Welsh v Parnianzadeh

LORD JUSTICE PETER GIBSON: I will ask Lord Justice Mance to give the first judgment.

LORD JUSTICE MANCE: I would like to start this judgment by paying tribute to the quality of the concise advocacy which we have heard from both counsel. I take the facts from the chronology, which is helpfully contained in the skeleton argument submitted by Miss Johanna Boyd for the appellant, which is broadly the same as the chronology she used before the circuit judge below.

This appeal arises out of matters going back as far as 13 February 2000 when the respondent, the claimant in the proceedings, suffered an alleged accident at the premises of the appellant, Southern Fried Chicken, 95 Dudden Hill Lane, Willesden, London NW10. The claim was not brought until near the expiry of the three-year time period, and this appeal arises from the fact that after a series of defaults the claim was on 19 January 2004 ordered to be struck out by District Judge Morris for failure to comply with an order of District Judge Cohen dated 29 September 2003. From that decision of District Judge Morris an appeal was brought which came before Her Honour Judge Dangor on 10 May 2004. The present appeal arises from the remarkable terms of that order, paragraph 1 of which reads:

On the other side the respondent, represented by Miss Yvette Genn, submits by an amended respondent's notice that the order is also clear, but in this case in her client's favour, and that the substance of the order is that the appeal was allowed on the basis that it would be disproportionate to strike the case out and that we should vary Her Honour Judge Dangor's order to make clear that that was the result.

Before the matter came on we communicated to both counsel our preliminary thoughts that there might be a possibility that neither side was right in their submissions and that the matter might, in effect, have to be redetermined.

Going back over the chronology in a little greater detail, events during the initial period prior to the commencement of proceedings have been somewhat clarified by the production today of a witness statement of the claimant, which is dated 19 January and was, we understand, put before District Judge Morris. This deals with the circumstances of the accident. The alleged circumstances were that the claimant fell heavily while entering the defendant's shop because there was a wet and defective shop floor and has, as a result, suffered loss of employment, injury and strain. THe claimant then says:

Reverting to the chronology, after the issue of the claim form on 30 January 2003, an acknowledgment of service was entered but that was rejected by the court because a request for judgment in default had been received from the claimant. Judgment in default was entered by the district judge on 25 February 2003 but was set aside by another district judge on 4 March 2003 with an order that the claimant do pay £245 in respect of the defendant's costs of the application to set aside. The first district judge, District Judge Tetlow, then resumed control of the case on 1 May 2003 and, having considered the statements of case and allocation questionnaires, ordered a further hearing, first, to obtain medical evidence of the claimant's injuries; secondly, to obtain medical records of the claimant; thirdly, to establish the date of the accident or give directions as to the means of identifying that date; and fourthly, to consider what directions should be given at this stage on the claim.

On 14 May the defendant's solicitors wrote to the claimant enclosing letters of authority, addressed to her GP and to the hospital who treated her, for all medical notes to be released to them and enclosing a stamped-addressed envelope. Nothing happened. On the next day, however, the claimant's solicitors changed from Brewer Harding & Rowe to McCormack & Co. However, they apparently filed a notice of change which said that they were acting for the defendants, rather than the claimant, which caused a certain amount of confusion.

On 16 May District Judge Mostyn ordered that the matter be transferred to the Willesden County Court; that the parties agree a joint orthopaedic report by 13 June; and that the claimant have permission to file an amended particulars of claim by 16 July with permission to the defendant to amend his defence if so advised within 21 days. He ordered the matter be relisted for a case management conference date after 8 August and he ordered costs in the case. That was what Miss Boyd described as a "second chance" to get the particulars of claim and the claimant's case in order.

On 10 June the defendant's solicitors wrote to McCormack & Co, stating that they would "no doubt be writing to us with a selection of names to select a joint expert", and again requesting copies of GP notes and hospital records and any other treatment received by the claimant.

On 22 July they wrote again, noting that the claimant's solicitors had not complied with the order of 16 May and pointing out that the medical notes might now be available and asking for their early disclosure.

On 11 August the defendants were provoked into applying for an unless order, that unless a particularised claim was filed and served by 14 August the claim would be struck out. However, unbeknown to them and quite possibly also to the claimant, a third district judge, District Judge Lawrence, at around this time appears of his own motion to have struck out the claim. In so far as any hearing took place, it was without notification to the defendant's solicitors, quite probably because of the mistake made by McCormack & Co, and it was not attended by either party.

