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IN THE SUPREME COURT OF JUDICATURE QBENI 99/1013/B1

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE QUEEN'S BENCH DIVISION (WORCESTER DISTRICT REGISTRY)

(HIS HONOUR JUDGE GEDDES)

Royal Courts of Justice

Strand

London WC2 A 2LL

Wednesday 8 December 1999

Before:

THE MASTER OF THE ROLLS

(LORD WOOLF)

LORD JUSTICE WALLER

LORD JUSTICE MAY


DAVID WOODWARD

Claimant/Appellant

- v -

VICTORIA MARILYN FINCH 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 J CAHILL (Instructed by Messrs Buller Jeffries, Birmingham, B2 5SN) appeared on behalf of the Appellant

MR C NIXON (Instructed by Messrs Newsome Vaughan, Coventry, CV1 2GW) appeared on behalf of the Respondent


JUDGMENT

(As approved by the Court)

©Crown Copyright Wednesday 8 December 1999

JUDGMENT

1.   LORD WOOLR, MR: I will ask Lord Justice May to give the first judgment.

2.   LORD JUSTICE MAY:This is an appeal from a decision of His Honour Judge Geddes sitting as a judge of the High Court at Worcester District Registry on 25 August 1999.

3.   The order relieved the claimant from the sanction of striking out his claim which had resulted from the claimant's failure to comply with an order which the same judge had made on 1 July 1999. Judge Geddes gave permission to appeal and in doing so he said:

  
     "This case involves an issue which, in my opinion, it is in the public interest for the Court of Appeal to consider, namely bearing in mind the provisions of the CPR, in what circumstances should relief against a strike out be granted where the strike out has occurred as a result of the breach of a court order."

4.   We are told that the judge's decision was made before there was available a transcript or report of the decision of this court in Biguzzi v Rank Leisure Plc [1999]1 WLR 1926 which is of relevance to this appeal.

5.   Mr Woodward, the plaintiff as he then was, was injured in a road accident on 13 May 1991. The defendant was convicted of a driving offence. There was never any real dispute about liability. Mr Woodward suffered a variety of injuries of which damage to his right knees appears to have been significant. An affidavit says that he resumed work in January 1995.

6.   These proceedings began 5½ years ago with a writ issued on 28 April 1994 shortly before the end of the 3-year limitation period. The action proceeded at a dismal pace, such as was all too common before the change of culture which culminated in the introduction of the Civil Procedure Rules in April 1999. Judgment was entered for damages to be assessed on 14 September 1994. There was an application to set aside the judgment which failed on 8 December 1994. The plaintiff was ordered to serve a statement of claim and the summons for directions was adjourned generally with liberty to restore.

7.   The statement of claim was served on 13 January 1995. The rest of 1995 was taken up with a leisurely series of applications for an interim payment, which eventually produced an order for a total payment of £11,500 by 20 December 1995. On that occasion there was an order for accountancy experts to meet and prepare a joint report by 31 January 1996. There was to be an exchange of medical and accountancy reports and a further directions hearing on the first open date after 14 weeks. Most of 1996 was spent with the plaintiff failing to comply with the order about the meeting of accountancy experts. On 11 November 1996 the order of 20 December 1995 was extended so that the accountants were to meet on 25 November 1996 and time for reports was extended to, in one instance 9 December and the other 16 December 1996.

8.   Nothing much happened in 1997. The first report from the plaintiff's accountant was not sent in its final form until August 1998. There had been no agreement or meeting of the accountants by the time of the hearing before Judge Geddes on 1 July 1999.

9.   On 15 February 1999, the defendant applied for an updated schedule of loss and for disclosure of documents. These were ordered by a deputy district judge to be served by 15 March 1999. The action was to be stayed if this was not done. It was not done, and the claimant, as he had by then become, only set about complying with this order when application was made to strike out the action.

10.   Judge Geddes heard this application on 1 July 1999. He was not persuaded to strike out the action, but it appears to have been a close run thing. He reserved the action to himself and ordered that it be listed for trial in the period 8 - 12 November 1999. He made orders about experts evidence and, crucially, he ordered Mr Woodward to serve a witness statement by 29 July 1999, in default of which the action was to be struck out. He ordered the claimant's solicitors to pay the defendant's costs of the application which he summarily assessed at £1,821.25, thereby indicating that he regarded them to have been at fault.

