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This Report is referred to in: Arrow Nominees v Blackledge [69], Ashton v Securum Finance [32], Asiansky Television Plc v Bayer-Rosin [42], [43], [43], [44], [45], Audergon v La Baguette Ltd [51], Best v Charter Medical [20], [20], Nasser v United Bank of Kuwait [30], Purdy v Cambrian [49], [51], [51], Walsh v Misseldine [76], [81], [81].
IN THE SUPREME COURT OF JUDICATURE
QBENI 99/0827/A2

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

(His Honour Judge Prosser QC (sitting as a Deputy High Court Judge)

Royal Courts of Justice, The Strand, London WC2

6th December, 1999

Before:
LORD JUSTICE WARD

LORD LLOYD OF BERWICK

UCB CORPORATE SERVICES LIMITED
(Formerly UCB BANK PLC
Claimant/Appellant

v

HALIFAX (SW) LIMITED
Defendant/Respondent

(Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited, 180 Fleet Street,
London EC4 A 2HD

Tel: 0171 421 4040

Official Shorthand Writers to the Court)

MR D PHILLIPS QC (Instructed by Messrs Speechly Bircham, London EC4 A 2HX) appeared on behalf of the Appellant

MR M SIMPSON (Instructed by Messrs Williams Davies Meltzer, London EC4 A 1AP) appeared on behalf of the Respondent

JUDGMENT
(As approved by the Court)