On 14 August the claimant hand-delivered an amended particulars of claim to the defendant's solicitors but on or about the same date Mccormack and Co informed the defendant's solicitors that they were ceasing to practice. On 25 September 2003 a third firm of solicitors, AM Walters & Co, wrote to the defendant's solicitors informing them that they were now acting on behalf of the claimant and enclosing notice of acting. It appears that the fact that McCormack & Co were no longer acting may not have been communicated immediately to the claimant.

The matter came back before a fourth District Judge on 29 September 2003, District Judge Cohen. He ordered that the claim be reinstated by, as he said, the skin of its teeth. He pointed out that this would be the claimant's third and final chance. He made clear that the medical record had to be full and not just GP notes. He set aside District Judge Lawrence's order of 11 August 2003 and so reinstated the claim; and he made an order which, as it was drawn up some two weeks later on 13 October, reads as follows:

On 9 October further amended points of claim with attached GP reports dated 18 December 2002 and 7 October 2003 were served on behalf of the claimant. On 28 November the defendants applied to strike out the claim on the basis of non-compliance with District Judge Cohen's order of 29 September and on 19 January the matter came before District Judge Morris and was struck out.

The tape recording system either was not switched on or did not work so there is no transcript of the proceedings before District Judge Morris. However, we have notes taken by counsel who then appeared, from which it appears that after counsel's submissions the district judge said very little, but that he referred to deficiency or non-compliance in relation to prior orders. The district judge is recorded as saying that the claimant had not been cooperating with the court regarding the medical expert, and that the claimant's solicitors had known that a GP's letter was not an appropriate expert's report and had not forwarded any name of an orthopaedic expert. As a result he "recommended" that the case be struck out.

From that decision, to the basis of which I will return, an appeal was brought to Her Honour Judge Dangor. The grounds for appeal were:

One can say at once in relation to the first point that the complaint about the period allowed by the order of District Judge Cohen seems inappropriate, bearing in mind that this was an appeal to Her Honour Judge Dangor from District Judge Morris and all the more bearing in mind the length of time which had expired since District Judge Cohen made his order without compliance with it.

As to ground 2, the point about pregnancy was not raised before District Judge Morris at all. Apparently the claimant gave birth in November 2003, so again that does not seem to be a significant point. As to ground 5, unless grounds 3 and 4 have force, it is difficult to see how ground 5 could have any relevance, and if they have force ground 5 is unnecessary. The authorities in this court on the operation of the rules demonstrate that there is adequate discretion under the rules to give full effect to the European Convention on Human Rights, and if the discretion was exercised disproportionately this would ordinarily include a failure to act in accordance with the rules, and references to Article 6 would be unnecessary.

A third possibility is that the district judge was simply giving effect to a previous order made by District Judge Cohen whereby, unless certain steps were taken, the claim would be struck out. If that were the situation and there was no application for relief under CPR 3.9, then all the district judge would be doing on the face of it would be determining whether or not the steps had been taken. However, that was not either side's apparent case before Her Honour Judge Dangor and it does not seem to me to have been the way she viewed it either. After hearing argument she raised with counsel this point:

From that judgment the defendant now appeals, with permission to appeal from the single judge, on three grounds. The first and second to some extent overlap. The first is that the judge dismissed the claim and had no power to give directions thereafter, The second is that her order was essentially contradictory and that the second part should be struck out while the first part of paragraph 1 should stand. The third ground is that, if she had power to do as she did, it was a misuse of and/or a misapplication of the overriding objective to give directions. The third ground has really fallen away since neither side has suggested that, if an appeal is actually dismissed, the court has any power by virtue of the overriding objective to resurrect it without setting aside the dismissal.

