The Court of Appeal has upheld a first instance decision granting relief from sanctions despite the non-compliance being neither trivial nor for a good reason. (Chartwell v Fergies  EWCA Civ 506)
Although this seems, at first glance, to be a departure from the tough post-Jackson case management regime, it remains in line with the principles set down in Mitchell. This decision shows that, although the two factors specified in CRP Part 3.9 will ‘usually’ prevail, there will be occasions where, given all the other circumstances involved, those factors carry less weight.
While the Court of Appeal endorsed the Mitchell message, it emphasised that in considering applications for relief from sanctions, the courts should also not see their sole objective as ‘a display of judicial musculature’—the aim of CPR 3.9 was to achieve a just result.
The tougher regime implemented by the April 2013 Jackson Reforms will inevitably require fine-tuning as it evolves to ensure the (amended) overriding objective is met. Although mandatory time limits in court orders may be too draconian, the laxity of recent years needed to be addressed.
The key, in this case, to the granting of relief was the accumulation of the circumstances, including: both parties were in default; the trial date would not need to be changed; there were no significant costs implications; and, crucially, a refusal would effectively have meant the end of the claim (note, however, this was not the sole reason for granting relief). Practitioners should therefore not see this as the courts’ resolve on Mitchell weakening. Rather, it may be seen as a logical progression of the CPR amendments with the overall message from the court remaining: parties and their solicitors must adhere to timetables and orders to avoid sanctions that will not be reversed lightly.
The claimant issued proceedings for commission allegedly owing following the sale of a property owned by the defendant. A court order was made that the parties should serve the statements of all witnesses of fact by simultaneous exchange on 22 November 2013. The order also indicated a trial window between March–May 2014.
The parties could not agree on disclosure, as reflected in much correspondence between them. The claimant contended that it required further disclosure from the defendant in order to finalise its witness statements. The defendant refused on the basis that the additional information was irrelevant. As it turned out, neither party served witness statements on the ordered date (and neither sought an extension from court).
Following further futile correspondence, the claimant issued an application for, amongst other things:
- relief for the parties from sanction under CPR 3.9 for failure to exchange witness statements on time
alternatively that the parties have permission under CPR 32.10 to rely upon the evidence of those witnesses whose statements will have been served by a new proposed date
The defendant opposed the applications. The first instance judge considered the breach was not trivial and nor was there good reason for it. However, he attached weight to the following facts in granting relief:
both parties were in default
the trial date could remain and there were no significant costs implications
if relief were not granted, it would certainly be fatal for the claim as the order related to all witness statements of fact (and CPR 32.10 provides that if there is breach of the time for serving a statement, the witness may not give oral evidence)
The defendant was granted permission to appeal.
Sanction under CPR 32.10
Davis LJ refused the appeal, finding the first instance judge had been entitled to decide the matter as he did.
A clear sanction is set down for failure to serve a witness statement in CPR 32.10, namely that the witness may not be called to give oral evidence (unless the court gives permission). This would effectively deny the claimant the opportunity of proving its case.
As the rules specify the sanction, there can be no argument that it is unjust or disproportionate. The sole question is therefore whether it should be disapplied on the facts of a particular case. The giving of permission by the court, notwithstanding the breach, is not open-ended but should be considered in the context of CPR 3.9.
The application of CPR 3.9 (relief from sanction)
The amended CPR 3.9 is one of the April 2013 Jackson Reforms designed to require greater observance by litigating parties (and their solicitors) of rules, practice directions and court orders. It is now the subject of the decision of the Court of Appeal in Mitchell, which is hugely important in adding flesh to the rule’s bones:
the court must consider whether the non-compliance was trivial
if it was not trivial, it must decide whether there was good reason
the promptness of any application for relief will be material
where non-compliance is not considered trivial, the expectation is that the factors mentioned in CPR 3.9(a) and CPR 3.9(b) will ‘usually trump other circumstances’ (and relief refused as a result)
the court ‘will not lightly interfere with a previous case management decision’
The cases of Durrant and Thevarajah also endorse this approach.
However, CPR 3.9 requires the court to consider ‘all the circumstances’ of a case. Mitchell enshrines the paramount importance of the two specific considerations in that rule, but does not make them exclusive to other factors. The fact the claimant’s claim would effectively be brought to an end were relief not granted could not be taken, on its own, as reason enough to grant the relief. However, it was, nevertheless, a compelling point of too severe a consequence when weighed up with all the circumstances and the procedural history of the matter.
This case is an unusual example of the two specific factors in CPR 3.9(a) and CPR 3.9(b) being trumped by all the other circumstances of the case. In relation to the Mitchell principles: even though the non-compliance was thought not to be trivial, nor to have good reason, the first instance judge was entitled to attribute importance to several other key factors which, combined, meant relief ought to be granted.
On a more general note, the case of Mitchell should not be viewed by the courts as a blunt tool with which they solely flex their judicial muscle in considering, and refusing, applications under CPR 3.9. The courts are there to protect the interests of litigants and the wider interests of justice and the outcomes of these applications should reflect that.
For further guidance on relief from sanctions, Lexis®PSL Dispute Resolution subscribers can see: Compliance and relief from sanctions—overview and Practice Notes: Relief from sanctions and Case management—key compliance and relief from sanctions decisions.
Court: Court of Appeal (on appeal from the Queen’s Bench Division)
Judges: Lord Justice Davis (giving judgment), Lord Justice Laws and Lord Justice Sullivan (in agreement)
Date of judgment: 16 April 2014