Joshi & Welch Ltd v Tay Foods
| Jurisdiction | England & Wales |
| Judge | Mr Justice Green |
| Judgment Date | 02 December 2015 |
| Neutral Citation | [2015] EWHC 3905 (QB) |
| Date | 02 December 2015 |
| Court | Queen's Bench Division |
| Docket Number | No: QB/2015/0421 |
[2015] EWHC 3905 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand
London
WC2A 2LL
Mr Justice Green
No: QB/2015/0421
Mr Wright appeared on behalf of the appellant.
Other representation not known.
Wednesday, 2 December 2015
A. INTRODUCTION
There is before the court today an application by the appellant, Joshi & Welch Limited, for relief from sanctions imposed by order of His Honour Judge Wulwik on 24 August 2015. Upon that occasion the judge upheld the defendant's application for summary judgment on a counterclaim.
I remind myself that this is not a re-hearing; this is an appeal. I must first decide whether the judge erred in principle or has ignored relevant considerations or taken account of irrelevant considerations. If such an error exists and it is material, then the appellate court will consider the exercise of discretion itself or perhaps remit the matter to be reheard. In evaluating the judgment below, I must also give due weight to the fact that the judgment was delivered upon an ex tempore basis.
Permission to appeal was granted by Wilkie J on 21 October 2015 upon the basis that there was a real prospect that the appeal would succeed. In order to understand the application, it is necessary to set out the main stages in the procedure adopted in the course of the trial to date.
B. THE HISTORY OF THE PROCEEDINGS
The claim relates, in essence, to fees for services provided by the appellant to the defendant firm. The defendant denies owing the fees claimed and argues that the work was not authorised and/or that the fees represent over-charges. The work in issue related to legal and practical advice in relation to intellectual property, and in particular trademarks. The defendant has counterclaimed for sums allegedly overpaid.
The claim (issued by the appellant as claimant) was initially issued in June 2014. The defendant served a Defence on or around 23 July 2014. An Amended Particulars of Claim was served on 1 October 2014. On or around 2 October 2014, the defendant served an Amended Defence and Counterclaim. Paragraphs 23–32 of this pleading relate to the Counterclaim. Paragraph 23 repeats paragraphs 1–22 of the Defence. It then goes on to challenge various invoices dated variously 29 June 2011, 31 March 2010, 7 May 2010 and 28 January 2010. These relate to work performed on behalf of the defendant in relation to a claim brought by the defendant against a company called Cofresh Snack Food Limited.
In paragraphs 29 and 30 of the Counterclaim, the defendant pleads as follows:
"29. JMW Solicitors LLP paid the claimant £19,405.56 from funds held on the defendant's behalf and the settlement sum of £40,000 received and held by JMW Solicitors LLP in part-payment of invoice no.101009, which invoice states, ' Taj v Cofresh dispute. Our services generally in respect of the above matter since it was first instructed including advising thereon on the dispute, the outcome seizures, liaising with enforcement officers. JMW Solicitors and lawyers for the defendant including investigator's costs and Indian lawyer's costs'.
30. The defendant denies that the claimant is entitled to the sum of £19,405.56 and claims that it was unjustifiably paid that sum. The defendant was never given an estimate for this work and the invoice number 101009 was not sent to the defendant until after the payment of £19,405.56 was made by JMW Solicitors LLP to the claimant. Upon receiving the invoice, the claimant for £19,405.56 from JMW Solicitors Limited, the defendant disputed the figure."
The appellant did not serve a reply or defence to counterclaim. Time for service of a Defence to Counterclaim expired on or around 29 January 2015. On 26 January 2015, disclosure was given. Witness Statements of fact were served in February 2015. In particular, a Witness Statement from Mr Manesh Joshi was served on 9 January 2015. This is 28 paragraphs long. It does not specifically differentiate in its content and substance in a clear way between the Defence to the Particulars of Claim and the Counterclaim.
However, it is possible to identify certain paragraphs of the Witness Statement which, plainly, take issue with the defendant's Counterclaim. This is in particular the case with paragraphs 23–26. It suffices for present purposes to refer to one example. Paragraph 25 of the Witness Statement addresses paragraph 30 of the Counterclaim. It states:
"The payment of £19,405.56 through JMW Solicitors was in respect of the claimant's services on the Cofresh dispute. The payment of these fees was correctly made from the payment of £40,000 as part of the settlement by Cofresh to JMW Solicitors. An invoice for the fees particularising the work was sent to JMW Solicitors and this was accounted to the defendant by JMW Solicitors. Therefore, the payment of £19,405.56 was nothing to do with the other matters that the claimant was handling on behalf of the defendant."