11.   On 1 July 1999 Judge Geddes said:

  
     "I have to balance therefore the considerations of the delay caused by the claimant in these proceedings - and undoubtedly there has been delay - against the injustice that would be caused to the claimant if I were to strike this action out now. Of course I also have to bear in mind not only the prejudice which would be caused to the defendant by the delay, but also to other litigants who are waiting in the queue.

  
     I have been referred to a number of cases, some of them very recent, by Mr Cliff, dealing with questions of delay and giving examples of where the court will strike out or has struck out actions where there has been excessive delay, on the grounds that there has been an abuse of process. Although those reports are to my mind helpful, this, as the rules make perfectly clear, is a new procedural code, and these past authorities, which related to the earlier code, can only be in my judgment guidance. They are not binding on me at all as to how the new code should be construed.

  
     When deciding whether it would [be] just to strike out, one obviously must take into account all the facts and circumstances of the particular case that one is dealing with, and I have come to the clear conclusion here that it would not be consistent with the overriding objective acting justly if, despite the delay, which undoubtedly in my judgment has been caused by the claimant, I were to strike out the action at this stage.

  
     What I propose to do is to set a very strict timetable from now to the trial date, which I intend to fix, and I am going to apply to that strict sanctions of strike out if they are not complied with. I will reserve this case to myself as an indication that, if they are not complied with, there will be very little chance indeed of the claimant obtaining any relief from that sanction."

12.   Mr Woodward did not serve his witness statement by 4 pm on 29 July 1999, as had been ordered by the judge, so the action was struck out in accordance with the judge's order. The witness statement was not in fact served until 24 August 1999, the day before the hearing which has resulted in this appeal.

13.   By application notice dated 3 August 1999, Mr Woodward applied to be relieved from the sanction and for the action to be reinstated. The reason given for failing to comply with the order was that Mr Woodward changed solicitors after the hearing of 1 July and the legal aid certificate was not transferred until 29 July. The new solicitors were a firm in Coventry to which Mr Paul Ashcroft, a legal executive who had the conduct of Mr Woodward's case at his former's solicitors, had moved on 21 May 1999. Mr Ashcroft was not in charge of the case on 1 July, but the case was not new to him when Mr Woodward changed solicitors.

14.   Judge Geddes heard the application to reinstate on 25 August 1999. He ordered the action to be reinstated. It is against this order that the defendant appeals with permission of the judge.

15.   The main points in favour of Mr Woodward's application to reinstate were that: (i) he had judgment on liability so the dispute related only to quantum; (ii) the quantum was said to be in the order of £½m, although I confess to the strongest suspicion that it would have been much less than that if the matter been tried at the proper time back in 1995; (iii) the trial period was not affected by the default; (iv) there was little or no prejudice to the defendant from the mere failure to serve the witness statement by 29 July.

16.   The main points in favour of the defendant were: (i) that there had been massive delay by the plaintiff for which there was little or no excuse; (ii) that the plaintiff had failed to comply with a number of earlier orders; (iii) the claimant had been given what the judge in effect told him was a last chance on 1 July and he had not taken it; (iv) the plaintiff had failed to serve his witness statement in accordance with the order of 1 July and that it had taken effect according to its terms; and (v) there was, it was submitted, no proper excuse for his failure.

17.   In deciding to reinstate the action, the judge said:

  
     "In considering an application for relief against sanctions, I have to bear in mind all the matters set out in paragraph 9 of part 3 of the Civil Procedure Rules. The court is required to consider them, in addition to any other circumstances, but they are the following. First of all, the interests of the administration of justice. I do not see that that really has very much relevance here. Secondly, whether the application for relief has been made promptly. In this case I find it has. Thirdly, whether the failure to comply was intentional. In my judgment it is not entirely clear, as to whether it was intentional on the part of Mr Woodward. I think he may have been muddled headed, thinking that either one solicitor or the other solicitor would act on his behalf in carrying out the direction contained in the order. But I do find, as I say, that he was told that he would have to serve the statements in time and failed to do so. Fourthly, whether there is a good explanation for the failure. The claimant has given his explanation for the failure. I do not consider it a very good explanation, but it is perhaps just an explanation.

