RELIEF FROM SANCTIONS GRANTED AFTER LATE SERVICE OF WITNESS SUMMARY: HIGH COURT CASE CONSIDERED
Whilst the Court of Appeal ruminates over the problems caused by Mitchell life goes on at the procedural coalface. Attached to this post is a decision of Mr. N. Strauss Q.C. sitting as a Deputy High Court Judge on the 16th June 2014. It relates to the late service of a witness summary. Relief from sanctions was granted under the Mitchell criteria. The judgment is set out below and the approved judgment is attached here Gordon Judgment No 1
Approved judgment (no. 1)
- This judgment concerns an application by the defendant on the first day of the trial of the action to call a witness, despite her failure to serve a witness statement or a witness summary in time.
- The application was made after the time for service had expired, and was therefore governed by the Mitchell principles relating to applications for relief from sanctions pursuant to CPR 3.9. I nevertheless allowed the application for the reasons explained below, even though the breach of the rules was neither trivial nor covered by a good reason.
- My main reasons for doing this were (a) that to have tried the case without the only available independent evidence would have given rise to a serious risk of injustice, (b) that the defendant’s breach of the rules had neither prejudiced the claimant nor had any effect on the efficient conduct of the litigation and (c) that to have refused the application would have led to an adjournment which was not needed if I allowed it. I said that I would give full reasons in my judgment and these follow.
- The action is brought by the claimant, who is aged 93, against one of his daughters. In it, he alleges that the defendant improperly withdrew large sums of money from an account at Santander. The account was in their joint names, but it is common ground that the claimant was its beneficial owner. There were many individual withdrawals and the claimant’s case is that most of them were withdrawals by the defendant, although there were a few by himself, but resulting from the defendant’s undue influence.
- The rules which are relevant to this application are CPR 32.9 and 32.10. CPR 32.9 provides in effect that a party who is unable to obtain a witness statement from a witness whom he wishes to call may serve a witness summary instead, summarising the evidence, if known, which would otherwise have been included in a witness statement or, if not known, the matters about which he proposes to question the witness; unless the court orders otherwise, the witness summary must be served within the period in which the witness statement would have had to be served. CPR 32.10 provides that, if a witness statement or a witness summary for use at trial is not served in respect of an intended witness within the time specified by the court, then the witness may not be called to give oral evidence unless the court gives permission.
- The relevant chronological events were as follows:
11th July 2013 – direction by Deputy Master Nurse that witness statements be exchanged by 18th October 2013.
1st August 2013 – claimant applies for an extension of time; defendant consents.
6th August 2013 – order extending time for the exchange of witness statements to 31st October 2013.
30th October 2013 – claimant applies for a further extension of time; defendant consents.
31st October 2013 – defendant serves her witness statements on time.
Accompanying letter informing the claimant that a witness statement had been sought and prepared on behalf of the branch manager at Santander, which had been forwarded to the Santander head office for approval for her to sign it.
6th November 2013 – order extending time for exchange of witness statements to 14th November 2013.
22nd November 2013 – defendant’s solicitors come off the record; defendant now in person.
25th November 2013 – defendant writes to claimant’s solicitors to say that she had not received the witness statement from the branch manager and asking for an extension to 6th December 2013; no response from the claimant’s solicitors.
29th November 2013 – Santander informs defendant that it will not authorise the branch manager to sign her statement or attend court without a court order; branch manager will attend if so ordered.
2nd December 2013 – defendant applies, with explanatory statement, for an order “requiring the Bank to release Ms. Manning’s Witness Statement”.
11th December 2013 – Court’s e-mail:
“Please be advised that the Master has stated:
“I cannot order Ms. Manning to serve her Witness Statement. I can give permission to the Defendant to serve a Witness Summary in respect of Ms. Manning’s evidence. Thereafter in due course the Defendant could issue a Witness Statement (sic) to Ms. Manning for her attendance.””
