Chiu v Waitrose Ltd and Wates Construction Ltd (2011) – unless order by consent The court can grant relief from sanctions where a party has failed to comply with a time limit in a consent order but it should only do so where there are special circumstances. This was such a case.

Following repeated failures by the third party, Wates, to serve its witness statements, the parties agreed to vacate the trial date and a consent order was made in the following terms:

“Unless the third party exchanges witness statements with all other parties within 14 days of the date of this order, then its defence, Part 20 claim and Part 20 defence do stand as struck out.”  

The last day for complying with the order was Good Friday, 22 April 2011. Wragge & Co, acting for the first defendant Waitrose, wrote to Mayer Brown, acting for Wates, on Tuesday 26 April telling them they were in default of the unless order. Mayer Brown replied that because the final day for compliance was a bank holiday, it rolled over to 26 April as the next business day. They served two witness statements by 13:00 on 26 April.

Time for exchange

The wording of the consent order required exchange of witness statements within 14 days of the date of the order. The parties did not realise that the last day for compliance would be a bank holiday. This problem would not have arisen had the order expressed the last date for compliance as a calendar date, as required by CPR 2.9.

Mayer Brown wrongly assumed that CPR 2.8(5) applied and that the period was extended until the next business day. This rule says that when the period specified for doing an act at the court office ends on a day on which the office is closed, that act shall be in time if done on the next day on which the court office is open. This would have been the case had the consent order required Wates to exchange and file the witness statements within 14 days, but it did not.

Consent order and relief from sanctions

Wates applied for relief from sanctions under CPR 3.9. Waitrose opposed the application. It argued that the overriding consideration was that there was a consent order and that the court should consider granting relief from sanctions so as to upset the bargain between the parties. The judge held that the relief from sanctions is available where there is a consent order but that the court should be slow, except in unusual circumstances, to depart from what the parties have agreed.

He concluded that the circumstances were unusual. The fact that the parties unintentionally agreed an order requiring the witness statements to be exchanged and not served meant that what was required could not happen on the last day for compliance, Good Friday, without special arrangements.

Default by the legal representative

The judge considered the various factors under CPR 3.9, and concluded that the most serious default was the continuing failure to serve the witness statements prior to the consent order. This was explained by the illness of the solicitor at Mayer Brown. Reviewing the effect of CPR 3.9(1)(f), the judge concluded that a failure by the legal representative is treated as weighing in favour of granting relief, as compared to a failure by the party itself.  

Comment

An unless order was described by the Court of Appeal in Marcan Shipping (London) Ltd v Kefalas as "one of the most powerful weapons in the court's case management armoury”. Judges were reminded that an unless order should not be deployed unless its consequences could be justified and should not be made for “good housekeeping purposes”. The decision also clarified that once a party has failed to comply with an unless order, that is the end of the matter. The condition, usually the striking out of the claim or defence, will take effect automatically.

There are occasions when a party consents to an unless order, presumably because it realises that the court would make such an order if requested. The present case is an example of this and illustrates how important it is to get the wording of such a drastic weapon correct. Sloppy drafting costs time and money. As CPR 2.9 and Practice Direction 40B para 8 prescribe, orders should not use the formula “within x days” but should specify the calendar date and time for compliance. Anything else is ripe for confusion.

To be fair, the CPR does provide a bewildering variety of ways to calculate time. If the order had required Wates to file the witness statements, there would have been no problem because the court would have been closed on Good Friday and CPR 2.8(5) would have applied. The deemed service provisions for documents under CPR 6.27 also postpone the deemed service date to the next business day where the deemed date falls on a weekend or bank holiday so it is not surprising that the solicitor from Mayer Brown assumed he had until the Tuesday after the Easter weekend.

On a related note about relief from sanctions, in Khatib v Ramco International the Court of Appeal recently refined the approach the court should take when dealing with an application under CPR 3.9. The appealed unreserved judgment referred in general terms to CPR 3.9 and to the obligation on the court to consider all the circumstances and the nine factors listed in the rule. Although Woodhouse v Consignia and subsequent cases require the court to take all of the factors into account, the judge mentioned only some of them and did not refer in particular to the absence of any prejudice to the defendants. The claimant challenged the order refusing him relief on this ground.

The Court of Appeal dismissed the appeal. It would be wrong to lay down rules that are not reasonably practical for a judge dealing with the pressure of a hearing in the applications list in the Chancery Division or the Queen's Bench Division, or the equivalent in the county court, with other cases competing for the court's time, and often (as here) not enough time available for the hearing. A tick box or point-scoring exercise and a lengthy review of all the factors is not required. An extempore judgment is not the same as a reserved judgment and the Woodhouse requirements should not apply with equal rigour to both. A similar conclusion was reached by the Court of Appeal a couple of years ago in St Albans Girls’ School v Neary where it reviewed the effect of the CPR 3.9 factors upon proceedings in the Employment Tribunal and overruled the line of authority requiring tribunals to specifically consider all nine factors. Tactical appeals raising technical points concerning CPR 3.9 decisions should be made with caution in future, particularly where the judgment is not reserved.