LATE SERVICE OF WITNESS STATEMENTS: CHARTWELL -v- FERGIES CONSIDERED IN DETAIL

The case of Chartwell Estate Agents Ltd -v- Fergies Properties Ltd [2014] EWHC 438 (QB) has been dealt with in an earlier post. At that stage a Lawtel summary of the case was available.  The full transcript is now released.

CHARTWELL: A RECAP OF THE FACTS

The claimant made repeated requests for full disclosure, threatening an application for specific disclosure.   The point was made that disclosure was required in order that the witness statements could be drafted.

• The claimant informed the defendant that witness statements could not be served on the date required by the court order.
• The defendant later disclosed the documents, the claimant never made an application for specific discover.
• The defendant refused to agree to an extension of time for service of witness evidence.
• Several weeks after the required date for exchange the claimant made an application for permission to serve the witness statement out of time.

THE JUDGE’S CONSIDERATION IN RELATION TO SANCTIONS AND THE LATE SERVICE OF WITNESS STATEMENTS

Mr Justice Globe reviewed the background and stated.

“26. It is against this unsatisfactory background that the application is now made
principally for an extension of time to serve witness statements and to obtain relief
from sanction. The procedure is set out in a number of the rules. CPR 32.10 states:

“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.”

CPR 3.1(2)(a) states:

“Except where these Rules provide otherwise, the court may –
(a) extend … the time for compliance with any rule, practice direction or
court order (even if an application for extension is made after the time for
compliance has expired)”.

CPR 3.8(1) states:

“Where a party has failed to comply with a rule, practice direction or court
order, any sanction for failure to comply imposed by the rule, practice
direction or court order has effect unless the party in default applies for and
obtains relief from the sanction.”

CPR 3.8(3) states:

“Where a rule, practice direction or court order –
(a) requires a party to do something within a specified time, and
(b) specifies the consequences of failure to comply,
the time for doing the act in question may not be extended by agreement
between the parties”.

CPR 3.9(1), as recently amended, states:

“On an application for relief from any sanction imposed for a failure to
comply with any rule, practice direction or court order, the court will
consider all the circumstances of the case, so as to enable it to deal justly
with the application, including the need –
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders.”

27. There is clear authority that the prohibition imposed by CPR 32.10, on calling a
witness whose witness statement has not been served within a specified time,
amounts to a sanction in terms of CPR 3.8(1) taking effect for failure to comply
with a rule or court order. Accordingly, a party applying for permission under
CPR 32.10 must apply for relief from sanction as provided for by CPR 3.9.

28. The note to the White Book at 32.10.2 states:

“However, where before trial a party requests the court to exercise its
powers under CPR 3.1(2)(a) to extend time for serving their witness
statements, it could be argued that CPR 3.9 does not apply because at that
stage the sanction imposed by CPR 32.10 has not had effect within the
meaning of CPR 3.8”.

29. If that is correct, no relief from sanction is required and I would need to consider
whether it is appropriate to extend time for service and exchange of the witness
statements in accordance with CPR3.1(2)(a) applying the principles of the
overriding objective of dealing with the case justly and at proportionate cost. The
note may be correct because the time has not yet arrived when any party is seeking
to call a witness and it is not until that happens that the issue of the court giving
permission also arises. It may also be correct in that the sanction is that permission
is needed if a witness statement is not served in time. As such, maybe that is
independent of any application under CPR 3.9.

30. The contrary argument is that, with the time limit having expired for the exchange
of the witness statement, CPR 32.10 debars the calling of any witness to give
evidence at trial unless the court gives permission. The debarring runs from the
time when the time for the witness statement to be served expired and unless and
until permission is granted the sanction remains in force and has effect. Relief from
sanction is thereby required.

31. If relief from sanction is required, consideration needs to be given to the case of
Mitchell [2013] EWCA Civ. 1537, where the Master of the Rolls gave guidance as
to how the new approach to seeking relief from sanction under CPR 3.9 should be
applied in practice. In para.38 reference was made to the more robust approach to
rule compliance and relief from sanctions inherent in the Jackson reforms. In

para.39 the Court of Appeal endorsed that approach. In paras.40 and 41 guidance
was set out. It is worthy of reminding oneself of the context of that guidance.
Paragraph 40:

“… It will usually be appropriate to start by considering the nature of the
non-compliance with the relevant rule, practice direction or court order. If
this can properly be regarded as trivial, the court will usually grant relief
provided that an application is made promptly. The principle “de minimis
non curat lex” (the law is not concerned with trivial things) applies here as
it applies in most areas of the law. Thus, the court will usually grant relief if
there has been no more than an insignificant failure to comply with an
order: for example, where there has been a failure of form rather than
substance; or where the party has narrowly missed the deadline imposed by
the order, but has otherwise fully complied with its terms. We acknowledge
that even the question of whether a default is insignificant may give rise to
dispute and therefore to contested applications. But that possibility cannot
be entirely excluded from any regime which does not impose rigid rules
from which no departure, however minor, is permitted.”

