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Woodhouse v Consignia Plc  EWCA Civ 275 (7th March, 2002)
| || ||Neutral Citation Number:  EWCA Civ 275|
| || ||Case No: B2/2001/0332|
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CROYDON COUNTY COURT
HH Judge Coningsby QC
District Judge Fink
| || ||Royal Courts of Justice|
London, WC2A 2LL
| || ||7th March 2002|
B e f o r e :
LORD JUSTICE BROOKE
LORD JUSTICE LAWS
LORD JUSTICE DYSON
| || TRACEY WOODHOUSE|
(Widow and Administratrix of the estate of Mark Woodhouse deceased)
| ||- and -|
(Transcript of the Handed Down Judgment of
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1 Introduction 1
2 Woodhouse v Consignia plc 2
3 Steliou v Compton 15
4 The principles to be applied in cases of this type
(i) The removal of an automatic stay 29
(ii) CPR 3.9 31
5 The application of the principles in the Woodhouse case 48
6 The application of the principles in the Steliou case 52
Lord Justice Brooke :
- We heard these two appeals separately on the same day, but because they raise issues of general importance in relation to the transitional arrangements in Part 51 of the Civil Procedure Rules and the relevance of the Human Rights Act 1998 in cases where a court is minded to make an order which has the effect of barring a claimant from pursuing his case without a trial on the merits, we are now giving a single judgment of the court on the two appeals. We have structured our judgment so that it will begin with a statement of the facts in each appeal, continue with a consideration of the principles a court must apply when determining issues of this kind, and end with the application of those principles to the two cases before us. The Steliou case also raised an additional issue which we consider in the final part of this judgment.
2. Woodhouse v Consignia plc
- This is an appeal by the claimant Tracey Woodhouse, who sues as widow and administratrix of her dead husband Mark Woodhouse’s estate, against an order of Judge Coningsby QC at the Croydon County Court on 29th February 2001 when he dismissed her appeal against an order of District Judge Fink on 4th September 2000 whereby she had refused to lift the automatic stay imposed on the proceedings pursuant to paragraph 19 of the Practice Direction to Part 51 of the Civil Procedure Rules (“CPR 51PD”).
- This action was started on 30th April 1998. Mr Woodhouse committed suicide 17 days later. It appears that he had been suffering from paranoid psychosis prior to his death. He was claiming damages against the defendants, who were his employers, arising out of a reference they had written for him when he was applying for a job with the local council. He had been offered the job subject to satisfactory references, and he complained because he said that the unsatisfactory reference, which lost him the job, contained false information about his disciplinary record and otherwise failed to give a fair and accurate view of his employment history.
- This episode occurred in November 1997. Mr Woodhouse obtained legal aid in February 1998 and commenced this action less than six months after his alleged cause of action arose. Following his death on 17th May, the defence was filed on 18th May, and Mr Woodhouse’s solicitors told the defendant’s solicitors of their client’s death on 21st May 1998. Thereafter nothing happened in the action as between the parties for more than two years. On 28th June 2000 Mrs Woodhouse’s solicitors made an application for an order removing the automatic stay imposed by virtue of the transitional provisions contained in CPR Part 51 and its Practice Direction, and also for an order amending the Particulars of Claim so that she was substituted for her husband as the claimant.
- The only evidence she placed before the court in support of her application for the stay to be removed was in these terms:
“The untimely death of Mr Woodhouse caused her immense grief and distress. She now, however, feels able to continue this action on behalf of Mr Woodhouse’s estate.”
- The judge observed that although the formal evidence (apart from a reference to Mr Woodhouse’s paranoid psychosis prior to death) was otherwise silent, it was possible to ascertain from the papers before the court that letters of administration had been granted to Mrs Woodhouse as long ago as 25th August 1998 and her husband’s legal aid certificate was amended in her favour a month later. It also appeared that counsel had made the necessary amendments to the particulars of claim in December 1999, six months before the application to the court was made.
- When the matter came before the district judge, she observed that this was a difficult area of law because it was still comparatively new. She considered that the Practice Direction did have the effect of imposing a stay in this case, and she went on to say that this was an inordinate delay. She accepted that the claimant was upset, but this was far too long a delay. She therefore refused to remove the stay.
- The claimant appealed, and at the hearing of the appeal she sought permission to adduce new evidence in support of her case that the stay should be removed. She also asked that the judge should treat the appeal as a complete rehearing rather than merely a review of the district judge’s judgment. The judge refused both these applications, and on this second appeal there is no challenge to either of those rulings. Although he dismissed the appeal, Judge Coningsby indicated that there was an area of law raised by the case on which he believed that further guidance from this court would be valuable. He expressed it in this way:
“Whether on an application to lift a stay imposed by PD 51.19 the criterion is the same as for an application to strike out for want of prosecution (ie inordinate delay) as stated in the footnote on page 1334 of Jordans’ Civil Court Practice for November 2000, or some other criterion.”
- In saying this he made it clear that he did not wish to encourage an appeal to this court, because of the relatively small value of the claim and principles of proportionality. On 30th July 2001, however, Lady Justice Arden granted permission to appeal. She said:
“There is an important point of practice raised by this case for the purposes of CPR 52.13, and a real prospect of success, in respect of the argument that in the light of CPR 1.1 and the decision of this court in Biguzzi v Rank Leisure  1 WLR 1926 the test applied by the judge was too narrow.”