©Crown Copyright

Monday 6th December, 1999

JUDGMENT

1.   LORD JUSTICE WARD: I will ask Lord LLoyd to give the first judgment.
2.   LORD LLOYD: This is an appeal from a decision of Judge Prosser QC, given on 12th July 1999, whereby he struck out the claimants' action for damages for breach of contract or negligence. The claimants, UCB Corporate Services Ltd, are a bank. In 1989 one of their customers asked for a loan to purchase a property known as Squirrels Nursing Home in Brentwood. The purchase price was £2.5 million. The bank obtained a valuation report from the defendants, Halifax (SW) Ltd, which was dated 24th October 1989. The defendants valued the property at £2 million. The claimants' case is that that was a gross overvaluation and that at the valuation date the property was worth only £1.45 million. The claimants say that they have suffered loss as a consequence, even though the property was in the event sold on 27th May 1997 for the precise figure at which it had been valued.
3.   On 23rd October 1995, one day before the expiration of the limitation period, the claimants issued a writ. The subsequent course of the proceedings is set out in an agreed chronology. The summons for direction was issued on 24th December 1996, and further directions were given on 21st February 1997.
4.   The case was due to be set down by 30th July 1997. But thereafter there were repeated failures by the claimants to comply with their obligations under the rules and orders of the court, notwithstanding repeated reminders by the defendants. Nothing, or almost nothing, happened after the further directions given on 21st February 1997. But I need not go into details because this case does not depend on an understanding of the details.
5.   On 17th May 1999 the defendants made their application to strike out. That application came before Judge Prosser, as I have said, on 12th July 1999. The defendants relied on two main grounds. The judge declined to strike out on the first of the two grounds, namely, that the claimants had no reasonable prospect of success in the action. There is a cross-appeal in relation to that ground. Instead the judge struck the action out on the second of the two grounds, namely, that a continuation of the action would be an abuse of the process of the court, in view of the wholesale disregard by the claimants of the rules and orders of the court.
6.   Now wholesale disregard is a quotation from the decision of this court in Arbuthnot Latham Bank Ltd v Trafalgar Holdings [1998] 1 WLR 1426. I read two paragraphs from the Master of the Rolls' judgment at page 1436:
7.  
     "It is already recognised by Grovit v Doctor [1997] 1 WLR 640 that to continue litigation with no intention to bring it to a conclusion can amount to an abuse of process. We think that the change in culture which is already taking place will enable courts to recognise for the future, more readily than heretofore, that a wholesale disregard of the rules is an abuse of process as suggested by Parker LJ in Culbert v Stephen G Westwell [1993] PIQR P54.
8.  
     While an abuse of process can be within the first category identified in Birkett v James [1978] AC 297 it is also a separate ground for striking out or staying an action (see Grovit v Doctor at pp 642-643 Paragraph [6]) which does not depend on the need to show prejudice to the defendant or that a fair trial is no longer possible. The more ready recognition that wholesale failure, as such, to comply with the rules justifies an action being struck out, as long as it is just to do so, will avoid much time and expense being incurred in investigating questions of prejudice, and allow the striking out of actions whether or not the limitation period has expired."
9.   and I need not read the rest of that paragraph.
10.   That passage from the judgment in Arbuthnot Latham was quoted and applied by Henry LJ in an unreported decision given on 5th May 1999 named Shikari v Malik. The same approach was adopted in another decision of this court, in which the judgment was given by May LJ on 28th July 1999. The name of that case was Cooperative Retail Services Ltd v Guardian Assurance Plc.
11.   In the light of those authorities, the judge was, in my judgment, fully justified in asking himself the question whether, on the facts of this case, there was such a total disregard of the rules and orders of the court as to amount to an abuse of the process. The answer to that question depended on the exercise of his discretion. Applying the Arbuthnot Latham approach, the judge reached a conclusion which he was entitled to reach and at any rate was not plainly wrong.
12.   But Mr Phillips for the claimants submits that Arbuthnot Latham is no longer the correct approach, or at any rate is a dangerous approach if applied in isolation. He argues that a change has been brought about by the subsequent decision, again of this court, in a case called Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926. In that case Lord Woolf MR gave the leading judgment. It will be noticed that that case was decided between the date of the Shikari case on 5th May and the Cooperative Retail Services case on 28th July. All three cases, like the present case, were decided subsequent to the new rules coming into force.
13.   We have not found it necessary in this case to call on counsel for the respondent, but we understand that he would have relied on yet another very recent case in which what I will call "the Arbuthnot Latham approach" was adopted.
14.   Mr Phillips accepts that under Part 3.4 of the Rules there is an unfettered discretion to strike out a case where there has been a breach of the rules. But he submits that in the Biguzzi case Lord Woolf MR drew attention to alternative ways in which cases of delay can be dealt with: for example, by an order for the payment of costs on an indemnity basis, or by the disallowance of interest on any subsequent award of damages. I quote the paragraph from Lord Woolf's judgment at page 1933 (Paragraph [51]) on which Mr Phillips relies on in support of his argument. The Master of the Rolls said:
15.  
     "There are alternative powers which the courts have which they can exercise to make it clear that the courts will not tolerate delays other than striking out cases. In a great many situations those other powers will be the appropriate ones to adopt because they produce a more just result. In considering whether a result is just, the courts are not confined to considering the relative positions of the parties. They have to take into account the effect of what has happened on the administration of justice generally. That involves taking into account the effect of the court's ability to hear other cases if such defaults are allowed to occur. It will also involve taking into account the need for the courts to show by their conduct that they will not tolerate the parties not complying with dates for the reasons I have indicated."
16.   Had Judge Prosser had those words of Lord Woolf before him then he would, as Mr Phillips submits, or at any rate should, have reached a different conclusion on the facts of this case. He would have applied one of the lesser sanctions available.
17.   In support of that argument he relies on four main matters. Firstly, the claimants have changed their solicitors not once only but on two occasions, first in July 1997 and then again in February 1999. Secondly, there was a need, so it was said, for this case to keep in step with a concurrent action against different defendants, but arising out of the same facts. The concurrent action has, in the event, already been struck out. Thirdly, Mr Phillips points out that this was an unusually heavy case, so far as concerns discovery, with 20 lever arch files to be considered. Finally, and this is perhaps his strongest point, he submits that this is a case where a fair hearing is still possible.
This Paragraph is referred to in: Audergon v La Baguette Ltd [51].
18.   In those circumstances, he argues that the failure to consider the lesser sanctions available to the judge vitiated the exercise of his discretion and we are therefore required to exercise our discretion afresh.
19.   I, for my part, cannot accept Mr Phillips' argument. There is no reason to suppose that Judge Prosser was not aware of his power to make an order falling short of striking out, even though such a power was not relied on by the claimants. What we do know is that the judge regarded the flouting of the rules and court orders in this case as sufficiently serious to justify the striking out. That was the course which in his view justice required. Those are the very words which he uses at the end of his judgment. His approach therefore was entirely in line with the underlying purpose of the new rules.
20.   It would indeed be ironic if as a result of the new rules coming into force, and the judgment of this court in the Biguzzi case, judges were required to treat cases of delay with greater leniency than they would have done under the old procedure. I feel sure that that cannot have been the intention of the Master of the Rolls in giving judgment in the Biguzzi case. What he was concerned to point out was that there are now additional powers which the court may and should use in the less serious cases. But in the more serious cases, striking out remains the appropriate remedy where that is what justice requires.
21.   For those reasons, I can see no ground on which this court could interfere with the judge's discretion. But if it were open to us to exercise our discretion afresh, I would reach the same conclusion.
22.   I would therefore dismiss the appeal. It follows that the cross-appeal does not arise.
23.   LORD JUSTICE WARD: I agree. As the Master of the Rolls made plain in Biguzzi v Rank Leisure Plc [1991] 1 WLR 1926, at page 1933 paragraph [49], the judge has an unqualified discretion to strike out. But, as he points out:
24.  
     "The advantage of the CPR over the previous rules is that the court's powers are much broader than they were."
25.   The judge in this case approached the matter asking himself the two questions (see page 5 of his judgment):
26.  
     "Has the failure of the claimant to progress the case by carrying out the orders of the court been an affront to the court? If it is, is it so bad that in my discretion it amounts to an abuse of the court entitling me to say that the case stops here and now?"
27.   I cannot see how that can possibly be said to amount to a misdirection, and in coming to his conclusions the judge reached a decision with which I, for my part, would agree.
28.   Mr Phillips QC suggests that the Biguzzi is some landmark decision which throws all of the previous law on its head, though he does not put it as inelegantly as that. That, however, is not how I read that judgment. When the Master of the Rolls said in Biguzzi at page 1934G-H (paragraph [63]):
This Paragraph is referred to in: Best v Charter Medical [20].
29.  
     "Earlier authorities are no longer generally of any relevance once the CPR applies,"
30.   he was not saying that the underlying thought processes that informed those judgments, especially those such as Arbuthnot, which were written mindful of the way the new wind was blowing, should be completely thrown overboard. Moreover, as the Master of the Rolls observed further at page 1932 of his judgment (paragraph [25]), dealing with the interesting question of the adjustment of wing mirrors, he said at paragraph C (paragraph [40]):
31.  
     "He [the judge] could not, and should not, ignore the fact that the parties previously had been acting under a different regime. The fact that they were acting under a different regime does not mean that the judge is constrained to make the same sort of decision as would have been made under the previous regime." (my emphasis)
32.   His Lordship was therefore not saying that it would no longer be a proper approach to a question of strike out to treat abuse of the court's process as sufficient to justify the extreme remedy. That is how Judge Prosser QC approached it, and I can see no error in that approach.
33.   I would therefore dismiss the appeal and agree that the cross-appeal therefore does not arise.
34.   ORDER: Appeal dismissed with costs. Permission to appeal to the House of Lords refused.
35.   (Order not part of approved judgment)