The original respondent's notice simply sought further time while the claimant tried to obtain legal assistance. By the very late amended respondent's notice, dated 7 December 2004, for which we have given leave in the absence of any objection, the respondent, the claimant, has in effect conceded the inconsistency in the circuit judge's order, but submits that the order should be varied to give effect to the clear intention, as she submits it to be, of the circuit judge to allow the appeal to continue. For my part, I think it clear that the circuit judge had no power to dismiss an appeal which struck out a claim and after such a dismissal, once it had been finalised, if it was, then to give directions for the continuation of the claim. However in order to understand Her Honour Judge Dangor's order, I think we need to look back at the whole context. This was a claim which had been reinstated by the "skin of its teeth" on 29 September when an order was made. The actual terms of the order were unsatisfactory in the sense that the paragraph beginning "unless" has no end. There are two possibilities. Either one reads into that paragraph words striking out the claim if the paragraph was not complied with; alternatively, one treats the word "unless" as if it had crept in inadvertently and deletes it. There would be much to be said for the latter viewpoint if the material I have so far described was all we had. However, we can see from the notes of what took place on 19 January 2004 that both counsel were apparently agreed about what is meant by the unless order, although it is not spelled out there precisely what they understood. However, this is spelled out in a contemporaneous letter of 29 September 2003 written by the appellant's solicitors to the court, in which they wrote:

It seems to me therefore probable that the former situation applies, namely, that there should have been written into the order the further words that "the claim be struck out and judgment be entered in favour of the defendant", and indeed that the order on that basis should have been corrected under the slip rule. Notwithstanding this, Miss Boyd, when the matter came before Her Honour Judge Dangor submitted that District Judge Morris had been acting under CPR 3.4. The district judge, however, could have received an application for relief against any order by District Judge Cohen striking out the matter unless there was compliance with his directions; and the question arises whether there was such an application before District Judge Morris. An application under CPR 3.9 does not require to be made formally. It seems to me that the witness statement which I have read, dated 19 January 2004, did amount to an application for relief under CPR 3.9. Accordingly, if District Judge Morris could only exercise discretion under CPR 3.9 he should have done so; and if, as Miss Boyd actually submitted to Her Honour Judge Dangor, District Judge Morris was acting under CPR 3.4 he would anyway have had a discretion to exercise under that rule.

What is not clear to me from the notes of the district judge's judgment is how far he did treat the matter as one of discretion. The fact that we do not have any reasons lead to that lack of clarity. It was certainly one of the grounds of complaint to Her Honour Judge Dangor that he had not acted under CPR 3.9. Judge Dangor does not deal with that point. However she does appear to treat the matter as one of discretion. She does appear, if one reads the first three paragraphs of her judgment, to treat the matter as one where she was considering whether the district judge was wrong, by inference as a matter of discretion, to have struck the matter out. It can hardly be thought that she was simply directing herself to the question whether there had been a non-compliance with District Judge Cohen's order. There obviously had been. Thus in asking herself whether the district judge was wrong she must have meant whether he was wrong as a matter of discretion, although the phrase she in fact used was "wrong in law". However she did not, any more than District Judge Morris, go through the matter in a schematic way. Neither of them addressed specifically any checklist or all the considerations which could be relevant in the context of an application to strike out or to refuse relief against an order striking out. Instead, as I have indicated, District Judge Dangor first of all expressed the view that the district judge had not been wrong in law. She pointed out the fault of the claimant or the claimant's solicitor. She pointed out the delay in relation to the orthopaedic surgeon. In that context, there had been a further paragraph in the claimant's witness statement before District Judge Morris which to my mind dealt with that also in a thoroughly unsatisfactory way. It said this:

However, having said that that meant that she could not really find that the district judge was wrong to strike the matter out, the circuit judge then reverted to matters which would ordinarily be very relevant to the exercise of a discretion whether or not to strike out, namely, limitation of the claim if it were struck out, the difficulties the claimant had had with solicitors and the absence of prejudice to the respondent and the fact that in her view the matter could get back on track with firm directions. She therefore made the further directions I have outlined. It does not appear whether or not she took those considerations into account in determining that the district judge was not wrong to strike the matter out. On the face of it she did not; and on the face of it she should have done.

