Andrew Ian Mctear and Another v Michael Conrad Englehard and Others
| Jurisdiction | England & Wales |
| Judge | Richard Spearman |
| Judgment Date | 14 March 2014 |
| Neutral Citation | [2014] EWHC 722 (Ch) |
| Court | Chancery Division |
| Date | 14 March 2014 |
| Docket Number | Case No: HC12C00705 |
2014 EWHC 722 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Richard Spearman Q.C.
(sitting as a Deputy High Court Judge)
Case No: HC12C00705
Simon Davenport QC and Richard Samuel (instructed by Isadore Goldman, Lawrence House, 5 St Andrew's Hill, Norwich for the Claimants
Jonathan Lopian (instructed by Hansells Solicitors) for the Defendants
Hearing dates: 5, 6, 7 March 2014
Richard Spearman Q.C.:
Introduction
On 27 November 2013, the Court of Appeal handed down the judgment in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, [2013] 6 Costs LR 1008, on the effect of the new CPR 3.9. At [46], the Court said:
" 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 … the Implementation Lectures given well before 1 April 2013 were widely publicised. No lawyer should have been in any doubt as to what was coming. We accept that changes in litigation culture will not occur overnight. But we believe that the wide publicity that is likely to be given to this judgment should ensure that the necessary changes will take place before long".
The present case is another in which the implications of Mitchell fall to be considered.
I was referred to the subsequent decisions of the Court of Appeal in Durrant v Chief Constable of Avon and Somerset Constabulary [2013] EWCA Civ 1624 (dated 17 December 2013) and Thevarajah v Riordan [2014] EWCA Civ 14 (dated 16 January 2014). I was also referred to the recent decisions at first instance of Hamblen J in Lakatamia Shipping Co Ltd v Nobu Su [2014] EWHC 275 (Comm) (dated 1February 2014), Globe J in Chartwell Estate Agents Ltd v Fergies Properties SA [2014] EWHC 438 (QB) (dated 18 February 2014), Leggatt J in Summit Navigation Ltd v General Romania Asigurare Reasigurare [2014] EWHC 398 (Comm) (dated 21 February 2014) and Andrew Smith J in Associated Electrical Industries Ltd v Alstom UK (a private limited company) [2014] EWHC 430 (Comm) (dated 24 February 2014).
It was drawn to my attention that in Durrant and Thevarajah the Court of Appeal had reversed decisions of judges at first instance to grant relief from sanctions. Further, that at [47] in the Associated Electrical case Andrew Smith J had concluded that, although he considered that as between the parties this was a disproportionate response and unjust, the emphasis that the Court of Appeal has given in Mitchell to enforcement of the CPR in order to encourage procedural discipline had driven him to conclude that he should grant the defendant's application to strike out the claim form and refuse the claimant's application for an extension of time. I was informed that permission to appeal to the Court of Appeal has been granted in Chartwell and that permission to appeal to the Supreme Court is being sought in Thevarajah.
Summary of the case
Although the relevant legal principles need to be properly identified and correctly applied, each case falls to be decided on its own particular facts. In some cases, a party has been in breach of anorder, direction or rule; has then been made the subject of a further order in which an express sanction is spelled out; and has then failed to comply with that further order. In other cases, applications for relief from sanctions or for extensions of time have been made long after the time when the relevant steps ought to have been taken. What has happened in the present case is different, not least because it involved a number of defaults the effect of which came all together either shortly before or even during the trial, as appears from the procedural history below.
The Claimants are represented by Simon Davenport QC and Richard Samuel. The Defendants are represented by Jonathan Lopian.
Mr Lopian submitted that, like the party which was criticised by Leggatt J in Summit Navigation, the Claimants in the present case have sought to rely on Mitchell to turn to their tactical advantage a short delay by the Defendants in complying with the timetable contained in an order of the Court which in itself had no material impact on the efficient conduct of the litigation, nor on the two needs that are highlighted in the new CPR 3.9: "for litigation to be conducted efficiently and at proportionate cost", and "to enforce compliance with rules, practice directions and orders". These submissions are entirely in line with the way in which this litigation has been conducted on behalf of the Defendants in the run up to the trial. In my judgment, however, they are quite unreal. I also consider that they reflect a lack of understanding of the appropriate way in which litigation should be conducted.
