Last week the Commercial Court dealt out a salutary warning to Parties whom are seen to opportunistically attempt to take advantages of defaults by their opponents.
Mr Justice Popplewell in the case of Viridor Waste Management Ltd v Veolia ES Ltd (unreported, QBD (Comm) 22 May 2015) awarded a claimant its costs assessed on the indemnity basis in circumstances where it was held that the defendant had taken unreasonable advantage of the claimant’s late service of particulars of claim in the hope of securing an opportunistic strike out. It was held that in the circumstances, relief from sanctions was the obviously appropriate outcome.
The facts however do not appear to be starkly in favour of the eventual outcome before the Court.
Here, the claimant’s Claim Form (claiming some £32 million for unjust enrichment) was served four days late. This was overlooked by the defendant and in without prejudice discussions a twenty-eight day extension for service of particulars of claim was agreed. However, the claimant defaulted on this agreement (the second default in the short history of the case) when these particulars were not only served a day late, but were done so by second class post, which is a method of service unrecognised by the CPR. The Claimant subsequently re-served by hand, email and first class post, albeit five days beyond the agreed deadline.
Rather than consent to the claimant’s application for an extension of time for service, the defendant applied to strike out on the grounds that the delay itself and failure of the method of service were serious breaches of important rules of procedure. It was also argued that to allow an extension would also effectively extend limitation on the facts of this case.
In the author’s opinion, the grounds put forward by the defendant had some merit and given the potential value of the case, may well be one where a party is urged to “have a go” albeit perhaps opportunistically. The claimant had defaulted previously and the tenor of the so-called ‘Jackson reforms’ is to consider default from procedural canon to be serious.
Popplewell J however disagreed with the Defendant and your author. He held that it was unrealistic to regard any delay as being always “serious and significant”. On the facts of this case, it was held that the default should be “measured” to being just a few hours late, given the fact that the particulars of claim were in the defendant’s hands via second class post the day after that when service was due. A purposive approach was taken to the rule of service, and it was held that the said delay of a few hours would not have had any real impact on the course of litigation, other litigation or other court users were it not for the defendant’s application. Applying the Court of Appeal’s guidance in Mitchell and Denton therefore, it was held that the breach was immaterial and thus relief should be granted.
Unfortunately for it, things did not end there for the beleaguered defendant. The court held because it was obvious that relief from sanctions ought to be granted in this case, the actions of the defendant were an attempt to take unreasonable advantage of the claimant’s default in the hope of obtaining a windfall strike-out. This, and the defendant’s refusal to consent to the claimant’s application, was held to have caused further delay in this litigation as well as a negative impact upon other court users. Thus the claimant was awarded not only its costs, but they were to be assessed on the indemnity basis too.