THE CONSEQUENCES OF CHARTWELL 2: OBTAINING RELIEF FROM SANCTIONS IS DIFFICULT BUT NOT IMPOSSIBLE
The Court of Appeal decision in Chartwell –v- Fergies Properties has already been considered in detail. An earlier article dealt with the importance of serving witness statements on time. Here we consider the implications for the principles relating to granting relief from sanctions. Many commentators have expressed surprise that the decision to grant relief from sanctions was upheld by the Court of Appeal. The Chartwell case demonstrates that relief from sanctions is possible but remains difficult.
BREACH OF COURT ORDER IN RELATION TO WITNESS STATEMENTS
The breach in Chartwell arose from a deliberate decision by the claimant not to serve witness statements until full disclosure had been given by the Defendant. The Court of Appeal found that the failure to serve a witness statement in accordance with the court order was a breach of the rules which required relief from sanctions.
REVIEW OF THE MITCHELL PRINCIPLES
The judgment of Lord Justice Davis in Chartwell contains a succinct summary of the Mitchell principles. After considering the new CPR 3.9 he stated:-
“32. But the interpretation of, and the approach required under, CPR 3.9 is now subject to the decision of the Court of Appeal in Mitchell v News Group Newspapers Limited  1 WLR 795,  EWCA Civ 1537, with which all those specialising in litigation will by now be familiar. The decision is of the utmost importance. In all these cases of applications for relief from sanction the starting point has to be the terms of CPR 3.9 itself; and CPR 3.9 has itself to be read, and applied, in accordance with what is said in Mitchell .
33. That decision makes quite specific that the need for litigation to be conducted efficiently and at proportionate cost and the need to enforce compliance with rules, practice directions and court orders are now “to be regarded as of paramount importance and be given great weight”: paragraph 36. Further, the other “circumstances of the case” referred to in CPR 3.9 are, subject to the guidance set out in the decision, to be given less weight than the two considerations specifically mentioned in the rule: paragraph 37. The emphasis thus under the new CPR 3.9 is not to be placed simply on the interests of the parties in the individual case; a wider approach is mandated, calling for protection of the position of court users generally. As is stated at paragraph 41:
“… the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner.”
Laxity in compliance by the parties and laxity in enforcement by the courts will accordingly not be acceptable. A tougher and more robust approach is called for.
34. Regard must of course be had to the totality of the decision in Mitchell . But the guidance can, I think, for present purposes be summarised as follows:
i) It is necessary to consider whether the nature of the non-compliance is such that it can be regarded as trivial.
ii) If the non-compliance is not trivial, it is necessary to consider whether there is a good reason explaining the non-compliance.
iii) The promptness (or otherwise) of an application to court for an extension of time and relief from sanction for these purposes will be material.
iv) If the non-compliance is not trivial and if there is no good reason for the non-compliance then the “expectation” is that the sanction will apply. The court has power to grant relief but, if the non-compliance is not trivial and if there is no good reason for it, the expectation is that the factors mentioned in (a) and (b) of the rule will “usually trump other circumstances”.
See, in particular, paragraphs 40-41 and 58 of the judgment of the court. It is also stated (at paragraph 46):
“The new more robust approach that we have outlined above will mean that from now on relief from sanctions should be granted more sparingly than previously.”
- One other point at this stage may be noted from Mitchell . It is stated in paragraph 52 of the judgment – reflecting what is recommended by Sir Rupert Jackson in his Report – that “this court will not lightly interfere with a case management decision”.
- A number of other authorities were cited to us, although it is not necessary to refer to all of them. Thus Durrant v Chief Constable of Avon and Somerset Constabulary  EWCA Civ 1624 was a case in which the Court of Appeal, applying the approach laid down in Mitchell , reversed a first instance decision (made before the decision in Mitchell ) to grant relief from sanction. That was a case involving a very late application which followed a sustained failure to comply with time limits for serving witness statements imposed by a previous “unless” order. Thevarajah v Riordan  EWCA Civ 15 was another case in which the Court of Appeal reversed a decision to grant relief from sanction and, in addition, a decision to revoke a previous debarring order. The circumstances there were striking. A High Court Judge had actually made a debarring order against the defendants for significant failures to comply with a previous “unless” order made by a High Court Judge which had itself attached the debarring sanction. Notwithstanding that, the deputy High Court Judge then revoked the previous debarring order and granted the defendants relief from sanction on a further (and late) application made on the date of trial: thereby, when granted, necessitating an adjournment of the trial. It was wholly unsurprising that that decision was reversed by the Court of Appeal: indeed, the decision might well not have withstood scrutiny even under an application of the rules in their previous form.
APPLYING MITCHELL TO THE CHARTWELL CASE
The Court of Appeal held that the judge at first instance was entitled to grant relief from sanctions.