- When the matter came before the judge in January 2001, he had only two sources of guidance as to the manner in which a court should exercise its discretion whether to lift an automatic stay pursuant to CPR 51 PD para 19(2), the Practice Direction itself being silent on this subject.
- The first was the footnote in the Civil Court Practice for November 2000 (see para 7 above). This was in these terms:
“A party may apply under CPR 23, supported by evidence, to lift the stay, and the provisions in the checklist set out in CPR3.9, dealing with relief from sanctions, would apply to any such application. Notwithstanding the clear guidance in Biguzzi v Rank Leisure plc  1 WLR 1926 that compliance with time limits is more important under the CPR than under the old regime, a judge must still consider all the circumstances of the case before deciding whether to reinstate an action. Similar considerations will no doubt apply to an application to lift a stay. It is unlikely that the courts will decline to lift a stay introduced by PD 51 para 19 unless the delay involved in the individual case brings it within the criterion which would otherwise justify an order striking out the case for want of prosecution.” (Emphasis added)
- The other was a note of a judgment of Judge Adams, the former Registrar of Civil Appeals, in Axtell-Powell v Labor  12 Current Law 59, to the following effect:
“The purpose of Part 51 was not to kill off those cases which fall within its ambit but to require any party wishing to continue with the case to ask the court for permission to do so.
The two factors of significance in deciding whether or not to lift the stay were:
(i) whether the request to lift the stay was made timeously;
(ii) whether it was still possible for a fair trial to be conducted.”
- Judge Coningsby said that he had no reason to dissent from what Judge Adams had said, but it did not seem to him to be a complete statement of the law. In particular, he said, it did not pick up the point made in the footnote in the Civil Courts Practice which we have emphasised in the extract from that footnote cited in paragraph 10 above.
- Because he was concerned only to review the way in which the district judge had exercised her discretion, he found that he was unable to interfere with her conclusion that the delay had been inordinate. He therefore dismissed the appeal. The claimant now appeals to this court.
3. Steliou v Compton
- This is an appeal by the claimant Martin Steliou against an order of Judge Thompson QC in the Basingstoke County Court on 27th April 2001 whereby he dismissed Mr Steliou’s appeal against an order made by District Judge Fuller in the same court on 19th January 2001 striking out as an abuse of court process an application he had made on 8th November 2000 for the removal of an automatic stay imposed on the proceedings through the operation of CPR 51 PD para 19. There had been an earlier application (and subsequent appeal) by the claimant to the same two judges in connection with this matter on 4th August and 27th October 2000 which were made in the unusual circumstances we describe in paragraphs 21 to 24 below.
- Mr Steliou was seriously injured in a road accident on 3rd February 1994. He suffered injury to both legs and hips. He underwent a number of operations in 1994, 1996 and 1998. The most recent medical report, by Mr Hook, a consultant orthopaedic surgeon, is dated 28th March 2000. On the basis of this report it is clear that, despite the passage of time and the operations, Mr Steliou continues to suffer from some pain and disability as a result of the injuries that he sustained in the accident.
- He started proceedings on 3rd November 1995 in the Basingstoke County Court. On 26th February 1996 the court ordered that there be “a split trial dealing first with the issue of liability”. As is explained in the statement of Mr Collins (the solicitor who represents Mr Steliou), the reason for ordering a split trial was that it was already clear in 1996 that it would be a very long time before the prognosis for the injuries would be sufficiently clear for damages to be assessed. Following a trial, Mr Recorder Boyle decided that Ms Compton had been negligent, but held that the damages should be reduced by 40% to reflect the contributory negligence of Mr Steliou. On 21st August 1996 he ordered that there be judgment in favour of Mr Steliou, with damages to be assessed. It is clear that Mr Steliou was entitled to a substantial award of damages. Indeed, it was submitted on his behalf that the figure will exceed £100,000, even allowing for the 40% discount for contributory negligence. Some small payments into court have been made by the defendant during the course of these proceedings.
- Following the decision on liability, Mr Collins did not seek directions from the court in relation to the trial of the assessment of damages. He decided not to make any application to the court until the prognosis became clearer. But as is apparent from the bundle of correspondence that has been placed before the court, he took active steps to clarify the medical position, and the defendant’s solicitors were kept informed. Since no criticism has been made of Mr Collins, it is unnecessary to consider the details of this correspondence. In his statement, he says that it was common ground between the defendant’s solicitors and himself that progress with the action could not be made until it was determined whether the operation for the reconstruction of Mr Steliou’s left knee had been a success, and that this would not be known until at least six months after the operation had been carried out. The operation was carried out in October 1998. In March 1999 Mr Steliou was still complaining of pain, and further surgical intervention remained a possibility. The parties agreed, therefore, to instruct an expert jointly. That is how Mr Hook came to be instructed on 11th June 1999.
- Mr Hook produced his first report on 3rd August 1999. He required X-rays before he could give a firm prognosis. Mr Collins received his final report of 28th March on 3rd April 2000. On 13th April 2000 he instructed Keith Carter (an employment consultant) to advise on Mr Steliou’s employment prospects. He received Mr Carter’s report on 9th June.
- Crucially for the purposes of this appeal, the proceedings had not come before a judge, at a hearing or on paper, between 26 April 1999 and 25 April 2000. The proceedings were, therefore, automatically stayed. It is not clear on the evidence when Mr Collins first appreciated that the proceedings had been automatically stayed. The procedural twists and turns that the case then followed were unusual, to say the least.