In my judgment, the suggestion that what has happened in the present case can properly be characterised in that way is misguided. I have reached the conclusion that the stance of the Claimants in the present case, and the orders they invite me to make, accord not only with Mitchell but also with the overriding objective, with unambiguous provisions of the CPR (concerning, for example, expert evidence), and with pre- Mitchell case law (concerning, for example, late applications for permission to amend). In Summit Navigation, Leggatt J said at [54] that the grounds for arguing that the defaults relied upon were material were without merit, and that the stance of the party opposing relief from sanctions "disregarded the duty of the parties and their representatives to cooperate with each other in the conduct of proceedings and the need for litigation to be conducted efficiently and at proportionate cost. It stood Mitchell on its head". I consider that the correct analysis is that the reverse applies in this case.
The Defendants have not provided any satisfactory explanation as to why they did not find the new documents before standard disclosure ought to have been given on 22 April 2013, and still less for their conduct after those documents were found on 15 February 2014. They decided, quite deliberately, to wait until 21 February 2014 to spring those documents on the Claimants, without identifying them to the Claimants, and instead by including them in a bulky exhibit to a witness statement which made repeated reference to them. Their witness statements had to be delivered by hand due to the bulk of this exhibit, and were served late. At the same time, they served expert evidence that they had no permission to adduce, and waited until the trial to apply to reamend the Amended Defence to plead new matters. The usual procedures, either within the times laid down by the CPR and court orders or (where that is needed) with the permission of the Court, involve: first, formulating and serving pleadings; second, providing disclosure and inspection of documents; third, serving witness statements; and, last, preparing trial submissions. However, the Defendants decided to follow their own rules. They have:
(i) produced (without identifying them to the Claimants) a significant number of documents that they have not previously disclosed;
(ii) done this at the same time as serving their trial witness statements and in such a way that those documents are inextricably entangled with that evidence;
(iii) served evidence and written submissions for trial relating to issues that they have not pleaded, or even formulated at the time in a draft Re-Amended Defence, including one factual issue that they accept cannot be tried as part of this trial;
(iv) served evidence from an accountant that they accept is expert evidence in part (and, as I consider, in whole) without seeking the permission of the court;
(v) done all of this not only out of time in accordance with rules and orders, including a recent order that was made on their own application, but also on the eve of trial and all together;
(vi) refused to accept the need to make applications to the court, and therefore have not made those applications either promptly or so that they might be heard before the trial;
(vii) accordingly, placed the Claimants in the position that they did not know what case they had to prepare to meet and would require an adjournment if relief was granted;
(viii) in any event, seriously disrupted the trial timetable, with the attendant risk (that was, in the result, averted by refusing them relief from sanctions) of jeopardising the interests of other court users.
By proceeding in this way, it seems that the Defendants hoped to impose on the Claimants new documents, new evidence, and a new pleaded case, and to obtain the court's endorsement for their conduct, whether on the grounds that it was immaterial, or that there were good reasons for it, or that the prejudice to the Defendants of refusing to endorse it so outweighed the prejudice to the Claimants of endorsing it that it should be endorsed in the interests of doing justice. I consider that this approach is unacceptable, and that it would be wrong for the court to endorse it.
The proceedings
The Claimants are the former joint administrators of Broadland Wineries Limited ("BWL") and the former supervisors of a Company Voluntary Arrangement ("CVA") which BWL entered into. BWL went into administration on 10 March 2006 and came out of administration on 1 February 2007. BWL entered into the CVA on 18 October 2006 and the CVA came to an end on 20 November 2011. By a Deed of Assignment dated 20 September 2011, BWL's claims in these proceedings were assigned...
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Andrew Ian McTear and Another v Michael Conrad Engelhard and Others
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