MINISTRY OF DEFENCE REFUSED EXTENSION OF TIME TO COMPLY WITH PEREMPTORY ORDER: ORDERS ARE ORDERS
In Eaglesham -v- Ministry of Defence  EWHC 3011 (QB) Mrs Justice Andrews DBE refused the defendant’s application for an extension of time for compliance with an unless order. The Defence was struck out.
“A party who faces genuine difficulties in compliance with a court Order, particularly an Unless Order, should come back to the Court and explain the problems that it is facing as soon as they arise, if those problems are sufficiently serious to give rise to a real risk of non-compliance.”
“At the end of the day, Unless Orders should mean what they say. The Defendant knew the risk. Even though this was not a case of a deliberate flouting of a court order it is not an appropriate case in which to grant the Defendant any further indulgence.”
- The Court refused to grant relief from sanctions to a defendant that had breached a peremptory order for the disclosure of documents.
- Although the defendant’s application for relief was made the day before compliance was due it was appropriate for the court to apply the “Denton” principles.
- A party that cannot comply with a peremptory order should make a prompt application to court as soon as problems arise, not leave it to the last minute.
On the 5th July 2016 the court made an unless order was made stating that, unless the defendant gave disclosure by the 21st October 2016 the action would be struck out.
On the 20th October the defendant made an application for an extension of time and relief from sanctions.
COMMENTS ON THE DEFENDANT’S CONDUCT
The application notice was issued on 20 October 2016, the day before the deadline for compliance. Mr Heppinstall, who appeared for the Defendant today, as he did before Laing J, submitted that the Defendant issued the application at the last possible minute because it only became apparent late in the day that it was going to be unable to comply with the Order. Quite apart from the fact that there was no evidence before me addressing, let alone explaining the lateness of the application, I regret that I cannot accept that submission. On the basis of the evidence that has been filed in support of the application, it must have been obvious to the Defendant long before 20 October that it was not going to comply with the Order.
The Defendant has still not fully complied, although four more weeks have passed; and it is seeking up to a further two months’ indulgence. A party who faces genuine difficulties in compliance with a court Order, particularly an Unless Order, should come back to the Court and explain the problems that it is facing as soon as they arise, if those problems are sufficiently serious to give rise to a real risk of non-compliance.
THE EFFECT OF THE APPLICATION BEING “WITHIN TIME”
The effect of issuing an application notice at the latest possible moment was that although it was impossible to list a hearing before the deadline for compliance expired, technically this is not an application for relief against sanctions because the sanction has yet to bite, see Hallam Estates Ltd v Baker  EWCA Civ 661. However, Mr Heppinstall realistically conceded that the Court of Appeal’s reasoning and approach in Denton v TH White Ltd  1 WLR 3926 should be applied, as they were by Laing J on the previous occasion. The observations of Jackson LJ in Oak Cash & Carry Ltd v British Gas Trading Ltd  EWCA Civ 153 at - are also relevant, given that this is a case of non-compliance with an Unless Order.
As Flaux J said in another case involving non-compliance with an Unless Order, Suez Fortune Investments Ltd and others v Talbot Underwriting Ltd and others  EWHC 1085 (Comm) at  the necessary underlying assumption in Denton v White is that relief may be granted if either (i) the relevant default has been cured (in other words, the rule, practice direction or Order has been complied with or is about to be complied with) or (ii) that compliance can somehow be dispensed with, perhaps on terms, without doing injustice between the parties.
THE DEFENDANT’S PREVIOUS CONDUCT
There had been earlier delays by the defendant in relation to disclosure.
“When the Defendant eventually got around to making an application for an extension of time for compliance with that order for specific disclosure, which it did on 26 May 2016, more than eight months after the date on which it had agreed to provide the documents, it sought an extension to 21 October 2016, a week or so after the date by which the trial should have ended. Thus at the time when the Defendant was first seeking the indulgence of the Court, it wanted around six months more to complete the task of disclosure.”
The earlier trial date had been vacated as a result of the late disclosure, and after the later order was not complied with the court made a peremptory order.
CONDUCT AFTER THE DEADLINE HAD EXPIRED
The judge was not happy with the defendant’s explanation in relation to late disclosure:
Since the deadline expired, the Defendant has disclosed another 238 documents in four tranches, most recently under cover of a letter dated 18 November which was received by the Claimant’s solicitors on 21 November. That brings the grand total of documents disclosed to 477, approximately half of which were disclosed in the month that has elapsed after the deadline expired. According to Mr Duke-Evans, in October 2016 the Defendant had identified 600 relevant documents in respect of which PII would not be claimed, plus another 40 in respect of which PII may be claimed. He estimates that around 245 documents need to be processed for disclosure by 23 December, plus the 40 which need to be subjected to the PII process by 23 January 2017.
Ms Bowler complains that the documents were provided in random order, with no explanation as to where they have come from, no explanation of the context in which they were prepared, and no explanation of the acronyms/abbreviations used in them. She says that some are duplicates, and that many of them are undated – which as Ms Bowler points out, is singularly unhelpful in a case in which the Defendant’s state of knowledge at particular dates is crucial. There has been no attempt by the Defendant to give even a broad range of dates or details of where the undated documents were found or which department they came from.
How has this unhappy state of affairs come about? Mr Duke-Evans states that the reasons for the Defendant’s non-compliance lies in the “number and sensitivity of further documents found since the last hearing, the technical problems encountered, and the constraints on Subject Matter Expert resources.”
His current evidence does not fit easily with what the Court was told on the previous occasion. For example, he now says that the Defendant issued a formal search instruction to a number of its departments on 13 May 2016 to identify relevant documentation, and that this search resulted in the Defendant locating and obtaining over 5,000 documents of which “just over 600” have been identified as relevant. However, that is the same search instruction of 13 May that was deposed to by Mr Duke-Evans in paragraph 17 of his first witness statement, which generated the 3624 documents.
