David Buwule v MT Finance Limited & Anor

On 9 April 2021 Griffiths J granted the Applicant an interim injunction restraining the Respondents from selling a property. The consequence was that there was, at that time, a set of legal proceedings for an interim injunction and there was a court order granting it. On 16 April 2021 there was then a hearing before David Lock QC (“the Judge”) at which the Applicant appeared in person and Ms Whitehouse appeared for the Respondents. That hearing culminated in an Order (“the Order”) by which the Judge discharged the interim injunction and ordered the Applicant to pay the Respondents’ costs.

The Judge – of his own initiative (as I understand it) – did something else in the Order. That is, he ordered:

On 29 April 2021 the Applicant issued an application to vary the Order by extending the time for filing and serving the Claim Form and Particulars of Claim. The position was that time was about to expire, at 4pm on 7 May 2021. In his application, the Applicant explained that he wished to have a further opportunity to obtain professional legal assistance, and he asked the Court to give him until 4pm on 30 July 2021. Within that application he said this:

It is important to appreciate this. In principle, the Applicant – prior to the making of the Order by the Judge, would have had the option of commencing a Part 7 claim based on breach of duty and seeking damages, in the usual way. As Ms Whitehouse rightly points out, commencing such a claim would be expected to entail the discipline of following Pre-Action Protocol requirements.

I am entirely satisfied, and Ms Whitehouse fairly and properly accepts, that the provisions made in the Order by the Judge did not, and would not, serve to curtail the alternative vehicle of a Part 7 claim, freshly commenced. That means that the considerations raised by the Applicant on the face of the application for the extension of time, about wanting legal assistance to make a claim whose limitation period was said to be 6 years, were considerations all readily accommodated within the alternative procedural vehicle open to the Applicant, of starting fresh proceedings. In a skeleton argument provided this morning, Ms Whitehouse squarely and straightforwardly identifies that position. She says this of the Court not extending time under the Judge’s Order:

At the start of today’s hearing, I was anxious to ensure that the Applicant – a litigant in person – was aware of the two vehicles, in principle, open to him. That concern was in light of what he had said in his application, in case there had been a misunderstanding of the consequences of the expiry of the time limit laid down by the Judge. It was apparent from the application to extend time that the Applicant was taking it that the Order would have precluded the commencement of a Part 7 claim in the usual way. As he explained to me this morning that was indeed his understanding, based on the phrase “these proceedings shall stand dismissed”. Ms Whitehouse recognises, rightly, that that wording was not intended to have the effect – and did not have the effect – of precluding the Applicant from commencing a Part 7 claim in the usual way. What it was doing was something different. It was allowing the alternative option of a claim brought within the umbrella of the existing interim relief application, provided that that was done within a short period of time. I am grateful to Ms Whitehouse for the recognition reflected both in this morning’s skeleton argument and in her oral submissions to the Court: accepting that the Applicant still had and would have – if time expired under the Judge’s order – his option of commencing a Part 7 claim in the usual way.

Once the position had been clarified – including that it was a position accepted by the Respondents – the Applicant had the option this morning of pursuing his application for an extension of time. He told me that in those circumstances he did not wish to pursue the application for an extension of time. He also told me that he would not have made the application for the extension of time, had he realised that he had the option of commencing a Part 7 claim in the usual way. That is an explanation which rings true alongside what he said in his application. Indeed, the ability to commence a Part 7 claim in the usual way would have liberated him from the constraints not only of the timeframe in the Judge’s order, but of the 4pm deadline on 30 July 2021 which he had put forward as an extension of that timeframe, comparing it – as he did – to the statutory limitation period which he said he understood would apply.

The Applicant was understandably anxious as to whether the non-pursuit today, following the clarification, would sound in an order for costs against him. Had there been the prospect of a costs order, he would not only have needed to address the Court in relation to costs, but it would have been appropriate to hear him and to hear Ms Whitehouse on the underlying question of whether time in the Order should be extended, in all the circumstances (including the way in which he had understood the Order).

