Lakatamia Shipping Company Ltd v Nobu SU and Others (Defendants/Applicants)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Hamblen |
| Judgment Date | 13 February 2014 |
| Neutral Citation | [2014] EWHC 275 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 13 February 2014 |
| Docket Number | Case No: 2011-357 |
[2014] EWHC 275 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
Mr Justice Hamblen
Case No: 2011-357
Stephen Cogley QC and Josephine Davies (instructed by Cooke Young and Keidan) for the Defendants/Applicants
N.G. Casey (instructed by Hill Dickinson LLP) for the Claimant/Respondent
Hearing dates: 10 February 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
The Defendants apply pursuant to CPR 3.9 for relief against the sanction imposed by order of Cooke J dated 13 December 2013 that their defence and counterclaim be struck out "unless standard disclosure is provided on or by 17 January 2014" ("the Order").
Background
The Claimant's claim is for US$45,854,200.24 allegedly due from the First to Sixth Defendants under a contract for a series of FFAs made on or about 6 July 2008 and from the Seventh Defendant as guarantor.
The CMC in the case was heard in July 2013 and an order was made on 17 July 2013 which included directions leading up to a 6 day trial, which has been set down for 20 October 2014. The order provided that standard disclosure was to be made by 30 August 2013. The Defendants were unable to comply with this deadline. Eventually, the parties agreed to extend the date for the provision of disclosure to 6 December 2013. That agreed extension was recorded in a consent order made by Andrew Smith Jon 18 November 2013.
On 5 December 2013, the day before that revised deadline, the Defendants sought another extension. The Claimant refused to agree the extension sought. The Defendants applied to the court for an extension of the deadline to 17 January 2014. Cooke J granted the application, but made the requested order in "unless" terms. Paragraph 1 of the Order reads:
"Paragraph (5) of the Order of Andrew Smith J dated 18 November 2013 … is hereby varied to provide that unless standard disclosure is provided on or by 17 January 2014 the Defendants' defence and counterclaim shall be struck out…"
Under the CPR orders imposing a time limit for doing any act must include the time of day by which the act must be done — CPR 2.9(1) (b) and PD40B 8.1.
The Order did not specify a time of day by which the order was to be complied with. However, the Commercial Court Guide provides at D19.2 that absent specific provision in an order, the latest time for compliance is 4:30 pm on the day in question. Although, not expressly set out in the Order, against the background of D19.2, the Commercial Court Order made by Cooke J is therefore reasonably to be understood as requiring compliance by 4:30 pm on 17 January 2014.
In the light of the importance of compliance and the "robust" approach to relief from sanctions exemplified by the Court of Appeal decision in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537 it may be preferable for Commercial Court orders to specify the time of day by which an order is to be complied with, notwithstanding D19.2 of the Guide. The present case illustrates the desirability of doing so.
The evidence is that the Defendants' solicitors were working on the basis that the deadline was 5:00 pm rather than 4:30 pm. They were working on disclosure up to the assumed deadline because of further documents provided to them by the Defendants that day. This meant that the list was not ready until about 4:40 pm.
The Defendants' solicitors offered exchange of lists by email at 4:45 pm on 17 January 2014. At 4:54 pm the Claimant's solicitors wrote, "There is an argument that this is out of time. We are considering and will revert soonest."
Nothing having been heard, at 5:16 pm (46 minutes after 4:30 pm), the Defendants' solicitors provided standard disclosure by list in any event and asked the Claimant to do likewise. At 5:29 pm the Claimant's solicitors wrote "We will revert on Monday. We are waiting to speak to Counsel." No list of documents was provided by the Claimant by 4:30 pm on 17 January 2014 or at all.
In the evening of Sunday 19 January 2014, the Defendants' solicitors notified the Claimant of their intention to apply for relief from sanctions. No response was received and, on Monday (20 January), the Defendants' application for relief from sanctions was issued and sent to the Claimant at 1:39 pm. The application is supported by the 12 th and 13 th Witness Statements of Mr Gerald Cooke of the Defendants' solicitors. The Claimant has filed the 8 th Witness Statement of its solicitor, Mr Russell Gardner, in response to the application, which is opposed.
Following inspection, the next step in the proceedings is exchange of witness statements which is due to take place on 10 March 2014. The start date for the trial is 20 October 2014.