- Reverting to the present case, Globe J did not, in my view, misdirect himself. He did not, moreover, decide to grant Chartwell relief from sanctions solely because refusal to do so would result in a disproportionately severe consequence in its being unable to pursue the claim. On the contrary, he reached his conclusion that it would be too severe a consequence when set against all the background history and the other matters listed by him.
- In my view, that background – that is, all the circumstances of the particular case – entitled the judge in this case to depart from the expectation which otherwise ordinarily would arise. 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.
THE PARTICULAR FACTORS IN CHARTWELL
One unusual feature of the Chartwell case was that the claimant had issued an application for relief from sanctions on behalf of both parties (the defendant also being in default). The defendant made no application. The Court of Appeal considered this issue:-
“… For one further particular factor, albeit to be coupled with the other factors listed by the judge, was the default of the defendants. There was designed to be simultaneous exchange on 22 November 2013: but the defendants themselves (as found) were not in fact ready to exchange on that date. They did not, for example, seek to lodge at court at that time their own witness statements. In fact, their witness statements were not even finalised as at 21 January 2014, they having participated in the debate on disclosure matters in the interim. They – as much as Chartwell – also needed relief from sanction if they were to rely at trial on their witnesses. They had made no application of their own. In the event, the application eventually issued by Chartwell had sought an order in this regard relating to both parties: an order the judge in the result made. It is not, in fact, difficult to deduce that the defendants ultimately never themselves filed their own application for relief just because of the calculation that if Chartwell, as claimant on whom the burden of proof lay, was knocked out from relying on any witness evidence it would not then matter to the defendants if they were likewise knocked out. (The calculation also no doubt would have been that if Chartwell obtained relief from sanction then the defendants inevitably would also.) That, when set also in the light of the intervening correspondence, would be a most unattractive result. Overall, the judge was, in my view, entitled to attach importance to the fault of the defendants in this regard.
- Given that, and given all the other factors, this was one of those cases in which, notwithstanding the paramount importance and the great weight to be given to the two matters specified in CPR 3.9, those two matters could reasonably be assessed as outweighed by all the other circumstances. There is, in my view, no proper basis for interfering with the judge’s evaluation of the position and his exercise of discretion.”
NO ORDER FOR COSTS OF APPLICATION
The defendant also appealed against the decision that there be no order for costs.
“Mr Deacon did also, as a further ground of appeal, object to the judge’s decision to make no order as to costs. He submitted that, even if he were justified in granting relief from sanction, the judge should still have ordered Chartwell to pay the defendants’ costs of the application. In my view, however, the order as to costs made by the judge was, given the circumstances, well within the range of a proper exercise of discretion.”
CASE MANAGEMENT DECISIONS
Decisions in relation to relief from sanctions are properly categorised as case management decisions.
“62. I would also wish to repeat the point emphasised in Mitchell that appellate courts will not lightly interfere with a case management decision. Robust and fair case management decisions by first instance judges are to be supported. In the present case, Globe J had directed himself correctly. Mr Deacon’s submission that the judge had failed to adopt the necessary robust approach ultimately was an exercise in, as it were, self-certification. It in essence founded itself on the proposition that the judge had not been robust in the way enjoined by Mitchell just because the judge had not found in favour of the defendants and refused relief from sanction. That will not do. There may be cases where, although a judge purports to direct himself in accordance with Mitchell , his approach thereafter does not comply with it. But that is not this case. The appellate courts will not interfere if a judge has correctly directed himself, has adopted the correct approach in principle and has taken all the circumstances into account. It is also to be 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 .
63.Accordingly, the enjoinder that the Court of Appeal will not lightly interfere with a case management decision and will support robust and fair case management decisions should not be taken as applying, when CPR 3.9 is in point, only to decisions where relief from sanction has been refused. It does not. It likewise applies to robust and fair case management decisions where relief from sanction has been granted. If parties understand this then at least satellite interlocutory appeals should be avoided and at all events will get no encouragement from the appellate court.”
There are a number of important elements of this judgment that justify repeating.
- The Court of Appeal in Mitchell did not say that the two factors specified in CPR 3.9 will always prevail.
- There is an expectation that the two specific factors will usually predominate.
- However the Court of Appeal did not say that they always will.
- The rule requires that all the circumstances are to be taken into account.
- The rules also require that the application be dealt with justly.
- “It is also to be 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.”
It remains to be seen whether this judgment represents a modification of the Mitchell principles or simply the application of them. In Mitchell the Court of Appeal never said that relief from sanctions was impossible. The object of CPR 3.9 is not about a display of “judicial musculature” and the aim remains to obtain a “just result”. Consideration of the wider interests of justice plays a part in consideration of what is a “just result”.