Practice and procedure – Relief from sanctions – CPR 32.10 and CPR 3.9 – Disclosure – Order for exchange of witness statements by specified date – Statements not exchanged by that date – Relief from sanctions granted under CPR 3.9 – Whether CPR 3.9 correctly applied – Appeal dismissed
The respondent firm of estate agents brought proceedings against the appellants to recover £450,000 plus VAT to which it claimed to be entitled as commission under the terms of an agency agreement on the sale of the first appellant’s property in Knightsbridge, London SW1, for £25m.
Case management directions given in October 2013 included an order for standard disclosure with simultaneous exchange of witness statements to take place by late November 2013. A trial date was subsequently fixed for April 2014. Thereafter, disputes continued over disclosure, with the respondent seeking disclosure of the conveyancing file and other documents and the appellants asserting that no further documents had to be disclosed. The time for service of evidence expired without either side seeking an extension of time or serving witness statements, thereby attracting the sanction, under CPR 32.10, that the witnesses in question could not be called to give oral evidence unless the court gave permission.
In late January 2014, the respondent made applications to the court: (i) under CPR 3.1(2)(a), for an extension of time to February 2014 for exchange of witness statements; and (ii) under CPR 3.9(1), for relief from the sanction otherwise imposed by CPR 32.10. Allowing the applications, the judge found that both parties had been at fault for not exchanging witness statements but that the respondent’s fault was greater, since it had failed to apply for specific disclosure despite being the party dissatisfied with disclosure. He found that the non-compliance was not trivial and that there was no good reason for it. However, taking into account that there was default occurring on both side, that the trial date could still be maintained and that there were no significant additional cost implications, whereas the application of the sanction would effectively bring an end to the respondent’s claim, he concluded that it was appropriate to grant an extension of time and relief from sanction to both sides. The appellant appealed.
Held: The appeal was dismissed.
On an application for relief from a sanction prescribed by a rule, practice direction or court order, the starting point should be that the sanction had been properly imposed and complied with the overriding objective of dealing with cases justly. The phrase “unless the court gives permission” in CPR 32.10 could not be applied in a free-standing way, leaving the exercise of judicial discretion at large. In deciding whether to give permission, the court had to have regard, and give effect, to other relevant rules such as CPR 3.1 and the provisions of CPR 3.8 and CPR 3.9 concerning applications for relief from sanctions.
When deciding whether to grant relief, the two considerations specifically mentioned in CPR 3.9(1)(a) and (b), namely the need for litigation to be conducted efficiently and at proportionate cost and the need to enforce compliance with rules, practice directions and orders, were to be given paramount importance and weight over the other “circumstances of the case” referred to in CPR 3.9. The emphasis was therefore not simply on the interests of the parties in the individual case; instead, a wider approach was required, calling for protection of the position of court users generally. Laxity in compliance by the parties or in enforcement by the courts would not be acceptable. It was necessary to consider whether the non-compliance was trivial in nature and, if it was not, whether there was a good reason for it. The promptness or otherwise of an application to court for an extension of time and relief from sanction would be material for those purposes. If the non-compliance was not trivial and there was no good reason for it, then the expectation would be that the sanction should apply since, in those circumstances, the factors mentioned in CPR 3.9(1)(a) and (b) would usually trump other circumstances: Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537; [2014] 1 WLR 795 applied.
Applying the foregoing principles, the judge had been entitled to grant relief from sanctions in the instant case. He had been entitled to take into account, as other “circumstances of the case”, the important facts that the trial date would not be lost if relief were granted, a fair trial could still be had and no significant extra cost would be occasioned if relief were granted. A further relevant circumstance was that refusal to grant relief from the sanction stipulated by CPR 32.10 would effectively mean the end of the claim, since the burden of proof was on the respondent to prove its case and it would have no evidence. Although that grave consequence could not necessarily be regarded as a determinative factor in itself, the judge had not fallen into the error of granting relief from sanctions solely on that ground. Instead, his conclusion that it would be too severe a consequence had been reached against all the background history and the other matters listed by him. The case was one where the two matters in CPR 3.9(1)(a) and (b) could reasonably be assessed as being outweighed by all the other circumstances.
Robert Deacon (instructed by Blake Lapthorn) appeared for the appellants; Michele de Gregorio (instructed by SGH Martineau LLP) appeared for the respondent.
Sally Dobson, barrister