- On 13th July 2000 Mr Collins gave notice of intention to apply for “an order for a further interim payment and directions”, because “the liability trial in this action was heard on 21st August 1996 since when the claimant has undergone further surgery 3 operations. As a result the claimant is still not able to provide the court with a long term prognosis. The claimant has not been able to return to full time working since the accident and is suffering severe financial loss”. In Part C of the application notice, Mr Collins identified the evidence on which he wished to rely in support of the application. That evidence was Mr Hook’s latest report, coupled with the information that Mr Steliou had now been advised that further surgery would be needed to his left knee. A proposed directions order, annexed to the application notice, began with a draft direction to the effect that “any stay in respect of these proceedings be removed”.
- The application came before District Judge Fuller on 4 August 2000. Mr Livesey of counsel appeared on behalf of Mr Steliou. His primary submission was that the proceedings had not been stayed, since paragraph 19 of the Practice Direction was ultra vires. During the course of argument, the district judge made it clear that he was unimpressed with this submission. Mr Livesey submitted in the alternative that, if the proceedings had been stayed, the stay should be lifted. The district judge pointed out that an application to lift a stay under paragraph 19(2) must be supported by evidence (CPR 3.9(2)), and that no evidence had been adduced in support of the application in this case. Mr Livesey was asked twice whether he wished to apply for an adjournment, but he refused on each occasion. He sought to persuade the district judge to treat the bundle of correspondence that he produced as being sufficient. We have not been shown the bundle of correspondence, but we infer from the exchanges between the district judge and counsel that it included most, if not all, of the documents that are in the bundle that has been produced by Mr Collins.
- In a short judgment the district judge rejected Mr Livesey’s ultra vires argument, and further held that, even if the application that was before him could properly be treated as an application to lift the stay, he would refuse it on the grounds that it was not supported by any evidence.
- The claimant appealed to Judge Thompson QC on 27th October 2000. Mr Livesey repeated his ultra vires argument, but apparently with less vigour than before the district judge. His main point was that the stay should be lifted. The judge read the correspondence, but observed that there had been nothing to stop the claimant’s solicitors from bringing the matter before the court before 25th April 2000. He decided that the district judge was right to hold that there was no evidence before him on which he could have acted. The appeal was dismissed.
- On 8th November 2000 Mr Collins made a fresh application. This time he asked in terms for an order that the stay imposed by operation of paragraph 19(1) should be removed. He also asked for a further interim payment of £20,000 and directions in relation to the trial of the issue of damages. He supported the application with the statement to which we have earlier referred, to which were annexed substantial exhibits, including the correspondence.
- The application was heard by District Judge Fuller on 17th January 2001. This time, Mr Steliou was represented by Mr Woodhouse of counsel. Mr Woodhouse submitted that there had never been an application to lift the stay of the proceedings. In refusing to lift the stay, the district judge said:
“I lean very strongly to the procedural management of this case. The matter was there in August. The question of the removal of the stay was discussed. It is inconceivable that learned counsel did not ask for the stay to be removed. The second part of the order is the reason why it was not. There was no evidence. Given the extreme pressure on the court service to supply adequate judicial resources, given the directive about allocation of time, I do not think it is within the spirit of the CPR that once the solicitor for the claimant has got it wrong, as he did, and gone to appeal, he can then totally abandon all the arguments and go back on those principles and say, ‘Oh, yes, I know about it all the way and it has cost me money and time, but I now see what I should have done, and I am now going to do it’. It is too late for that. I have the greatest sympathy for the claimant. This is not an insignificant case. I am bearing that one in mind. Nobody has ventured to tell me what the likely amount of the claim is. There is no argument that he is not entitled to run it. Substantial sums have already been paid on account. But at the end of the day it is very difficult to say that it is not the case that it has already been dealt with on this point of the removal of the stay and res judicata. They cannot come and put it again on issue estoppel. More importantly, if the new rules are to work they have got to be complied with. The spirit is there. It is quite clear we have had two years almost to get to grips with these things. On that doctrine I could not support learned counsel for the claimant. The main emphasis is on the case management powers. It does not mean to say that the plaintiff will [not] get his money, but he will get it from the solicitors’ insurance company, and the insurance company will pay. I would strike this matter out on the basis of an abuse of the court process pursuant to my management.”
- Once again, Mr Steliou appealed. Once again, the appeal was heard by Judge Thompson. This time, Mr Steliou was represented by Mr Challenger, who has also appeared before us. On 27th April 2001 Judge Thompson dismissed the appeal. He said:
“If something could and should have been brought forward before the court on the previous occasion, then it is not open to a party to re-litigate that at a later stage, when it could have been litigated at the earlier stage”
- He went on to say that the district judge had treated the application as an application to lift the stay, and that there could only be a further application to lift the stay “if something new had arisen subsequently”. In the present case, all the matters relied on by Mr Steliou had arisen before the first application had been made to the district judge. Since all of them could and should have been raised before the district judge at the first application, the second application had to fail, and the appeal was “doomed to failure for that reason”. The judge concluded that the decision of the district judge was right, and that the passage from the judgment of the district judge which we cited “very succinctly encapsulates the position here”. He added:
“If something could and should have been brought forward before the court on the previous occasion, then it is not open to a party to relitigate that at a later stage, when it could have been litigated at the earlier stage.”
