LATE SERVICE OF A REPLY: RELIEF FROM SANCTIONS WOULD HAVE BEEN GRANTED – IF IT HAD MATTERED

October 1, 2019 · by · in Applications, Statements of Case

In Sports Mantra India Private Ltd & Anor v Force India Formula One Team Ltd [2019] EWHC 2514 (Ch) Deputy High Court Judge Lance Ashworth QC considered the question of whether relief from sanctions should be granted when a Reply was served late.  The case is also worth reading for the judge’s comments on the particulars of claim and the pleading of evidence.

THE CASE

The defendant applied for reverse summary judgment in a case where the claimant sought commission due under an agency agreement.

 

THE PARTICULARS OF CLAIM

It is worthwhile reading the judge’s observations on the Particulars of Claim.

“The Particulars of Claim (drafted by Mr Dearing) runs to some 185 paragraphs over 40 pages plus appendices and 32 annexes in which detailed evidence is set out. It is not the role of the Particulars of Claim to set out the evidence, let alone to plead (as has been done on numerous occasions) that a witness “will say in evidence” particular things, but rather it is to set out the material facts. The Particulars of Claim, in my judgment, do not accord with the proper principles of pleading and are too long and verbose. If this matter had been commenced in the Commercial Court, it is inconceivable that permission would have been granted to the Claimants to exceed the 25-page limit on a statement of case.”

THE CLAIMANT’S LATE SERVICE OF A REPLY

The judge heard the hearing and reserved judgment. Some two weeks after the hearing the claimant served a reply. This was considerably out of time.

    1. There was no plea of estoppel raised in the Particulars of Claim, nor had Sports Mantra served a Reply at any stage prior to the hearing before me, despite the time for serving a Reply having expired at the latest on 16 July 2018 over 12 months previously.
Further Submissions
  1. It therefore came as somewhat of a surprise when on 14 August 2019 in the middle of vacation and more than 2 weeks after the hearing (and while I was abroad), I was sent a copy of a letter of that date from Sports Mantra’s solicitors to Force India’s solicitors enclosing a Reply to the Defence “pleading an alternative case based on estoppel in relation to the 12 month time limit under the Agency Agreement. The points were raised and dealt with at the hearing, both in written and oral submissions, however we are also covering the points in the Reply for completeness “. The attached Reply is 6 pages long.
  2. I invited further short submissions in writing as to whether in the circumstances it was appropriate for me to consider the Reply.
  3. Force India, through Mr Mill, took the position that while I should consider the Reply, Sports Mantra needed permission to serve it out of time and that it should make an application to do so under CPR Part 3.1(2)(a) to extend time for compliance with CPR Part 15.8. The principles in Denton v. White [2014] EWCA Civ 906 need to be considered. Mr Mill says applying those principles it is too late for the Reply to be served. Further, he says that if this case were to be advanced it should be in the Particulars of Claim, not in a Reply, as it is not permissible to make a claim in a Reply. Yet further, he says that the proposed Reply is embarrassing for want of particularity, nothing being said as to the species of estoppel, nor is there any statement of what the unequivocal representation is (if that is the basis for the estoppel). Additionally, he submits that reliance on silence or inactivity is hopeless as the meaning of silence can never be clear.
  4. By contrast, on the application of the Denton principles, Sports Mantra submitted that the proceedings are at a very early stage, there still having been no CCMC. Accordingly, despite the delay, the service of a Reply does not imperil future hearing dates or otherwise disrupt the conduct or efficient progress of the litigation. Therefore, it was said, the breach is at the very bottom end of the seriousness and is not significant.
  5. While there is no witness evidence to support an application for permission (no application having been formally made), it was said in Sports Mantra’s written submissions that it was not reasonably possible to file and serve a properly pleaded Reply before the Application. Further, it is submitted that in all the circumstances of the case, the Reply should be permitted even at this stage.
  6. As to the merits, it is said that the Reply is supported by credible evidence, being that set out in the witness statements adduced on the summary judgment application and therefore it potentially could keep the claim alive and allow Sports Mantra continued access to justice.
  7. Sports Mantra’s submissions as to the reasons for the delay caused Force India’s solicitors to send me correspondence showing that the parties agreed in October, 2018 to lift the stay on the proceedings imposed automatically when Force India went into administration in July, 2018.

THE JUDGE’S DECISION

The judge indicated that he would have given permission to serve the Reply late. However the defendant obtained judgment on other grounds and it would be a pointless exercise.

  1. Accordingly, but for the late service of what I should treat as a draft Reply, I would have no hesitation in holding that the current pleaded case is strikable and/or that the Claimants have no real prospect of succeeding on this issue and therefore on the Claim.
  2. However, I have now been supplied with the draft Reply and it is well known that directing amendments to pleadings can be an alternative to striking out a claim. Similarly an application for summary judgment can be met by an amended pleading which can have the effect of showing that there is some issue to be tried.
  3. There is still no formal application before me to extend time to allow the Claimants to serve this Reply and were this matter to be going any further, I would require a formal application to be made.
  4. If this matter was going forward I would, albeit with some reluctance, have granted an extension of time to allow a Reply to be served. While it is a long time since the Reply would have been due, there was a stay in place for 2-3 months at least. There was nothing, as far as I can see, which would have stopped the Claimants from putting in this Reply sooner and I reject the submissions to the contrary. However, all that has happened since the stay was lifted is this Application. Accordingly, the service of a Reply has not altered the course of the litigation to this point. I think it can therefore be considered as being relatively not very serious under the first limb of the test in White v. Denton.
  5. I do not accept that there is a good reason for the late service of the Reply. It has been plain and obvious on the pleadings, including in the Claimants’ own Particulars of Claim, that there was an issue about the 12-month time limit. If a Reply was the right way to advance the estoppel argument, it could and should have been served at the appropriate time. Even if for some reason it could not have been served earlier, there is no proper explanation as to why it was not served when this Application was made. It is very unsatisfactory that it was only served after the Application was heard and, I suspect, only as a result of my having pointed out in argument that an estoppel argument could not be run without it having been pleaded.
  6. However, applying the third limb of the test in White v. Denton in all the circumstances of the case I would have been prepared to extend time to allow a Reply to be filed. It would be wrong to shut out Sports Mantra from running an estoppel argument if that would have otherwise saved the case. To do so would not have been in accordance with the Overriding Objective.
  7. I would, on the other hand, have required the Reply to have been more fully particularised setting out the precise nature of the estoppel. I accept the force of Mr Mill’s criticisms in that respect.
  8. I am not persuaded on the very limited submissions that I have received, because of the way that this matter has arisen, that it is necessary for the estoppel to have been pleaded in the Particulars of Claim. The claim is clearly pleaded as being for commission said to be due under the Agency Agreement. The defence (on this limb) is that the sponsorship agreement was entered into outside of the 12-month limit. It seems to me that it would be open to plead the estoppel in a reply to answer that defence. It is not in itself the basis for the claim.
  9. A properly particularised Reply would, on the basis of the evidence, put before me give rise to issues to be tried, such that I could not have been satisfied that the Claimants would have had no real prospect of succeeding on the Claim.
  10. Given, however, that I have decided that the Claimants do not have any real prospect of succeeding on the Claim on the other 2 grounds, it would serve no purpose to allow the Reply to be served as it does not affect those 2 grounds, either of which would be sufficient to lead to the conclusion that judgment must be entered for Force India. Accordingly, I refuse the prospective application for permission to serve the Reply.
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