  
     Fifthly, the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant pre-action protocol. In this case there is a history of default, stretching way back to when the action started, but of course the majority of the default, if there has been default, occurred long before the new rules came into force in April of this year.

  
     Sixthly, whether the failure to comply was caused by the party or his legal representative. As I find here, it was largely the fault of Mr Woodward. Seventhly, whether the trial date or the likely trial date can still be met if relief is granted. It is clear that the trial date can still be met. Eighthly, the effect which the failure to comply had on each party. Again I do not think the failure to serve on time has had very much effect on either party, in so far as their conduct of the action is concerned.

  
     Ninthly, the effect which the granting of relief would have on each party. Clearly if I were to refuse the relief applied for, it would have a devastating effect on the claimant, whose very substantial claim would be lost.

  
     I have to bear in mind, when considering the application for relief, in particular the overriding objective, and the overriding objective which is contained in part 1 of the new rules is to deal with cases justly. There is then set out in paragraph 2 a number of matters which the court should take into account.

  
     I do not think in fact there is very much that I need to take into account, except, as I say, the overriding objective to deal with the case justly, and that involves a balancing exercise, it seems to me, between the effect of the failures on the part of the claimant in this case and the effect of the sanction if it were to continue to apply."

18.   The judge then referred to a decision in the High Court called Mealey Horgan Plc v Horgan and continued:

  
     "No adjournment is going to be necessary here, and in my judgment the balancing exercise in this particular case requires me to allow this application, and therefore the claimant should be relieved of the sanction of strike out. I should add a warning though, that in my judgment if this were to happen again, a court might take a very different view. There has, as I say, been a history of failure in this particular case and it is only by the narrowest of margins that the claimant is successful in this particular application."

19.   It is said in the notice of appeal and in submissions by Mr Cahill, in support of the appeal, that the judge exercised his discretion wrongly and upon wrong principles. In summary, it is said that the judge was wrong not to give greater weight to the administration of justice; that he was wrong to say that the application was made promptly; that he gave insufficient weight to previous defaults by the claimant; that he failed, as he should have done, to implement the threat which he expressed on 1 July; that he failed to conclude that the court's benevolence should have been exhausted by the leniency shown on 1 July; and that points in favour of the claimant were by then used up and should not have been used again.

20.   The points in the notice of appeal which Mr Cahill has stressed before us are numbers 1 and 5 where it is submitted that the judge misdirected himself in ignoring, or placing too little weight on, the interests of the administration of justice. It is submitted that the interests of the administration of justice were not served by repeated breaches of court orders of which the breach of the order of 1 July was but one. Paragraph 5 of the notice of appeal contends that, having already considered on 1 July 1999 the effect on the claimant of a strike out, the judge relied on precisely the same ground for granting relief on 25 August 1999.

21.   Mr Cahill has referred us, helpfully, to the decision of this court in Biguzzi, to which I have referred. In that case the issue was one of strike out under CPR Part 3.4, which is closely allied to relief against sanctions under CPR Part 3.9. I refer in particular to a passage from the judgment of my Lord, the Master of the Rolls, starting at page 1932G (Paragraph [45]) of the report in the Weekly Law Reports under the heading "The position under the CPR":

"Under the CPR the keeping of time limits laid down by the CPR, or by the court itself, is in fact more important than it was. Perhaps the clearest reflection of that is to be found in the overriding objectives contained in Part 1 of the CPR. It is also to be found in the power that the court now has to strike out a statement of case under Part 3.4...."

22.   and the Master of the Rolls set out the relevant parts of Rule 3.4. He then proceeded at the top of page 1933 (Paragraph [49]):

  
     "Under Rule 3.4(2)(c) a judge has an unqualified discretion to strike out a case such as this where there has been a failure to comply with a rule. The fact that a judge has that power does not mean that in applying the overriding objectives the initial approach will be to strike out the statement of case. The advantage of the CPR over the previous rules is that the court's powers are much broader than they were. In many cases there will be alternatives which enable a case to be dealt with justly without taking the draconian step of striking the case out.

  
     Under the court's duty to manage cases, delays such as has occurred in this case, should, it is hoped, no longer happen. The court's management powers should ensure that this does not occur. But if the court exercises those powers with circumspection, it is also essential that parties do not disregard timetables laid down. If they do so, then the court must make sure that the default does not go unmarked. If the court were to ignore delays which occur, then undoubtedly there will be a return to the previous culture of regarding time limits as being unimportant.

