SANCTIONS AND DEFAULT: THE NEW APPROACH IN PRACTICE. THE FULL TRANSCRIPT OF BAKER -v- HALLAM ESTATES
The post yesterday looked at the duties owed by an applicant making a without notice application. The full transcript of the case is now available and contains some salutary observations.
Baker –v- Hallam Estates
Baker -v- Hallam Estates  EWHC was a case where the claimant had obtained, without notice, an extension of time to serve points of dispute to a bill of costs. The Master who made the order refused to set aside the order. Judge Jeremy Richardson QC, sitting as a judge of the High Court, allowed an appeal and set aside the extension of time.
The opening words of the judgment: the new regime
The opening words of the judgment, in themselves, give rise to a clear indication of the Post-Jackson approach:
“1. The culture of civil litigation is in the process of change. Resources are not limitless and a more pro-active regime of case management at all stages of litigation is now adopted. This is coupled to an insistence on parties complying with case management orders and the provisions of the Civil Procedure Rules. If asked to indicate how the court is now required to act; I would say, sensibly and robustly. Recent rule changes provide the lodestar for this approach.”
The failure to make full disclosure on the application
The judge decided that the claimant had failed to make full disclosure when making the application.
“… there was without doubt a failure to disclose all material facts when making his extremely belated ex parte application which, if successful, would have had serious consequences for the defendants. Indeed, did so.
15. On that basis alone I am far from convinced the order can stand. When an application is made of any kind there must be open, honest and full disclosure of material facts so that a judge or master may make an informed decision. That is of enhanced importance when an application is made on an ex parte basis. The witness statement of Mr Stainer does not begin to accurately set out the history or give the proper basis for the Master to make a decision. There is not one mention of the claimant’s non-compliance with the order of Tugendhat J. The clear suggestion is that the fault rests with the defendant.
16. CPR 47.9(2) is of pellucid clarity. The period for serving the points of dispute is 21 days. There is no provision for extension within that rule itself. However, the costs Practice Direction at section 35.1 makes it clear that the parties may agree to lengthen or shorten that period and “a party may apply to the appropriate office for an order under rule 3.1(2)(a) to extend or shorten (the 21 daytime limit)”. Accordingly, it was open to the claimants to apply under CPR Part 3.1(2) to extend the 21 daytime limit for serving their points of dispute and such an application can be made after that period has expired.
CPR Part 3.8(1) provides:
“Where a party has failed to comply with a rule practice direction or court order, any sanction for failure to comply imposed by the rule, practice direction or court order has effect unless a party in default applies for and obtains relief from the sanction.”
17. If a party does not comply with a time limit by reason of a rule of court the party must apply for relief from sanction and an extension of time, providing always there is a sanction for non-compliance. In this case the sanction isclear. The party who does not serve his points of dispute may not be heard further in the detailed assessment proceedings unless permission is granted. It is inconceivable that could be characterised as anything other than a sanction. Whilst I am truly reluctant to differ from a master with all the procedural savoir faire associated with that office, I feel that the Master, absent as he was argument on the point, fell into error. Furthermore, I am convinced that had the Master known the facts as they are, rather than the less than full scenario presented to him by the claimants, I am convinced he would have not granted the extension nor granted thereby relief from sanction.”
OTHER TRENCHANT OBSERVATIONS
The judgment did not stop there. The judge went on to make important observations about the new approach to compliance.
“18. Attention was called to the new provision within the overriding objective at CPR Part 1.1(2)(g) where greater regard must be paid by courts to enforcing compliance with rules. His Honour Judge Pelling QC said this in Fons HF v Corporal Ltd  EWHC 1278 Chancery:
“…the amended Civil Procedure Rules now require the court to play close attention on the failure of parties to comply with rules, directions and orders. A failure to comply with a rule, direction or order is of itself a clear breach of the overriding objective and is likely to result in severe sanctions…
However, all parties and the wider litigation world should be aware that all courts at all levels are now required to take a very much stricter view of the failure by parties to comply with directions, particularly where the failure to comply is likely to lead to a waste of the limited resources made available to those with cases to litigate.”
19. Historically the court broached the subject of non-compliance with a rather broad concept of balancing fairness and prejudice. There was a focus upon compliance, but perhaps not always the strictest view upon compliance. There is now much greater focus upon compliance. The rules are not a procedural menu from which a party may select those parts with which he intends to comply. Court resources are limited and must be husbanded with care. There is now much greater of emphasis on compliance in all areas of the court’s affairs in each division. Procedural rules and time limits are not advisory. They demand compliance. There is no slide rule available to be adjusted at will. It is my view that rules must be firmly and sensibly applied. Time limits are exactly that. When there has been non-compliance, particularly when it involves a late application on an ex parte basis relating to a time limit, an application for an extension of time or relief from sanction demands scrupulous examination.”
This case emphasises two things:
1. The central duty to make full disclosure on a without notice application.
2. The new approach to default and non compliance.
It also emphasises the points made in the “Jackson: Survival Guide” http://civillitigationbrief.wordpress.com/2013/08/23/litigation-after-jackson-a-10-point-survival-guide/