An unusual case? – Relief from sanction upheld by the Court of Appeal

PI_Simon_Ross Simon Ross

Chartwell Estate Agents Limited –v- (1) Fergies Properties SA (2) Hyam Lehrer [2014] EWCA Civ 506 – Decision on 16th April 2014.

The application for relief from sanction concerned a failure to serve witness statements in time. The relevant court direction had provided that there be “simultaneous exchange of such statements by no later than 4pm on 22 November 2013”.

None of the parties served statements by the prescribed date. The Claimant’s solicitors had complained that they were prevented from so doing as a result of the Defendants’ failure to provide full disclosure.

On 27th January 2014 the Claimant’s solicitors issued an application seeking, amongst other things, an extension of time for service of witness statements and relief from sanction under CPR r.3.9.

Mr. Justice Globe at first instance granted relief in a clear and reasoned decision in which he quoted Mitchell

He held that:

(i)                 the breach was not trivial; and

(ii)               there was no good reason for the non-compliance

Nevertheless, he considered all the circumstances of the case and found that relief should be granted because of the following points:

  • there was fault on both sides – the order was for exchange of witness evidence and the defendants had not been ready to serve their own evidence by the directed date;
  • the trial date could be maintained;
  • refusal to grant relief would mean the end of the claim which would be ‘too severe a consequence’ and ‘an unjust result’ against the factual background; and
  • if the costs budgets were not increased then there were no additional cost implications and so the proportionality of the claim as a whole was unaffected.

Davis LJ (one of the ‘Jackson Five’) gave the leading decision in the Court of Appeal

He found that Mr. Justice Globe had not misdirected himself and all the circumstances of the case, namely the factors he had identified, entitled him to reach the decision he had. There was no basis to interfere with his exercise of discretion.

Davis LJ observed (at paragraph 57),

It must not be overlooked that the Court of Appeal in Mitchell did not say that the two factors specified in CPR 3.9 will always prevail, as a matter of weight, over any other circumstances in a case where the default is not trivial and where there is no good justification. It is true that it later stated that the expectation is that the two factors mentioned in CPR 3.9 will “usually” trump other circumstances. But it did not say that they always will. That, with respect, must be right. It must be right just because CPR 3.9 has required that all the circumstances are to be taken into account and has required that the application be dealt with justly.”.

It was noted that the amendment to CPR r.3.9 was not achieving its intended aim of reducing satellite litigation, but it was hoped that would only be a temporary situation.

The Court of Appeal re-iterated that it would not lightly interfere with robust and fair case management decisions, but stressed that that included decisions where relief was granted and not just decisions when it was refused.

It was also emphasised that, “the courts in considering applications under CPR 3.9 do not have and should not have as their sole objective a display of judicial musculature. The objective under CPR 3.9 is to achieve a just result, having regard not simply to the interests of the parties but also to the wider interests of justice. As has been said by the Master of the Rolls (in his 18th lecture), enforcing compliance is not an end in itself. In the well-known words of Lord Justice Bowen: “The courts do not exist for the sake of discipline” Such sentiments have not been entirely ousted by CPR 3.9, as to be interpreted and applied in the light of Mitchell”.

Whether this decision will pave the way for Judges to grant relief more frequently remains to be seen.

However, it should be noted that Laws LJ observed the result was “an unusual one” reached on the particular facts of the case and so it may be easily distinguished.

For the full decision please click here.


One comment

  1. […] My colleague Simon Ross considers whether the Chartwell decision was an unusual case […]

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