| 3. | This is an appeal, by permission given by Stuart Smith L.J., by the
defendants, Guardian Assurance plc, from a decision of H.H. Judge
Hayward, sitting as a deputy judge of the High Court, made on 10th
December 1998. The judge dismissed Guardian's appeal against a
decision of Master Hodgson on 20th October 1998 refusing to strike the
action out for want of prosecution. The judge decided that the Master's
reasons for refusing to strike the action out were wrong, but he found
in favour of the plaintiffs on another ground which the Master's
consideration had not reached.
| 4. | The judge held that there had been inordinate and inexcusable delay for
a period of 5 years and 5 months but that this had not caused
substantial prejudice to the defendants. He accordingly held that it
had not been shown that there was a substantial risk that a fair trial
of the issues in the litigation would not be possible. The defendants
say that this conclusion was plainly wrong. The plaintiffs say that it
was a conclusion properly open to the judge on the material before him
and that this court ought not to substitute its own discretion for that
of the judge, even if this court might themselves have reached a
different discretionary conclusion.
| 5. | Narrative
| 6. | The plaintiffs own shop premises at 49-51 The High Street, Barnstaple,
in Devon. In 1989, the buildings were elderly. In May 1989, the
defendants acquired a large development site next to the plaintiffs'
store by a vesting order made under a compulsory purchase order. The
defendants set about developing their site. There were as many as 42
adjoining owners to that site, the plaintiffs being one of these. The
defendants engaged consultant architects and engineers and entered into
a building contract with Sir Robert McAlpine & Sons Limited, who
became third party to these proceedings. The contractors cleared the
site and carried out excavations. These works, it seems, revealed the
need to provide additional foundation support to the walls of the
plaintiffs' buildings in a number of places where the buildings abutted
the defendants' site. Both the plaintiffs and the defendants engaged
surveyors who were concerned, among other things, with negotiations
arising from the compulsory purchase order in which the plaintiffs
claimed compensation. There were protracted negotiations about this
compensation which were finally to be concluded in February 1998.
There was also a dispute over access to the site which was largely
resolved by April 1993.
| 7. | These proceedings arose because the defendants' contractors carried out
underpinning works to some of the walls of the plaintiffs' buildings.
The evidence does not tell us much about the detail of these works,
which were carried out between the end of June and the end of September
1989. They were designed by the defendants' engineers. They were
carried out by McAlpine or sub-contractors engaged by them. There were
frequent inspections of them by building control officers of the local
authority, the North Devon District Council.
| 8. | A photograph (A4) attached to a structural survey report of February
1990 made by a representative of the plaintiffs' surveyors shows
completed underpinning work to the gable wall of the soft furnishings
department. The wall itself is elderly irregular stonework. The
underpinning appears to be quite substantial fair-faced concrete, which
no doubt was reinforced. The photograph also shows a clear vertical
construction joint, which may or may not be designed as an expansion
joint. These details suggest (but the evidence does not explicitly
say) that there was a reasonably sophisticated design of the
reinforcement and of the concrete and its shuttering and it would be
surprising if there was not also some form of temporary support (which
would also have to be designed) to the plaintiffs' building while the
underpinning work was carried out.
| 9. | The plaintiffs' surveyors soon knew that these works were being carried
out. They had prepared a Schedule of Condition as at 5th June 1989.
The defendants' architects in the person of their site architect, Mr
Atkinson, also appear to have made a separate survey. By letter dated
30th June 1989, the plaintiffs' Property and Estates Manager wrote that
no consent had ever been given for any person connected with the
defendants or their builders to enter the plaintiffs' land. He was to
have a meeting with representatives of the defendants. By letter dated
28th July 1989, the plaintiffs' surveyor, Mr Dyte, wrote to the
defendants' surveyor, Mr Chase, saying that he had visited the site on
22nd July 1989. He said that, since the Schedule of Condition on 5th
June 1989, there had been substantial movement to the rear of the
plaintiffs' premises. His opinion was that this did not represent a
hazard to health and safety, but that it was a matter of concern. He
asked for tell tales to be fixed. In a letter dated 31st July, Mr
Walker of the defendants' architects told Mr Chase that he had had
discussions with their site representative and McAlpine and
| 10. |
| |
"It would appear that McAlpines site agent gave full notice to the
Co-op's Manager of their intention to commence works in underpinning to
these premises, and further, by agreement with the Manager, he has
taken steps to improve some of the construction to the rear of these
premises by the reduction in height of an existing masonry wall."
|
| 11. | Mr Chase replied to Mr Dyte's letter on 18th August 1989 speaking of
the need for expediency as a reason why written notice of the work had
not been given. He appreciated a concern that some movement appeared
to have occurred. He suggested an urgent meeting to resolve details.