6th February 2014 – defendant serves Ms. Manning’s witness summary.
- I was informed by the defendant’s counsel that the defendant did not apply to the Master for permission to serve the witness summary before serving it on 6th February 2014, because she understood that he had already given such permission in the e-mail of 11th December 2013. I consider that the sentence beginning “I can give permission …” is ambiguous, and I accept that explanation.
- By the defendant’s skeleton argument in support of the application to call Ms. Manning to give oral evidence, despite the late service of the witness summary, I was informed:
“Marcia Manning was the Manager of the Branch of the Bank relevant to these withdrawals. She eventually provided Statement which makes it quite clear that it was the Claimant who attended the Bank on his own and made the withdrawals. Her evidence is of significant importance to the justice of the case against the defendant.”
- The new approach to applications for relief from sanctions, following the Jackson reforms and the amendment to CPR 3.9, is of course set out in the judgment of the Court of Appeal in Mitchell v. News Group Newspapers Ltd  EWCA Civ 1537, and may be summarised as follows:-
(a) Applications for relief from sanctions are now governed by the new CPR 3.9 which requires the court to consider “all the circumstances of the case, so as to enable it to deal justly with the application”; “justly” includes ensuring that the parties are on an equal footing and that the case is dealt with fairly and expeditiously and enforcing compliance with rules, practice directions and orders (para. 37).
(b) There is no rule that applications will only be allowed “in exceptional circumstances” and the court is required by the rule to consider all the circumstances of the case, including all or any of these set out in the former CPR 3.9 at (a) to (i), where relevant (paras. 35-6 and 49).
(c) Nevertheless, the considerations set out in the new CPR 3.9, the need for litigation to be conducted efficiently and at proportionate cost and the enforcement of compliance with rules, practice directions and orders, are of paramount importance and will be given greater weight unless (i) the breach of the rules is trivial or (ii) there is a good reason for it (paras. 37, 39-40, 49).
(d) A good reason is likely to be one which arises from circumstances outside the control of the party in default (paras. 41-3).
(e) An “insignificant failure”, such as narrowly missing a deadline, may be seen as trivial. But inadvertence, for example because of overwork, does not make a breach of the rules trivial; “well-intentioned incompetence” does not provide an excuse (paras. 40-1, 49).
(f) The possibility of satellite litigation, meaning disputes about whether relief from sanctions should be granted, is not a reason for adopting a more relaxed approach (para. 48).
(g) The dictum of Andrew Smith J. in Rayaan Al Iraq Co. Ltd v. Trans Victory Marine Ltd.  EWHC 2696 (Comm) at para. 15 to the effect that relief would not be refused if injustice would result was wrong:
“It seems to us that, in making this observation, the judge was focusing exclusively on doing justice between the parties in the individual case and not applying the new approach which seeks to have regard to a wide range of interests.” (paras. 49-50)
10. There is no doubt that the Mitchell principles apply where a party, as in the present case, seeks permission after the time for service of witness statements (or summaries) has expired to call a witness whose statement (or summary) has not been exchanged. CPR 32.10 provides that such a witness cannot be called without permission, and the application for permission is governed by CPR 3.9. See per Nugee J. in Re Guidezone Ltd.  EWHC 1165 (Ch) paras. 29-30; Chartwell Estate Agents Ltd. v. Fergies Properties SA  EWCA 506 paras. 24-6.
11. It is clear however that the principles set out in Mitchell, while of general application and to be applied robustly, are not entirely inflexible. Hamblen J. said in Lakatamia Shipping Co. Ltd. v. Nobosh  EWCA 275 (Comm) that “compelling circumstances” are likely to be required for relief to be granted if the default is neither (i) trivial nor (ii) covered by a good reason; conversely “compelling circumstances” are likely to be required for refusal, if the default is trivial or there is a good reason for it. The first part of this comes close to saying that “exceptional circumstances” will be required. To similar effect, Leggatt J. said in Summit Navigation Ltd v. General; Romania Asigurore Reasignrore SA  EWHC 398 (Comm) at para. 27(iv) that relief will not usually be given where the fault is not trivial and there is no good reason or it. In Chartwell, above, which was decided after I heard this application, Davis L.J. (with whom Sullivan and Laws L.JJ. agreed) put it slightly differently at para. 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.”