Relevant Principles
CPR 3.9(1) provides that:
"On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need —
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders."
In a case in which I gave judgment last week, Newland Shipping & Forwarding Ltd v Toba Trading FZC [2014] EWHC 210 (Comm), I sought to summarise the approach to be adopted in the light of the Mitchell case as follows:
"39. The leading authority is the Mitchell case. This requires a "robust" approach to be taken. As explained at [41], "the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner. If departures are tolerated, then the relaxed approach to civil litigation which the Jackson reforms were intended to change will continue".
40. Under CPR 3.9 the "paramount" considerations are now "the need (i) for litigation to be conducted efficiently and at proportionate cost and (ii) to enforce compliance with rules, practice directions and court orders" [36].
41. Whilst "regard should be had to all the circumstances of the case…the other circumstances should be given less weight" than the two "paramount" considerations [37].
42. The "starting point" is that "the sanction has been properly imposed and complies with the overriding objective" [45]. "An application for relief from a sanction presupposes that the sanction has in principle been properly imposed. If a party wishes to contend that it was not appropriate to make the order, that should be by way of appeal or, exceptionally, by asking the court which imposed the order to vary or revoke it under CPR 3.1(7)" [44].
43. In considering whether relief should be granted, "it will usually be appropriate to start by considering the nature of the non-compliance with the relevant rule, practice direction or court order. If this can properly be regarded as trivial, the court will usually grant relief provided that an application is made promptly." [40].
44. "If the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the court to grant relief. The court will want to consider why the default occurred. If there is a good reason for it, the court will be likely to decide that relief should be granted." [41]. "Good reasons are likely to arise from circumstances outside the control of the party in default" [43].
45. In summary, the importance of the "paramount" considerations means that as a general rule relief will not be granted unless (i) the non-compliance was trivial or (ii) there was good reason for the default. Although all the circumstances of the case are relevant, they are of less weight than the "paramount" considerations. Compelling circumstances are therefore likely to be required if relief is to be granted for a non-trivial default for which there is no good reason".
I would add that, conversely, if the applicant can show that the non-compliance is trivial and/or that there was good reason for the default, relief will "usually" be granted. In such a case compelling circumstances are therefore generally likely to be required if relief is to be refused.
(1) The nature of the non-compliance and whether it can be characterised as trivial
The Defendants' disclosure was 46 minutes late although it could have been made only around 15 minutes late if the Claimant had agreed to exchange. It is a delay measured in minutes not hours. It can be said that the Defendants "narrowly missed the deadline" — a circumstance which the Court of Appeal in Mitchell expressly contemplated as being de minimis and usually deserving of relief from sanctions at [40]:
"…the court will usually grant relief if there has been no more than an insignificant failure to comply with an order: for example…where the party has narrowly missed the deadline imposed, but has otherwise complied with the order"
That the non-compliance is also trivial is also borne out by its effect. It has caused no prejudice to the Claimant, and none is suggested.
The Claimant submits that the non-compliance cannot be characterised as trivial in the light of the history of earlier defaults by the Defendants. However, what matters is whether the non-compliance which resulted in the sanction is trivial and in my judgment that...
To continue reading
Request your trial
-
Denton and Others v Th White Ltd and Another; Decadent Vapours Ltd v Bevan and Others; Utilise Tds Ltd v Cranstoun Davies and Others
...was a matter of obvious importance given the tight trial timetable". Also there was no good reason for the default. 17 In Lakatamia Shipping Co Ltd v. Su [2014] EWHC 275 (Comm); [2014] 2 Costs LR 307, the defendant was 46 minutes late in giving disclosure. Hamblen J held that the breach wa......
-
Andrew Ian Mctear and Another v Michael Conrad Englehard and Others
...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), Le......
-
UTILISE TDS Ltd (Claimant/Appellant) v NEIL CRANSTOUN DAVIES & 2 OTHERS
...a non-trivial default for which there is no good reason. 34 The second of the decisions of Mr Justice Hamblen is the case of Lakatamia Shipping Co Limited v Nobu Su [2014] EWHC 275 (Comm). There, having repeated what he had said in Newland, Mr Justice Hamblen added (at paragraph 15) the fol......