THE ABSENCE OF A GOOD EXPLANATION
The judge reviewed in detail the defendant’s explanation for its failures to give disclosure. They were not satisfactory.
Mr Duke-Evans has repeatedly assured the Court that the Defendant has made every effort to meet its disclosure obligations in this claim. However, the order was not an order to use best endeavours. It was made in the expectation that the Defendant would concentrate its resources on full compliance and do that which Mr Duke-Evans had assured the Court it could realistically expect it to do, given the processes that had to be undertaken which were expressly known to the Defendant and factored into the proposed timetable. I do not accept that the delay was due to circumstances beyond the Defendant’s control, save for the technical issues. Had those technical issues led to a short delay in meeting the deadline and had all the documents been disclosed by now, the Court would be facing a very different situation to the one which presents itself before me”
THE DEFENDANT DID NOT FULFIL THE BURDEN PLACED UPON IT
The burden is on the Defendant to persuade the Court that this is an appropriate case in which to grant the extension of time for compliance. In dealing with this application I must, of course, bear in mind the overriding objective. In the present context the factors listed in CPR 1.2(d)(e) and(f) are of particular importance. The Court must endeavour to ensure that cases are dealt with expeditiously and fairly; it must allot to a case an appropriate share of the court’s resources, whilst taking into account the need to allot resources to other cases; and it must seek to enforce compliance with rules, practice directions and orders. An “Unless Order” is an order of last resort and the nature of the Court’s indulgence to the Defendant in the present case was underlined by Laing J’s warning that if the Defendant did not comply it was very unlikely to be given any further leeway to do so.
The starting-point, as Mr Heppinstall conceded, is that there has been a substantial and serious breach of an “Unless Order” made against the background of what was accepted before Laing J to be the “highly regrettable” failure by the Defendant to comply with its disclosure obligations for over a year, without any real excuse. The previous breach was classed by Laing J as serious, significant and long-standing and she regarded the explanation for it as inadequate. She was reluctantly persuaded to give the Defendant a further 3½ months for compliance. As at the time of the hearing of the application there still has not been full compliance and the default cannot be described as “trivial”. The effect of acceding to the application would be to grant the Defendant another 3 months and even then the Court could not be confident that it would comply.
I have already indicated that I am unimpressed by the litany of excuses put forward for non-compliance, apart from the failures of technology which appear to have played only a minor role in the delay. This is not a case, in my judgment, in which the volume of documentation generated by the searches could not have been foreseen and in which the delay has been caused by matters beyond the Defendant’s control. I am not persuaded that the Defendant went about the searches in a sufficiently thorough manner to begin with and I am highly sceptical as to whether Laing J was presented with a realistic timetable on the basis of what was known at the time, though I make it clear that I am not criticising Mr Duke-Evans, who was reliant on what he was being told by other people.
The pressure of other work and demands on the time of staff, including SMEs, is also an insufficient excuse, since those factors were known at the time when the original estimate was given and were built into the supposedly “realistic” timetable put before Laing J. If a team of six counsel was insufficient to carry out the filtering exercise in time, the Defendant could and should have instructed more. I am not persuaded that the time and effort involved in educating new team members would outweigh the efficiencies to be gained by bringing them on board if further human resources became necessary.
I turn, therefore, to the third factor in Denton. The failures of the Defendant in this case have already undermined the conduct of the litigation by causing the trial date to be vacated, and now they have caused the CMC to be postponed until 2017 with the likelihood that a trial would not take place until 2018, five years after the claim form was issued and four years after the issues crystallised.
The Claimant is suffering from the depressive disorder to which Laing J alluded in paragraph 29 of her judgment, and his CFS has a poor prognosis. He faces the prospect of having the claim hanging over him for at least another year, for reasons which are not his fault. On the face of it the claim stands a real prospect of success; the disclosure, if and insofar as it relates to the state of the Defendant’s knowledge, may well support it. It is said, on the other hand, that the Defendant has a good arguable defence which is supported by the evidence of an eminent expert in the field of Tropical Medicine. Quantum is estimated to be in the order of £6-8 million; but if the order is enforced, the effect will be that judgment is entered for liability only and there is nothing to preclude the Defendant from challenging quantum.
Mr Heppinstall relied, though not to any significant extent, on the existence of other Q Fever cases raising similar issues, including Graveston v MOD. In that case the timetable for disclosure has been extended by consent, and endorsed by Master Roberts, so as to provide for standard disclosure to be given in respect of documents that do not attract PII by 23 December 2016 and in respect of those documents that are likely to be the subject of an application for PII immunity by 4pm on 23 January 2017 – the same dates that the Defendant seeks to be substituted in the Unless Order. However, in that case, the Defendant was not in breach of any court order and I do not regard it as particularly significant to the exercise of my discretion that the Defendant may well have to complete the same disclosure exercise in respect of other claims of a similar nature, come what may.
Nor am I particularly impressed by the point that there is a risk of inconsistent judgments. The risk that was taken in not making sufficient effort to comply with the Unless Order was that judgment on liability would be entered with the result that the merits cannot be fully aired; but nobody could describe this as a claim which is of little or no merit. At the end of the day, Unless Orders should mean what they say. The Defendant knew the risk. Even though this was not a case of a deliberate flouting of a court order it is not an appropriate case in which to grant the Defendant any further indulgence. I therefore refuse the application, with the consequence that judgment will be entered on liability with damages to be assessed. There will need to be provision in the order for further directions in respect of the trial on quantum, and I will consider any further proposals that counsel make in that regard.”