There is an issue about whether the urgency concerned structural
stability or, as is possible, means of escape in case of fire. A
meeting was held on 19th September 1989 called by Mr Walker of the
defendants' architects. The main thing he wanted to discuss was the
fire escape route. In the course of the meeting, it is recorded that
Mr Dyte indicated that the underpinning to the plaintiffs' building
seemed to be quite satisfactory but that the building appeared to be
still moving and that tell tales had not been provided. Mr Dyte added
that he was not happy with the structural stability of the premises and
said that this might ultimately mean that the plaintiffs' store had to
close.
| 12. | The defendants' building works proceeded. It became necessary to trim
the underpinning. The vibration from this is said to have caused
further damage to the plaintiffs' building and 12th February 1990 is
identified as a date when this is said to have occurred. A Building
Control Officer from the District Council, Mr Irving, made a site
inspection. He wrote on 16th February 1990 that the condition of the
plaintiffs' premises were very poor. He stated that continuous
building control inspection of the underpinning of all properties
adjoining the defendants' site had been undertaken since their works
began. He said that the exterior of the fabric of the plaintiffs'
building had particularly caused concern. The plaintiffs' solicitors
wrote back on 2nd March 1990 stating on instructions that the
plaintiffs' premises were in reasonable and safe condition before the
defendants' works began. Mr Ley, another Building Control Officer,
replied on 28th March 1990 saying that the Building Control Division of
the local authority was working closely with the contractors and were
trying to make sure that the work they carried out did not affect the
stability of the plaintiffs' property. He expressed the opinion that
the underpinning carried out had not had that effect. On the contrary
it had provided better foundation stability. The plaintiffs' surveyors
responded to this in detail by letter dated 6th April 1990 taking issue
with what had been said, but accepting that the plaintiffs' building
was of an advanced age and that maintenance of older properties can be
particularly difficult.
| 13. | I have sketched in these details to show the nature of what was going
on, not to give a complete picture. There is no doubt at all that the
defendants were carrying out a major building operation on which
numerous professional and technical people were engaged. The
plaintiffs, for their part, were obviously concerned about the
stability of an elderly building and the effect which the defendants'
works may have had on it.
| 14. | The plaintiffs' surveyors produced a further Structural Survey and
Report dated February 1990. This is a lengthy document, whose general
import is that there were numerous defects in the structure of the
plaintiffs' premises, including, for instance, in the gable wall to
which I have already referred. A tabulated schedule suggests that the
"possible cause" of a substantial number of these defects was the
defendants' underpinning. The introduction to the report includes the
statement that neither existing foundations nor recent underpinning
could be directly inspected without excavating trial pits. It was also
stated that it was not possible to assess the general construction of
the foundations of the building. It was recommended that certain walls
should be taken down and reconstructed. On 16th June 1990 the
plaintiffs closed the store apart from the electrical department being
concerned about its stability.
| 15. | The writ in these proceedings was issued on 17th December 1990. It
complained of the underpinning works between June and September 1989
and vibration damage caused by the trimming works in February 1990.
The underpinning was alleged to be a trespass and the vibration a
nuisance. It was said that the plaintiffs had suffered damage, whose
particulars included the cost of removing the underpinning before new
walls could be built to replace those underpinned; the cost of
demolishing and rebuilding existing walls damaged by the underpinning;
losses consequent on closing most of the store but keeping the
electrical department open running at a loss; and other matters
concerning guttering and drainpipes, which did not feature in this
appeal. The writ claimed, among other things, an injunction requiring
the defendants to demolish and remove the underpinning; injunctions and
declarations in relation to trespass, water accumulation, guttering and
down pipes, rights of way and drainage easements; and damages. It is
to be noted that the proceedings began more than a year after the
underpinning was completed and some 10 months after the trimming works.
The plaintiffs had not taken any proceedings to prevent the
underpinning or its trimming while these works were taking place. They
did not at any time apply for an interim injunction after they had
started proceedings.
| 16. | The reality of the plaintiffs' position in early 1991 appears
reasonably plain from their answers, served on 24th September 1991, to
a Request for Further and Better Particulars dated 11th March 1991.
They were saying that their preferred course of action was to demolish
and rebuild the store. But the existence of the defendants'
underpinning meant that the cost of removing it would be expensive so
as to make the plaintiffs' proposed redevelopment uneconomic. The
alternative was to leave the underpinning in place. But designing and
building a new store round it would also be expensive and uneconomic.
Hence the idea, claimed but never pursued in these proceedings, of
getting an order requiring the defendants to remove the underpinning at
their own expense. A positive court order to this effect was never
likely to be obtained. The plaintiffs had taken no steps 18 months
earlier to stop the defendants doing the underpinning. Assuming that
the plaintiffs would in due course establish their claim, damages would
have been seen as a sensible and satisfactory solution.
| 17. | The defence was served on 11th March 1991. It defended the allegation
of trespass by saying that in June 1989, Mr Fox, the plaintiffs' store
manager, had given verbal consent to the underpinning to Mr Nutt,
McAlpine's site manager. It was denied that the underpinning had
caused any material movement in the walls of the plaintiffs' premises.
