LATE WITNESS STATEMENT: RELIEF FROM SANCTIONS NOT GRANTED: A WARNING AGAINST COMPLACENCY

Anyone who has had the pleasure of hearing Professor Dominic Regan lecture will know that he gives a constant warning that the Denton principles have not gone away. In relation to the late service of budgets in particular, but in relation to sanctions in particular.  We have seen an example of this today in the case of Tully v Exterion Media (UK) Ltd & Anor [2020] EWHC.  Another example can be seen within the judgment of HHJ Halliwell (sitting as a High Court Judge) in Secure Mortgage Corporation Ltd & Anor v Harold & Ors [2020] EWHC 1364 (Ch).

THE CASE

The application concerned the validity of the appointment of the defendant as an administrator of a floating charge.

THE APPLICATION FOR RELIEF FROM SANCTIONS

Part of the judgment deals with an application for an adjournment and then an application for relief from sanctions in relation to late service of witness evidence.   The defendants served a witness statement two weeks before trial, outside the time allowed by directions. The judge refused to grant relief from sanctions.

THE JUDGMENT ON THE DEFENDANTS’ APPLICATION FOR AN ADJOURNMENT AND RELIEF FROM SANCTIONS

1. At the commencement of the trial, Messrs Harold, Tierney and Bamber applied, through counsel, for an order adjourning the proceedings pending the outcome of an application they have recently issued, in the County Court at Central London, to set aside the 12^th June 2019 Order. After hearing the application, I declined to do so on two grounds.

2. 1. Firstly, at a hearing on 30^th April 2020, HHJ Hodge QC had already refused to stay or postpone the present proceedings in anticipation of their application to set aside the 12^th June 2019 Order. Although unchallenged, the available note of his judgment is unapproved and I must thus exercise a measure of caution. However, it appears from the note that the Judge’s decision was based on his observations that Messrs Tierney and Bamber had elected to appoint Mr Harold as administrator when aware of the 12^th June 2019 Order and he could see no good reason why the present hearing should not go ahead. Following the hearing before HHJ Hodge QC, Messrs Tierney and Bamber issued their application to set aside the 12^th June 2019 Order. However, in my judgment, this did not amount to a material change of circumstances to warrant varying the HHJ Hodge’s order since the judge can be taken to have entertained the application on the footing that Messrs Tierney and Bamber genuinely intended to apply for an order setting aside the 12^th June 2019 Order. There is nothing in the unapproved note of his judgment to suggest the Judge had any doubts about their intentions or, indeed, that this featured in his analysis.

3. 2. Secondly, the preliminary application was listed for hearing on the first day of the trial itself and, if successful, the trial would be aborted. However, it had already been vacated and re-listed once before. To do so again would have involved further delay and an un-necessary waste of costs. It would also have been inconsistent with the Overriding Objective of dealing with cases justly and at proportionate cost so as to save expense, ensure expedition and allot to each case an appropriate share of the court’s resources while taking account the of need to allot resources to other cases and enforce compliance with court orders. As indicated in my ex tempore judgment, these considerations were, in themselves, fatal to the preliminary application.

4. Following my determination of their application for a stay or adjournment, Messrs Harold, Tierney and Bamber applied for relief from sanction to rely on an additional witness statement from their solicitor, Mr Healey of Bishop & Co. By an order dated 20^th March 2020, HHJ Pearce had extended time for the parties to file further evidence on condition that they would not be entitled to rely on witness evidence filed outside the new deadlines. The additional witness statement was filed on 1^st May 2020, less than two weeks prior to the date fixed for trial and precluded SMC and HCC from filing evidence in response within the three-week period for which HHJ Pearce had allowed. Applying the three-stage test in Denton v TH White Ltd [2014] 1 WLR 3296, I concluded that the breach was serious and significant and no satisfactory explanation had been provided for the default. Having taken into consideration the circumstances of the case, including the need for litigation to be conducted efficiently and at proportionate cost and the need for compliance with court orders, I decided it would unfair and unjust to allow the application and refused relief from sanction.