Striking out cases in the Royal Court for want of prosecution

The Royal Court considered an appeal from an order of the Master striking out a claim. The power to strike out is one of the most draconian judicial weapons available to the court, and the judgment provides a clear and comprehensive description of the applicable principles.

In earlier proceedings the plaintiff was awarded a judgment against a company, Sidem, in respect of a debt totalling over USD 1.4 million. He was unable to enforce the judgment, and brought a claim by way of a Pauline action against Sidem and one of its directors (the second defendant), whom the plaintiff alleged had transferred funds away from the company with the intention of preventing these monies being used to satisfy the outstanding judgment debt. The claim was issued towards the end of the 10 year limitation period. After the filing of the second defendant's answer, the appellant failed to issue a summons for directions and there was a period of inactivity totalling nineteen months.

The second defendant then issued a summons to strike out the appellant's claim on the grounds that (i) the plaintiff had failed to issue a summons for directions pursuant to Rule 6/26(2) of the Royal Court Rules 2004; or alternatively (ii) for want of prosecution on the grounds of inordinate and inexcusable delay. The Master struck out the plaintiff's claim on both grounds, and the plaintiff appealed the decision.

In a lengthy judgment, the Royal Court carried out a comprehensive review of the applicable authorities and granted the appeal. The judgment emphasises the overriding objective that all parties to civil litigation must progress to trial in accordance with an agreed timetable, at a reasonable level of cost and within a reasonably short time. The Royal Court cited the judgment in the case of Ybanez v BBVA [2007] JRC 131 where it was stated that wherever possible actions should be brought to a conclusion within 12 months, and that even a complex case should be concluded within 24 months, with a delay exceeding this limit likely to be inordinate.

The applicable test when considering whether to strike out a claim for want of prosecution was expounded in Garfield Bennett v Phillips [2002] JRC 214. Where there has been no contumelious conduct by the plaintiff, if the court is to strike out a claim for want of prosecution it must be satisfied that (i) there has been inordinate and inexcusable delay after the issue of proceedings; and (ii) that such delay will give rise to a substantial risk that it is not possible to have a fair trial or is such as is likely to cause or have caused serious prejudice to the defendant. The court held that the first limb of the test was satisfied by the inordinate delay, which was for the greater part inexcusable, but concluded that the test was not satisfied and the claim should not be dismissed because, as a question of fact, the second limb of the test was not met.

The court then turned to consider the application pursuant to Rule 6/26. It held that the principles in Lescroel v Le Vesconte [2007] JLR 273 would apply, keeping in mind that the overriding intention of the case management rules are to ensure that civil litigation is conducted in a timely and cost effective manner, with a strong emphasis on judicial control. The test is whether the plaintiff has satisfied the court that (i) he has prosecuted his case with at least reasonable diligence; (ii) the failure to apply for a summons was excusable in all the circumstances; and (iii) whether the balance of justice indicated that the action should be allowed to continue.

The court was not satisfied that limbs one and two of the test were met by the plaintiff. However it held that the third limb was satisfied, as the second defendant had not suffered any serious prejudice, and a fair trial was not rendered impossible by the delay. Of particular concern was the plaintiff's allegation that the second defendant had deliberately deprived him of the fruits of his judgment in the first action, and the failure to warn the plaintiff that his claim may be struck out. The court held that on the balance of justice, the action should continue and dismissal of the claim would be inappropriate.

It is worthy of note that the court called into question the conduct of the second defendant on the grounds that he should not have 'let sleeping dogs lie' and should have issued a summons for directions. They indicated that a failure on the part of the plaintiff to respond to a formal warning of a possible strike out application, without good excuse, could assist in tipping the balance towards dismissal being a just and proportionate remedy.

This judgment clearly demonstrates the court's approach to breaches of its case management rules, and although the appeal against the strike out order was allowed, the plaintiff's conduct resulted in his, wholly avoidable, financial detriment. He was ordered to pay the second defendant's costs of the hearing before the Master on an indemnity basis, and disallowed from claiming interest on his claim for the duration of the period of delay.