4. The principles to be applied in cases of this type
(i) The removal of an automatic stay
- Another division of this court has now resolved the important point of practice identified by Arden LJ when she granted permission to appeal in the first of these appeals. In Audergon v La Baguette Ltd  EWCA Civ 10 at  –  Jonathan Parker LJ, with whom Pill and Tuckey LJJ agreed, held that the automatic stay imposed by CPR PD 51 para 19 fell to be treated as a sanction “imposed for a failure to comply with any rule, practice direction or court order” within the meaning of CPR 3.9.
- He followed in this respect an earlier indication to the same effect made by Latham LJ, with whom Longmore and Potter LJJ had agreed, in Stanford v Stanford  EWCA Civ 1289.
(ii) CPR 3.9
- It follows that it is now CPR 3.9, and not a footnote in a textbook, that judges must take into account when determining whether to lift an automatic stay imposed by virtue of the transitional provisions of CPR Part 51 and its Practice Direction. This rule reads:
“(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order the court will consider all the circumstances including –
(a) the interests of the administration of justice;
(b) whether the application for relief has been made promptly;
(c) whether the failure to comply was intentional;
(d) whether there is a good explanation for the failure;
(e) the extent to which the party in default has complied with other rules, practice directions and court orders and any relevant pre-action protocol;
(f) whether the failure to comply was caused by the party or his legal representative;
(g) whether the trial date or the likely date can still be met if relief is granted;
(h) the effect which the failure to comply had on each party; and
(i) the effect which the granting of relief would have on each party.
(2) An application for relief must be supported by evidence.”
- This rule is a good example of the way in which the draftsman of the Civil Procedure Rules has sometimes endeavoured to set out in a codified form the various matters which the court may have to take into account when deciding how to exercise its discretion in a context with which it will be all too familiar. One of the great demerits of the former procedural regimes was that simple rules got barnacled with case-law. Under the new regime the draftsman has sought to dispense with the need for litigants to be familiar with judge-made case-law by drawing into one place the most common of the considerations a court must take into account when deciding whether a litigant should be granted relief from a sanction imposed on him.
- The circumstances in which a court may be asked to make a decision of this kind are infinitely varied. This is why the rule instructs the court to consider all the circumstances of the particular case, including the nine listed items. On the other hand, the rule would lose much of its praiseworthy purpose of encouraging structured decision-making if courts did not consciously go through the exercise of considering all the items on the list when determining how, on balance, it should exercise its discretion. Provided it does so, and in this way ensures that the risk of omitting any material consideration is minimised, it is most unlikely that an appeal court will interfere with its decision. If it fails to do so, an appeal court may not be able to detect that it has taken all material matters into account, and it may be obliged to exercise its discretion afresh for this reason.
- The two cases at present before the court were simpler than many, because in neither of them was there any evidence that the claimant had intentionally failed to comply with the sanction imposed by the practice direction; a trial date and/or a likely trial date had not been fixed in either case; and the party in default, namely the claimant, had not previously failed to comply with any other rule, practice direction, court order or relevant pre-action protocol. If any of these features are present, they may tend to incline a court in an appropriate case to bar a claimant from pursuing a case, or from pursuing a chosen course of action within a case, after incurring a sanction of a type described at the beginning of CPR 3.9(1).
- At the end of his judgment in Audergon v La Baguette Ltd  EWCA Civ 10, Jonathan Parker LJ, with whom Pill and Tuckey LJJ agreed, made two comments of general application about the application of CPR 3.9. We have no difficulty in adopting and endorsing his aversion to “a judicially-created checklist, which does not appear in the rule itself” for the reasons he gave in paragraph 107 of his judgment:
“Inherent in such an approach, as it seems to me, is the danger that a body of satellite authority may be built up, rather as it was under the old rules in relation to the dismissal of an action for want of prosecution, leading in effect to the rewriting of the relevant rule through the medium of judicial decision. This would seem to me to be just the kind of undesirable consequence which the CPR were designed to avoid.”
We wholeheartedly agree.
- It appears to us, however, that paragraphs 103 to 106 of the judgment in Audergon, which are clearly correct in the context in which they appeared, may give rise to misunderstandings if they are taken out of context, particularly as there is earlier Court of Appeal authority, to which the court does not appear to have been referred, which tended the other way. In Audergon, the court was concerned with a submission that the Chief Chancery Master (and Rimer J on an appeal from the Chief Chancery Master) were so much in error in failing to refer specifically to CPR 3.9 (and in not referring specifically to the list of matters contained in paragraph (1) of that rule) when deciding whether or not to remove an automatic stay, that this court should exercise its discretion in the matter afresh. In this context, Jonathan Parker LJ said (at paras 103-106):
“However, it does not follow that the Master was in error in not referring specifically to the rule in his judgment and/or in not framing his judgment specifically by reference to the list of matters contained in paragraph (1) of the rule. In my judgment the rule does not require the court to adopt such an artificial and mechanistic approach. (Emphasis added)
I reach that conclusion for two main reasons. In the first place, I reject Mr Ralls’ submission that the word “will” in CPR r.3.9 imposes a mandatory duty on the court to deal specifically and separately in its judgment with each of the matters listed in paragraph (1). As in the case of CPR r.52.11, the word “will” in CPR r.3.9(1) is not an imperative: the paragraph merely identifies a number of specific matters which the court “will” consider in every case. No doubt one of the reasons why the rule refers specifically to such matters is to assist litigants to focus their evidence and their arguments on relevant aspects of the particular case. (Emphasis added)
In the second place, one must not lose sight of the fact that the overriding objective of the court in considering applications under the rule is to determine in each case where the justice of the case lies (see CPR r.1.1) The discharge of that task involves, by definition, a consideration of all the relevant circumstances (as the opening words of CPR r.3.9(1) make clear); and that will in turn include a consideration of the various matters listed in the paragraph. But provided always that the court gives sufficient reasons to enable those affected by its decision to understand the basis for that decision, it is not in my judgment a legitimate criticism of the court’s judgment that it does not refer specifically to the rule, or that its judgment is not framed specifically by reference to the list of matters contained in paragraph (1) of the rule.