Trimming the underpinning was admitted, but it was denied that this
constituted a nuisance or that it caused any damage to the plaintiffs'
walls. On 23rd April 1991, the defendants served a third party notice
against McAlpine. They have featured little in the proceedings and
have taken no direct part in the matter now under appeal. The
plaintiffs served further and better particulars of the statement of
claim on the 24th September 1991. [Two days later, the defendants
completed their development works.] There was a summons for directions
which was partly heard on 24th July 1992. It was adjourned to the 13th
October 1992, when directions were made by consent in both the action
and the third party proceedings. The directions included that there
should be lists of documents within 56 days of the date of service of
the order, that is by about Christmas 1992. There were directions
about witness statements and expert reports. The estimated length of
the trial was one week. The matter was to be set down upon application
by any party having first given not less than one months' notice to the
other two parties.
| 18. | There had been no urgency in the conduct of the action. The terms of
the consent order showed no enthusiasm for progressing the action in
the future. The plaintiffs served their list of documents on 5th
November 1992. The defendants and McAlpine have never done so. On 6th
January 1993, the plaintiffs' solicitors wrote to each of the other
parties asking about their list of documents. McAlpine's solicitors
wrote back the following day saying that their list of documents would
be served shortly. It was not. After that, the action and the third
party proceedings went to sleep.
| 19. | Meanwhile in January 1993, the plaintiffs demolished their old store
and built a new one. This was completed in October 1993. The
plaintiffs say that the design of the new store was more expensive
because it had to take account of the defendants' underpinning which
was not removed. There was some desultory negotiations extending over
the next 4 years or more mainly directed to settling the compensation
claim from the compulsory purchase order. The limitation period for
the trespass claim expired at the latest in about September 1995. The
limitation period for the nuisance claim expired in February 1996 - I
think the date of 12th February 1997 referred to in the chronology is a
year out (see paragraph 4 of the statement of claim and paragraph 15 of
the affidavit of Christopher Taylor), but it does not make much
difference in the present context. In the course of without prejudice
discussions in July 1997, representatives of the defendants told the
plaintiffs that the defendants would apply to strike out the
proceedings for want of prosecution if the plaintiffs tried to revive
it. This did not jolt the plaintiffs into action. Outstanding issues
on the compulsory purchase claim were resolved in principle in February
1998. On 24th March 1998 the plaintiffs served a notice of intention
to proceed. The defendants issued their summons to strike out for want
of prosecution on 24th April 1998. The access and the compulsory
purchase order issues were finally settled in June 1998.
| 20. | The parties have understandably taken no steps to progress the action
itself since April 1998. The present position is that there are some
pleadings, now about 8 years old, and the plaintiffs have served a list
of documents. Apart from that, and the evidence served in the striking
out proceedings, nothing has happened. The evidence indicates - and it
is obvious - that the plaintiffs would need to reconstruct their claim.
The claims for injunctions, which, on one view, were the main focus of
the action when it was started, are no longer relevant. In outline,
the plaintiffs would now want to claim damages for:
| 21. |
| |
(a) losses incurred because the old store was closed or partly closed
in 1990;
| | | (b) the extra cost of constructing the new store because its design
had to accommodate the defendants' underpinning which was not removed;
and
| | (c) loss resulting from the contention that the plaintiffs had to
build the new store some 10 years earlier than they would have, if the
old store had not been damaged by the defendants' works.
| |
| 22. | As Waller L.J. said during the hearing, there may be conceptual
problems with the third of these claims. The second of them is likely
to raise detailed questions of architectural and engineering fact and,
possibly, opinion, which the parties have not even begun to address in
detail.
| 23. | In short summary the issues which it appears this action would have to
address include:
| 24. |
| |
(1) whether underpinning works which ended in September 1989
constituted a trespass or a nuisance and whether they damaged the
plaintiffs' building.
| | | (2) whether subsequent trimming works were a nuisance and damaged the
plaintiffs' building.
| | (3) whether the plaintiffs' original store became unusable in whole or
in part because of the defendants' works.
| | (4) whether in consequence the plaintiffs had to demolish and rebuild
their store earlier than they otherwise would have.
| | (5) whether the plaintiffs' rebuilding works were more expensive
because they had to work around the underpinning.
| | | |
| 25. | Factual questions relevant to one or more of these issues include (a)
whether a representative of the defendants orally agreed in June 1989
that the defendants might carry out their underpinning works, and (b)
what was the physical state of the plaintiffs' building before the
defendants undertook their works, and (c) to what extent did the
defendants' works make the state of the plaintiffs' building worse.
| 26. | The parties' submissions did not dwell on the possibility (which I
think is nevertheless apparent) that the plaintiffs might wish to try
to amend their claim to allege additional causes of action, for
instance, negligence, withdrawal of support or breach of an undertaking
given by the defendants by their solicitors on their behalf in
correspondence. Such an application would be outside the limitation
period. I mention the possibility only to fill out the factual and
legal complications which this action would be likely to engender about
facts which happened 10 years ago.
| 27. | The judge's decision
| 28. | The judge considered with reference to Birkett v James [[1978] A.C. 297]
whether the plaintiffs been guilty of inordinate and inexcusable delay
in the prosecution of the claim. He considered that the delay of 5
years and 5 months between November 1992 and March 1998 was inordinate.
