PEREMPTORY ORDERS, EXTENSIONS OF TIME AND WITNESS CREDIBILITY

In Suez Fortune Investments Ltd -v- Talbot Underwriting Ltd [2016]  EWHC 1085 (Comm) Mr Justice Flaux considered an application to extend time or vary a peremptory order.

“I consider that a claimant in contumelious breach of Court Orders whose claim has been struck out cannot be heard to say that it should be allowed to continue its claim merely because another claimant is doing so.”

KEY POINTS

• A party had deliberately breached a peremptory order.
• There could be no question of relief from sanctions.
• The court could not simply make an “order that was just” when a party was deliberately in breach.
• The fact that another claimant could continue the action was irrelevant and the action remained struck out.

THE CASE

The first claimant in the case had been ordered to deliver up an unredacted copy of an electronic archive within 7 days or the action would be struck out. Shortly before the order took effect the claimant applied for an extension of time for compliance and relief from sanctions. Shortly before the hearing the claimant made an application to vary the order.

THE HEARING

The judge heard oral evidence during the hearing and there is a close examination of issues relating to the credibility of the claimant’s witnesses (essentially they had very little).

“ I have reached the firm conclusion that the owners’ whole case about handing the archive to Mr Grigorakis for safe-keeping on 9 March 2015, the subsequent toing and froing with the archive, culminating in the alleged miscommunication between Mr Iliopoulos and Mr Bezas which led to its handing back the day before the Final Order, the refusal of Mr Grigorakis and Mr Agha to agree to hand it back and the change of attitude by Mr Agha which was thwarted by the insurers’ representatives’ conduct set out in the Grigorakis complaint, is a complete invention. It is a case which has evolved, with further explanations and excuses for non-compliance with the Unless Order, but in all its versions, it remains incredible.”

THE CONSEQUENCES OF BREACH

1. In the light of my findings of fact, I can deal with the application of the legal principles relatively shortly. So far as the application for an extension of time is concerned, if, as I have held, the owners’ story about their inability to hand over the archive is a fabrication, not only have they deliberately misled the Court, but they are deliberately refusing to hand over the archive, in contumelious breach of the Unless Order. In those circumstances, there is no basis whatsoever for granting them the indulgence of any further time. Even if I accepted the owners’ case at face value, on that case, Mr Agha’s refusal to disclose the archive is obdurate and there is no realistic prospect of any court process, either in Greece or the Marshall Islands, to compel him to disclose it succeeding. In those circumstances, as I said at [45]-[46] above, any further extension of time is futile, there is nothing to grant it for and I decline to grant any extension.

2. On the basis of my primary findings of fact, that the owners’ story is a fabrication, that they have deliberately misled the Court and that they are deliberately refusing to hand over the archive, they are in contumelious breach of the Unless Order. For the reasons already set out at [51] to [54] above, there can be no question of any relief against sanctions in circumstances where that breach has not been remedied. The position would be no different, even if I accepted the owners’ case at face value: they have still unnecessarily, deliberately and knowingly put the WWGT archive outside their legal control, for which breach the sanction was the Unless Order. As I have already held, it is unlikely that the Court would ever grant relief against the sanction of an Unless Order, but if there were such a rare case, it is not this one.

3. There is no question of the Court simply determining now what Order the justice of the case requires, as Miss Blanchard QC sought to submit. To the extent that the application made is one for relief against sanctions, that submission essentially drives a coach and horses through the regime of strict compliance required by CPR 3.9 as interpreted in Mitchell, albeit tempered by Denton v White. The Court still has to engage in the three stage analysis set out in the latter case. In the present case, any attempt to seek relief against sanctions is doomed to fail. At the first stage, the breach by the owners was so serious and significant that the Court imposed an Unless Order which has still not been complied with. At the second stage, the breach occurred because, as I found, even taking the owners’ case at face value, the owners had unnecessarily, deliberately and knowingly put the WWGT archive beyond their legal control, so the default was deliberate. In fact, for the reasons set out in my detailed findings of fact above, on the material now before the Court, the owners’ position is worse and the seriousness of their breach is greater than it appeared on 12 January 2016. At the third stage, that of considering justice between the parties, Ms Blanchard QC’s submission that justice somehow required that, because the owners face the difficulties which they allege, their obligation to disclose the archive should be diluted to an obligation to use their best endeavours to disclose it, was hopeless. Even on their own case, the owners are the authors of their own misfortune and justice between the parties, the efficient conduct of the litigation and the need for Unless Orders to be complied with, all point inexorably to the sanction remaining in place.

4. Furthermore, this case comes nowhere near the limited circumstances in which, pursuant to the principles stated in Tibbles, the Court will vary or revoke an Order under CPR 3.1(7). There has been no material change of circumstances since the Unless Order was made on 12 January 2016 which would justify the variation or revocation of the Unless Order. On the contrary, in so far as anything has changed as a consequence of the evidence now available, specifically Mr Iliopoulos’ oral evidence, it has only served to demonstrate that the Unless Order was appropriate and just.

5. This is not a case in which the other situation in which, as Tibbles recognises, an Order could be varied or revoked, could have any application. As I said in [59] above, there is no question of the Court having been misled at the hearing on 12 January 2016 or of the facts upon the basis of which the Unless Order was granted having been misstated. Even on the owners’ own case, as I held, they unnecessarily, deliberately and knowingly put the archive outside their legal control. On the insurers’ case which I have accepted, their conduct was even more deliberate. The new or additional facts on which the owners now rely do not demonstrate that the Unless Order was made on the basis of a misapprehension.

6. As part of her submission that the question for the Court was simply what was the right Order to make in order to deal with the case justly, Ms Blanchard QC made the bold submission that the Court should somehow conclude that the case could be tried justly even without the archive, because the claim by the second claimant, the bank, would be proceeding to trial in any event. In my judgment, that submission is unmeritorious. Leaving to one side the fact that the insurers have indicated an intention to apply to strike out the bank’s claim on various grounds, including that its claim is tainted by the owners’ failure to comply with their disclosure obligations (as to which I say nothing further, as I heard no submissions from the bank at the present hearing other than a point made by Mr Jackson of Clyde & Co which I accept, that nothing that has been said by the Court has any bearing on the conduct of the bank) I consider that a claimant in contumelious breach of Court Orders whose claim has been struck out cannot be heard to say that it should be allowed to continue its claim merely because another claimant is doing so. In any event, I am firmly of the view that there could not be a fair trial as between the owners and the insurers unless there was full and proper compliance by the owners with their disclosure obligations, including handing over the archive.