Mr and Mrs Backhouse v David Robert Earl (executor of the Estate of Mr Anthony Petersen (deceased) [01.09.2020]
On 1 September 2020, HHJ Berkley sitting as an Appeal Court Judge handed down his written Judgment, upholding the first instance decision of DJ Nichols dated 25 November 2019 in which he refused to grant the Claimants relief from sanctions, struck out the Claimants’ claim on the basis that the Claimants could call no factual evidence and awarded the Defendant costs of the proceedings.
The Claimants brought a professional negligence claim against a building surveyor, who was instructed in 2001 to supervise the conversion works to a Grade II listed building, which included the installation of a damp-proofing system to prevent flooding to the basement kitchen area. The Claimants alleged that the Defendant was negligent in connection with the damp-proofing works, which had been carried out, such that their basement flooded on 6 January 2014. The Defendant died in May 2014. The Claimants issued proceedings on 17 January 2017 against his estate, alleging that the damp-proofing system was defective and had been inadequately installed. The proceedings were defended by Plexus in respect of limitation, breach of duty, causation and loss. On 3 December 2018, there was a Case Management Conference where the court gave procedural directions to advance the litigation to trial. The relevant procedural directions were as follows:
- Disclosure by 4pm on Friday 15 February 2019
- Inspection by 4pm on 22 February 2019
- Witness statements by 4pm on 19 April 2019
- Expert reports by 17 May 2019, with experts to meet to discuss their positions by 7 June 2019 and joint statement of issues by 21 June 2019
- Pre-Trial Settlement Hearing on the first open date after 5 July 2019
- Pre-Trial Review on the first available date after 30 September 2019
- Trial window 4 November 2019 to 31 January 2020
The Claimants failed to exchange lists of documents until 17 August 2019 and witness statements were served on the eve of the strike out hearing, and filed at court during the course of the hearing. The Pre-Trial settlement hearing had been lost and the remaining procedural directions were out by 7 months. The Defendant made an application to strike out the Claimants’ claim.
The first instance decision
DJ Nichols considered the three-stage test set out in the Court of Appeal decision in Denton, as follows:
- Serious or Significant Breach
DJ Nichols concluded that the Claimants’ failure to effect disclosure by 6 months and serve their witness statements by 5 months, despite being repeatedly chased by the Defendant, was serious and significant because the trial window had been lost. The Claimants reluctantly did not challenge this on appeal.
- No good reason
The Claimants’ reason for their failure to comply with the directions was because of ongoing negotiations. This was not accepted by DJ Nichols. Negotiations was not a good reason for disregarding the procedural directions and, in fact, as the Defendant maintained, contrary to the Claimants’ submissions no offers to settle had been made. The Claimants reluctantly did not challenge this on appeal.
- All the circumstances
The Claimants had failed in all the circumstances of the case to conduct the litigation efficiently and at proportionate cost, and had failed to enforce compliance with rules, practice directions and Orders.
DJ Nichols, in striking out the claim, gave an ex tempore Judgment, which characterised the Claimants’ breaches as “extreme” and “breath-taking” in nature, with the entire timetable having been affected to such an extent that the trial could not be heard within the trial window. DJ Nichols found that this had caused actual prejudice to the Defendant.
The Claimants sought permission to appeal.
The Claimants were initially refused permission to appeal. However, a hearing was requested and HHJ Berkley heard the application for permission to appeal and the appeal simultaneously. The hearing was conducted remotely in May 2020 due to Covid-19 restrictions. Essentially, this was a hearing about how the Court should deal with the third stage of the Denton test.
HHJ Berkley concluded that there was no question that the litigation had been conducted inefficiently and at disproportionate cost for a considerable time with directions being ignored, court time wasted and the Defendant being put to the waste of time and expense of chasing the Claimants. The persistent breaches was a relevant factor. The Claimants took no action to remedy their breaches and had ultimately forced the Defendant to make an application. Conversely, the Claimants were astonishingly slow with their application for relief from sanctions, despite warnings and invitations from the Defendant. HHJ Berkley importantly highlighted that the Defendant had initially agreed in May 2019 not to oppose any application.
The Defendant relied upon the decision in Clearway Drainage Systems Limited v. Miles Smith Limited  EWCA Civ 1258. In that case, the defendant applied to strike out the claimant’s claim due to their two-month delay in serving witness statements. The claimants applied for relief from sanctions immediately after the defendant made the application, and served witness statements four days later. The Court of Appeal upheld the decision of the judge at first instance to refuse relief from sanctions, despite the fact that this would effectively terminate the claimant’s claim. The breach had been serious and significant despite the fact that the trial date had not been imperilled; there was no good reason for the breach; the application for relief had not been made promptly, and the need to ensure efficient conduct of litigation and compliance with court orders weighed against the grant of relief. However, the Claimants’ conduct of this matter had been, significantly more egregious than the conduct of the claimant in the Clearway case.
HHJ Berkley concluded that the Claimants’ brazen and unapologetic disregard of the Court’s Orders was such that DJ Nichols’ decision was almost inevitable. The learned Judge concluded that DJ Nichols was entitled to exercise his discretion and, given the Claimants’ egregious failures, there was no basis for suggesting that his decision was so unreasonable that it fell outside the wide discretion afforded to him. HHJ Berkley concluded that any appeal by the Claimants had no real prospect of success and, accordingly, the application for permission to appeal was dismissed.
This case serves as a useful reminder of the crucial importance of complying with rules, procedural Directions and Orders, and that deadlines are not missed, overlooked or simply ignored. Notably in the current-Covid-19 era where many people are working from home, it is of paramount importance that a robust diary management system is in place to ensure that procedural deadlines are appropriately recorded with timely reminders in place to avoid missing procedural deadlines. However, where there has been a breach, it is important that an extension of time is sought and that an application is made promptly to the court for relief from sanctions without delay (before the breach occurs) irrespective of whether or not the application is made with the consent of the other party.
The Defendant was represented by Alain Orengo, a Partner at Plexus Law, London.
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If you would like to know more about this matter, please speak to your contacts at Plexus Law:
Alain Orengo, Partner
T: 020 7220 5861 | M: 07816 073 864 | E: email@example.com