Chiu & Ors v Waitrose Ltd & Ors

This is an application by Wates Construction Limited (“Wates”) for relief from sanctions pursuant to CPR 3.9(1) in respect of an unless order. The application raises the question of the extent to which the Court will grant such relief when a party has failed to comply with a consent order so that the sanction for failure to comply has been imposed pursuant to an agreement between the parties.

The First Claimant, Mrs Chiu owns a Chinese Restaurant which she runs with her husband, the Third Claimant. It adjoins a store and car park owned and occupied by Waitrose Limited (“Waitrose”) in Ampthill, Bedford. The Second Claimant, Mr Shayler is the leasehold owner of a restaurant situated adjacent to the Waitrose car park.

The Claimants brought proceedings against Waitrose arising from the flooding of their premises which they allege has been caused by the development of the Waitrose store and car park, carried out for Waitrose by Wates as a design and build contractor, with the Fourth Party (“Fairhurst”) being appointed to design the new storm water drainage system. The First Claimant also brings certain claims directly against Wates based on damage which they allege was caused to the foul drainage system to and a down pipe at her premises.

Proceedings were originally commenced in the Queen’s Bench Division but were then transferred to the Technology and Construction Court. Directions were given on 9 September 2010 leading to a ten-day trial commencing on 3 May 2011. Those directions included an order for Wates to file and serve an Amended Defence and Amended Fourth Party Particulars of Claim by 26 November 2010, for disclosure of documents by 14 January 2011 and for Witness Statements to be exchanged and filed by 28 January 2011.

Wates were late in serving their Amended Defence and Amended Fourth Party Particulars of Claim. They were served on 15 December instead of 26 November 2010. In that Amended Defence Wates pleaded that the cause of the flooding was, amongst other things, caused by a water pipe belonging to Anglian Water which had been discovered to be leaking and was only repaired in November 2010. On 26 November 2010 Wates’ solicitors, Mayer Brown International LLP (“Mayer Brown”) wrote to Kimbells LLP (“Kimbells”), solicitors for the Claimants, to say that for a variety of reasons it would not be possible to serve the amended pleading on that day. It was said that the reasons included the fact that Wates’ experts had been abroad, that important personnel at Wates had been away and that there had been difficulties in obtaining documents from Wates. In addition, questions were raised as to the particularisation of the new allegations in the Amended Particulars of Claim to which the Amended Defence was to respond. There had been provision for parties to object to the amendments made in the Amended Particulars of Claim and Mayer Brown indicated that they would wish to know the position of Fairhurst before they consented to the amendments.

Kimbells responded to that letter and raised concerns as to the delay in filing the Amended Defence and Amended Fourth Party Particulars of Claim. There was no response from Mayer Brown and on 3 December 2010 Kimbells chased for a response. There was still no response and on 14 December 2010 Kimbells said that unless the Amended Defence was received by 16 December 2010 they would advise their client to apply for an unless order. The Amended Defence and Amended Fourth Party Particulars of Claim were then served the next day. As a result Fairhurst did not file and serve its Amended Fourth Party Defence until 14 January 2011 and, although the Claimants provided disclosure as ordered on 13 January 2011, Waitrose, Wates and Fairhurst provided disclosure on 26 January 2011.

In relation to the exchange of Witness Statements an initial extension of 7 days to 25 February 2011 was agreed between the parties. On 25 February 2011 as a result of requests from Mayer Brown and Kimbells, exchange of Witness Statements was extended until 1 March 2011. In the event both Kimbells and Mayer Brown indicated that they would not be in a position to exchange Witness Statements until 7 March 2011. Kimbells did then exchange their Witness Statements on 7 March 2011. By 10 March 2011 Mayer Brown had still not exchanged their Witness Statements or stated when they would be ready for exchange. Solicitors for Waitrose, Wragge and Co LLP (“Wragge”) wrote on 10 March 2011 to ask when Mayer Brown would be ready for exchange. They sent a chasing e-mail on 11 March 2011. On 14 March 2011 Mayer Brown said they would have two Witness Statements by close of business on 15 March 2011 or sooner if possible.