The plaintiffs did not suggest otherwise, but they submitted to the
judge that the delay was excusable. They said that the order for
directions of 13th October 1992 contained an express agreement which
relieved them from any obligation to prosecute the action until either
they or one of the other parties gave notice for setting down.
Alternatively, the plaintiffs said that there was an agreement or at
least an understanding between themselves and the defendants that the
action should remain in abeyance pending the resolution of the claim
arising from the compulsory purchase order. Master Hodgson had decided
in the plaintiffs' favour on the first of these points. The judge
considered that this was wrong. He also considered in detail
correspondence and affidavit evidence directed to the question whether
there had been agreement or acquiescence by the defendants that the
action should not proceed. He held that there had not. There is no
challenge by the plaintiffs to these findings in this court. So the
delay was, not only inordinate, but also inexcusable.
| 29. | On the issue of oral consent to the underpinning works, the defendants'
case is that in June 1989 the plaintiffs' store manager, Mr Fox, gave
his oral consent to Mr Nutt, who was McAlpine's site manager, that the
underpinning works might be carried out. They say that this is a
question which depends exclusively on oral evidence. Mr Nutt left
McAlpine in May 1991. The defendants say that there will be obvious
difficulties in him being able to remember a crucial conversation 10
years or more ago when there are no documents to help. No witness
statement was taken from him, although the defendants' then solicitors
spoke with him before the defence was served. He is thought to be an
unwilling witness and the defendants may have to serve a witness
summons to get him to give evidence. The plaintiffs' submissions
included that it would be incredible if permission to proceed with
substantial encroaching underpinning works had been obtained in a
conversation between the contractor's site manager and the plaintiffs'
store manager. There was a letter dated 18th August 1989 suggesting
that there had been no such permission.
| 30. | The judge considered the parties' submissions about Mr Nutt. It was
not suggested that he could not be traced, but there was no witness
statement from him. The judge said that there was no evidence that he
would not be able to recall the contract. In the judge's view, the
issue of consent was a very short point. He was not prepared to infer
that Mr Nutt would not be able to deal with it. There were some
contemporary documents to assist the court, even if they did not help
the defendants' position.
| 31. | The defendants submitted to the judge that they were prejudiced because
the demolition of the plaintiffs' store and the building of a new store
had destroyed any physical evidence on the ground before experts could
be instructed to prepare reports. The judge considered that this was
not a good point. The defendants had themselves raised in their
defence served in March 1991 the issue that the plaintiffs' buildings
had been unstable and that their stability had not been affected by the
underpinning works. The plaintiffs started to demolish the store 3
months after the order for directions on 13th October 1992 and a month
after the plaintiffs' list of documents had been served. The
defendants clearly knew that the plaintiffs intended to demolish the
original buildings and had themselves raised the issue to which this
submission goes. The judge considered that the redevelopment, not the
plaintiffs' delay, had destroyed the evidence on the ground. He might
also have said that the defendants had opportunity to gather evidence
of the condition of the buildings before they were demolished in
support of an issue which they themselves had already raised in the
litigation. Neither party appears to have taken systematic steps to
record for the purpose of this litigation relevant details of the old
building as it was demolished nor of that part of the design and
construction of the new building said to have been required because the
defendants' underpinning remained where it was. This would be
surprising, if there was any real intention at the end of 1992 to
progress the litigation.
| 32. | On questions relating to the physical state of the plaintiffs'
buildings before and after the defendants' underpinning works, the
defendants rely on what they said were numerous evidential difficulties
arising from the delay. Documents, to which I have already referred,
indicate that the Building Control Officers of North Devon District
Council, Mr Ley and Mr Irving, made frequent site inspections of the
plaintiffs' premises before the defendants' development and in the
early months of 1990. But they now have little if any memory of the
details of the state of this building 91/2 years ago.
| 33. | The defendants say that there are other difficulties. Mr Bond, the
resident structural engineer who initially inspected the site and who
worked for the consulting engineers which designed the underpinning
works, Ernest Green Partnership, cannot be traced. Neither can his
successor, Mr Lane, and efforts to contact another successor, Mr
Hubbard, have been unsuccessful. They both attended certain relevant
meetings on site with Mr Atkinson, the site architect, when no other
representative of the defendants was present. Mr Hubbard is thought to
have designed the underpinning. Ernest Green Partnership and its
successor have no documents recording in detail the condition of the
store. Mr Atkinson was sacked in the Spring of 1990 and has not been
found. The memories of the supervising architect, Mr Walker, and the
defendants' surveyor, Mr Chase, are not good. The only documents which
Mr Chase has relating directly to the condition of the property are
three pages of hand written notes relating to an inspection which he
carried out on 2nd September 1988. The schedule of condition prepared
by Mr Atkinson and a report prepared by him on damage to the structure
which the plaintiffs were alleging had been caused by the underpinning
cannot be found. The architects' files mainly comprise correspondence
about other disputes which were going on at the time and contain no
relevant photographs.