He also said at para. 46 that:-
“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.”
12. Thus, the Mitchell principles represent an unforgiving doctrine. An application for relief for sanctions will, at least usually, be refused, if there is any procedural error other than a trivial one (which is narrowly interpreted) for which there is no good reason. This may be the case even if the default has neither prejudiced the other party nor disrupted the running of the court in such a way as to affect other court users. Whether the error has had any harmful effect has no bearing on whether it was “trivial”. So even if no harm has been done, and even if there has been no previous default, the application should ordinarily be refused: one strike and you are out. The result, as shown in the AEI case, below, is that an action, which as between the parties it would be just to allow to continue, may nevertheless be summarily terminated “pour encourager les autres”.
13. In Associated Electrical Industries Ltd. v. Alstom UK  EWHC 430 (Comm) Andrew Smith J., having referred to the criticism in Mitchell and in Thavatheva Thevarajah v. Riordan  EWCA Civ 14 of his decision in Raayan, refused to allow an out-of-time application for an extension of the time for service of the particulars of claim, even though as between the parties it would have been fair and just to do so. The result was that the action was dismissed, even in a case in which the non-compliance had not aggravated the costs:-
“46. …The court must still seek to give effect to the overriding objective, including the aspects of it emphasised in CPR 3.9. As I see it, the requirement to deal with cases at proportionate cost is not in point here: AEI’s non-compliance did not aggravate the costs (and indeed, as Mr Preston explained, Clyde & Co adopted the course that they did with the aim of saving unnecessary costs). Alstom’s real argument is the importance of enforcing the requirements of the CPR.
14. One reason that dealing with a case in accordance with the overriding objective includes enforcing compliance with rules, practice directions and orders is to enable the courts’ resources to be shared fairly between litigants, and to prevent a defaulting party from using them excessively. As I have said, AEI’s non-compliance with the CPR did not have a significant impact on resources. However, there is a more general reason that the Court of Appeal has emphasised: it is considered that “once it is well understood that the courts will adopt a firm line on enforcement, litigation will be conducted in a more disciplined way and there should be fewer applications under CPR 3.9. In other words, once the new culture is accepted, there should be less satellite litigation, not more”: Mitchell (loc cit) at para 48, and see para 60. I must balance this against my conclusion that as between the parties it is a disproportionate response and unjustto refuse an extension and strike out the claim form. The emphasis that the Court of Appeal has given to enforcement of the CPR in order to encourage procedural discipline drives me to conclude that I should grant Alstom’s application and refuse that of AEI.…
15. Therefore, despite my conclusion about fairness between the parties and what would be a proportionate response to the non-compliance, I allow Alstom’s application and refuse that of AEI.”
16. By contrast, in Chartwell the Court of Appeal upheld the decision of Globe J. to allow an out-of-time application for an extension of time for the service of witness statements, on the ground (see para. 41) that in all the circumstances of the case to put an end to the action would be too severe a consequence and unjust, when there was fault on both sides, the trial date would be maintained and there were no significant cost implications. Davis L.J. explained the reasons for upholding the decision:-
“56. 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.
17. 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.
18. In the present case, if relief from sanction were refused Chartwell’s claim would in practice indeed come to an end. I do not think that circumstance can be entirely subordinated to the consideration that Chartwell might then have a prospective claim against its solicitors (which, ironically, would then potentially involve further satellite litigation). If, on the other hand, relief from sanction were granted, a fair trial could still be had, without any adjournment of the trial date being required and with no additional cost for the parties arising. And there was more. For one further particular factor, albeit to be coupled with the other factors listed by the judge, was the default of the defendants. …
19. 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.”
