Star News Shops Ltd v Stafford Refrigeration Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE OTTON,LORD JUSTICE ROBERT WALKER |
| Judgment Date | 30 October 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J1030-13 |
| Docket Number | QBENI 97/0055/E |
| Court | Court of Appeal (Civil Division) |
| Date | 30 October 1997 |
and
and
[1997] EWCA Civ J1030-13
Lord Justice Otton
Lord Justice Robert Walker
QBENI 97/0055/E
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(His Honour Judge Gibbs QC sitting as a High Court Judge)
Royal Courts of Justice
Strand
London WC2
MR R WALKER QC and MR A HILL-SMITH (Instructed by Hextall Erskine, London E1 8ER) appeared on behalf of the Appellant
MR M de NAVARRO QC (Instructed by Watmores, London WC2A 1QU) appeared on behalf of the Respondent
Thursday 30 th October 1997
This is an appeal by the Fourth Party (United Hermetique) from the Order of HHJ Richard Gibbs QC made on 4th October 1996 whereby it was ordered that:
The Fourth Party having failed to comply with the Order of the 23rd August 1996, the Fourth Party's defence to the Third Party notice be dismissed and judgment be entered in favour of the third parties.
The Plaintiffs' original claim arose out of a fire that occurred in a refrigeration unit at their shop premises in Haslucks Green Road, Shirley, Birmingham, on the 19th November 1988. The Plaintiffs sought to recover damages arising out of the fire. The refrigeration unit, subsequently found in the main action to be the source of the fire was supplied to the Plaintiffs by the Defendants, Stafford Refrigeration in April 1988. In turn, UPO, the first Third Party had supplied Stafford with the refrigeration unit. UPO in its turn had obtained the refrigeration unit from the second Third Party, Asko Oy. The first Third Party and the second Third Party were associated companies.
By a contract said to have been made in November 1987, the Fourth Party supplied a compressor for use in the refrigeration unit to Asko Oy. The Third Parties alleged that this compressor was responsible for the fire. The compressor was incorporated into the refrigeration unit by one of the Third Parties.
In May 1991 Star News commenced an action against the Defendants for damages for breach of contract and negligence. In September of that year the Defendants brought Third Party proceedings against UPO alleging breach of contract and negligence. In 1992 the Defendants also joined Asko Oy as a second Third Party. In July 1994 the action and the Third Party proceedings were transferred to the Mercantile List of the Birmingham District Registry.
In November 1994, UPO and Asko Oy commenced separate proceedings against Unite Hermetique out of the Central Office of the High Court, Queen's Bench Division alleging breach of contract, negligence and liability under the Civil Liability (Contribution Act) 1978. In July 1995 Master Trench ordered this claim to be struck out in part (for breach of contract). The claims in tort and contribution were permitted to proceed.
On the 13th July 1995 the Third Parties made an application for leave to commence Fourth Party proceedings against Unite Hermetique. The matter came before HHJ Gibbs on 26th October 1995, leave to join Unite Hermetique was granted. The High Court proceedings were transferred to the Birmingham District Registry and ordered to be consolidated with the Fourth Party proceedings. Directions in the Fourth Party proceedings were given on the 8th December 1995 on which occasion it was ordered that these proceedings would be heard on the same occasion as the main action and the Third Party proceedings.
On the 14th March 1996 Unite Hermetique served a list of documents on the Third Parties. On this occasion they disclosed the existence of only 107 documents. Not surprisingly the Third Parties took out a summons for specific discovery against the Fourth Party. This summons was heard on the 23 rd August 1996, it was fiercely contested and an order for specific discovery was made, albeit in narrower terms than had been sought by the Third Parties in their summons. The order specified that the Fourth Party (by their proper officer) should swear an Affidavit within 14 days of the order stating whether it had certain categories of documents as set out in the schedule to the order and giving inspection of such documents within three days. It is to be noted that this was (what I shall refer to as) a "bare" order, it was not expressed as a final order or an "Unless Order". The Fourth Parties were lamentably at fault in complying with this order.