| 34. | The judge referred in some detail to the evidence about Mr Ley, Mr
Irwin, Mr Bond, Mr Lane, Mr Hubbard and Mr Atkinson. He also
considered evidence relating to the documents available to the
defendants in the hands of the various professionals. As to the
missing survey and report of Mr Atkinson, the judge noted that Mr Dyte,
the plaintiffs' surveyor, prepared the survey report dated 5th June
1989. The judge recorded Mr Whitaker's submission on behalf of the
plaintiffs that when complaints about the underpinning works were first
made, surveyors were engaged on both sides, Mr Dyte and Mr Chase, and
that they were heavily involved in the work and in the compulsory
purchase order negotiations. They would have comprehensive files to
refresh their memories on these various issues. Mr Whitaker also
submitted that this was a substantial development involving McAlpine,
architects, specialist engineers and surveyors, and that there would be
a vast number of documents relating to the works. He also submitted
that, if the defendants had complied with the order for directions of
the 13th October 1992 by taking, in the Autumn of 1992 and the early
months of 1993, steps which they ought to have taken in preparation for
the litigation, they would be in a better position to know what
documents were available to them. The prejudice for which the
defendants contend, said Mr Whitaker, derived from their own fault.
| 35. | The judge then said this at page 19A of the transcript:
| 36. |
| |
"I have considered these submissions carefully. The buildings works
were not, of course, carried out by the defendants but by its
contractors, and architects, surveyors and engineers were, of course,
involved. I am satisfied that there is bound to be a wealth of
documents and records here which the contractors and professionals can
refer to refresh their memories. Given that help, I am not persuaded
that their recollection will be any worse now than it would have been
perhaps three or four years ago when this action might have been tried
had the plaintiff moved the matter along."
|
| 37. | The judge considered that the loss of Mr Atkinson's survey and report
was not prejudicial, or at least was mitigated by the fact that a
survey was done, although by the plaintiffs' surveyor. He is a
professional man, and the judge saw no reason to suppose that the
survey was not done in a proper and a professional way. There was no
reason to assume that a report by Mr Atkinson would have reached very
different conclusions from those of Mr Dyte. As to the Building
Control Officers, there were documents available to refresh their
memories. Even if they did not, the judge was not persuaded that their
memories as to the condition of the plaintiffs' premises before the
building works began were of such importance to the defendants' case to
justify striking out the claim. It was unlikely that their memories
would be any worse now than they would have been some 3 or 4 years
earlier.
| 38. | The judge took account of his view that the defendants' difficulties
had to a significant extent been caused by their own conduct. They
could not, in his view, have it both ways. They could not say that
there was never any agreement to hold this action in abeyance and then
rely upon their own total inactivity since the order for directions to
establish prejudice. The defendants should have sorted out their own
evidence and obtained witness statements. It was all the more
important that the defendants should have taken steps to prepare
themselves to some extent to fight this action, since they were always
going to have to rely on the evidence of McAlpine and their employees
and their professional advisors.
| 39. | In the result, the judge was not persuaded that a fair trial could not
now take place or that the delay on the part of the plaintiffs had in
fact caused the defendants serious prejudice. The judge accordingly
upheld the Master's order, although, as I say, for a different
reason.
| 40. | The parties' submissions
| 41. | Miss Andrews on behalf of the defendants has, both in writing and
orally, restated and elaborated upon the submissions made to the judge.
In summary, she submits that none of the professional witnesses
engaged by the defendants on their development who would have been able
to give direct first hand evidence of the condition of the plaintiffs'
store is available. This is particularly acute for Mr Bond, the
resident structural engineer, who cannot be found and Mr Hubbard, the
structural engineer who designed the underpinning. The Building
Control Officers cannot remember anything which would significantly
explain or expand on the views expressed in the contemporary
correspondence. Vital documents relevant to the condition of the site
are missing. If Mr Atkinson could be found, his contemporary survey
and report is not available to refresh his memory. The documents
available to the defendants are of peripheral relevance and limited
value in refreshing the memories of witnesses. The memories of other
professionals are significantly impaired. Mr Nutt's evidence is
critical to one element of the defence and he would now have to rely on
his unassisted memory of what happened more than 10 years ago. Miss
Andrews submits that it is obvious that memories must have faded
significantly over a period of this length and that the judge was wrong
to rely on the fact that there was no evidence that Mr Nutt would not
be able to recall the contract. Five years and 5 months in this
context is a very long time. She submits that it is unnecessary for a
party seeking to strike out a claim for want of prosecution to produce
specific evidence of the impairment of the memories of specific
witnesses (see Shtun v Zalejska [[1996] 1 W.L.R. 1270 at 1285B Peter
Gibson L.J. and 1288 Hobhouse L.J.]) nor as to the time within the
period of delay at which their memories became impaired. She refers us
to the well known passage in the speech of Lord Browne-Wilkinson in
Roebuck v Mungovin [[1994] A.C. 224 at 234E-G], where he said that a
judge can infer that any substantial delay at whatever period leads to
a further loss of recollection and that an attempt to allocate
prejudice to one rather than another period of delay is artificial and
unsatisfactory.
