Despite this, the Defendants have seemingly not taken any legal advice. I must therefore go on to look at all the circumstances of the case.

THE DECISION: COUNTERCLAIM STRUCK OUT

  1. This litigation has lasted now for more than two years, not including pre-action phases. So far in this litigation there have been at least nine hearings. Thousands of pages of documents have been prepared and read for those hearings. The claim itself was resolved last July. The counterclaim is nowhere near ready for trial. The Defendants have had two attempts at putting their counterclaim in a form which can be understood and pleaded to, but without success. At the present rate of progress, and even assuming that the Defendants were prepared to do what was necessary, the case would not be ready for at least another year, perhaps longer.
  2. On the face of it, the present case is one where the statement of case in question, the counterclaim, should be struck out as an abuse or as obstructing the just disposal of the proceedings. I have however considered whether it would be possible to make an “unless” order, such that, if the Defendants within a certain time did not file a further revised counterclaim, this time complying with the rules, the counterclaim would stand automatically struck out: cf Forrester Ketley & Co v Brent [2005] EWCA Civ 270, [12]-[14]. I have concluded that this would not be an appropriate course to take in the present case. My reasons are these.
  3. First, the Defendants have already had one opportunity to rewrite their counterclaim in the face of one that palpably did not comply with the rules. Although the second version is an improvement on the first, it still falls far short of what is needed. It is not for the Court in effect to rewrite the statement of case by setting out in detail what needs to be included and what left out, and how each point needs to be put.
  4. Second, even though they served the revised statement of case at the end of September, and it was criticised by the Claimant from November onwards, in the context of this application, at the hearing in January, and in the written submissions that followed it, the Defendants have shown not any acceptance of the existence of defects in the revised statement of case. I have discussed the Defendants’ attitude in paragraphs 48, 49, 54 and 55 above. Far from being prepared to put right any problems, they seek to blame the Claimant for delaying the proceedings, and indeed seek “summary judgment” against him on the basis that the Claimant has failed to defend the counterclaim.
  5. Thirdly, in Kim v Park [2011] EWHC 1781, [40], Tugendhat J said that a party should normally have the opportunity to correct a defective pleading “provided that there is reason to believe that he will be in a position to put the defect right”. The First Defendant has already had one opportunity, and has produced a second defective statement of case. The First Defendant’s attitude and approach to this litigation throughout has been to deal with every step and every hearing on his own terms. So, even if the Defendants were given the opportunity to, and did, revise the counterclaim further, I have no confidence that what would be produced would come anywhere near complying with the rules. Moreover, there is no love lost and no co-operation between the parties. There would inevitably be a dispute as to whether the Defendants had complied or not, and there would have to be another lengthy hearing to resolve the issue.
  6. Fourthly, I am reasonably sure that, even if, contrary to my previous point, the Defendants did provide a further revised counterclaim that was somehow compliant, the Claimant would make significant requests for further information under CPR Part 18, which would take yet further time and probably require even more court hearings.
  7. Fifthly, as set out above in paragraphs 44 and 47, the Defendants require permission to make a counterclaim against someone other than the Claimant, and probably also against the Claimant in his capacity as a solicitor advising the deceased. There would therefore have to be a further hearing at which the strength of the claims would be considered.
  8. But the claims which can be perceived at present, however inadequately, in the revised counterclaim, are weak. I had originally thought (and I think Mr Bowmer for the Claimant had thought) that there were three main areas of dispute: the delay in the administration, the problems with the house deeds, and the Hong Kong bank account. However, at the end of the hearing in January, the First Defendant told me that really there were only two, the deeds and the bank account, and everything else was really just “context”.
  9. As to the claim of delay in the administration, if this is a separate head of claim, the problem for the Defendants is that the First Defendant was also a co-executor. His obvious remedy was to apply to remove the Claimant. But he did not. Indeed, he insisted that the Claimant should stay. It was the Claimant that made the first move. As to the claim in relation to the deeds of the deceased’s house, Deputy Master Mark held that the Claimant had no duty to do what the First Defendant said he should have done, and I held that the Claimant’s behaviour was not unreasonable. It will be hard for the Defendants to make a case on the deeds without mounting a collateral attack on existing judgments.
  10. As to the Hong Kong bank account, the First Defendant disclosed a statement from the bank’s successor showing that withdrawals had been made by the deceased from the account without entries in the book (see para 35 of my costs judgment of 20 November 2015). So any claim against the bank would be at best an uphill struggle. Moreover, the First Defendant is now the sole executor and can take action by himself if he thinks fit. If he wins, there is no substantive loss caused by the Claimant. If he loses, the Claimant can have caused no loss by not suing.
  11. Looking at the matter in the round, I ask myself, why should the Court grant a further indulgence to parties who have shown no signs of understanding what is wrong with their statement of case, who have shown no apparent interest in obtaining professional help to resolve the difficulty, who need permission to make the counterclaim so far as it involves third parties, but have not applied for it, and whose case, so far as it can be gleaned at all, is at best weak?
  12. Moreover, I must consider the position of the Claimant. He too is entitled to be treated fairly by the legal system in these proceedings. Allegations have been made at him, which have been hanging over his head now for some years. He is entitled in all justice to know what is the case which he has to meet. However, because of the state of the revised counterclaim, he does not know it sufficiently to be able to plead his defence. The case cannot proceed on this basis.
  13. In addition, there are the interests of other litigants with disputes waiting for resolution in the system. The resources which the courts have today are sadly limited. There must come a point where the litigants in a given case have had as much of the resources as is proportionate, in particular given the way in which they have been making use of them. The interests of the other users of the system must be taken account of. CPR rule 1.2(2)(e) specifically requires the Court to consider this.
  14. This litigation has already consumed enormous amounts of court time and resources. It is not justified to keep it going on the speculation that the Defendants will behave differently in future, and that their case will turn out to be rather better than it appears at this stage. Of course it is a strong thing to strike out a statement of case, especially that of a litigant in person. But I am satisfied that, taking all the circumstances of this case together, I should strike out the counterclaim under rule 3.4(2)(b), as an abuse of the court’s process or as otherwise likely to obstruct the just disposal of the proceedings.
  15. In these circumstances it is not necessary for me to go on and consider whether it is appropriate to allow the amendment of the application notice and the claim for summary judgment. The test for summary judgment is not the same as for a strike-out, and the focus of the arguments in this application was on the latter, not the former. So, in light of my decision on the strike-out, I prefer to say nothing about it.

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