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England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Azure East Midlands Ltd v Manchester Airport Group (Rev 1)  EWHC 1644 (TCC) (07 May 2014)
Cite as:  EWHC 1644 (TCC)
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TECHNOLOGY & CONSTRUCTION COURT
B e f o r e :
|AZURE EAST MIDLANDS LIMITED
|- v -
|MANCHESTER AIRPORT GROUP
|PROPERTY DEVELOPMENTS LTD
____________________Transcribed by Cater Walsh Reporting Limited
MR WHITFIELD appeared on behalf of the Defendant
Crown Copyright ©
"1. The parties entered into an agreement for lease on 5th March 2010 which included provision for the construction of hotel premises at Pegasus Business Park at East Midlands Airport. The agreement for lease was subsequently amended … and there was a variation agreement dated 25th October 2011.
2. A dispute arose between the parties in respect of the works under the agreement for lease. The issues in dispute, which remain relevant to these proceedings are
(a) the provision of a mobile phone signal in the main public areas of the building and in the guest rooms in accordance with paragraph 1.1 of the schedule to the agreement to vary the agreement for lease …; and(b) the paint finish in the hotel."
Mr Warner has reminded me that there is in fact a third area of dispute conveniently referred to as the 'Wheatcroft Management Suite issue' which is the subject of continuing discussion between the parties.
"3. In accordance with clause 22 of the agreement for lease, the parties referred the disputed matters, along with others, for determination by a member of the RICS, Mr Don Smith, FRICS FCArb.
4. Following submissions by the parties, Mr Smith delivered his determination dated 4th June 2013. The determination provided …
(a) that the first defendant had failed to provide a mobile phone signal and should forthwith take all necessary measures to provide such a signal; and(b) that the painting of the hotel was inadequate in that the vinyl matt finish used on the walls in the corridors and public areas was not fit for purpose, and that the first defendant was liable to pay the claimant the proven or reasonable costs incurred up to the date of the determination of repainting the corridors and public areas ...
5. The claimant alleges that, notwithstanding the determination by Mr Smith, the defendant had failed or neglected to carry out the above matters.
6. In response the defendant asserts that it has taken all reasonable steps in connection with the provision of the mobile phone signal but that it has not been implemented due to delays by the contractors they have approached, and the redecoration quotes go beyond the scope of the determination.
7. There are further issues outstanding between the parties relating to the building management system controllers and the air handling unit serving the Wheatcroft Suite."
That is the matter to which I referred just a moment or two ago.
"The application for relief appears to suggest that the claimant is not in default of rule 3.13 because it completed section G of the CMIS concerning costs. This cannot be right. Section G of the CMIS simply seeks estimates of costs incurred and costs to be incurred. It has no bearing on the requirement to file the costs budget under CPR rule 3.13. The order of 27th January 2014 did not displace the costs management provisions of Rule 3.12."
I should observe straight away that no order was in fact made on 27th January 2014; instead that was the date of the standard form of notice which is sent out by the court office to the parties giving notice of the data of a forthcoming case management conference. But putting that minor point to one side, I generally accept Mr Whitfield's submissions in this regard. In my judgment, completion of a CMIS does not in any way relieve a party from its separate obligations to file and/or serve a costs budget in accordance with the provisions of CPR rules 3.12 to 3.18.
"In this application the claimant refers to the judgment … in Wain v Gloucester CC  EWHC 1274 TCC In that case it was held that a delay of one day in the context of a time period of seven days was trivial. The claimant here submits that a delay of two days is also trivial. This is self-evidently a matter for the court to decide."
In the course of his oral submissions today, Mr Whitfield confirmed that that indeed was the defendant's position.
"It will usually be appropriate to start by considering the nature of the non-compliance with the relevant rule, practice direction or court order. If this can properly be regarded as trivial, the court will usually grant relief
provided that an application is made promptly. The principle 'de minimis non curat lex' (the law is not concerned with trivial things) applies here as it applies in most areas of the law. Thus, the court will usually grant relief if there has been no more than an insignificant failure to comply with an order: for example, where there has been a failure of form rather than substance; or where the party has narrowly missed the deadline imposed by the order, but has otherwise fully complied with its terms."