| 42. | Miss Andrews submits that the judge failed to deal with the
unavailability of certain of the professionals to which the evidence
referred. She submits that the judge's finding that there was bound to
be a wealth of documents and records from which witnesses could refresh
their memories did not accord with evidence that the documents
available to the defendants were largely concerned with other matters.
She submits in effect that the judge brushed aside the importance of
the loss of Mr Atkinson's survey and report and that there was no
proper basis for supposing that Mr Dyte's report should be regarded as
essentially uncontentious. She submits that the judge was wrong to
blame the defendants for inactivity. The main obligation to progress
an action lies on the plaintiff and a plaintiff who fails to do so for
a very long period cannot properly contend that evidential prejudice is
the fault of an equally inactive defendant. She refers to Allen v McAlpine [[1968] 2 Q.B. 229 at 258D] explaining passages at 263E and 273F
as references to waiver; and to
Arbuthnot Latham v Trafalgar Holdings [[1998] 1 W.L.R. 1426 at 1435G]. She submits that at most the
defendants' inactivity in this case should only properly be criticised
in relation to discovery.
| 43. | One of the written grounds of appeal is that the judge failed to take
into consideration the consequences to other litigants and to the
courts of inordinate delay and the fact that the plaintiffs had chosen
not to set down the action for trial by giving the notice required by
the order for directions of 13th October 1992. The plaintiffs' delay
was, she says, intentional. The judge should have had regard to
prejudice to the due administration of justice in considering whether
there was a substantial risk that there could not be a fair trial. She
refers us to Arbuthnot Latham v Trafalgar Holdings [[1998] 1 W.L.R. 1426
at 1436], where Lord Woolf said:
| 44. |
| |
"Any delay which occurs will be assessed not only from the point of
view of the prejudice caused to the particular litigants whose case it
is, but also in relation to other litigants and the prejudice which is
caused to the due administration of civil justice."
|
| 45. | Miss Andrews submits that this court in Choraria v Sethia [ [1998] C.L.C 625] made it clear that those considerations apply, not only to future
cases, but also to those which are already started. The judge ought to
have taken these matters into consideration, but did not.
| 46. | In conclusion, Miss Andrews submits that it is difficult to think of a
more obvious case for striking out an action for want of
prosecution.
| 47. | Mr Whitaker's submissions support the judge's conclusion. Although he
accepts that the plaintiffs' claim will now need to be restructured to
some extent, he emphasises that the plaintiffs' Further and Better
Particulars of September 1991 had explicitly asserted that damage
caused by the underpinning works had accelerated the plaintiffs' need
to replace the building. There has been no recent radical change in
the plaintiffs' case. He emphasises that the defendants knew that the
store was to be redeveloped in January 1993 and that they could not
have thought in the period between the Directions Order of October 1992
and the demolition of the building that the action was not going to be
pursued. The defendants did not however take any steps to have the
building surveyed before it was demolished.
| 48. | Mr Whitaker does not suggest that he can rely on the defendants'
inactivity during the period of culpable delay. But he does submit
that, following the order for directions in October 1992, there were
steps which the defendants should have then taken and that the period
of delay did not in essence start until the Spring of 1993. During
that period, which included the demolition of the plaintiffs' building,
the defendants should have got their documents in order and taken
witness statements from those witnesses who would be essential to their
case. As I have said, he submits that by then the defendants were well
aware that the plaintiffs' case was that the underpinning had
accelerated the need to demolish and rebuild.
| 49. | As to the impairment of witnesses' memories, Mr Whitaker submits that
Mr Nutt was always going to have to rely on his memory largely
unsupported by documents. The main points in the case concerned the
condition of the plaintiffs' building before and after the underpinning
and what happened on site then. The professional witnesses would
always have to rely on documents and this is not, as Mr Whitaker puts
it, an eye witness case. The judge was entitled to infer that there
would be a wealth of documents from contractors and professionals. Mr
Whitaker relies strongly on the probability that from one source or
another there will be substantial documentation of the progress of the
works and contact between the parties. These documents would include
site diaries, minutes of site meetings, architects' instructions,
correspondence between the professionals and the contractor and between
the professionals themselves and correspondence with their respective
clients.
| 50. | Mr Whitaker submits that the defendants specifically withdrew before
the judge any point arising from Grovit v Doctor [[1997] C.L.C 1038] and
that they did not rely on prejudice to the due administration of
justice. This appears to be a reference to passages in the affidavit
of Judith Hayward, a solicitor with the firm representing the
defendants, to the effect that the plaintiffs had only kept the action
alive to help their negotiations for compulsory purchase compensation
and that this should be seen as an abuse of process. This was
strongly denied in Mr Taylor's affidavit on behalf of the plaintiffs.