20. Apart from this, there is little guidance as yet as to what circumstances may make it appropriate to depart from the usual rule and, in particular, as to the weight to be attached to the prospect of satellite litigation (apart from the application itself: see Mitchell para. 48). Relief from sanctions may be applied for in a wide variety of circumstances and the practical effect of refusing it may also vary considerably in different contexts. In Mitchell the effect was a drastic curtailment of the costs recoverable by the solicitors, but it would have no other effect on the proceedings and no later consequential litigation would ensue. In other cases, however, the practical effect of refusing permission, in furtherance of the objectives of promoting efficient litigation and preventing a waste of the court’s resources, may be to cause much greater disruption and waste (in addition to the sometimes protracted hearing of the application for relief from the sanction) than would be caused if permission were given. For example, in AEI the refusal of the application may give rise to a new action, an application to strike it out as an abuse and, if that fails, to the action being rerun from the start: see the judgment of Andrew Smith J. at paras. 36-40. He held that this was a relevant consideration (para. 40), but not one that persuaded him to allow the application, even though its dismissal might well lead to greater strain on the court’s resources.
21. Equally, where a party’s solicitors may have been at fault, the refusal of an application may lead to a negligence action, in which the issues will be not only whether there was negligence but also what loss was caused; that would in turn depend on what the outcome of the original action would have been, which is sometimes not easy to decide. The undesirability of this must have been one of the reasons underlying the inclusion of “whether the failure to comply was caused by the party or his legal representatives” as one of the matters listed in the former CPR 3.9 which therefore, according to Mitchell paras. 35-6 and 49 and Chartwell para. 57, should be taken into consideration. Another effective deterrent to inefficiency in such a case, at least if it is clear that the solicitors were at fault, may be to make a wasted costs order but let the action proceed.
22. On the question of “satellite litigation”, Davis L.J. said the following in Chartwell at para. 61 but it is concerned only with the application itself as a form of satellite litigation:-
“One of the further stated aims of the new culture evidenced in the new CPR 3.9, is the avoidance of satellite litigation. It is an unfortunate– although it is to be hoped temporary– by-product of the new rule that satellite litigation thus far seems not to have been avoided but if anything seems to have been promoted. The present case is an example. The advantages to the defendants, if their opposition to the grant of relief from sanction succeeded, would have been enormous: the entire disposal of a doubtless unwelcome, as well as costly, legal action against them. For Chartwell, on the other hand, the consequence would in practice have been the entire loss of its claim against the defendants. With the possibilities afforded by the new CPR 3.9, and when the stakes can be so high, satellite litigation such as has occurred here is therefore perhaps not wholly surprising: albeit most unfortunate. But the one sure way to circumvent such satellite litigation is for parties to comply precisely with rules, practice directions and orders: and, where that really is not capable of being done, to seek from the court the necessary extension of time and relief from sanction at the earliest moment.”
23. Again, as in Mitchell at para. 48, this is a reference only to the limited kind of “satellite litigation” constituted by contested applications for relief from sanctions, of which there is a hopefully temporary profusion. This leaves open the extent to which the court should take into account, in deciding a CPR 3.9 application, a likelihood of more substantial forms of satellite litigation, over and above the application, arising from not allowing an application, such as fresh actions and claims against solicitors; sometimes these may render the refusal of the application seriously counterproductive as regards the efficient conduct of litigation and the waste of the court’s resources.