In the circumstances, it was appropriate to allow Ms Whitehouse to develop – as she did in detail – the Respondents’ position on why they said this Court should today make a costs order today against the Applicant, if the application for the extension of time were not now, in all the circumstances, being pursued. Ms Whitehouse relied on a number of reasons in support of the submission that a costs order in favour of the Respondents was not only appropriate but that it would be unfair and unjust not to make one.

Ms Whitehouse emphasised that the Respondents had had to deal, at top speed, with this application. She emphasised that, although she accepted that the Applicant had sent an email on 30 April 2021 (around 3pm) to the Court and copied to her instructing solicitor referring to the application, that email had failed to attach the application documents. In any event, that was immediately before the Bank Holiday Weekend. She emphasised that it was only at 13:44 on Tuesday 4 May 2021 that a copy of the Application was seen by the Respondents’ solicitors. As she submitted, and as I recall – since the initiative was mine as the Urgent Applications Judge, later that afternoon (4 May 2021) the Court communicated the wish to ensure that the Respondents had been served with the application for an extension of time and the Court wished any response that the Respondents wished to put forward, as to whether time should be extended, should be provided urgently to the Court. It was, by a helpful witness statement from the Respondents’ solicitor filed the next day (5 May 2021). Ms Whitehouse, very fairly, has accepted that there is “no criticism at all” of the Applicant for filing his application to extend time before time had expired. As she put it: “that cannot be faulted”. However, she does criticise the Applicant for asking the Court to hear the application prior to the expiry of the deadline in the Order of the Judge. She submits that the application should have been filed, but with a much lengthier timeframe before any hearing. She submits that the urgent timetable denied the Respondents’ solicitors the opportunity to write and engage with the Applicant. She submits that it is not for the Respondents or their solicitors to “give legal advice” to the Applicant, so as to draw his attention to his alternative option and avenue of starting a Part 7 claim in the usual way.

Ms Whitehouse submits that costs should in principle follow, if the application for the extension of time is not pursued. She submits that the Applicant is obtaining an “indulgence” from the Court, having placed the Respondents in a position of inevitably needing to incur costs. She points to the history of this case and has taken me – in some detail – to the events preceding the grant of the interim injunction (by Griffiths J) and preceding the hearing before the Judge at which that injunction was discharged. In that context, she criticises the Applicant: for failures; for what are said to be non-disclosures; for late evidence; and for incorrect statements which are still maintained. Finally, she also points to the Applicant’s failure, as yet, to have complied with the costs order made by this Court.

In my judgment, in the circumstances of this case, it would not be just or appropriate to make a costs order against the Applicant. His application was simply to extend time for taking a step under a court order. He had explained, clearly, the reason why he wanted that extension of time. It was clear from his explanation that what he was seeking was to be able to file his claim, with legal assistance if he could obtain it, and not to be precluded from doing so by reason of the deadline in the Order having passed. He had made the points that there would not be prejudice to the Respondents, in that context.

There was, in my judgment, a clear, compelling and obvious point that could have been made on behalf of the Respondents, but which was only made in the skeleton argument this morning. The point is that the Order of the Judge did not prevent the commencement of a Part 7 claim. If that point had been made, and the fact that it had been accepted by the Respondents, it would have put the Applicant clearly on the spot. If he had pursued his application in those circumstances, the threat of a costs order were he unsuccessful would have been strongly fortified. That point was made, but it was made for the first time in a skeleton argument filed 15 minutes before the hearing at 11 o’clock today, which neither the Applicant nor the Court had had an opportunity to read. That is not a criticism of Ms Whitehouse at all. She has explained the time pressure under which she and the Respondents’ solicitors were acting. But this was an application for an extension of time of the deadline. In my judgment, what the Court needed was a crisp description of why it was that time should not be extended. In my judgment, it is entirely understandable that the Applicant should have taken the opportunity given in the Order – with its deadline and its description of “proceedings” being “dismissed” as meaning that he would need to get a Part 7 Claim made within that deadline. In my judgment, it is obvious, on the face of his application, which the Respondent’s solicitors had from 13.44 on 4 May 2021, that that was his understanding. There was a solution. It could readily be pointed out. I do not accept that pointing out that an extension of time was not needed, to achieve what the Applicant clearly understood was needed, would have been the “giving of legal advice”. It would have been, rather, a key part of a robust position as to why the opportunity to use the existing vehicle of interim relief should now be at an end: particularly in circumstances where the costs had not been paid; and bearing in mind that interim relief applications can carry with them the issuing of substantive claims but only usually where the interim relief has had success and where there is a link between a successful application for interim relief and the issuing of the substantive claim. The points that the Applicant had an alternative open to him, which readily dealt with the concerns that he was raising on the face of the application, was a point which could promptly have been made.