On the 11th September 1996 the Third Parties took out an application for the defence to the Fourth Party notices to be dismissed and for judgment to be entered in the Fourth Party proceedings on the ground of the Fourth Party's failure to comply with the order of the 23rd August. This application was accompanied by a short affidavit in conventional terms. The application came on for hearing on the 4th October 1996 when HHJ Gibbs made the order sought by the Third Parties.
On 14th October a supplemental List of Documents was served on the Third Parties —this time identifying approximately 1600 documents. The Third Parties were invited on the same day to consent to the appeal being allowed but they declined. An application for leave to appeal was lodged on the 18th October.
In the meantime the trial date fixed for the hearing of the main proceedings and the Third Party proceedings was the 4th November 1996. The trial took place on this date before HHJ Michael Lee QC and resulted in judgment being given for the Plaintiffs in the main action and judgment for the Defendant against the Third Parties in the Third Party proceedings. The application for leave to appeal the order of HHJ Gibbs was considered by the single Lord Justice on the 20th December 1996 when he granted leave.
The approach of HHJ Gibbs can be gleaned from three vital passages in the judgment. At page 4 H he said:
"I imagine that the fourth parties, had they immediately filed a cross-application for extension of time given by the order of the 23rd August and supporting it my affidavit evidence containing substantial reasons for such an extension, may well have successfully obtained a limited extension of time. They may have persuaded the third parties even to consent to such a limited extension of time, although whether or not that is the case is a matter of speculation."
Later at 5C-H
"However, the fact is that there has been no response to all this summons by the fourth parties, save that they have instructed Miss Peck to attend to oppose it. There has been no affidavit filed given any reason or excuse for the non-compliance with the order. There has been no application to extend the time of the order under Order 3 rule 5 of the Rules of the Supreme Court. There has been no attendance by any solicitors instructing Miss Peck. I only mention that latter point because, in one of the cases cited to me, a solicitor was actually called to give evidence excusing the delay, thereby providing the court in that case with a late substitute for the affidavit evidence which should have been previously filed, but there is nothing of that in this case whatsoever.
There are merely submissions made by Miss Peck, who has done the best that she possibly can on instructions. She has referred to certain matters which, had there been evidence of them, may or may not have amounted to good reasons for the default of the fourth party, but I am not in a position to judge that because no evidence has been adduced."
and a critical passage at page 11A-F
"The defaults of the fourth parties, which I have outlined, their non-response to this summons and the absence of any evidence of an excuse or application for a extension of time, leave me with no alternative but to order in favour of the third parties the Draconian relief which is sought.
Assuming that I do have a discretion as to whether or not to impose this or any other remedy in the absence of any evidential material upon which to exercise it in the fourth parties' favour, I exercise that discretion in favour of the third parties. The reason I do that is because of the various matters to which I have referred, the imminent trial date and the complete absence of any explanation for default. It seems to me that it would be quite wrong to exercise my discretion in any way……
There is, I believe, no other reasonably appropriate sanction that can be imposed, other than that referred to in Order 24 rule 16(1)".
Order 24 Rule 16 deals with failure to comply with requirement for discovery, and provides:
"(1) If any party who is required by any of the foregoing rules, or by any Order made thereunder, to make discovery of document . fails to comply with any provision of that rule or with that order, then, the Court may make such order as it thinks just including, in particular, an order that the action be dismissed or, an order that the defence be struck out and judgment be entered accordingly."
The commentary to Order 24/16/2 includes the following passage:
"Failure to comply with order for discovery —The Court should ensure that its order for discovery is complied with but should not otherwise punish a defaulter, eg by requiring the payment of the amount or the balance of the amount claimed into Court (see Husband's of Marchwood Ltd v Drummond Walker Developments Ltd [1975] 1 W.L.R. 603; [1975] 2 All E.R. 30, C.A.).
An order for discovery which is stated to be "final" is not the same as as "unless" order (see not "Application to dismiss the action or strike out defence" above, and para. 3/5/5 "Unless or conditional order to extend time"). An "unless" order spells out the consequences of failure to comply with its terms, and...
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