24. As I explain later, there are practical issues of this kind in the present case, but an application for an extension of time for a witness statement to be served, and for permission to call the witness, may also give rise to a different consideration. Where there is a failure to serve particulars of claim, as in AEI, or a failure by the claimant to serve any evidence as in Chartwell, the consequence of refusing the application is that the action fails and will no longer be tried by the court on its merits. That is one thing. Where however the default relates to some but not all of a party’s evidence, then if the application fails the consequence is that the court will have to proceed to try the case without the excluded witness. That is much more problematic. If there is to be a trial, its basic aim will be to decide correctly what the rights of the parties are. The exclusion of relevant evidence puts that at risk and so imperils the integrity of the judicial process. While, as the Master of the Rolls made clear in the 18th implementation lecture (see Mitchell para. 38 and see also paras. 50-1) there is “no overarching consideration of securing justice in the individual case”, reaching the right decision remains the object of the exercise in any continuing litigation, and therefore a relevant and important consideration that the court cannot lightly cast aside. Again, the list in the old CPR is relevant – “whether the trial date or the likely trial date can still be met ….” – if the late introduction of important evidence would cause an adjournment, then it is often reasonable to exclude it. Kharbari, above, was such case. It is quite another matter for a court to turn its back on relevant evidence which can be heard without difficulty, and without prejudicing the other party or the court’s process, and it may be questionable whether to do so is justified by the general aim of enforcing procedural discipline.
25. So far as I am aware (now – it was not cited at the hearing), the only case in which this particular issue has arisen is Bianca Durrant v. Chief Constable of Avon & Somerset  EWCA Civ 1624, in which the Court of Appeal reversed the decision of the trial judge to extend the time for service of witness statements despite repeated failures to meet either the original or extended dates for exchange, resulting in the adjournment of the trial. The Court of Appeal disapproved of the importance placed by the judge on the availability of the statements, given the seriousness of the issues: see para. 44:-
“In reaching his decision, Judge Birtles placed particular weight on the potential effect on the careers and reputations of individuals and the police force if the officers concerned were unable to give evidence, and on the public interest in scrutinizing the actions of police officers in the light of all of the evidence from both sides. In our judgment, however, considerations of that kind have only a limited role to play in the context of relief from sanction. They may be relevant to the question of how much time should be allowed for service of witness statements in the first place and even to the question of what sanction should be imposed for failure to meet the deadline; but once the court has determined both the deadline and the sanction applicable for failure to comply, we do not think that such considerations can properly carry much weight in determining whether to grant relief from the sanction or non-compliance.”
However, in Chartwell, Davis L.J. said at para. 54 that this passage was to be understood in the context of the facts in Bianca Durrant, and was not of general application:-
“Mr Deacon submitted that at all events only limited weight could be attached to the potential consequential effects of refusal to grant relief from sanction. He relied on paragraph 44 of the judgment in Durrant for that purpose. But in my view that is a misreading of the judgment. Ms Durrant was making strong allegations of misfeasance in public office, racial discrimination, inhumane treatment and the like against police officers. One argument raised on behalf of the defendant in support of the application for relief from sanction had been the potential effect on the careers and reputations of individuals and the police force if the officers concerned were unable to give evidence: as well as the public interest in proper scrutiny of their actions. It was those considerations which the court thought, in the circumstances of the case, could not properly “carry much weight” in deciding whether to grant relief. The court, however, was not stating the position as an invariable proposition of general application with regard to the consequences of a refusal to grant relief going beyond the specified sanction. …” (my emphasis)
26. Turning to the facts of this case:-
(a) The breach of the rules cannot be described as trivial; the witness summary should have been served by 14th November, but was not served until 6th February, despite the fact that the defendant (as I accept) understood the Master to have given permission on 11th December for it to be served.
(b) No good reason for the breach has been established:-
(i) The defendant was represented at the time of the initial failure to give a witness summary. The defendant’s solicitors must have been in a position to serve a summary explaining at least what it was proposed to ask Ms. Manning. They ought, before coming off the record, to have told the defendant that an application should be made urgently for permission to do so out of time. Either they did, but the defendant failed to deal with it, or they did not, in which case they were at fault.
