"MISAPPLICATION OF THE WORD SANCTION": EXTENDING TIME ON A CONSENT ORDER IS NOT AN APPLICATION FOR RELIEF FROM SANCTIONS: SERVICE -v- BEACKON CONSIDERED

Mediatelegal

The case of Service Insurance Company Ltd -v- Beackon is briefly reported on Lawtel on the 26th June 2014.   It is a High Court decision by Andrews J where he rejected an appeal by an insurance company against an order extending time to comply with the terms of a consent order.

THE FACTS

The claimant agreed damages with an insurer.   The driver issued proceedings but failed to serve the driver of the vehicle properly.  Fresh proceedings needed to be issued in order that the insurer could have a judgment against the driver.  A consent order was made between the claimant and the insurer whereby it was agreed that the claimant would issue proceedings within one month and pay the insurer’s costs in relation to an application to strike out.

The claimant lodged the new proceedings at a processing court on the 16th September with a note stating that the claim form should be issued by the 21st September.  The claim form was issued on the 26th September.

The claimant applied for, and obtained, an order from a Master for an extension of time and relief from sanctions. The insurer had paid damages in the interim and the only dispute between the parties related to costs.

THE DECISION OF THE MASTER

The Master found that it was open to the court to extend the time limit if the justice of the case required.  He also found that relief from sanctions did not arise.  If it did then the factors in favour of granting relief were overwhelming.

THE APPEAL

The insurer appealed arguing that the order could only be varied under contractual law principles.  This argument was rejected by Andrew J.

  • The timing of the issue of the claim form was outside the claimant’s control.
  • It was to the insurer’s advantage that fresh proceedings were issued.
  • The substantive paragraphs of the order were not in Tomlin form.
  • The agreement had not settled a substantive issue but a case management issue.
  • The argue that a failure to take an opportunity attracted a sanction was a misuse of the word sanction.
  • The claimant had allowed sufficient time for the claim form to be issued and had written a letter drawing attention of that to the court.
  • The consent order was procedural rather than contractual.

“MISAPPLICATION OF THE WORD SANCTION”

The overwhelming trend of the past 9 months has been for every possible breach and error to be categorised, somehow, as a sanction.  It follows that CPR 3.9 is activated and the difficult Mitchell criteria come into play.  There is no doubt that this wide definition of the word “sanction” has come to apply to matters which were never anticipated.  It will be interesting to read the full transcript to see how this is dealt with.

VARYING A CONSENT ORDER

The case refers to the leading judgment on this matter Pannone LLP -v- Aardvark Digital Ltd [2011] EWCA Civ 125.  In that case the claimant had been 6 minutes late in filing and 2 minutes late in serving documents when there was a consent order which provided for the striking out of the claim in the event of late service.

Tomlinson L.J observed, in the Aardvark case, that

  1. In my view the weight to be given to the consideration that an order is agreed will vary according to the nature of the order and thus the agreement. Where the agreement is the compromise of a substantive dispute or the settlement of proceedings, that factor will have very great and perhaps ordinarily decisive weight, as it did in Weston v Dayman, which was not in any event concerned with an application to extend time. Where however the agreement is no more than a procedural accommodation in relation to case management, the weight to be accorded to the fact of the parties’ agreement as to the consequences of non-compliance whilst still real and substantial will nonetheless ordinarily be correspondingly less, and rarely decisive. Everything must depend on the circumstances, and CPR 3.9(1) prescribes that on an application for relief from a sanction for a failure to comply with a court order the court will consider all the circumstances, including those enumerated in the following sub-paragraphs. Beyond noting that where an order is made by consent, that is one of the circumstances which the court will take into account, it is not I think necessary to impose any further gloss on the Rules, which are already adequately drafted so as to ensure that all proper considerations must be taken into account.
  1. My conclusion is I think entirely consistent with the approach taken by Pill LJ as a single judge of the Court of Appeal in Confetti Records v Warner Music UK Limited 2003 EWCA Civ 1748. We were also referred to a recent decision of Ramsey J, Fung Oi Chiu & Others v Waitrose & Others [2011] EWHC 1356, in which he reviewed the cases to which I have referred above and concluded:-

“24. The overall effect of those cases is that the strict approach of the position before the introduction of the CPR does not apply and the court does have the ability to extend time or grant relief from sanctions in relation to an agreed order made in a consent order. However the court will be slow to do so and will generally hold the parties to the terms of the consent order but that there will be unusual cases where it will be just to extend time or grant relief from sanctions. In all cases the fact that there is a consent order will be a factor upon which the court should place very great weight in exercising the discretion given under the CPR or under any liberty to apply in the consent order.”

