A DELIBERATE DECISION NOT TO FILE A WITNESS STATEMENT AND YET RELIEF FROM SANCTIONS GRANTED: MONDE PETROLEUM SA-V- WESTERNAZAGROS LTD CONSIDERED

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In Monde Petroleum SA –v- Westernzagros Ltd (2014) QBD (Comm) (Hamblen J) 19/05/2014 a party intentionally failed to file a witness statement on time, yet relief from sanctions was granted. (The following is based on the Lawtel summary)

THE FACTS

The claimant filed a witness statement three months late. This was done because there were related arbitration proceedings and the claimant felt it would save costs to wait until after the arbitration award. The Claimant believed that it would not be proper to incur the costs of putting a large volume of evidence when there was a major overlap between the court action and ongoing arbitration proceedings. The claimant then filed the witness statement three months late.  The witness statement was primarily for clarification and not of great significance.

THE DECISION: NOT A TRIVIAL BREACH BUT RELIEF FROM SANCTIONS GRANTED

It was held that:

  • The fact that the evidence was not of great significance did not mean that the breach was trivial.
  • The statement was served three months late. The rules and time limits were there for a reason and the breach could not be classed as trivial.
  • It was due to the Claimant’s deliberate decision; however which had paid off to some extent as the proceedings had been stayed pending publication of the arbitral award and the Claimant had not needed to provide a full witness statement.
  • In the present case the Claimant had shown a good reason for the court to grant an extension of time to serve the statement, and that it was just and appropriate to grant relief from sanctions.

A SIDE POINT: SKELETON ARGUMENTS

The recent post of Skeleton Arguments: If you don’t do them properly you won’t get paid highlighted the importance of skeleton arguments. During the hearing the Court was also asked, by the Defendant, to consider substantial and complex issues regarding jurisdiction which required knowledge of the background facts.

However the Defendant’s skeleton argument did not reference or explain the authorities relied upon in their skeleton. The court found that a skeleton argument should clearly alert the reader to an intention to pursue points. In the present case it had not and the Claimant had been caught unaware and was prejudiced. It was unfair to require the Claimant to meet those arguments at short notice.

SUMMARY

  • Do not be lulled into a false sense of security by the fact the relief from sanctions was granted in this case. Intentionally failing to adhere to Court rules and directions remains dangerous. Any proponents or advocates of this practice should consider themselves clearly part of the 99.8%.
  • It would have been  prudent to seek an extension of time from the court in advance of the date for compliance.
  • The Monde highly fact specific; it is unlikely that there will be many cases where  a court will find there is good reason for a breach in cases where a deliberate decision is made not to comply with an order of court.
  • The fact that the evidence is not crucial and late service is not prejudicial does not mean that a court will regard the breach as “trivial”.