Paragraph 41:

“If the non-compliance cannot be characterised as trivial, then the burden is
on the defaulting party to persuade the court to grant relief. The court will
want to consider why the default occurred. If there is a good reason for it,
the court will be likely to decide that relief should be granted. For example,
if the reason why a document was not filed with the court was that the party
or his solicitor suffered from a debilitating illness or was involved in an
accident, then, depending on the circumstances, that may constitute a good
reason. Later developments in the course of the litigation process are likely
to be a good reason if they show that the period for compliance originally
imposed was unreasonable, although the period seemed to be reasonable at
the time and could not realistically have been the subject of an appeal. But
mere overlooking a deadline, whether on account of overwork or otherwise,
is unlikely to be a good reason. … If departures are tolerated, then the
relaxed approach to civil litigation which the Jackson reforms were
intended to change will continue. We should add that applications for an
extension of time made before time has expired will be looked upon more
favourably than applications for relief from sanction made after the event.”

32. Mitchell was a case concerned with a decision to refuse relief from a sanction
imposed for failure to comply with the rules on cost budgeting. The Court of
Appeal case of Durrant [2013] EWCA Civ. 1624, which was reported on 17th

December 2013, was concerned with a decision to grant relief from a sanction for
non-compliance with an order requiring service of witness statements by a
specified date. The result of the grant of relief on the trial date itself was the loss
of the trial date. The appeal was allowed and the Court of Appeal substituted a
decision refusing the application for relief from sanction. The Durrant case is
therefore a closer parallel to this case, save that the application for relief was on the
trial date itself.

33. A similar situation came before this court in the even more recent first instance
decision of Turner J. in M A Lloyd & Sons Ltd v PPC International Ltd [2014]
EWHC 41 QB, which was reported on 20th
January 2014. Turner J. refused relief
from sanction for failure to serve witness statements in accordance with a court
order. The date fixed for trial in that case was 30th
January 2014. The hearing
before Turner J. was not on the trial date. It was 10 days beforehand. However,
the failure to serve witness statements seriously impacted upon the trial date.”

THE CLAIMANT REQUIRED RELIEF FROM SANCTIONS

It is important to note that the judge concluded that the claimant did require relief from sanctions.

RELIEF FROM SANCTIONS GRANTED

The Judge considered the errors in the case, particularly by the Claimant.

• Both parties were at fault.
• The issue of disclosure should have been dealt with at the Case Management Conference.
• The Claimant’s failure to serve witness statements in time could be be regarded as trivial.
• There was a burden on the Claimant to persuade the court that there was good reason for non-compliance.
• The Claimant could have served witness statements on time and applied to serve supplementary statements after disclosure.
• No justifiable reason was given for a failure to seek an extension of time prior to the date that witness statements were due to be exchanged.

RELIEF FROM SANCTIONS GRANTED

Relief from sanctions was granted because:

• The attitude of the defendants in correspondence had not been helpful.
• They eventually gave disclosure.
• The order for exchange was not sequential, as it had been in Lloyd & Sons.
• The Defendants were not ready to exchange their witness statements on the relevant dates.
• Both parties could exchange witness statements almost immediately, within 7 days.
• It would be too severe a consequence, and an unjust result, considered against the background history, with default occurring on both sides.
• The trial date could be maintained.
• The costs budgets would not be increased and there were no additional costs consequences. Any additional expenditure on each side was a direct result of its own default.
• The proportionate costs of the whole action were therefore not affected by a relief from sanction.

DO NOT RELY ON RELIEF FROM SANCTIONS IF IN DOUBT SERVE AND APPLY

One of the key points to take away from this case is that litigators should avoid, at all costs, having to apply for relief from sanctions. The safest course would have been to serve witness statements and made an application for permission to serve supplementary statements. Ironically if the Claimant had served witness statements on time it appears that the Defendants were not ready. It may have been the Defendants applying for relief from sanction.