FRESH PROCEEDINGS CAN BE ISSUED IF FIRST PROCEEDINGS ON BEHALF OF THE DECEASED WERE A NULLITY: DENTON CONSIDERED

In the judgment today in Hutson & Anor, The Personal Representatives of v Tata Steel UK Ltd [2019] EWHC 143 (QB) Mr Justice Turner considered several points relating to the ability of those acting on behalf of an estate to issue a second set of proceedings when the first were a nullity.He also considered the Denton criteria and granted relief from sanctions.

THE CASE

There is an ongoing group action in relation to asbestos.  A Group Litigation Order has been made. The cut off date for entering the GLO expired in November 2018.   The judge was hearing applications to extend the time and allow a number of cases to proceed.

THE JUDGMENT

The application was allowed in relation to one group of claimant subject to a strict timetable and peremptory order.  The judge then considered a second set of cases.

1. 1. The eight claims which form the subject matter of this application were not identified within Order No 9 and thus do not fall within the parameters of Application 1 the purpose of which is to seek further to extend the deadline imposed by that order.

   2. In respect of five of these cases, the claims were purportedly registered before the requisite formalities had been observed but were not technically eligible for registration at the time. Nevertheless, such formalities had been satisfied before the original cut-off date and the defendant realistically concedes that, subject to the payment of costs, these cases should be allowed to proceed by granting the necessary extension of time. I endorse this approach and no further consideration of these claims is called for.

   3. This leaves three cases in which the claim had purportedly been entered on the register but the requisite formalities had not, in fact, been complied with before the deadline imposed by Order No 3 had passed.

   4. The details of the individual circumstances of these claims are set out in the appendix to this judgment.

   5. One overarching point was raised by the defendant in respect of each of these claims. This was to the effect that, as a matter of law, any claim purportedly commenced by a deceased party is a nullity which is incapable of subsequent rectification. In this regard, I was referred to the case of Kimathi v Foreign and Commonwealth Office (No 2) [2016] EWHC 3005.

   6. In that case, the defendant successfully applied to have a claim struck off the GLO register on the ground that the claimant had died before his claim had been registered. The application was resisted on two grounds:

(i) the claim had been commenced when the claim form was issued and the deceased was at that stage still alive; and

(ii) even if the claim had been commenced on the date of registration, this was an irregularity which could and should be cured by the exercise of the Court’s wide-ranging powers under CPR 3.

1. 1. The Court rejected both of these arguments finding that the wording of the GLO made it clear that:

(i) a claimant only became a party to the litigation on the date of entry of a claim onto the register and not before; and

(ii) CPR 3 afforded no discretion to the Court to rectify a purported claim which was, in law, a nullity.

1. 1. The claimants do not seek to challenge the soundness of these conclusions but contend that the fact that one claim is a nullity does not preclude the commencement of a subsequent claim which is not. Of course, there may be circumstances in which such subsequent claim could be struck out as an abuse of the process of the court but unless and until this happens the second claim is procedurally valid.

   2. I agree. Otherwise, to take an extreme example, where an action was commenced on behalf of a claimant who had, unbeknown, died on the previous day it would be an extraordinary suggestion that his estate was thereby precluded from starting a fresh action properly constituted thereafter.

   3. Accordingly, I approach this issue on the basis that this Court does indeed have a discretion to extend the time within which these three claims may be entered on the register. Of course, that is not an end of the matter and the defendant is entitled to seek to persuade me that I should exercise that discretion against the claimants.

   4. In this regard, an issue arises as to the basis upon which such discretion falls to be exercised. The defendant argues, on the strength of recent authority, that the Court should proceed on the basis that the same level of stringency should be applied as if the case fell squarely within the parameters of the tests laid down in Denton v TH White Ltd [2014] 1 WLR 3926 because the court’s indulgence is being sought in an application made after the time for compliance has already passed. I do not express any final view on the validity of this argument but note, in passing, that both Orders Nos 3 and 9 expressly provided for liberty to apply for an extension of time.

   5. In any event, if the claimants were able to succeed in satisfying the Denton tests then, a fortiori, it must follow that they would also have been able to prevail by the broader and less stringent application of the overriding objective. I will therefore assume, without deciding the issue, that Application 2 should be approached as if it were an application for relief from sanctions.

   6. The Denton approach is, for the purposes of adjudication on these applications, adequately summarised in the headnote which, in so far as is relevant, provides:

“A judge should address an application for relief from sanctions under CPR r 3.9(1) 1 in three stages: (i) identify and assess the seriousness and significance of the failure to comply with any rule, practice direction or court order which engages rule 3.9(1) ; (ii) consider why the default occurred; (iii) evaluate all the circumstances of the case, so as to enable the court to deal justly with the application including the factors in sub-paragraphs (a) and (b) . The focus of the inquiry at the first stage should be not on whether the breach has been trivial but on whether it has been serious or significant. The assessment of seriousness or significance should not, initially at least, involve a consideration of other unrelated failures which may have occurred in the past. If a judge concludes that a breach is not serious or significant, relief from sanctions will usually be granted and it will usually be unnecessary to spend much time on the second or third stages. If the court decides that the breach is serious or significant, the second and third stages assume greater importance. Although the second stage cannot be derived from the express wording of the rule, it is important particularly where the breach is serious or significant.

Sub-paragraphs (a) and (b) of rule 3.9(1) are of particular importance and so particular weight should be given at the third stage, when all the circumstances of the case are considered, to the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules, practice directions and orders. If the breach has prevented the court or the parties from conducting litigation efficiently and at proportionate cost, that will weigh in favour of refusing relief. The court must always bear in mind the need for compliance with rules, practice directions and orders, because the old lax culture of non-compliance is no longer tolerated. In giving particular weight to those two factors, the court will take account of the seriousness and significance of the breach (which has been assessed at the first stage) and any explanation (which has been considered at the second stage). The more serious or significant the breach the less likely it is that relief will be granted unless there is a good reason for it. Where there is a good reason for a serious or significant breach relief is likely to be granted. The factors which are relevant will vary from case to case. Relevant circumstances, to be weighed in the balance along with all the circumstances, will include the promptness of the application and other past or current breaches by the parties of the rules, practice directions and court orders.”

1. In respect of all three claims to be considered within the scope of Application 2, the claimants realistically concede that their defaults were serious and significant. The reasons for the defaults in each case involve culpable oversight. I give particular weight to these factors. Nevertheless, I am satisfied that these breaches have not prevented to any significant degree the court or the parties from conducting these claims or the litigation as a whole efficiently and at proportionate cost. This is not a case in which there has been a history of non-compliance. Even bearing in mind the important need for compliance with orders of the Court, I am satisfied that the factors which persuaded me to grant an indulgence in respect of the claims falling within Application 1 apply, for the most part, with similar (and, ultimately, decisive) force to the application of the third Denton test relating to all the circumstances of the case.

2. I thus conclude that Application 2 should be granted and that the time for entering these claims should be extended to 7 February 2019.