"6. The Court of Appeal did not define what is meant by the adjective 'trivial' in Mitchell. It may well be said that there was no need to do so, the word having a plain meaning. In his judgment in Aldington & 133 Others v Els International Lawyers LLP  EWHC B29, HH Judge Oliver Jones QC, sitting as a judge of the High Court at the Birmingham Civil Justice Centre, drew attention to the interrelation between the nature of the non-compliance which was engaged, and the consequences of non-compliance: see paragraph 32 of his judgment."
7. It is perhaps also appropriate to refer to a short part of the paper delivered by Lord Justice Jackson at the recent conference held on 21st March 2014 by the Civil Justice Council on the impact of the Jackson reforms. In paragraph 3.9 of that paper, having referred to the decision of the Court of Appeal in Mitchell, Jackson LJ wrote: 'Nevertheless, parties should not be allowed to exploit trivial or insignificant breaches by their opponents, as Leggatt J stated in Summit Navigation Ltd & others v Generali Romania Asigurare Reasigurare SA (2014) EWHC 398 (Comm)."
14. … a good deal depends on the context. Much depends on the particular circumstances of the case, and in particular whether the parties are able to deal with the material contained in the costs budgets on the day in question, and whether or not any disruption to the court's timetable has been or will be occasioned by such breach."
"(i) It is necessary to consider whether the nature of the non-compliance is such that it can be regarded as trivial;
(ii) If the non-compliance is not trivial, it is necessary to consider whether there is a good reason explaining the non-compliance;
(iii) The promptness (or otherwise) of an application to court for an extension of time and relief from sanction for these purposes will be material;
(iv) If the non-compliance is not trivial and if there is no good reason for the non-compliance then the 'expectation' is that the sanction will apply. The court has power to grant relief but, if the non-compliance is not trivial and if there is no good reason for it, the expectation is that the factors mentioned in (a) and (b) of the rule will 'usually trump other circumstances'."
"The judge nevertheless was still required, by the provisions of CPR 3.9, to consider "'all the circumstances of the case' so as to enable him to deal with the application justly," and in paragraph 50 he went on to hold that "Those circumstances included the important fact that the trial date would not be lost if relief were granted and a fair trial could still be had; and the fact that no significant extra cost would be occasioned if relief were granted."
I venture to suggest that the point I made in paragraph 14 of my judgment in Wain, namely that much depends on the particular circumstances of the case, is consistent with those paragraphs of Davis LJ's judgment in Chartwell Estate Agents.
(1) The delay here was of two days, in the context of a time period or time frame of seven days.
(2) As in Wain, that seven day period, namely for filing or serving a costs budget, is usefully to be compared with the three day period for service of an application notice before its hearing (see CPR rule 23.71).
(3) Again as in Wain, on behalf of the defendant Mr Whitfield has made it entirely clear in the course of his oral submissions that the defendant has not suffered any prejudice by reason of the delay of two days.
(4) Again as in Wain, the parties are each perfectly able to deal with the topic of costs management at today's adjourned hearing, notwithstanding the fact that the claimant initially served its costs budget with only five clear days rather than seven clear days before the first initial hearing.
(5) Again as in Wain, and unlike the position which obtained in Mitchell, in this case no or no material disruption to the court's timetable has been caused by the delay on the part of the claimant in filing and/or serving its costs budget. The only additional burden placed upon the court has been the need to take some time during today's time to consider the point and also for me again to spend some time, both before the commencement of this hearing and during the interim period, to prepare this ruling.
(6) As I have already noted, I refer to and rely on what the Court of Appeal initially stated in paragraph 40 of its judgment in Mitchell, and also on what the Court of Appeal has now stated in its more recent decision in Chartwell Estate Agents. Having regard to both those decisions, I find that the claimant's initial failure in missing by two days the requirement to file and serve a costs budget seven clear days before the first hearing of a case management conference was, or has become - in the context of the facts of this particular case - no more than an insignificant failure. That is because the court is considering the parties' costs budgets not at the first, but at the second hearing of the case management conference; that additional passage of time (of some 7 weeks) somewhat dilutes any impact or effect of the initial delay.
(7) Again as in Wain, the reference by the Master of the Rolls to a situation where there has been no more than an insignificant failure is to be borne in mind. The introduction to and the reference to the concept of "significance" in my judgment, continues to resonate with the point made above, namely the relevance of the inter-relation between the breach, i.e., the non-compliance, on the one hand, and its consequences, on the other hand. Such reference to the concept of "significance" would also appear to be consistent with Jackson LJ's short concurring judgement in Fred Perry (Holdings) Ltd v Brand's Plaza Trading Ltd  EWCA Civ 224.