Mr Whitaker accepts, however, that the plaintiffs' delay was
intentional and he came close to accepting - what I think is obviously
correct - that they had decided to "warehouse" the case, in the terms
of Lord Woolf M.R. in at 1437.
| 51. | Discussion
| 52. | The starting point is, as always,
Birkett v James [[1978] AC 297] in
which Lord Diplock said at page 318 of the court's power to dismiss
actions for delay:
| 53. |
| |
"The power should be exercised only where the court is satisfied
either (1) that the default has been intentional and contumelious, e.g.
disobedience to a peremptory order of the court or conduct amounting to
an abuse of the process of the court; or (2) (a) that there has been
inordinate and inexcusable delay on the part of the plaintiff or his
lawyers, and (b) that such delay will give rise to a substantial risk
that it is not possible to have a fair trial of the issues in the
action or is such as is likely to cause or to have caused serious
prejudice to the defendants either as between themselves and the
plaintiff or between each other or between them and a third party."
|
| 54. | Many authorities have over the years dealt with Lord Diplock's second
limb. These include Roebuck v Mungovin [[1994] A.C. 224 at 234E-G] and
Shtun v Zalejska [[1996] 1 W.L.R. 1270], to which I have already
referred. Especially relevant to this appeal are passages in the
judgment of Peter Gibson L.J. in Shtun [at pages 1277 and 1285] and in
the judgment of Hobhouse L.J. at page 1288.
| 55. | More recently, there has been a culture change which anticipated the
introduction of the Civil Procedure Rules and which was already part of
the relevant law and practice in December 1998 when Judge Hayward gave
his decision in this case.
| 56. | The line of cases which exemplify this change concentrate on whether
there has been an abuse of process. Failure to progress litigation,
where there is no real intention of bringing the proceedings to a
conclusion or where there is wholesale disregard of the rules of court
is capable of being an abuse of process which may lead the court to
strike out proceedings irrespective of prejudice to defendants. An
important consideration which may contribute to this conclusion has
crystallised in rule 1.1(2)(e) of the Civil Procedure Rules to the
effect that dealing with a case justly includes, so far as is
practical, allotting to the case an appropriate share of the court's
resources, while taking into account the need to allot resources to
other cases. This ingredient of justice was already in place before
26th April 1999 when the Civil Procedure Rules came into force. It
means, in my view, that there may be cases which have been so conducted
that they do not in justice deserve the allocation of further court
resources.
| 57. | The line of cases to which I have referred include the House of Lords
decision of Grovit v Doctor [[1997] C.L.C 1038, in which Lord Woolf said
at page 1044 Paragraph [33]] that, if there is an abuse of process, it is not strictly
necessary to establish want of prosecution under either of the limbs
identified by Lord Diplock in Birkett v James. It also includes
Arbuthnot Latham v Trafalgar Holdings [[1998] 1 W.L.R. 1426] and
Choraria v Sethia [[1998] C.L.C. 625].
| 58. | In Choraria, there had been over four years' delay and the contention
was that the plaintiff's conduct amounted to an abuse of process so
that the action should be dismissed irrespective of prejudice either
under the first limb of Birkett v James or by the application of the
independent principle recognised in Grovit v Doctor. Nourse L.J. in
his judgment in Choraria considered Grovit v Doctor and Arbuthnot Latham in detail. He concluded that Arbuthnot Latham was declaring the
law as it now is and not only for the future. He then said at [page
630F]:
| 59. |
| |
"The law, as it applies to this case, may therefore be stated thus.
Although inordinate and inexcusable delay alone, however great, does
not amount to an abuse of process, delay which involves complete, total
and wholesale disregard, put it how you will, of the rules of court
with full awareness of the consequences is capable of amounting to such
an abuse, so that, if it is fair to do so, the action will be struck
out or dismissed on that ground. With regard to the facts of this
case, I would add that a disregard of a non-peremptory order must, if
anything, be a fortiori to a disregard of the rules."
|
| 60. | The concurring judgments of Pill and Thorpe L.JJ. were to the same
substantial effect.
| 61. | In the present case, the defendants did not rely before the judge on
wholesale disregard of the rules. It would be problematic to do so in
the light of the terms of the directions order of 13.10.92 and to rely
on specific failures would be artificial. This is simply a case where
benign directions were made by consent in October 1992, and then
nothing happened for 5 years and 5 months. Miss Andrews submits that
the delay was deliberate and that it would, to use the language of
Thorpe L.J. in Choraria at 635, be neither punitive nor unjust to
withdraw the case from plaintiffs who have shown no commitment to it.
