Bangs v FM Conway Ltd

Practice and procedure – Claim – Strike out – Respondent bringing claim against appellant concerning damage to property – Order made striking out respondent’s claim on ground that particulars of claim not served in time – Judge setting aside order and extending time for service – Appellant appealing – Whether judge erring by considering merits of claim – Whether order striking out claim to be restored – Appeal allowed The respondent lived in a basement flat with underground vaults in Upper Wimpole Street, London W1. The local highway authority appointed the appellant to carry out road resurfacing work in the surrounding areas. Local residents, including the respondent, were notified about the work and warned that the vault was a separate structure from the public highway and that keeping it watertight was the responsibility of the owner. The respondent’s vault had been tanked in about 2016 to ensure that it was watertight. A 10-year warranty had six years left to run. However, the respondent sought assurance from the highway authority that her vault would remain secure from damage and water ingress. The works were then carried out. The respondent argued that there was severe vibration, noise and disturbance and that she had discovered cracks, which had not been there before, in one of the two vaults in her property, together with damage to the walls. As a result, the respondent made a claim against the appellant. The court subsequently set aside an order striking out the respondent’s claim on the ground that particulars of claim had not been served in time, and extended time for such service. The judge concluded that the appellant’s previous admission of liability, which had since been withdrawn, together with other factors, demonstrated that the respondent’s case appeared to be very strong, so that striking out the claim was a disproportionate sanction: [2024] EWHC 494 (Comm). The appellant appealed. Held: The appeal was allowed. (1) When dealing with case management decisions, of which relief from sanctions was an example, it was not appropriate to investigate the merits of the claim in any depth. If the position were otherwise, there was a risk that every procedural application would turn into an expensive and laborious minitrial: Global Torch Ltd v Apex Global Management Ltd (No 2) [2014] 1 WLR 4495 and R (Hysaj) v Secretary of State for the Home Department [2015] 1 WLR 2472 considered. Although the court would want to know the nature of the claim and any defences, the general rule was that the merits of the underlying claim were irrelevant when the court had to make a case management decision such as whether to grant relief from sanction. It followed that it was unnecessary for the parties to deploy extensive evidence that they had a strong case on the merits and they should not seek to do so. Such evidence was likely to be a distraction from what the court needed to decide and was positively unhelpful. (2) There was an exception to that general rule if a party wished to contend that its case was so strong that it would be able to obtain summary judgment in its favour. Even when a party wished to make such a contention, the merits of the underlying claim should only be taken into account when that could be readily demonstrated, without detailed investigation. Because a party responding to a procedural application, including an application for relief from sanctions, would not generally be required or expected to deploy its case on the merits of the underlying claim, a party who wished to contend that the merits of its case satisfied the summary judgment test had to give clear notice of that contention sufficiently in advance of the hearing to enable the other party to decide what evidence on the merits it wished to deploy. Notice given only a few days before the hearing, or in a skeleton argument, was likely to be too late. Judges who were invited to take account of the merits of the claim when making that kind of case management decision should investigate whether such notice had been given and, if it had not, should firmly decline the invitation. Even when such notice was given, the other party would not be expected to deploy evidence to the full extent that it would do at trial. All that the other party was required to do was to show that there were sufficient matters in dispute that summary judgment was likely to be inappropriate. (3) In the present case, the respondent did not give any notice in advance of the hearing that it would be contended on her behalf that the merits of her claim were so strong that it was a suitable case for summary judgment. Nor was it suggested that she had a very strong case on the merits, or that that was relevant to the application for relief from sanction. Because it had not been suggested on behalf of the respondent that the merits were relevant to the issue of relief against sanction, the appellant did not go on to address the merits of the claim; nor that it would be unjust for the overall merits of the claim to be taken into account where no notice of that point had been given. Such a submission would have been recorded and dealt with in the judgment, if it had been made. The fact that it was not was understandable, where the respondent had not made any submission that the merits were relevant to the grant of relief against sanction going beyond the narrow and mistaken point made in her skeleton argument. The result was that the judge was not alive to the potential injustice of forming a view about the merits of the claim. (4) In those circumstances, for the judge to go on, as he did, to consider the merits of the underlying claim, unwittingly caused an injustice to the appellant. It was understandable that he did so, but the result was that the appellant did not have a fair opportunity to deploy its case, or to seek to show that the claim was not suitable for summary judgment. As it was, the case had moved on since the judge’s decision. The appellant now pleaded a defence and did not submit that it would now be possible for the respondent to obtain summary judgment on liability. As the judge’s view that the respondent had a very strong case on liability was decisive in his decision to grant relief from sanction, the appeal would be allowed. Elizabeth Boon (instructed by DWF Law LLP) appeared for the appellant; Caitlin Corrigan (instructed by Athena Law) appeared for the respondent. Eileen O’Grady, barrister Click here to read a transcript of Bangs v FM Conway Ltd