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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Summit Asset Management Ltd v Coates [2013] EWHC B36 (QB) (10 December 2013) URL: http://www.bailii.org/ew/cases/EWHC/QB/2013/B36.html Cite as: [2013] EWHC B36 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Claim No: HQ13X03534 Royal Courts of Justice Strand WC2A 2LL
		10th December 2013

Master McCloud (EXTEMPORE):

1. This is one of the no doubt many cases that are part of the fallout from Mitchell in terms of raising the question of what approach the Court should take one of the vastly diverse circumstances, the personal circumstances, the factual circumstances and the case law that in reality comes before the Court day after day. No two cases are the same. Every case is decided on its facts, but one has to apply the principles, and now the guidance given by the Court of Appeal in Mitchell.
2. This is a case where around about half a million pounds is claimed as a liquidated sum from the Defendant, plus interest, in other words a large sum, and the consequence of the predicament in which the Defendant finds himself today is that he would be placed in a position where he cannot defend that case, in other words if one compares this with Mitchell, Mr Mitchell did not lose his case, he was not driven from the Court. In this instance the consequences of the sanction, which is the Unless Order which has bitten because it has been breached leading to judgment, are more serious in that the result is a half a million pound judgment in the form of a strike out, and indeed I think judgment has been entered consequent on that, so there is a judgment.
3. Now, let us pick through the facts here. Breach number one was the failure by the Defendant to comply with the Court Rules, that is the pleading. That breach was the subject of a sanction in itself and that sanction was the making of the Unless Order, so that was the proportionate sanction that the Court imposed and no one suggested that that was anything other than proportionate. That breach by itself, therefore, clearly did not itself lead to striking out but it led to a sanction in the form of an Unless Order.
4. The Unless Order was made by me, I think on the 31st October. It was not sealed until the 8th November and it was not served until the 12th. In my order made on the 31st October I gave the Defendant until the 15th November to put in his defence. In other words I was giving just a bit over two weeks. I was probably allowing a couple of days for it to get through the court process
5. Now, one factor that I considered in Mitchell was time for compliance and in Mitchell I considered very carefully whether I had given the parties enough time to comply. In that case I think they had four days ultimately, and I considered there on the facts there had been time for compliance because the parties were dealing with a well known cost budgeting system which applies from the start. The starting gun, I said, for cost budgeting is not on receipt of an order, the starting gun is the start of the litigation, and I considered that that was sufficient time, the Court of Appeal agreed with me. That was in the context of cost budgeting.
6. In this instance we have a half million pound claim and a litigant who, as a result of delays in the court process of sealing an order, was left with three days to comply, with a penalty of losing the entire claim in default.
7. Mr Coates emailed the Court asking for more time prior to expiry of that deadline and I refer to that, of course, as a factor that was relevant in Mitchell in that no request (in that case) for relief had been received prior to the default. It is fair to say that in the present case the correct procedure to have followed would be under Part 23, but is it not wrong to write to the Court to ask for relief. There are better procedures and the correct procedure would be Part 23, but contacting the Court informally is far better than not contacting the court at all to try to resolve a problem and indeed I criticised the Claimant in Mitchell for failing to do just that. It would be disingenuous for me to then, in a case where someone has done just that, to say that doing so is wrong.
8. Now, it seems to me that there is procedural unfairness in this instance in the Court having given three, or what amounted to three days to comply with an Unless Order with a penalty of half a million pounds as the consequence of default. It would not and was not my intention when making the order on the 31st October to lead to that state of affairs.
9. I have noted that Mr Coates took the prudent step of making an informal request for time prior to the expiry of that deadline.
10. I must go back to Mitchell and look at the criteria. This is not a trivial breach, the original breach of the Rules was not a trivial breach and the later non-compliance of an Unless Order was not a trivial breach. Neither of them are trivial, and it is a big claim and needs to be pleaded properly. Mitchell provides that where there is not a trivial breach there has to be a good reason for the breach. But I do not read Mitchell as excluding procedural unfairness which was out of the defaulting party's control as being a good reason for a breach of an Unless Order. In the circumstances of this case, where I have formed the view that three days was insufficient time to comply, I think I have to say that that in itself, in other words being a victim of procedural injustice, is a sufficient reason for non-compliance. Court delays led to the shortness of notice, not a default on the part of the party seeking relief.
11. Merely not knowing the Rules, merely not getting legal advice, all the rest of it, are good reasons but the simple fact that the court process has led to an unfairly short time, on the facts of this case, is a sufficient reason and I do not read Mitchell as inconsistent with that approach. The Court of Appeal upheld me on the facts in Mitchell, but the facts are and the context here are different in Mitchell and the outcome is different in this case.
12. In this case I can grant relief from sanctions or I can decide treat Mr Coates' email of the 14th to the court seeking more time as a request that I reconsider the strike out time limit in my original Unless order and extend time under my order. I make it clear that I would if necessary grant relief from sanctions for the reasons above but I will in fact waive the irregularity of the absence of a Part 23 application to vary my order, treat his letter as such an application and I will accordingly then vary my order to provide the sort of time period that I had intended under my original order, but for the delay in sealing and posting of the order, which is that unless within 14 days from today a compliant defence is filed and served, then the defence shall be struck out.
13. In other words I am varying that under the right to apply, effectively, whilst waiving the irregularity of the lack of a Part 23 application.
14. I do not think 14 days is really needed for the draft defence because it has already been drafted but I am simply giving two weeks because I think that the when I made my order two weeks was what I had in mind in the first place and I seriously underestimated the time it would take the Court to process the order. Perhaps I should have said two weeks from receipt of the sealed order, in retrospect and that is my omission.

(proceedings continue)

15. I will just briefly add a postscript to my judgment that it appears possible, we do not have the email in Court and so on, but there appears to be a possibility at least, that the email letter from Mr Coates in which he asks for more time originally may have fallen foul of a crisis that we had here at the RCJ Central Office at some stage, I think, during November, I have lost track of when it was myself, whereby the court office email inbox had filled up and messages from litigants were being automatically rejected one assumes in very large numbers. The technology here is in parts old and limited, some pre-dating the CPR I believe – and not up to modern standards -and on this occasion the enormous volume of work which we deal with in the Masters' corridor caused it to break down. I should say that since the advent of centralised issuing in the other courts of the land, the work of the Central Office has expanded very significantly, one assumes because litigants prefer to issue here in person or by post, rather than at the central issue centre and to take advantage of case management operated by a small cadre of Masters sitting cheerfully behind their growing piles of court files. The email system in any event broke down, though the Masters did not.
16. I do not know, it is not being positively contended that it did fall in that period, but it just looks to me, from another email I have seen of the 18th November, which says that the Court rejected that message as the subject line did not have enough information on it. Whilst on the face of it that is not a reference to the inbox being full, I cannot see that the Court computer would ever automatically reject something because of the subject box does not have enough information in it, and it just seems to me to be a bit of a coincidence that at around that time we were having issues with our email and certainly we have had intermittent issues at other times in any case, even if this was not truly allied to that specific crisis.
17. So I simply mention that this may fall into that category, and if it did then obviously that would further go to support my judgment and it may explain why, whilst it looks vaguely familiar, I may not have seen Mr Coates' email until rather later, and I simply record that in the event that there is any appeal, that if it is indeed the case that the Court IT system bounced this email then I anticipate the Court of Appeal will at least consider exercising its discretion to admit evidence after the hearing, because it could not reasonably have been be before me today in my view.