THE COURT WILL NOT READILY IMPLY SANCTIONS INTO ORDERS THAT DO NOT EXPRESSLY CONTAIN SANCTIONS: AN EARLY CHRISTMAS PRESENT FOR LITIGATORS

December 19, 2019 · by · in Applications, Case Management, Civil Procedure, Relief from sanctions

In  Djurberg v London Borough of Richmond & Ors [2019] EWHC 3342 (Ch) Chief Master Marsh held that a party did not require relief from sanctions when it failed to comply with a court order that did not impose a sanction.

  1. it would be wrong for the court to search out reasons for imposing sanctions that do not obviously arise out of the terms of the CPR or an order made by the court. As to orders made the court, it is always open to the court to impose a sanction and it should be clear on the face of the order so that the parties know of the consequences of a failure to comply with it.

THE CASE

The court made directions in a long running case at a CMC, that order included a provision that

“3. If the [First] Defendant wishes to apply to strike out the claim such application must be issued and served with any further evidence relied on by 4pm on 31 May 2019. It shall be listed for hearing on 3 September 2019 at the same time as the Claimant’s application.””

The defendant did not make an application by the 31st May. It wished its application to be heard and made an application for relief from sanctions.

 

THE JUDGMENT ON THIS ISSUE

The Master first considered whether an application for relief from sanctions was necessary and found that it was not.

    1. Paragraph 3 of the order dated 7 May 2019 did not contain an express sanction and no provision of the CPR imports a sanction to such an order. At the hearing on 3 September 2019, it emerged that the first defendant had not issued an application notice by the deadline although substantial steps had been taken towards compliance. In the course of discussion between the court and Mr Hoar, who appeared for the first defendant, the possibility that the order might contain an implied sanction was raised.
    2. Mr Hoar has addressed this question in his helpful skeleton argument. Having considered his submissions I am satisfied that the order did not contain an implied sanction and there is no requirement to consider the first defendant’s application to extend time for issuing and serving the application with their evidence against the backdrop of the relief from sanctions regime as is required in some circumstances.[1] It seems to me that the order amounted to no more than routine case management. It would have been open to the court to have imposed an express sanction but in the absence of the order there is no basis for importing a sanction that does not arise by way of necessary implication or because it is obvious. Indeed, the court should not be over-inclined to import that sanctions regime unless it is clear that this is what was intended.
    3. The notion of an implied sanction is not a new concept. It was considered in relation to appeals in R (Hysaj) v Secreataty of State for the Home Department [2014] EWCA Civ 1633 where there was a failure to file a notice of appeal in time (applying the earlier decision of Sayers v Clarke Walker (Practice Note) [2002] 1 WLR 3095). The same approach was applied to a respondent’s notice in Salford Estates (No2) Ltd v Altomart Ltd: Practice Note [2015] 1 WLR 1825.
    4. Elliott v Stobart Group Ltd and others [2015] EWCA Civ 449 is an example of the court implying a sanction where there was an enquiry into whether the defendant was entitled to recover loss pursuant to a cross-undertaking in damages given to the court. An order that the defendant “must” serve an expert report by a certain date was not complied with. Tomlinson LJ held that the order implied a sanction on the basis that, without further order, the expert evidence could not be relied on at the trial of the issue.
    5. In Mark v Universal Coatings & Services Ltd and another [2019] 1 WLR 2376 Martin Spencer J considered the rationale for a sanction being implied in the cases mentioned above. In Mark v Universal, the claimant had failed to serve a medical report or a schedule of loss within the time stipulated in paragraphs 4.2 and 4.3 of Practice Direction 16. Those paragraphs stipulate that the documents “must” be served with the particulars of claim. In deciding that the provision of the CPR did not imply a sanction, the judge observed:
“In his submissions, Mr Limb referred to the wording of paragraph 4 of the Practice Direction and the use of the word “must” indicating that it is a mandatory provision. Whilst this is true, I would observe that this is a characteristic of the drafting of the CPR and the word “must” is used liberally. However, to imply the need to apply for relief from sanctions in all cases where a rule or practice direction contains such wording would, as Mr Walker submitted, result in the courts being inundated with applications quite unnecessarily.”
    1. I respectfully agree with that analysis. In my judgment, it would be wrong for the court to search out reasons for imposing sanctions that do not obviously arise out of the terms of the CPR or an order made by the court. As to orders made the court, it is always open to the court to impose a sanction and it should be clear on the face of the order so that the parties know of the consequences of a failure to comply with it.
    2. Mr Hoar submitted that there are three categories of case so far as sanctions are concerned.
(1) Cases where (a) there is an express sanction that is imposed as a consequence of failure to comply with a rule (such as the deadline for filing a costs budget (CPR 3.14) or serving a witness statement (CPR 32.10) or the effects of CPR 8.4(1) and 8.6(1)) or (b) orders that impose a time limit with an unless order.
(2) Cases where a sanction must be implied. This occurs where although the rule or order does not impose a sanction, the effect of the rule or order is to require a party to have to apply to the court for permission or take some other step to avoid a negative consequence Examples are having to apply for permission to appeal out of time or to be permitted to participate in hearings where no respondent’s notice has been served.
(3) Cases where an order is expressed in mandatory terms such as “shall” or “must” but no consequences are directed in the rule or order for a failure to comply.
    1. It seems to be that this is a helpful categorisation subject to two observations:
(1) With reference to the second category, loosely ‘implied sanctions’, in some cases it will be obvious that the court intended there to be a sanction for a failure to comply with the order and it is also obvious that what that unexpressed sanction should be. This is matter of the court construing the earlier order. But as I have observed already, since it is open to the court to impose an express sanction in an order, it will be rare of the court to be able to reach the threshold for implication. After all, if it is so obvious that the court intended there to be a sanction, why was it not expressed. But I distinguish here a failure to draw up the order to as to reflect the intention of the court as it was expressed at the hearing, from seeking to construe the order to establish the court’s unexpressed intention.
(2) As with any categorisation, the boundaries between the categories may be indistinct.
  1. I am satisfied that the order made on 7 May 2019 did not contain a sanction. I would add that even if my analysis of the CPR is wrong, I would have been willing to grant relief. The failure to serve the application and evidence by the deadline was serious because the idea behind the order was to put the claimant in a position in which he knew whether or not the application was to be made and if so on what terms. However, the explanation for the breach that is provided in the first defendant’s evidence goes a long way to explain the breach and when all the circumstances of the case are considered, the fact that the claimant wishes to resurrect this is very weak case after a lengthy period of inaction militates strongly in favour in granting relief. The court is required to consider the merits of the amended claim when dealing with the application for permission to amend the particulars of claim. It follows that even when the considerations set out in CPR 3.9(1)(a) and (b) are taken into account, it would be right for the court to deal with the first defendant’s application.
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