In my judgment, Ms Whitehouse is right to accept that the Applicant cannot be faulted for filing his application as a matter of urgency knowing that the deadline was looming. But equally, in my judgment, the Applicant cannot be faulted for treating the application as one which should be dealt with urgently. There would have been a risk, from his perspective, that if he simply filed the application, and then sat back while it took a leisurely timetable, then it would be said against him that he should have taken steps to progress it. Particularly because he was only asking for an extension for a period to 30 July 2021. Moreover, it was open to the Respondents’ representatives to say in response to the application that they accepted that it had rightly been issued properly, but that there was no need for it to be heard urgently, that they wanted to have a further time period to engage with the Applicant, and that there would be no prejudice to him from the hearing being at a later date.

The key point, which I have identified and Ms Whitehouse identified in her skeleton argument, is not in my judgment – as I have said – the “giving of legal advice”. It is a point properly raised by the Respondents, but only raised immediately prior to the hearing. The points made in relation to the background are all, in my judgment, features – strikingly – which concerned events prior to the discharge of the injunction by the Judge. The injunction was discharged, at a hearing at which concerns could be raised, and a costs order in favour of the Respondents was made by the Judge. Points relating to the history do not, in my judgment, provide a basis for this Court making a costs order today in circumstances where the application for the extension of time is not pursued, now that the position has been clarified, including the Respondent’s recognition of it. The failure to comply with the costs order made by the Judge when the interim injunction was discharged, would have featured strongly as a reason not to extend time had the application been pursued. But the Judge did not make the payment of costs which he ordered a precondition for the issuing of a Part 7 claim. In my judgment, there is an insufficient nexus between the Applicant’s default in payment of costs and the situation that has arisen this morning, to justify a costs order in relation to the costs that the Respondents have incurred in putting together their arguments against the extension of time.

In circumstances where I am quite satisfied that a costs order would not be appropriate, it has not been necessary for me to hear submissions on any further features of the case. I have in mind the submissions that the Applicant would have made, had the application for an extension of time been pursued, and those advanced by the Respondents, including a series of submissions which appeared to be intended to invite this Court to rule that a claim for damages would be unlikely to succeed. In the circumstances it is not appropriate and has not been necessary to delve into such matters.

Ms Whitehouse put down the clear marker, which the Applicant has told me he accepts, that any Part 7 claim would need to be preceded by the appropriate pre-action steps. He is also in the position of knowing, at least in outline, why it is that the Respondents say that any damages claim will be doomed to fail. Reference has also been made by the Respondents to an application for security for costs and an application for summary judgment, should any Part 7 claim be commenced. Anything that the Applicant does, so far as commencing a claim is concerned, he does with his eyes wide open.

Since in the circumstances I have described it has not been pursued, I shall make no order on the Applicant’s application to extend time. I shall record that the Respondents’ application for costs is refused. The position that now applies is in substance the same position as would have applied if the Judge had not, of his own motion, made provision for the option of a claim to be pursued using the vehicle of the interim injunction proceedings.

It is appropriate to record, by this addendum to the judgment delivered ex tempore, that this was a remote hearing by BT Conference Call, as arranged with the parties. That was a mode which I was satisfied was appropriate and justified and involved no prejudice to any person, it having come to the Court’s attention at the hearing that the Court’s cause list had referred to a hearing by Microsoft Teams, with an email address usable by any member of the press or public who wished to attend the public hearing, we were able to take steps so that any interested person received dial-in details and could dial-in. The hearing was recorded. This ruling is being released in the public domain. I am satisfied that the open justice principle has been secured.