23.  
     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."

24.   Mr Cahill relies on a number of the remarks in that passage. In particular he submits that the judge contravened the principle of Rule 3.9(a) of the Civil Procedure Rules in disregarding the interests of the administration of justice. He submits that the order of 1 July was not complied with and therefore, under the new CPR regime and with a warning in the clearest terms of the consequence of not meeting the strict timetable then laid down, the guidance given in Biguzzi should have resulted in the sanction being continued and implemented.

25.   It is submitted that the interests of the administration of justice were clearly affected by the breach, as the judge had himself indicated when he decided on 1 July not to strike out the action. Mr Cahill submits that, independently of the guidance in Biguzzi, the interests of justice were not served by the approach which the judge adopted. He had said on 1 July that he would only accede to an application to strike out if there was a very good excuse indeed. He reserved the case to himself. He then did not implement the threat which he had clearly indicated on 1 July.

26.   Mr Cahill submits therefore that the judge failed to take into account a material consideration and that, in the light of his other findings, the failure vitiates the exercise of his discretion. It was a narrow run thing. He says that this is a factor which should push the decision the other way and this court should reverse an erroneous exercise of the judge's discretion.

27.   As to ground 5 in the notice of appeal, Mr Cahill submits that at the hearing in July the judge had referred expressly to the overriding objective in Part 1 of the Civil Procedure Rules. He concluded that it would not be consistent with the overriding objective to strike out the action at that stage, but that he so concluded with circumspection. Unlike Biguzzi, this was a case where there was no additional feature between July and August which justified the judge in reaching a conclusion other than that which he had threatened in July. The judge's duty to ensure that this and other cases are dealt with expeditiously and fairly should have resulted in this case remaining struck out at the August hearing.

28.   In my judgment, these are powerful submissions. It is clear from the terms of the Judge Geddes' own judgment, that his decision on 25th August was a difficult one which could well have gone the other way. Nevertheless, I am not persuaded by Mr Cahill's submissions that the judge made his decision on any erroneous principle. It is true that he made it very clear on 1 July that failure to comply with the order which he then made would result in the case being struck out. But he was entitled, and I think bound, to consider the matter afresh on 25 August in the light of all the circumstances which then existed.

29.   I do not think that the judge ignored the important factor of the administration of justice. As I read his judgment, he considered that his decision in this case would not seriously affect the court's administration, because the trial hearing which he had set was not affected. In this context one aspect of the administration of justice, to which the Master of the Rolls referred at page 1933 of Biguzzi, was the need for the court to take into account the court's ability to hear other cases, if defaults of the kind under discussion were allowed to occur. Mr Cahill does not rely heavily on any lesson to other litigants which might result from refusing the application for relief. I think the judge took into account all the relevant circumstances. As I have said, there were points of substance in favour of the application. Foremost among these were the fact that liability was not in dispute; the fact that the claimant looked as if he was going to recover substantial damages and the fact that the trial date was not affected. The fact that delay and the failure to comply with the order of 1 July was at least, in part, explained by a change of solicitors and the reissuing of the legal aid certificate were less persuasive, since I consider that the difficulties with legal aid are to be overcome and not advanced as excuses.

30.   Referring to the new approach required by the CPR on page 1934 (Paragraph [62]) in Biguzzi, the Master of the Rolls said:

31.  
     "Under that approach judges have to be trusted to exercise the wide discretions which they have fairly and justly in all the circumstances, while recognising their responsibility to litigants in general not to allow the same defaults to occur in the future as have occurred in the past. When judges seek to do that, it is important that this court should not interfere unless judges can be shown to have exercised their powers in some way which contravenes the relevant principles."

32.   I think this is a case where it is not shown that Judge Geddes exercised his discretionary powers in a way which contravenes the relevant principles. On he contrary, I consider that, on difficult facts in a difficult case, the judge exercised his discretion properly and that this court should not interfere.

33.   I would dismiss this appeal.

34.   LORD JUSTICE WALLER: I agree.

35.   LORD WOOLF, MR: I also agree.

Order: Appeal dismissed with costs. Legal Aid assessment of appellant's costs.