Wates’ Witness Statements were not exchanged on 15 March and Wragge chased Mayer Brown on 15 and 16 March 2011. On 21 March 2011 Kimbells chased Mayer Brown for exchange and said that if they were not in a position to exchange by 22 March 2011 they would make an application for an unless order. On 22 March 2011 Mayer Brown said they would be in a position to serve their Witness Statements by 23 March 2011. That did not happen and Mayer Brown indicated that they would need one more day but they were still not served on 24 March 2011.

There were then discussions as to the feasibility of keeping the trial date and on 1 April 2011, with the agreement of Wragge and Fairhurst’s Solicitors, Beale and Company Solicitors LLP, Mayer Brown wrote to Kimbells to set out the Defendants’ joint position on the proceedings. They said that it was becoming apparent that the probable principal cause of the flooding was the leak in the Anglian Water service pipe and that it was necessary for further water levels to be taken. They said that it was in the best interest of all the parties to suspend the litigation pending the final outcome of the water level monitoring.

In their response of 6 April 2011 Kimbells accepted that the most sensible way forward was for the trial date to be vacated and for an order to be made for monitoring data to be taken and for a further CMC. Following discussion between the parties a draft consent order was produced, which was signed by the solicitors for all parties. That order set out the agreed directions in 18 paragraphs and included the following provisions at paragraphs 12 and 18:

“12.

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.

...

It is common ground between the parties that the last day for complying with the order in paragraph 12 was Good Friday, 22 April 2011.

At about 9:30 am on Tuesday 26 April 2011, after the Easter Bank holiday, Wragge wrote to Mayer Brown to say that they were in default of the unless order. Mayer Brown responded to say that because the final day was a Bank Holiday, as was Monday 25 April 2011, the final day for exchange became 26 April 2011. Wragge responded to say that time had expired on Friday 22 April 2011. Shortly before 1 pm on Tuesday 26 April 2011 Mayer Brown served two short Witness Statements on behalf of Wates. As a result of the failure to exchange the Witness Statements, the other parties sought judgment against Wates pursuant to the unless order.

In his Witness Statement the solicitor at Mayer Brown explains the background to the failure to comply with the original order for the service of Witness Statements on behalf of Wates. He says that he has not previously stated publicly the reasons for the delays in the provision of those Witness Statements but did so in the following terms at paragraph 18 of his Witness Statement:

“The regrettable reality of the situation over the last few months is that in January 2011 I was diagnosed by a consultant psychiatrist and a psychologist with moderate to severe and severe (retrospectively) clinical depression (or Major Depressive Disorder, to use the modern nomenclature). At the time of drafting this statement, I am advised that I am 75% along the road to recovery. My mental health issues had no impact on the mistake I made in relation to the timing and service of Wates’ witness statements. However, it did impact my work for a period of many weeks. This included the period during which the witness statements should have been served. I kept this problem from both my partners at Mayer Brown and from Wates, because I felt embarrassed and ashamed by it. Accordingly they are not to blame: responsibility is entirely my own. One of the symptoms of such severe depressive disorder is an otherwise inexplicable torpor, with which I was gripped for much of this period. As I have mentioned, my recovery is well progressed and I no longer suffer from that particular paralysis. When I told the other parties about Wates’ witness availability and my conversations with them, those explanations were true, but what I did not mention, due to my personal embarrassment, was that I failed to follow up on those opportunities to discuss, confirm and agree the statements. Of course, this is a period I very much regret and I should apologise to the court for this initial delay in providing Wates’ witness statements, which is entirely my fault.”

In relation to the date in Paragraph 12 of the consent order he says that at the time of agreeing the order he did not realise that the 14 day period would mean that the final day for service of Wates’ Witness Statements was Good Friday. He says that in common with the other solicitors, he failed to recognise the requirements of CPR 2.9 which stipulate that times and dates should be set out in the order rather than a time period. He said he mistakenly thought that the date for service of the Witness Statements would be the next business day; that is 26 April 2011. He said he worked on the basis that the rule set out in CPR 2.8(5) applied to this effect but now accepts that this rule only applies to any act which requires filing at the court office or similar but that paragraph 12 of the order was not expressed in this way. He therefore accepts that the Witness Statements were served late.