(ii) It seems likely that the defendant’s solicitors had not appreciated that CPR 32.9 has the effect of making the time specified for the exchange of witness statements automatically apply to witness summaries, and thought it good enough to warn the claimant’s solicitors that the bank manager might be called. Indeed neither counsel nor I myself appreciated the position at the beginning of the argument, and there was therefore initially some doubt as to whether the CPR 32.10 sanction applied. But ignorance of even a less well-known rule of the CPR is not a “good reason” of the kind envisaged by Mitchell para. 41. However complex the CPR and its PDs, omniscience is required; there is no room for procedural error.
(c) The defendant has otherwise complied with the rules and, although I have had no detailed explanation of the reason for this breach, it is likely that it was inadvertent, not deliberate.
(d) As Mr. Roe Q.C. fairly accepted, the claimant’s case was not prejudiced by the late service of the witness summary, 6 weeks before trial, and it has had no effect on the court’s process apart from a brief argument at the beginning of the hearing, and no effect at all on other court users or the court’s resources.
(e) Overall, the infringement of the rules in this case, while not trivial, is not high up on the scale of seriousness.
27. The issue then was, should the court try the case without Ms. Manning’s evidence so as to further the objective of promoting rigorous compliance with the court’s rules? To have done so would have left the court with a case in which the claimant said, in effect, that his daughter had stolen his money, while she said he had drawn it out himself to finance his girlfriends and his gambling, and in which the only direct independent evidence had been shut out. There would have been a risk of reaching an incorrect conclusion that the defendant was a thief. As Sir Rupert Jackson said (as set out in Mitchell para. 35), the new CPR 3.9 “signal(led) a change of balance”. There is indeed a balance to be struck and, by the very terms of the new rule, a discretion to be exercised which requires all the circumstances to be considered. In my view, in a case in which the defendant’s mistake did not lead to a need to adjourn the trial, and caused no prejudice to anyone, for the court to run the risk of reaching an incorrect decision, as a result of deliberately excluding relevant, available and probably important evidence, would have been neither proportionate nor justifiable.
28. There was also a further practical consideration. As I have made clear above, Mr. Buckhaven explained the gist of Ms. Manning’s evidence in making the application, and I would have felt very uncomfortable in proceeding to try the case after excluding it. It would have been difficult if not impossible to be unaffected by the knowledge that the evidence existed, even though it could not now be tested. Despite the exclusion, it would inevitably have coloured my assessment of the evidence of the parties. It would have been far more prejudicial to a fair assessment of the evidence than, say, knowledge of a Part 36 offer. I would therefore probably, having given the parties an opportunity to make representations, have had to transfer the case to another judge, and to consider whether I should give directions that he should not be informed of the excluded evidence. So the refusal of relief would probably have led to an adjournment of the case, which was not required as a result of my allowing the application, involving unnecessary additional expense and waste of the court’s resources. The position would have been little different if counsel had told me no more than that he wished to call the Santander bank manager, without stating explicitly what her evidence was; I would still have been affected by the knowledge that one party wished to adduce the only available independent evidence, but that it had been successfully excluded by the other party. I would still have had difficulty, having excluded the evidence, in trying the case fairly on the remaining evidence.
29. There is also the point discussed earlier that, if the breach of the rules was the fault of the defendant’s solicitors, as may have been the case, the refusal of relief might well have led to further litigation, involving eventually significant additional use of the court’s resources.
The terms of CPR 3.9 require the court to consider all the circumstances in deciding whether, in the case before it, the objective of promoting a culture of efficiently conducted litigation is outweighed by other matters. In my opinion, these must include the effect which the refusal of the application may have on the court’s ability to conduct the case fairly. In the present case, for all the reasons given above, and principally because of the sheer undesirability of the court deciding whether the very serious allegations made in this action were true without hearing readily available and probably important evidence, which could be heard without disrupting the trial, I granted the defendant’s application for permission to call Ms. Manning. Her evidence did indeed turn out to be of considerable importance. I would have reached the same decision if I had had the advantage of seeing the judgments in Bianca Durrant and Chartwell.