We are faced here with a situation where, if there had been an order dismissing an appeal which had been drawn up and had related to a previous order striking out the claim, the circuit judge would clearly have no power to give further directions, which would have the opposite effect of the claim continuing. It would be dead. Nothing in the rules could contemplate that. But, here, the dismissal and the directions are in the same judgment and in the same order. We are asked to interpret the order. What does it mean? Both sides say that it is clearly in their favour. The defendant says that the judge clearly dismissed the appeal and went wrong thereafter: the claimant, that she in effect allowed the appeal and merely failed in the route she chose. Viewing the order as a whole, as I think we must, I find the question almost impossible to answer. The answer, if one gives any, may depend on whether one looks at the matter formalistically or as a matter of substance. It may also depend on whether the circuit judge thought that the district judge had been exercising a discretion or not, although, as I have said, I think probably she did, or otherwise she would simply have said there was no question but that there had been default in compliance with District Judge Cohen's order. But assuming that she did, then, as I have pointed out, she failed to address the issues on discretion, including fault, prejudice and proportionality, either at all or in any detail or, on the face of it, in the right place. She certainly did not go through the considerations under CPR 3.9 in the context of her decision on dismissal of the appeal. That is a point which Miss Genn seeks if necessary to take by way of further amendment of her respondent's notice.

If, as I am inclined to, one views the matter as one of substance looking at the order as a whole, it is clear that the substance of the district judge's order was that the claim was at an end. But the substance of the circuit judge's order was that that was something that she was not prepared to contemplate. So it seems to me, looking at it as a matter of substance, that the appeal was in reality allowed. At the end of the day, however, it is my opinion that the circuit judge's approach was so confused and so defective that it is impossible to reach any sensible, and certainly any sound or reliable, conclusion as to the intention or effect of the order that she made. Even if one conclusion were more probably correct on interpretation than any other, I also think she was so confused in her approach that we cannot be confident that she applied the right principles in reaching it. She was faced with an appeal against an order granting an application to strike out. On one basis or another she should have considered whether the district judge exercised his discretion correctly and proportionately. Before granting that application she should have taken into account all the considerations which she deployed, both in relation to the directions she gave for the claim's further continuation and in dealing with the appeal directly.

I consider in these circumstances that we have no option but to re-determine this appeal as if it were an appeal from the district judge. We could of course have remitted the matter to another circuit judge, but both parties very realistically and sensibly made clear that that was not what they wished. It would merely add another procedural step and further delay if we did remit it. However, in view of the way the matter has been argued, we are not in the easiest of positions in re-determining this appeal. The starting point is that the reasoning of the district judge is itself exiguous and does not assist us. The circumstances need not be repeated. It is evident that there are aspects of the conduct of both sides which are extremely unsatisfactory. I appreciate in saying that, that Miss Boyd's clients have not come here prepared with evidence to respond to that of the claimant in her witness statement. On the other hand, they evidently did not seek an adjournment on 19 January in order to respond to that witness statement and, unless it contains a grotesquely inaccurate description of the correspondence in the bundle, it does point to unsatisfactory conduct on the part of the defendant in the early stages. However, since the claim began there is no doubt that the balance of unsatisfactory conduct is in the other direction. This is no manner in which to conduct a claim; and I have felt the force of Miss Boyd's submission that we should give effect to that instinctive feeling which was the feeling of the district judge.

However in the end, I have come to a different conclusion. Looking at the matter in terms of a checklist, it is certainly the case that the interests of the administration of justice are not served by the present dilatoriness and incompetence. On the other hand, no prejudice is suggested to the defendant, or at least the circuit judge did not consider there was any, and we have not seen any positive suggestion of any. I accept the generalised prejudice which flows from delay. But it does not seem to me to lie particularly in this defendant's mouth to refer to it bearing in mind the attitude of this defendant for at least two years, and probably somewhat more, before proceedings were begun, at a time when this defendant, on the face of it, did not either cooperate or comply with the pre-action and protocol procedure.

The main issue seems to be whether there was any fall in the shop on the day in question, bearing in mind that the defendant suggests that the shop was actually shut. That should be relatively easy to address. These things are likely to be documented. One might add that there is a basic issue of credibility there the resolution of which is unlikely to be affected by the delay one way or the other. It is quite clear that this claimant was complaining very shortly after the alleged accident or fall. Was she making this up out of the blue? That is an issue which, if the defendant is right, is going to involve him suggesting that she was in effect fraudulent; but I do not see any particular prejudice in the resolution of that issue arising from the delay.