In considering the application, CPR 3.9(1) states factors to be taken into account as follows:

“(1)

On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order the court will consider all the circumstances including –

It is therefore necessary for the court to consider all the circumstances, including the matters set out in sub-paragraphs (a) to (i). In this case one of the most important circumstances is the fact that the relevant order was agreed in a consent order. I summarised the law in this context in Community Care North East v Durham County Council [2010] EWHC 959 at [16] to [22]. The position prior to the CPR was, as Neuberger J (as he then was) said in Ropac Limited v Inntrepreneur Pub Co (CPC) Limited [2001] L&T R 10 at [20]:

“First, at least in general, if the order was a genuine consent order, that is representing a contractual agreement between the parties, and stated that, if a party did not do something within a specified time, then his claim or defence would be struck out or that there would be some other sanction, that represented a contract with which the Court had no power to interfere, save in circumstances in which the court has power to interfere with a contract. That seems to be the effect of the judgments in Purcell v FC Trigell Limited [1971] 1 QB 359 – see at 365G per Winn LJ and 366 D per Buckley LJ.”

In relation to the CPR he concluded that the approach was more flexible and held that the court did have jurisdiction to grant relief by extending time. He said this at [31]:

“To my mind, the CPR therefore give the Court rather more wide-ranging, more flexible powers than the RSC. In my judgment, those powers are to be exercised not merely to do justice between the parties, but in the wider public interest. Further, the objective to deal with a case justly must, as I see it sometimes, (albeit rarely) require the court to override an agreement made between the parties in the course of, and in connection with, the litigation. I consider that this means that the court has greater power to interfere than before. Having said that, I should add this. Where the parties have agreed in clear terms on a certain course, then while that does not take away its power to extend time, the court should, when considering an application to extend time, place very great weight in what the parties have agreed and should be slow, save in unusual circumstances, to depart from what the parties have agreed.”

As Lord Denning MR said in Siebe Gorman & Co Limited v Pneupac Limited [1982] 1 WLR 185 at 189 orders made by consent can have two effects:

“There are two meanings to the words “by consent”.... One meaning is this: the words “by consent” may evidence a real contract between the parties. In such case the court will only interfere with such an order on the same grounds as it would with any other contract. The other meaning is this: the words “by consent” may mean “the parties hereto not objecting”. In such a case there is no real contract between the parties. The order can be altered or varied by the court in the same circumstances as any other order that is made by the court without the consent of the parties.”

In Weston v Dayman [2006] EWCA Civ 1165 the Court of Appeal had to deal with the effect of a consent order and an application to vary that consent order. In dealing with the application to vary the consent order, Arden LJ with whom the other members of the Court of Appeal agreed said this at [24] and [25]:

“24.

I need to deal with the argument put forward on variation. This is based on the Civil Procedure Rules 3.1(7), which provide for the Court to have power to make an order to vary or revoke an order and secondly, generally, on the liberty to apply.In relation to that matter Mr Warwick relies on the decision of Neuberger J , as he then was, in Ropac Ltd v Inntrepreneur Pub Co (CPC) Ltd [2001 L&TR 10. Neuberger J held in a nutshell that, even when parties have come to a consent order, in that case on an extension of time, there was an exceptional jurisdiction whereunder the court could still extend time. In my judgment, wherever the jurisdiction comes from - and it could come from the liberty to apply in this order - the court must be very careful in exercising a discretion to vary the terms of an order which represents a contract between the parties. Mr Warwick argues forcibly that this jurisdiction should be exercised so as to enable these proceedings to proceed to trial, because Elias J has already given permission, because it must surely be the policy of the court to allow proper claims to be brought against officers of the court in respect of mismanagement, and because the point was only taken by the receiver in her defence. It was not taken at an earlier stage, at which she was represented, when Elias J gave permission. In addition, of course, the damage to which he refers was not damage of which Mr Weston could have been aware at the date of the order.

25.

I will proceed on the basis (without deciding the point) that CPR 3.1(7) applies to paragraph 10 of the order of 23 January 2003. I would accept that the court should accede to an application for variation where it is just to do so, but in my judgment one of the aspects of justice is that a bargain freely made should be upheld. Mr Weston clearly obtained benefits under the order of 23 January 2003. It may well be that those benefits were not as great as he thought, but that is not a matter for this court. In those circumstances I do not consider it would be right for this court to exercise its discretion to vary the order as sought. I should say that this application was not before the Chancellor.”

