FAILURE TO RESPOND TO PART 18 REQUESTS PROPERLY LEADS TO STRIKE OUT: NO SECOND BITE OF THE CHERRY IN RELATION TO RELIEF FROM SANCTIONS
There are relatively few reported cases about Part 18 questions. The decision of the Court of Appeal today in Griffith -v- Gourgey  EWCA Civ 926 shows the dangers of failing to respond fully and properly.
“This shows the necessity for a defendant, who has already made one application for relief from sanctions, to show a material change of circumstances before he can make a second such application”
- Once a court had made a consent order that a party responds to Part 18 requests it was not open to that party to object to replying.
- Once the court had made a peremptory order and a party had been granted relief from sanctions once it was not open to the court to re-open the decided issues again unless the party could show a material change in circumstances.
This case shows the importance of taking Part 18 questions seriously. Particularly when a party is required to reply by court order. Needless to say the situation becomes critical where, as in this case, the court makes a peremptory order.
The petitioners were bringing an application for unfair prejudice. The petitioners made a request for further information in relation to three defences.
- A month after the requests were served the respondents objected to the requests on the grounds that they were “neither reasonable nor proportionate”.
- The petitioners made an application that the respondents reply. This was resolved by consent in an order including that the respondents “do provide a full response [to the Part 18 requests]”
- The respondents failed to respond by the date in the order.
- An unless order was made on the 4th April 2014.
- The respondents filed a response.
- The petitioners applied for an order that the defences be struck out on the grounds that the responses were inadequate.
- The respondents issued a cross-application for relief from sanctions.
THE SUBSEQUENT HEARINGS
8. Following a hearing of those two applications on 13th November 2014, Mr Monty QC (also sitting as a High Court Judge) determined that the First Response was deficient in various respects, and that the reason given by the appellants for the deficiencies (that the nature and extent of the Part 18 Requests was excessive) was one which not having been taken before Mr Hollington QC or Rose J, it was not open to them to take. Nevertheless he was persuaded, in his discretion, to grant relief from the strike-out sanction on strict conditions, including that the appellants would by 4th December 2014 serve a full and complete response to the Part 18 Requests; he so ordered on 13th November 2014 (“the Monty Order”).
9. The appellants served their purported full and complete response on 4th December 2014 (“the Second Response”).
10. The petitioners took issue with the adequacy of the Second Response, and applied on 29th January 2015 for relief on the footing that the defences remained struck out.
11. On 4th February 2015 the appellants applied for a second time for relief from sanctions.
12. Following a hearing of those applications on 23rd and 24th March 2015, Simon J gave judgment on 23rd April 2015, finding that the Second response was not, even now, a full and complete Response to the Part 18 Requests, that in consequence the conditions laid down in the Monty Order for the grant of relief from sanction had not been met, and that the defences accordingly remained struck out as from 22nd April 2014. He additionally refused the appellants’ further application for relief from sanctions, on the basis that there had been no material change of circumstances since the Monty Order which remained in force.”
THE ARGUMENTS ON APPEAL
Mr Daniel Lightman QC for the appellants (who did not appear below) submitted that it was unnecessary for them to show any change of circumstances since Mr Monty QC made his order and that he could therefore address the court on the basis that Mr Monty QC had applied a new sanction of strike-out or, if he had not, that he could again apply for relief from the sanction of strike-out imposed by Rose J. He then wished to submit that the judge should have relieved the appellants on the facts of the case instead of coming to the disproportionate conclusion he had.
We decided to hear argument on the first submission since, if it failed, the second submission would not arise.
Mr Lightman said that he was relying on CPR 3.9(1):-
“On the 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.”
He then submitted that there was nothing in the rule imposing any requirement that there should be any change in circumstances between one application for relief and another.
There might be some force in this argument if the order of Mr Monty QC had applied a new sanction different from the strike-out sanction imposed by Rose J. In fact it did nothing of the sort; it merely activated the original strike-out sanction by declaring that the amended points of defence were to stand struck out subject to the relief application and then providing that, if the appellants filed and served a full and complete response to the request for further information by 4th December 2014, the amended points of defence “shall be reinstated”. That is no new or different sanction from that imposed by Rose J by her order of 4th April 2014. The only sanction from which the appellants could seek relief was thus that of Rose J; that relief they had conditionally achieved but the condition was never satisfied.
The position was, therefore, that the application to Simon J was a second application for relief when the first application to Mr Monty QC had failed. In these circumstances it is axiomatic that a second judge (here Simon J) could not and should not entertain a second application after the application before the first judge (here Mr Monty QC) had failed (or, I would add, only succeeded on conditions that were never fulfilled), unless there has been a material change of circumstances.
