WHEN LITIGATION BECOMES A “VERBAL BRAWL”: DISCLOSURE MUST BE PROPORTIONATE

February 13, 2019 · by · in Applications, Conduct, Disclosure

In Canary Riverside Estate Management Ltd v Circus Apartments Ltd [2019] EWHC 154 (Ch) Master Shuman observed how disclosure applications could quickly become disproportional. The litigation had become a “verbal brawl”. It is an example of the dangers of losing sight of the overriding objective.

 

“This litigation is being conducted by the solicitors with increasing hostility. It is becoming a verbal brawl and the parties should not lose sight of their duty under CPR 1.3, which requires them to help the court to further the overriding objective. Part of the court’s duty to actively manage cases includes at CPR 1.4(a) encouraging the parties to co-operate with each other in the conduct of the proceedings.”

THE CASE

The claimant landlord brings an action for breaches of a lease. The defendant counterclaims on the grounds of the claimant’s unreasonable withholding of consent to assignments of certain parts of the property.  At an earlier hearing the Master had struck out a paragraph in the claimant’s reply which alleged dishonesty.   There were wide ranging applications for disclosure from both parties. These were only partially permitted by the Master, large parts of the disclosure sought were held not be relevant.

THE DISCLOSURE APPLICATIONS

    1. The claimant has also made an application for specific disclosure, made by application notice dated 3 March 2017. There are 10 categories of documents set out in the claimant’s application notice. They are extremely wide-ranging but have been revised in a draft order handed up to me by Mr Reynolds QC, together with the fourth witness statement of Chris Christou. The categories have become larger but more specific. The claimant also intends to make an application to amend its reply and defence to counterclaim.
    2. I am determining the cross-applications for specific disclosure. There are five lever arch bundles of documents before me and a raft of witness statements. The evidence comprises the following:
(i) On behalf of the defendant:

(a) 4 witness statements from David Stevens, a partner at the defendant’s solicitors Norton Rose Fulbright LLP (“NRF”), dated 13 February 2017, 21 March 2017, 7 February 2018 and 2 March 2018;

(b) 1 witness statement from Anne-Ceris Graham, a director of the defendant, dated 9 March 2017;

(c) 1 witness statement from Paul Rands, vice president of Development of Bridgestreet Accommodations London Ltd, dated 21 March 2017; and

(d) 1 witness statement from Michael Hughes, chartered surveyor of Residential Land Limited, dated 2 March 2018.

(ii) On behalf of the claimant:

(a) 2 witness statements from David Marsden, a partner at the claimant’s solicitors Trowers & Hamlins LLP (“TH”), dated 3 March 2017 and 14 March 2017;

(b) 4 witness statements from Chris Christou, an-in-house solicitor at the claimant, dated 8 February 2018, 2 March 2018, 18 May 2018 and 2 July 2018.

  1. The parties made submissions before me as follows. Having determined the defendant’s strike out application in the defendant’s favour, Mr Reynolds QC then made submissions in respect of the claimant’s application for specific disclosure and Mr Rainey QC on behalf of the defendant responded. That application was concluded but rather than deal with matters in piecemeal fashion the parties quite properly considered that I should then hear the defendant’s application for specific disclosure before giving judgment on both applications. At the next hearing Mr Taylor QC, now acting for the claimant, sought to reopen the claimant’s application. Mr Rainey QC then made submissions on the defendant’s application and Mr Taylor QC responded.
  2. This case provides a good example of why the disclosure pilot was necessary. So far I have heard two full days of submissions on disclosure alone. Cases must be dealt with justly and at proportionate cost. I question that the overriding objective is being adhered to by the parties given how much of the court’s resources have already been allocated to this case and the costs of this exercise to the parties. There is a need for the parties to focus on what is required in a case, it requires both cooperation between the professionals and for the parties to assist the court.

THE MASTER’S COMMENTS: THE ACTION WAS BECOMING A VERBAL BRAWL

“THE APPLICATIONS

  1. This litigation is being conducted by the solicitors with increasing hostility. It is becoming a verbal brawl and the parties should not lose sight of their duty under CPR 1.3, which requires them to help the court to further the overriding objective. Part of the court’s duty to actively manage cases includes at CPR 1.4(a) encouraging the parties to co-operate with each other in the conduct of the proceedings.”

SIGNATURE OF THE DISCLOSURE STATEMENT

There was even an issue as to who should sign the disclosure statement.

  1. In addition in the claimant’s draft order, albeit not in its application, the claimant seeks an order that the defendant’s disclosure list be signed by an appropriate person at the defendant. Mr Marsden in his statement dated 3 March 2017 says that the disclosure statement must be signed by a person who is able to confirm that the proper search has been carried out. He says that the statement should have been signed by the defendant.
  2. I wondered if ordering this might dispel some of the suspicion in this case. However I am not convinced that it would and moreover any order must be grounded in the CPR. Under CPR 31.10(7) where the party making the disclosure statement is a company the statement must also identify the person making the statement and explain why he is considered an appropriate person to make the statement. This is supplemented in the practice direction 31A paragraph 4.3. Indeed this paragraph states that the person making the statement must include his name and address and the office or position he holds in the disclosing party or the basis upon which he makes the statement on behalf of the party. The disclosure statement in the list of documents sets out that Michael Hughes has given that statement and that he is the “development director at Residential Land with responsibility for Circus Apartments, knowledge of the issues and access to the defendant’s documents”.
  3. I am satisfied that the defendant has complied with the requirements of paragraph 4.3 and CPR 31.10(7). I also consider on the evidence before me that Mr Hughes was the appropriate person to make the disclosure statement and it was not necessary for anyone else to do so. In the circumstances I do not make the order sought by the claimant.

 

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