In Ferrotex Industrial Limited v Banque Française de l’Orient [2001] EWCA Civ 1387 the Court of Appeal considered a case where an unless order had been made by consent in relation to providing security for costs of an appeal. Tuckey LJ said this at [6]:

“Since the CPR came into force, so far as I am aware this court has not had to consider whether the position has changed, although Neuberger J in Ropac Ltd v Inntrepreneur Pub Co (CPC) Ltd[2001] L&TR 93 thought “with some hesitation” that the court did have power to override an agreement between the parties because the overriding objective of the rules to enable the courts to deal with cases justly gave the court rather more wide ranging and flexible powers than the RSC, and the objective might require the Court to override an agreement in an exceptional case. However, for reasons which I will explain when I deal with the Ferrotex case, I do not think it is necessary to consider whether Neuberger J was right about this. Suffice to say at this stage that if the court is considering an application to extend time for complying with an order made by consent, one of the important factors which has to be taken into account is that the applicant had previously agreed to the time limit imposed by the order.”

Having considered the factors under CPR 3.9(1) Tuckey LJ came to the following conclusion at [32]:

“Those are the factors which we have to consider on this application. I am bound to say that, at the end of the day, I find the matter finely balanced, but on balance, I am not persuaded that we should extend time. My principal reason for taking this view is that the order was designed to produce finality. It was designed to make time of the essence given the imminence of the hearing date. Failure to comply with an order of this kind in such circumstances makes it very unlikely that the court will extend time. Taking this factor with the background of earlier default and delay by these appellants, I do not think it would be right for the court to extend time. I would therefore dismiss the appellants’ application.”

At [44] Peter Gibson LJ considered that the fact that the order was a consent order was the “first and foremost” factor in considering the balance under CPR 3.9.

In Confetti Records v Warner Music UK Limited [2003] EWCA Civ 1748 Pill LJ considered an application to extend time under a consent order by which a party had agreed to give security for costs. He set out his conclusions in the following terms at [13] and [14]:

“13.

I have come to the conclusion that the extension sought should not be granted in this case. I have regard to all the circumstances and to the matters listed in CPR 3.9(1). The fact that the order was a consent order is in my judgment an important consideration. As was stated by Neuberger J in Ropac Limited v Inntrepreneur Publishing Co Ltd [2001] CP Rep 31:

“… the Court should, when considering an application to extend time, place very great weight on what the parties have agreed and should be slow, save in unusual circumstances, to depart form what the parties have agreed.”

14.

A similar approach was taken in Ferrotex, Peter Gibson LJ stating, at paragraph 44, that this factor was “first and foremost”, namely that the order made by the Lord Justice in that case had been a consent order.”

The overall effect of those cases is that the strict approach of the position before the introduction of the CPR does not apply and the court does have the ability to extend time or grant relief from sanctions in relation to an agreed order made in a consent order. However the court will be slow to do so and will generally hold the parties to the terms of the consent order but that there will be unusual cases where it will be just to extend time or grant relief from sanctions. In all cases the fact that there is a consent order will be a factor upon which the court should place very great weight in exercising the discretion given under the CPR or under any liberty to apply in the consent order.

On behalf of Wates, Mr Manus McMullan QC submits that whilst it is difficult to seek relief from sanction in respect of a consent order, it was appropriate to do so where a genuine mistake had been made. In this case the parties had agreed 14 days from the date of the order which did not comply with CPR 2.9 and had led to the final date for compliance being Good Friday. The mistake made by Mayer Brown was that the fact that the order required something to happen on Good Friday did not mean that compliance with that Order on the first working day after Good Friday would suffice. He submits that in those circumstances the mistake which led to the Witness Statements being served on 26 April 2011, the next working day after 22 April 2011, rather than on 22 April 2011 was something which justified the court in granting an extension of time in order to deal with matters justly under the overriding objective.

In relation to the other factors in CPR 3.9(1) he submits that Wates have a good defence on the basis that they were not responsible for the flooding and for Wates to be precluded from relying on that defence would not be in the interests of the administration of justice. He says that the application for relief was made promptly on 28 April 2011, as accepted by the Claimants’ solicitors. He says that the failure to comply was not intentional as the solicitor at Mayer Brown believed that he had until the next working day after Good Friday to effect service and there was a good explanation based on the mistaken belief that CPR 2.8(5) covered the particular order.