Accordingly in the instant case it is not, in my judgment, a legitimate criticism of the Master (or, for that matter, of the judge) that in their judgments they did not address themselves specifically to CPR r.3.9.”
- This judgment related to judicial decisions made by two very experienced judges. It was also made at a time when there was a good deal of judicial uncertainty about the criteria to be applied when a court considered whether to remove an automatic stay imposed by virtue of CPR 51PD. It would, however, in our judgment, be in the highest degree unfortunate if the judgment was to be interpreted as giving any sort of green light to the abandonment of a practice recommended by this court on two previous occasions, even though the practice is not mandatory in the sense that a decision is defective if it has not been expressly followed.
- In Bansal v Cheema (CAT 2 March 2000), in an unreported judgment whose effect is noted in the current (2001) editions of both the White Book Service and the Civil Court Practice in the notes to CPR 3.9, this court was concerned with a case in which a judge’s refusal to extend the time for serving a witness statement had the practical effect of preventing the claimant from giving evidence in support of his case at the forthcoming trial. The claimant’s counsel argued that the judge’s order was very nearly the harshest order that he could have made, that in the absence of any previous serious or persistent default by his client he should not have acted so peremptorily, and that he should have confined himself to an “unless” order, which would have had the effect that the action would be struck out if the witness statement was not delivered and served by a date that fell just over nine weeks before the date fixed for trial.
- This court did not know the thought processes which had led the judge to make such a peremptory order. In a judgment with which Roch LJ and Ferris J agreed, Brooke LJ (said at paragraphs 22, 26, 27 and 28):
“The principal ground which is urged upon us by [counsel] today is that the judge failed to take into account all the matters which he was under an obligation to take into account under CPR 3.9(1). In my judgment [counsel] had made a good point. Although Judge Wakefield gave an ex tempore judgment, it is essential for courts, exercising their discretion on an occasion like this, to consider each matter listed under CPR 3.9(1) systematically in the same way as it is now well known that courts go systematically through the matters listed when an application is made for the exercise of the court’s discretion under section 33 of the Limitation Act 1980. In the present case there is no sign in the judge’s brief ex tempore judgment that he took into account the matters which he was bound to take into account under the rules which are set out in CPR 3.9(1)(g), (h) and (i).
So far as the effect which the granting of relief would have on each party (CPR 3.9(1)(g)), if relief was not granted the defendant would have the unsolicited windfall that this substantial action against him would be dismissed. On the other hand, this would have been an unsolicited windfall, particularly as the judge did not know when he made the order why it was that the claimant had suddenly had to go to India. The effect of the refusal of relief would clearly have a catastrophic effect on the claimant whose action would have been struck out. He would also face the Mangat action without being able to compensate himself from any money that he might have succeeded in recovering from the defendant. There is no sign at all that the judge took that into consideration.
I am always very reluctant for this court to interfere with a decision made by a judge in the exercise of his case management powers under CPR Part 3. The responsibility for managing these actions is given fairly and squarely to the judge. The role of the Court of Appeal should only be seen as a longstop, to be called in aid when things appear to have gone seriously wrong. If the judge had systematically gone through the list of matters he had to take into account under CPR 3.9(1), and come to the conclusion that the order he was making was a just order, it would be very difficult for this court to interfere with it, because he would manifestly have taken into account all the matters he was obliged to take into account. A circuit judge in a busy court like the Central County Court would have much greater experience of the problems and difficulties of controlling litigation in that court than this court necessarily has.
I am of the clear view, however, that on this occasion the judge did not do what the rules required of him, and that a substantial injustice was done as a result. Accordingly this court should interfere.”
- In Keith v CPM Field Marketing Ltd (CAT 11th July 2000) this court criticised a judge who had debarred the defendants from defending a claim when they had failed to produce some articles required of them by an earlier court order which set a deadline for compliance. In a judgment with which Swinton Thomas LJ and Gage J agreed, Brooke LJ referred (in para 36) to Bansal v Cheema, and commented that there was no sign in the judge’s brief ex tempore judgment that he had taken into account any of the matters which he was bound to take into account under the rules which are set out in rule 3.9(1)(g), (h) and (i). In addition, some of the other matters mentioned in that rule appeared to have been overlooked. He continued (at para 37):
“[The judge] had been confronted with an application to extend time for compliance with an unless order in a context in which, if time was not extended, relief would be sought from the sanction imposed by the order. In my judgment, it is obligatory for the court in such a situation, in pursuance of its obligation to deal with the case justly (see rules 1.1 and 1.2), to take into account the matters set out in rule 3.9. This rule sets out a very convenient list of many of the matters which a judge should take into account when considering whether to make an order as draconian as the order that Judge Overend made on 29th February. Of course, Bansal v Cheema was decided two days afterwards and this, strictly, was not a rule 3.9 case. But in my judgment, when he was exercising his discretion pursuant to the overriding objective, it should have been plain to the judge that he should take into account the matters set out in rule 3.9 in all the circumstances of the case.”