Later in his judgment at paragraph 34, Ramsey J said this:-

“34. Are these circumstances sufficiently unusual for the court to take the equally unusual course of granting relief from sanctions despite the fact that the agreed order was contained in a consent order and represented part of the agreement by which the trial date was vacated? I have come to the conclusion that the form of the agreed order, the lack of compliance with CPR 2.9 and the fact that unintentionally the period for compliance expired on Good Friday mean that this case is where, if the other factors in CPR 3.9(1) show that it would otherwise be just to grant relief, the court should not refuse relief despite the existence of the consent order. In this case, whilst the agreement between the parties has great importance and the court should clearly be slow to grant relief where there is a consent order given the particular unusual circumstances of this case I would be prepared to exercise my discretion and grant relief.”

It follows from what I have said above that for my part I do not think that it was incumbent upon Ramsey J to identify unusual circumstances before being prepared to grant the relief sought. I also doubt whether it can or should be asserted with confidence that the court will “generally” hold the parties to the terms of a consent order. No doubt that is the starting point of the debate but, particularly in relation to a case management decision such as under consideration in this case and before Ramsey J, an approach that the parties will “generally” be held to the terms of a consent order is in my view over-prescriptive and capable of detracting from the need to assess what, in the circumstances, is the weight appropriately to be given to the factor of consent.

Application of the principles to the present case

  1. The judge carefully considered and weighed all of the circumstances, including the respect that should be given to the agreement of the parties and all of the particular circumstances set out in the checklist in CPR 3.9. Given that the judge reached a conclusion which was well within the ambit of reasonable decision-making, it would be inappropriate to revisit the exercise of his discretion. However I would add that in my view he plainly came to the correct decision. I would have been astonished had either he or the District Judge come to any different conclusion. In view of the prize for success, I can understand why these two appeals have been pursued with such assiduity by a party who is not legally represented. In truth however, once it is accepted that the court has the power to extend time, there could only on these facts be one just outcome.

JUDGMENT OF LLOYD L.J: THERE IS A POWER TO VARY

The short judgment of Lord Justice Lloyd is also instructive:

Lord Justice Lloyd

  1. I agree that the appeal should be dismissed for the reasons given by Tomlinson LJ. Once the position was reached that the attack in the appeal was not on the power of the court to extend the time laid down by a consent order, but on whether the circumstances had justified the court in exercising that power, it became clear that the appeal was bound to fail and that the grant of permission to appeal had been over-generous.
  1. Nevertheless the appeal does provide an opportunity for this court to hold that there is such a power, and it is appropriate that we should take that opportunity. Nor is that power limited in any prescriptive way by reference to the existence of “unusual circumstances”. The fact that the order was made by agreement is one of the circumstances of the case to which the court is to have regard under rule 3.9, and it may be an important factor, but it is not inherently decisive, so as to render it unnecessary and irrelevant to examine the other relevant circumstances.
  1. One striking and perhaps unusual feature of this case, on its facts, is that it was the unrepresented litigant who put forward to the solicitors for the other party the terms of an order in draconian terms, failure to comply with which to the letter has given rise to the problem. Mr Weston was evidently familiar with rules and practices as regards the procedure to be followed in civil litigation, and a great deal more so than most unrepresented parties. If one were to suppose, for the purposes of comparison, that a consent order in similar terms had been proposed by a represented party to a litigant in person who was seeking an extension of time, there could be only one possible answer to the question whether the court would have the power to grant a further extension of time if the time allowed by the consent order had not proved to be sufficient. The fact that the order was made by agreement would be a relevant factor, but it could not prevent the court from considering whether to allow the party in default a further period of time for compliance.
  1. With hindsight it was no doubt foolhardy of the claimant’s solicitors to agree to an order in such drastic terms, and not to seek agreement in terms to service by email, and also not to start the process of filing and serving the document some ten minutes or more earlier. But on the merits of the case I agree with Tomlinson LJ that the case for extending time by a matter of hours, as the District Judge did, was overwhelming

SUMMARY

  • The court can vary the terms of a consent order, particularly when this relates to a procedural matter.
  • An application to vary may not necessarily be an application for relief from sanctions.