A similar situation arose in Thevarajah v Riordan  1 WLR 76 in which Arnold J granted a freezing injunction together with an order requiring the defendants to disclose information relating to their assets. Henderson J made a subsequent order stating unless disclosure was made by a certain date, the defendants would be debarred from defending the claim. No disclosure was given and the defendants applied for relief from sanctions under CPR rule 3.9. Hildyard J refused the requested relief and ordered that the defence be struck out. The defendants then made a second application for relief on the basis that they were now in a position to disclose the required information. This application was granted by Mr Andrew Sutcliffe QC. Both the Court of Appeal and the Supreme Court held that it was not open to the defendant to rely either on the power to revoke or vary a previous order contained in CPR 3.1(7) or on the power to give relief contained in CPR 3.9 unless there had been a material change of circumstances or the facts on which the first decision was made had been misstated. In paragraph 15 Lord Neuberger cited with approval para 44 of Mitchell v News Group Newspapers Ltd  1 WLR 795:-
“The discretion [exercisable under CPR r 3.1(7)] might be appropriately exercised normally only (i) where there had been a material change of circumstances since the order was made; (ii) where the facts on which the original decision was made had been misstated; or (iii) where there had been a manifest mistake on the part of the judge in formulating the order. Moreover, as the court emphasised, the application must be made promptly. This reasoning has equal validity in the context of an application under CPR r 3.9.”
“18 However, even if that were not right, it appears to me that, as a matter of ordinary principle, when a court has made an interlocutory order, it is not normally open to a party subsequently to ask for relief which effectively requires that order to be varied or rescinded, save if there has been a material change in circumstances since the order was made. As was observed by Buckley LJ in Chanel Ltd v FW Woolworth & Co Ltd  1 WLR 485, 492-493:
“Even in interlocutory matters a party cannot fight over again a battle which has already been fought unless there has been some significant change of circumstances, or the party has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter.”
Accordingly, even if CPR r 3.1(7) did not apply to the second relief application, it appears clear that the defendants would have faced the same hurdle before the deputy judge. That conclusion also derives support from the last sentence in para 44 in the Mitchell case  1 WLR 795, quoted in para 15 above.
19 There was no question of the facts having been misstated by Hildyard J or of manifest mistake in formulating his order. Accordingly, unless (perhaps) they could show that this was not a “normal” case, the defendants had to establish a material change in circumstances since the hearing before Hildyard J before the deputy judge could properly consider the second relief application on its merits. Mr Letman was unable to point to any factors which rendered this case relevantly not normal. Accordingly, I reject the defendants’ first point.”
This shows the necessity for a defendant, who has already made one application for relief from sanctions, to show a material change of circumstances before he can make a second such application. It is true that there is a factual distinction between Thevarajah and the present case in that in Thevarajah Hildyard J had refused relief against the strike-out sanction whereas here Mr Monty QC had granted relief on the condition of a full and complete response; that condition was never fulfilled and so Mr Monty QC’s order stood as a refusal of relief and the amended points of defence remained struck out. Mr Monty QC’s order was an effective refusal and has therefore to be regarded in the same light as Hildyard J’s refusal in Thevarajah.
Here there has been no material change of circumstance since the order of Mr Monty QC or, indeed, that of Rose J. In Thevarajah it was at least arguable that late compliance with the order of Henderson J was a change of circumstance (an argument which the Supreme Court in fact rejected). In this case there has been no compliance at all with the order of Rose J or the conditions of relief required by Mr Monty QC. Simon J was therefore correct to say at para 106 that the case was not one.
“in which relief against sanctions could or should be granted in view of the history of the litigation and the form of the relief order.”
Mr Lightman tried to rely on the tentative words of Lord Neuberger in paragraph 19 “unless (perhaps) they could show that this was not a “normal” case to run an argument that this was not a “normal” case. He sought to amend his notice of appeal to allege the facts on which he would rely in support of this argument but we refused permission to amend his notice of appeal at this very late stage of the proceedings.
These are the reasons why we decided to dismiss the appeal on Tuesday 27th June 2017. I do so all the more readily because the one point that the single lord justice thought was arguable, namely that the strike-out should have applied only to the paragraphs of the pleading in relation to which further information had been requested, had been ventilated before Mr Monty QC and (as Mr Christopher Parker QC for the petitioners was able to show us) had been rejected by him. There is no appeal from the order of Mr Monty QC and it could hardly have been open to Simon J to take a different view even if the point had been argued before him, which it was not.