- The comments in these two cases were made in ex tempore judgments when the court did not have the benefit of the argument addressed to the court in Audergon about the legal effect of any failure by a judge to make it clear that he had taken express notice of the matters mention in CPR 3.9. To that extent, such expressions as “bound”, “required” and “obligatory” are in a very strict sense inappropriate when used in the explanation of a rule which deploys the directory word “will” rather than the mandatory word “must”. Subject to that caveat we would reiterate the message given by the court in the two earlier cases. Judges (and, particularly, less experienced judges) should submit themselves to the discipline of considering each of the matters listed in CPR 3.9 which appear to them to be relevant to the case they have to decide. If they fail to do so, there may be a serious danger that an appeal court may overturn their decision for omitting to take a material consideration into account.
- It follows that in future judges should not simply latch onto one or two considerations (such as the length of any delay) to the exclusion of all others, when deciding whether it is just to remove a stay imposed on an action by the operation of CPR 52 PD para 19. They must remember that if a stay remains in place, they are depriving the claimant of access to the court, a concept which now has particular resonance under ECHR Article 6. They must carry out the necessary balancing exercise methodically and explain how they reached their ultimate decision.
- Provided that judges make their decisions in these cases within the general framework provided by CPR 3.9 and 1.1, they are unlikely to fall foul of the ECHR in this regard. In Ashingdane v United Kingdom (1985) 7 EHRR 528 at , the European Court of Human Rights said:
“Certainly, the right of access to the courts is not absolute but may be subject to limitations; these are permitted by implication since the right of access ‘by its very nature calls for regulation by the State, regulation which may vary in time and place according to the needs and resources of the community and of individuals’.”
- More recently the court emphasised the need for proportionality when it said in McElduff v United Kingdom (1998) 27 EHRR at :
“… a limitation will not be compatible with Article 6(1) if it does not pursue a legitimate aim and if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be achieved.”
- There is one further matter of general practice which we need to mention in relation to applications of this kind. Under the new CPR appeals regime, the original decision of the district judge or master takes on a much greater significance than it ever did prior to 26th April 1999, because the role of the appeal court is now that of a court of record and not of a court which conducts a complete rehearing of the application and exercises its discretion afresh (see Tanfern Ltd v Cameron-Macdonald (Practice Note)  1 WLR 1311, 1317 at .
- It may be that in an effort to save expense, particularly in relation to small claims, a party’s solicitors may prepare and serve quite a short witness statement in support of their application for the removal of the stay, and this may suffice in most cases, particularly if their application is unopposed. If, however, it is opposed, they would do well to reconsider the adequacy of their evidence before embarking on the hearing before the district judge or master.
- The Woodhouse case provides a very good illustration of what may happen if they do not. The evidence before the district judge was very sparse, and the circuit judge refused to admit a much fuller witness statement on the appeal. The moral of this story is that greater attention needs to be paid to the quality of the evidence adduced at the first hearing, because there may not be a second chance on appeal.
5. The application of the principles in the Woodhouse case
- It will now be evident that the district judge was wrong to concentrate only on the length of the delay in this case. None of the features we mentioned in paragraph 34 above were present, so that there is no need to comment any further on CPR 3.9(1)(c), (e) or (g). So far as the other matters listed in the rule are concerned, we can deal with them quite briefly in turn:
(a) The interests of the administration of justice are not directly affected either way.
(b) The application for relief was made only two months after the guillotine fell.
(d) There was an explanation for the failure, although it could not be described as a “good” one in the absence of greater particularisation.
(f) The court did not really know if Mrs Woodhouse or her solicitor was responsible for the failure to comply.
(h) The failure to comply improved the defendants’ case to the detriment of Mrs Woodhouse’s case, because they would be given the benefit of the doubt in the event of any failure of recollection.
(i) The granting of relief would mean that the defendants would have to go on defending a claim which was brought soon after the cause of action arose, and when the primary limitation period still had a long time to run. The refusal of relief would bar this widow from access to the court in a case in which none of the features mentioned in paragraph 20 above were present.
- The court is also charged under CPR 3.9(1) to consider all the circumstances. Judge Coningsby touched on these towards the end of his judgment, when he referred to the following additional considerations:
i) This was a small claim, less than £6,000 plus interest, being lost wages for 27 weeks until the date of death;
ii) Since Mr Woodhouse was suffering from paranoid psychosis prior to his death, his damages might be reduced still further because of this fact;
iii) The claim appeared to be a problematic one, because it seemed to be admitted that Mr Woodhouse was in fact away from work on 58 days in the previous 11 months (a reference to his poor attendance record being one of the matters complained of) and there was a dispute of fact, which the claimant might have difficulty in proving, as to whether the defendants told the council that Mr Woodhouse was subject to a final written warning;
iv) In a case where there were going to be difficulties of proof, and difficulties with regard to damage, and the claim was relatively small, the costs which would be incurred on either side would be vastly in excess of the amount likely to be recovered. On the other hand, the judge accepted that even a small claim, if it has merits, should be allowed to go forward, provided that the rules have been complied with and there has not been inordinate delay.
