ARDILA INVESTMENTS NV V ENRC NV (2015) QBD (Comm)(Leggatt J)
On 8th July 2015 Leggatt J ordered that it had not been appropriate to strike out a claim due to a claimant’s single failure to comply with a directions order for disclosure, where the order contained no sanction for non-compliance. The claimant’s failure had been serious, therefore an unless order was made giving further time for compliance, in default of which the claim would be struck out.
The defendant applied to strike out the claim for failure to comply with a disclosure timetable, or for an order that unless the claimant comply by a certain date the claim would be struck out.
2 days before the date fixed for disclosure the claimant asked the defendant to agree an extension. The claimant indicated that the process of collating documents was almost complete and it was confident that it would be able to give disclosure within 28 days. A consent order was made.
On the day before the next deadline the claimant sought a further 28 day extension, the defendant agreed to 7 days. The claimant issued an application for a 2 month extension. In the supporting witness statement the claimant stated that the process of reviewing the collated documents for disclosure had not begun, and further the claimant did not have funding in place for the review.
The hearing was vacated twice at short notice because the claimant had not instructed counsel to attend.
The defendant applied to strike out the claim and the application to extend was heard at the same time. The issues were whether:
i) to strike out the claim;
ii) time should be extended for disclosure but subject to an unless order.
i) The claimant must have known for some time that there had been no possibility of disclosure by the deadline and it had waited until the last possible moment to apply for an extension. The claimant’s conduct could not be regarded as full and frank, although it did not deserve to be described as dishonest.
The claimant had chosen not to attend the listing hearing for the strike out application and had made no attempt to find out the hearing date. It could be inferred that the Claimant had put its head in the sand.
There was, however, no justification for a strike out application. It would seldom be appropriate to apply for such a draconian order on the basis of a single failure to comply with an order when the order did not have any sanction for non-compliance. The claimant’s failure to keep the defendant informed about the lack of progress on disclosure could not be sufficient reason to justify striking out the claim. The strike out application should not have been made.
ii) The claimant’s default was serious. The claimant was not just in breach of a court order but could not comply for a further 5 weeks. The total 3 month delay put pressure on the timetable, although it did not cause adjournment of the trial.
It was also serious that the claimant had applied for an extension, then caused that hearing to be aborted at the last moment and made no attempt to have the hearing re-listed.
There was no good or sufficient reason for the claimant’s default.
The need to ensure compliance with court orders was relevant, as was the fact that it was the claimant’s fault that 2 hearings had been vacated. The claimant had however indicated an intention to take the case forward.
The claimant was ordered to provide disclosure by a certain date of all documents which it had by that stage reviewed. Unless that order was complied with the claim would be automatically struck out. The unless order would allow the defendant to know in broad terms how much work had been done, and to apply for a further unless order if it felt that progress had been insufficient.
∙ It’s clear from this case that even if a party is in breach of a court order, you should not automatically apply for strike out. Consider the circumstances and whether the order contains a sanction for non-compliance.