Fons HF v Corporal Ltd

The first issue I have to resolve concerns the filing of witness statements. The position in this case is as follows. This case had been the subject of at least two case management orders, the first made by District Judge Smith on 6^th October 2011 and the second made by District Judge Matharu on 26^th November of 2012. These proceedings were commenced by the issue of a claim form sealed on 21^st April 2011 and, thus, the action was commenced prior to the reforms to the Civil Procedure Rules which now govern the way in which civil cases are to be managed. Nonetheless, this case comes before me after 1^st April and, thus, after the date when the revised overriding objective contained in the amended Civil Procedure Rules come into effect.

It is the addition of subparagraph (f) to CPR r.1.1(2) that is significant for present purposes. It provides as follows:

“Dealing with a case justly andat proportionate cost includes, so far as is practicable… enforcing compliance with rules, practice directions and orders.”

The position so far as witness statements were concerned is that District Judge Smith gave a direction concerning the exchange of witness statements in his order of 6^th October 2011 which provided for the exchange of statements 13 weeks after the date on which security for costs was provided by the claimant. That time has, on any view, long since passed.

District Judge Matharu’s order of 26^th November 2012 provided that each party was to serve on every other party the witness statements on which the party serving the statement intended to rely in relation to any issues of fact to be decided at trial by 4 pm on 6^th April 2013. That time has come and gone. I am told that various extensions were agreed between the parties extending the time for the exchange of statements down to 18^th April 2013. We are now about three weeks on from that.

The position is that the claimant was and is ready, willing and able to exchange witness statements but the second defendant, who is the only active defendant in these proceedings, is not in a position to do so. The claimant wishes to file witness statements containing factual matrix evidence relevant to the construction of the document. Issues concerning estoppel and rectification which were previously pleaded in this case by the defendants are no longer relied upon by the second defendant and, thus, no longer require evidence to be filed.

So far as the second defendant is concerned, its position is that it does not wish to file any evidence at all other than in relation to one point which is addressed in the third paragraph of a letter from Keystone Law dated 8^th May 2013 where the writer of the letter says this:

“Subject to one point, we do not intend to call evidence on the limited issue of the construction of the legal charge. That one point is whether Pillar is entitled to the benefit of the legal charge. The pleadings are not clear as to the position taken by your client and we invite you to tell us whether this point is agreed or not.”

This was a somewhat disingenuous way of describing the issue since counsel appearing for the second defendant accepts that the issue was live on the face of the pleading because his client’s entitlement to rely upon the legal charge was not admitted as between the parties. Thus, the issue was one which had to be proved in the absence of admission.

The issue which arises, therefore, is whether and, if so, to what extent I should grant an extension of time for the filing of witness statements. I note that the order made by the district judge did not in terms provide for mutual exchange but simply provided that each party was to serve on every other party the witness statements on which the party serving the statements intended to rely. Thus, in truth, both parties are in breach of the order because it was the duty of the claimant to serve the witness statements or at the very least lodge them at court and either offer them for exchange or provide them to the defendants in escrow in a sealed envelope explaining to the court at the time why that step was taken. The defendants are the more seriously in breach of the order, however, for it has failed to file any evidence, is not in a position to file evidence and out of time for doing so notwithstanding that there is a clear need to file evidence in relation to the one short point referred to in the letter quoted above.

I have come very close to refusing an extension to either of the parties. As I have explained the amended Civil Procedure Rules now require the court to pay close attention on the failure of parties to comply with rules, directions and orders. A failure to comply with a rule, direction or order is of itself a clear breach of the overriding objective and is likely to result in severe sanctions.

The problem is all the more difficult in this case because the case has been listed with a trial estimate of five days on the assumption that estoppel and rectification remain live issues between the parties. In fact, as I have explained, that is no longer the case. Had witness statements been served as they should have been, then it would have become apparent to all parties at a very much earlier stage that those issues were no longer live and, thus, attention could have been focused on the length of time truly required for this trial. I would have fixed a revised trial estimate at this stage if I could but at least one party was not in the position to assist me with a revised estimate. The real prospect, therefore, is that while this trial continues to be listed with a time estimate of five days it will, in truth, be completed in a fraction of that time with the result that a valuable national resource, namely court sitting days, will be wasted as a result of the failure of these parties to comply with the directions given by the district judge.

In the end I am only persuaded to extend the time for the filing of witness statements because this hearing is taking place only a very short while after the amendment of the CPR and because the period that has elapsed since the final extension expired is relatively short. However, all parties and the wider litigation world should be aware that all courts at all levels are now required to take a very much stricter view of the failure by parties to comply with directions, particularly where the failure to comply is likely to lead into a waste of the limited resources made available to those with cases to litigate.

I am told that the defendant’s solicitor is unable to do anything about witness statements before next Friday because of family commitments. That, I am afraid, is not a satisfactory position to adopt. As far as I can see, Keystone Law is a substantial practice. There is no reason why arrangements cannot be made for someone to look after the affairs of Pillar Securitisation in the absence of the solicitor concerned. That is particularly the case, in my judgment, having regard to the vast sums of money that have been expended on legal costs in relation to this dispute to date. Therefore, what I propose to do is to extend the time for complying with the order of District Judge Matharu for the filing of witness statements until 4 pm tomorrow. In default of any party failing to comply with that order, that party shall be debarred from relying upon any evidence at trial.