- These are matters which should be weighed in the balance when deciding whether to allow a claim to proceed. We have to exercise our discretion afresh, and it seems to be wrong to bar this widow, who has the assistance of the Legal Services Commission, from access to the court because of the problematic merits of the claim, when all the specific matters to be considered under CPR 3.9 are either fairly neutral or tend to favour the further progress of her action to trial.
- We would therefore allow this appeal and set aside the orders in the courts below.
6. The application of the principles of the Steliou case
- Mr Challenger submitted quite simply that the district judge and the judge had misdirected themselves. They had wrongly considered that the fact that the application could and should have been made on the first occasion was determinative of the outcome of the application on the second occasion. What they should have done was to exercise their discretion taking into consideration the factors enumerated in CPR 3.9(1), and had they done so, they should have lifted the stay on the facts of this case.
- Mr Russell submitted that it was immaterial whether there was or was not an application to lift the stay on the first occasion. If no such an application was made at that time, one could and should have been made. If such an application was made, it was made incompetently since it was not supported by evidence. There was no reason why an application could not have been made, supported by evidence, on the first occasion. Either way, the second application was an abuse of the process of the court. In the exercise of its case management powers, the court has a discretion whether to allow or refuse a “second bite at the cherry” in such cases. The judge was right to regard the decision of the district judge as a proper exercise of discretion. That exercise of discretion can only be upset on appeal on familiar grounds: see G v G (Minors: Custody Appeal)  1 WLR 647. There are no grounds for interference in the present case.
- Mr Russell has drawn our attention to Securum Finance Ltd v Ashton  1 Ch 291, and in particular to paragraph 34 of the judgment of Chadwick LJ:
“For my part, I think that the time has come for this court to hold that the ‘change of culture’ which has taken place in the last three years – and, in particular, the advent of the Civil Procedure Rules - has led to a position in which it is no longer open to a litigant whose action has been struck out on the grounds of inordinate and inexcusable delay to rely on the principle that a second action commenced within the limitation period will not be struck out save in exceptional cases. The position, now, is that the court must address the application to strike out the second action with the overriding objective of the Civil Procedure Rules in mind – and must consider whether the claimant’s wish to have ‘a second bite at the cherry’ outweighs the need to allot its own limited resources to other cases. The courts should now follow the guidance given by this court in the Arbuthnot Latham case  1 WLR 1426, 1436-1437:
‘The question whether a fresh action can be commenced will then be a matter for the discretion of the court when considering any application to strike out that action, and any excuse given for the misconduct of the previous action: see Janov v Morris  1 WLR 1389. The position is the same as it is under the first limb of Birkett v James. In exercising its discretion as to whether to strike out the second action, that court should start with the assumption that if a party has had one action struck out for abuse of process some special reason has to be identified to justify a second action being allowed to proceed.’”
Mr Russell submits that the district judge carried out the balancing exercise referred to by Chadwick LJ, and that the judge was right not to interfere with that exercise, and this court should be similarly self-denying.
- The application of 8th November 2000 was undoubtedly a “second bite at the cherry”. It was supported by evidence that was available at the time of the first application. There was no good reason for the failure to place that evidence before the court on the first occasion. We accept that the fact that the evidence relied on in support of the application that was made on 8th November could and should have been put before the court in support of the earlier application is material to the exercise of the discretion conferred by CPR 3.9(1). There is a public interest in discouraging a party who makes an unsuccessful interlocutory application from making a subsequent application for the same relief, based on material which was not, but could have been, deployed in support of the first application. In some contexts, this is partly because, as Chadwick LJ said in Securum, there is a need for the court to allot its limited resources to other cases. But at least as important is the general need, in the interests of justice, to protect the respondents to successive applications in such circumstances from oppression. The rationale for the rule in Henderson v Henderson  3 Hare 100 that, in the absence of special circumstances, parties should bring their whole case before the court so that all aspects of it may be decided (subject to appeal) once and for all, is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever, and that a defendant should not be oppressed by successive suits when one would do: see per Sir Thomas Bingham MR in Barrow v Bankside Ltd  1 WLR 257, 260A-D.
- In our view, although the policy that underpins the rule in Henderson v Henderson has relevance as regards successive pre-trial applications for the same relief, it should be applied less strictly than in relation to a final decision of the court, at any rate where the earlier pre-trial application has been dismissed.
- To take an example: suppose that an application for summary judgment in a substantial multi-track case under CPR 24 is dismissed, and the unsuccessful party then makes a second application based on material that was available at the time of the first application, but which through incompetence was not deployed at that time. The new material makes the case for summary judgment unanswerable on the merits. In so extreme a case, it could not be right to dismiss the second application solely because it was a second bite at the cherry. In those circumstances, the overriding objective of dealing with cases justly, having regard to the various factors mentioned in CPR 1.1(2), would surely demand that the second application should succeed, and that the proceedings be disposed of summarily. In such a case, the failure to deploy the new material at the time of the first application can properly and proportionately be reflected by suitable orders for costs, and (if appropriate) interest. The judge would, of course be perfectly entitled to dismiss the second application without ceremony unless it could be speedily and categorically demonstrated that the new material was indeed conclusive of the case.
- In the present case, it is clear that both the district judge and the judge considered that the fact that the application of 8th November 2000 was a second bite at the cherry was decisive. In our view, they were wrong to do so. They failed to take into account the evidence of Mr Collins, and to consider how cogent the case was for lifting the stay, having regard in particular to the provisions of CPR 3.9(1). In short, they failed to exercise their discretion at all. In these circumstances, it is necessary for us to exercise our discretion afresh.