As to the other issues the medical evidence is again not likely to be destroyed. Indeed we are told that GP and hospital reports have now very belatedly been obtained by the claimant's husband. The financial evidence of any loss of earnings is, if anything, likely to have been crystallised by the period of delay. There has been delay at every stage. It cannot be said that any application for relief was prompt. Insofar as one was made by the witness statement of 19 January it was late. As to whether the failure was intentional, it was certainly not intentional in the sense of a deliberate flouting of the court by the claimant. I would accept that. There appears to have been very substantial failure by the claimant's several lawyers, particularly the most recent lawyers, in failing to impress on her the need to get on with the proceedings and failing to get on with them by proposing a joint orthopaedic expert, and getting medical records and the like themselves.

As to whether there was a good explanation for the delay, the answer is clearly no. As to whether there has been compliance with other rules, there has been some non-compliance, but one sets against that the defendant's lack of cooperativeness and non-compliance with the protocol. All those points are, I would accept, basically points in the defendant's favour; but they are points in the claimant's favour, points of real force. This is not, on the face of it, her fault. There is some evidence that she has committed her own means (£1,000), and her husband has made efforts to obtain the medical and hospital records needed for her claim. She has certainly been persistent in pursuing it as far as she, a non-lawyer, has been able to. She has gone to numerous persons and advisors, Claims Direct, and then at least three firms of solicitors. Should she suffer for their apparent default? It seems to me that that is a relevant consideration, as the two recent authorities have shown: Hansom v Rex Makin & Co [2003] EWCA Civ 1801 and Flaxmann-Binns v Linconshire County Council [2004] Civ 424 referred to in the supplement to the White Book at 3.9.2, indicate that a claimant who is reduced to a claim which would perforce be on a percentage basis for loss of chance against her legal advisers is not only suffering a real loss in the sense of being caused further delay and expense, but is also suffering a real reduction in the value of her claim.

Then there is the question of trial date. Of course this matter should have been tried earlier than it will be now. But it could have been tried but for the present appeal in accordance with the time schedule set out in Her Honour Judge Dangor's order. It has been put back but not to anyone's particular prejudice, so although one should bear in mind the general interest of court users and courts in disposing of litigation quickly, I do not see this here as a particularly forceful point against the claimant.

Two other points are points that seems to me of powerful weight in her favour: the effect of failure of the application, and the effect of grant of relief on each party. They represent points which are overwhelmingly in the claimant's favour. She would lose her claim and be at most remitted to a claim against her legal advisers, and the defendant would not on the material before us suffer any significant prejudice, save for the costs for the claim's continuing existence which is by itself no prejudice. The judge's order catered for such prejudice as the delay might have caused by making specific provisions for disallowing interest.

Then I think that one should stand back and look at the whole position and ask whether a fair trial is still possible and what the interests of justice require in the circumstances. We should not count numbers, but we should ask ourselves whether striking out would be proportionate, bearing in mind whether a fair trial would be possible.

Taking into account all the circumstances, including the overriding interest and the interests of efficient conduct of litigation, I confess to having had some doubt about this. It is important that this court should uphold the case management decisions of district judges. However, I am afraid in the circumstances of this case that I regard both the decision of District Judge Morris, perhaps for reasons beyond his control, and the decision of Her Honour Judge Dangor as decisions which are of relatively little assistance or weight in that regard. I have concluded that, despite the defaults on the claimant's side, the fact that they were probably not her personal defaults, combined with the defendant's own uncooperative attitude in the early days and his willingness that the matter should be delayed for a long period, are together factors just strong enough to justify permitting the claim to continue on broadly the same terms as in fact Her Honour Judge Dangor ordered. I consider that the district judge was wrong in that he failed to approach the exercise of discretion in a measured way, taking into account the checklist which applies under Rule 3.9 (assuming as I do that that applied) or the similar considerations which would be relevant under CPR 3.4 (if one were to look at it as a application under CPR 3.4); on this basis it is for us to redetermine the matter and, doing so, I consider for the reasons given that this is an appeal which should be allowed.

Accordingly, in my view, the district judge's order striking out the claim should be set aside on terms similar to those which Her Honour Judge Dangor ordered, although we should hear counsel as to whether any and what variations should be made to them. We should also of course hear counsel as to costs.

LORD JUSTICE PETER GIBSON: I agree.