As will be seen, I agree that this should be the result of this appeal
and I consider that the plaintiffs' intentional decision to "warehouse"
the claim, no doubt as an adjunct to the compulsory purchase order
negotiations, was very arguably an abuse. But I am prepared to proceed
(without specifically so deciding) on the basis that in this case there
was inordinate and inexcusable delay which did not by itself amount to
an abuse of process. The judge was not asked to decide the application
on this basis.
| 62. | The next question however is whether the delay has given rise to a
substantial risk that it is not possible to have a fair trial of the
issues in the action. In my judgment, the answer to that question is
plainly yes, and so plainly yes that I consider that this court should
reconsider and reverse the decision of the judge. I think that the
judge's discretionary decision is undermined by two related
misjudgments. Firstly, I think that he (and also the parties'
advocates) have substantially underestimated the scope of the factual
enquiry needed to resolve the main construction disputes which would
arise. You cannot decide whether quite sophisticated underpinning
damaged the structure of an elderly building without investigating the
details of the design and construction of the underpinning and the
temporary support and the structure and construction of a building
which has long since been demolished. Secondly, I think that the judge
substantially underestimated the significance for such an enquiry of
oral evidence. The fact that some litigation of this kind is conducted
with professional witnesses giving inadmissible evidence about facts
they think may be pieced together from a mass of documents which they
did not write and of drawings which they did not draw does not detract
from the fact that proper evidence should come from those who were on
site daily and who remember what happened. Masses of documents of this
kind written 10 years ago are not in the main in truth used to refresh
witnesses' memories. They are usually used in an attempt at historical
reconstruction by advocates and expert witnesses. In my view, it is
obvious that a delay of 5 years and 5 months in a case such as this
would make it substantially more difficult for the defendants - but in
fact anyone - to conduct this litigation. Further significant failing
of witnesses' memories during that period was, not only an inference
which it was open to the judge to draw, but one which in this case he
should have drawn. Although points of detail can be made to counter
the defendants' evidence and submissions here, I think that the main
burden of the case advanced by Miss Andrews about witnesses' memories
and availability is plainly sound. As one instance only, I think that
she is correct to submit that Mr Bond, Mr Hubbard and the Building
Control Officers were potentially important witnesses whose
unavailability or impaired memories would seriously hamper the
defendants.
| 63. | That by itself might be enough to establish serious prejudice to the
defendants such that the action should be struck out. But my views
about the judge's decision enable the court to look at the matter
afresh and to reach its own decision. In my view, there is another
powerful - I am tempted to say overwhelming - reason why this appeal
should succeed. The heart of the matter in this particular case seems
to me to lie in Mr Whitaker's unavoidable strong reliance on the
probability that from one source or another there will be very
substantial documentation of the progress of the works and contact
between the parties. These documents, he says, would include site
diaries, minutes of site meetings, architects' instructions,
correspondence between the professionals and the contractor and between
the professionals themselves and correspondence with their respective
clients. This, in my view, is an implicit acceptance that oral
evidence, in so far as witnesses can be found, will now be of little
help. I do not accept that it never would have been. It is also an
assertion that this moribund action would now have to proceed by
gathering together from numerous sources - architects, engineers,
quantity surveyors, site supervisors, the local authority, clients,
contractors and possibly subcontractors - what remains of the avowedly
very extensive documentation of two substantial building contracts -
the defendants' between 1989 and 1991 and the plaintiffs' in 1993. No
doubt the question should be addressed as it was in 1998. But the
implicit assertion is that the parties must now piece together from a
mass of documents the complicated details, many of them inferential by
this process, of demolition and construction works whose details are at
best a hazy memory. It is further the implicit suggestion that the
court should be expected to devote the time necessary to reach factual
conclusions from material of this kind.
| 64. | Disputes of this kind are always troublesome and usually overloaded
with documents. That would have been so, no doubt, had the action been
tried, as it should have been no later than about 1994. But to start a
process of reconstruction 10 years after some of the main facts and
after an interval of 5 years and 5 months when nothing has happened
undoubtedly means, I think, that the future progress of the action
would be substantially more troublesome, more time-consuming and more
expensive. In addition, there is a serious risk that the quality of
any eventual judgement would be worse than if the facts had been put
before the court at a proper time. For these reasons, there is a
substantial and obvious risk that a fair trial will not be possible.
The trial would not be fair for the parties, including the defendants,
who would therefore be seriously prejudiced. Nor, importantly, would
it be fair to the court to expect judges to participate in the process
and make decisions about facts reconstructed in this way. It would be
a painstaking and time consuming business - much more painstaking and
time consuming than if the delay had not occurred. It would not be a
proper or just use of the court's resources. It would not be fair to
other litigants who conduct their cases at a proper pace.
| 65. | Conclusion
| 66. | For these reasons, I think that the judge should have struck out the
plaintiffs' claim and action and I would allow this appeal.
| 67. | LORD JUSTICE WALLER:
| 68. | I agree that this appeal should be allowed for the reasons given by May
L.J.
| 69. | ORDER: Appeal allowed. Costs as agreed between the parties and
approved by their Lordships.
| 70. | (Order not part of approved judgment)
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