- As in the case of Woodhouse, none of the features mentioned in paragraph 34 above were present, so that there is no need to comment further on CPR 3.9(1)(c), (e) or (g). As regards the other matters listed in the rule, we comment as follows:
(a) The interests of the administration of justice are affected since, in the absence of special circumstances, it is contrary to the good administration of justice to permit parties to have a second bite at the cherry on the basis of evidence that was available on the first occasion.
(b) The first application was made about 10 weeks and the second a little more than six months after the guillotine fell.
(d) There was an understandable explanation for the failure to comply, even if it was not a good one. In his statement, Mr Collins said that the reason why he did not take account of the provisions of CPR 51 PD para 19(1) was because he believed that there would not be an automatic stay since this was a personal injury case “where there is no issue on liability but the proceedings have been adjourned by court order to determine the prognosis” (CPR 51PD para 19(3)(b)).
(f) The failure to comply was not caused by Mr Steliou, but by his legal representatives.
(h) The failure to comply had no effect on either party, since liability had been resolved, and the issues of damages would turn very largely on the evidence of jointly instructed experts.
(i) The granting of relief would mean that the defendant would continue to be faced with the liability to pay such damages as (if not previously agreed) were assessed by the court. The refusal of relief would deprive the claimant of his (no longer disputed) right to substantial damages. Since the primary limitation period has now expired, he would almost certainly start proceedings against his legal representatives claiming damages for professional negligence.
- In our view, if the first application had been supported by the evidence of Mr Collins, the district judge could not reasonably have refused to lift the stay. The case in favour of allowing the application would have been overwhelming. On any view, Mr Steliou has an unanswerable claim to substantial damages. Moreover, although Mr Collins was wrong to believe that CPR 51PD paragraph 19(3)(b) applied, the spirit of that provision was engaged by the facts of the case. The reason why the court ordered a split trial in the first place was that it would be some time before the court would be able to determine the prognosis. Once liability had been decided, there was no issue on liability. The court could have adjourned the proceedings on 21st August 1996 to determine the prognosis, but it did not do so. If it had done so, no stay would have been automatically imposed on 26th April 2000. In these circumstances, and in the light of the factors which we have mentioned when going through the list in CPR 3.9(1), the case in favour of allowing the first application if it had been supported by the evidence relied on in support of the second application would have been irresistible. Mr Russell does not contend otherwise.
- The question that arises, therefore, is whether the fact that there was a second bite at the cherry leads to a different result. We have no doubt that this additional factor is an important matter that must be taken into account in considering how the discretion given by CPR 3.9 should be exercised. Although there was no good explanation for the failure to adduce the evidence of Mr Collins on the first occasion, the mistake he made in misreading CPR 51PD para (3)(b) in the context of this case was not one which should be visited with a disproportionate penalty. After all, the facts of the case would have justified a court order being made in terms which would have meant that CPR 51PD para 19 did not apply: it was fortuitous that the court order was not expressed in words which achieved that effect.
- Moreover, the result of a stay would unquestionably be (a) to deprive Mr Steliou of substantial damages in a case which would be very likely to settle out of court (in view of the fact that the principal evidence was that of jointly instructed experts), and (b) to encourage him to start proceedings against his legal advisers. In our view, such an outcome would not further the overriding objective of enabling the court to deal with cases justly, nor would it reduce the call on the court’s resources. Nor would it be a proportionate response to the failure to make a proper application to lift the stay on the first occasion. We have no doubt that on the facts of this case, the discretion given to the court should be exercised so as to lift the stay.
- This court is always very reluctant to interfere with the way in which district judges and circuit judges exercise their case-management powers. They have a difficult task to perform, and the judges in the Basingstoke County Court were right to be reluctant to devote an excessive amount of the court’s resources on a single case. On this occasion, however, it appears that the penalty they imposed on a seriously injured claimant whose solicitor had made a pardonable mistake in his interpretation of a transitional rule was disproportionate to the error that was made. The error could be remedied by orders for costs, and these have already been paid. It deserved no greater penalty on the unusual facts of this case.
- We would therefore allow this appeal and set aside the orders in the courts below.
- Appeals Allowed.
Order in Wood house
- Claimant given permission to file and serve amended particulars of claim dated 23 March 1998
- Claim to be transferred to the Nottingham County Court
- To be listed for case management conference with time estimated of ½ hour
- Claimant to pay defendants costs of application in Croydon County Court on 4 September such costs to be set off against costs to be paid by the defendant as ordered in paragraph 5.
- The defendant should pay the claimants costs of the appeal heard in Croydon County Court on 29 January 2001 and claimant’s costs of the appeal heard in the Court of Appeal on 4 February 2002 to be costs subject to detailed assessment if not agreed.
Order in Steliou v Compton
- Appeal against order of Judge Thompson QC made on 27 April 2001 allowed and his order set aside.
- Order of District Judge Fuller made on 19 January 2001 to be set aside.
- Automatic stay imposed under CPR 51 PD 19 is lifted.
- Matter to be remitted to the Basingstoke County Court for further directions.
- Defendant to pay the costs of this appeal together with the costs of the application to the district judge of 19 January 2001 save for the claimant’s costs of issuing that application, and the costs of the appeal to the judge on 27 April 2001, such costs to be subject to detailed assessment if not agreed.
(Order does not form part of the approved judgment).
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