As such, although there was no formal pleading to the Counterclaim, there was a Witness Statement which put the Counterclaim squarely in issue. That statement was signed on behalf of the appellant by the director, Mr Joshi, with a statement of truth. It is relevant also to observe that paragraph 23 of the Counterclaim simply cross-refers to and "repeats" paragraphs 1–22 of the Defence and in general terms the Witness Statement of Mr Joshi responds to those paragraphs.
It is thus clear that the Counterclaimant (i.e. the respondent to the present proceedings) considered that the issue had in fact been joined. Indeed, Mrs Solanki on behalf of the Counterclaimant served a Witness Statement dated 8 April 2015 in which she expressly addresses the appellant's Defence to the Counterclaim in paragraphs 64 and following.
Nonetheless, on 23 April 2015, the defendants sought judgment in respect of the counterclaim upon the basis that there had been no formal Defence served, notwithstanding the witness statements to which I have made reference. On 20 August 2015, the appellant sought relief from sanctions and/or an extension of time to serve a Reply and Defence to Counterclaim. The matter came before His Honour Judge Wulwik on 21 August 2015. He dismissed the application made by the appellant for relief from sanctions and refused the requested extension of time. He granted judgment to the defendant upon its Counterclaim.
C. THE JUDGMENT BELOW
In his judgment, the learned judge set out the procedural history. In paragraph 7, the judge stated as follows:
"It seems that the absence of a reply and defence to counterclaim was not noticed or appreciated until the defendant issued its application for judgment in default dated 23 April 2015, it appearing to be the case that the parties had proceeded on the basis that the defendant's counterclaim was in fact defended. As I say, the claimant has now issued an application for an extension of time and/or for relief from sanctions to permit it to file and serve its reply and defence to counterclaim. I note from the bundle prepared for this hearing that a reply and defence to counterclaim has been prepared, being dated 19 August 2015."
In paragraph 8 of his judgment the judge set out the well-known three-part test articulated in Denton & Ors v White [2014] EWCA Civ 906 governing the grant or refusal of relief from sanctions. It is not necessary for me to set out the three parts of the test.
In relation to the first stage of the Denton test, the judge stated this at paragraph 9:
"Looking at the first stage of the Denton test, namely whether the breach is serious or significant, it appears to me that it cannot sensibly be argued that the failure to file and serve a defence to counterclaim in accordance with the rules is anything other than serious or significant, albeit that it may have had a minimal effect on the proceedings, it appearing to me that this is probably more relevant to consider under the third stage of the Denton test when taking into account all the circumstances of the case."
In relation to the second stage of the Denton test the judge stated the following at paragraphs 11 and 12:
"11. So far as the reason for the breach is concerned, it is said on behalf of the claimant that until recently the claimant was, in effect, acting as a litigant in person. It is said also that none of the orders that were made by the court in this matter referred to the necessity to file a reply and defence to counterclaim. It is therefore suggested that in the circumstances that the failure to file a defence to counterclaim might be more readily understandable on the facts of this case. However, I have been referred by the defendant to the decision of the Court of Appeal in the case of Hysaj v SSHD [2014] EWCA Civ 1633 where it was made clear by Moore-Bick LJ at paras 44–45 that the mere fact of a party being unrepresented does not provide a good reason for not adhering to the rules. He went on to say in that case that, if proceedings are not to become a free-for-all, the court must insist on litigants of all kinds following the rules and, in his view, being a litigant in person with no previous experience of legal proceedings, was not a good reason for failing to comply with the rules.
12. The defendant in this case goes a little further and says that the claimant was, in fact, clearly aware of the time limit set down in the Civil Procedure Rules to submit a defence, given that on 1 December 2014, the claimant unsuccessfully applied for judgment in default of service of an amended...
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...robust fair case management decisions should be borne in mind. Equally important, however, are the observations of Green J in Joshi & Welch Limitd v. Tay Foods [2015] EWHC 3905 at [28] that "Robustness is good but it sometimes needs tempering" and the undesirablity of permitting parties to ......
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...Estates (No. 2) Limited [2014] EWCA Civ 1408, which concerned the filing of a notice of appeal some five weeks late; and Joshi & Welch Limited v Tay Foods [2015] EWHC 3905, which concerned a failure to file a defence to a 9 In paragraph 22 of his judgment in the Court of Appeal in Altomart......