He submits that Wates have complied with five of the seven directions made in September 2010 requiring them to serve or deal with documents. He submits that although Wates were late in serving the Amended Defence and Amended Fourth Party Particulars of Claim, the lateness enabled them to plead that the flood was caused by the leak from the water service pipe of Anglian Water, thereby avoiding the need for a Re-Amended Defence. In relation to the Witness Statements he says that the Claimants themselves were not ready to serve on 18 or 25 February 2011 and only did so on 7 March 2011. He says that in the particular circumstances of the case the failure to serve the Witness Statements is explained by the unfortunate illness of the solicitor at Mayer Brown and it was not a failure caused by deliberate conduct. He submits that the failure was caused by the Solicitor and not by the party itself Wates and that this should be a factor which favours relief from sanction. He submits that the trial date of 10 October 2011 can be met and there is no question that the delay in service of Witness Statements from Good Friday until about 1 pm on 26 April 2011, the first day back after Easter, has caused any delay. Finally he submits that granting relief will allow Wates to put forward a proper defence on the merits as opposed to the prejudice that will be suffered if relief is not granted.

On behalf of the Claimants, Mr Geraint Webb, whose helpful and comprehensive submissions were adopted by Mr Robert Evans on behalf of Waitrose and by Mr Michael Taylor on behalf of Fairhurst, submitted that the terms of the consent order were a “real contract between the parties in the sense stated by Lord Denning MR in Siebe Gorman. He submits that the consent order was a bargain struck which provided both real benefit and detriments to the parties. He submits that Wates had been in continuous default in relation to the service of Witness Statements and had not served them by a date only three weeks from the original trial date. He said that in those circumstances, Wates were able to have the advantage of a further extension in which to serve the Witness Statements but with the imposition of the agreed unless order for failure to comply. In such circumstances he relies on the decisions in Ropac,Ferrotex, Confetti Records and Weston v Dayman and submits that there is no basis upon which the court should now rewrite the bargain agreed between the parties. He submits that to do so would deprive the parties of an important aspect of the very bargain of placing Wates under time pressure with the sanction for failure to comply given by the unless order. He submits that the unless order agreed by consent should deliver the finality which it was designed to provide as emphasised by the Court of Appeal in Ferrotex.

Mr Webb submitted that the overriding consideration in this case was the fact that there was a consent order and that the court should not grant relief from sanctions so as to upset that bargain. In such circumstances he submitted that it was not necessary to consider the other factors under CPR 3.9(1). However in relation to those items he submitted that it was not in the interests of the administration of justice to interfere with an unless order which had been part of a bargain between the parties. He accepted that the application under CPR 3.9(1) had been made promptly. He submitted that the failure to comply was intentional, although on the basis of a mistake made by the solicitor at Mayer Brown. He submitted that there was no good explanation for the failure. In relation to compliance with the other directions, he submitted that there was the failure to serve the Amended Defence and the Amended Fourth Party Statement of Claim and the failure to serve the Witness Statements, as well as a failure to respond to a Part 18 Request which had been made on 20 January 2011. He submitted that although the failure appears to be a failure by the solicitor at Mayer Brown, there is no evidence from Wates saying what their position was. He accepted that the trial date can be met; he submits that the effect of the failure to comply was that an agreed sanction bit upon Wates and that the effect of granting the relief would be to overturn a bargain which the parties had made.

He submitted that, as a result of the failure to comply with the unless order, there would be judgment on the direct claim by the First Claimant and that the defence to that claim was weak. He said that as Waitrose would not be liable if the flood was caused by the leak in the Anglian Water pipe, Wates would still have protection in relation to the claim by Waitrose which, as Mr Evans submitted is the subject of a broad indemnity. They would lose the claim against Fairhurst but Mr Taylor submitted that the evidence did not establish that claim. In those circumstances the Claimants, Waitrose and Fairhurst submit that the court should not grant relief from sanctions under CPR 3.9 (1).

Under CPR 3.9(1) the court can grant relief from the sanctions imposed by the unless order if the court considers it just to do so, taking into account all the circumstances including those set out in sub-paragraph (a) to (i) of that rule. Where there is a consent order, then, as the decisions set out above show, whilst the fact that the parties have come to an agreement does not take away the court’s power to grant relief, in considering whether to do so the court should place “very great weight” on what the parties have agreed and “should be slow, save in unusual circumstances, to depart from what the parties have agreed.” The fact that an order is made by consent and therefore is an agreement between the parties is one of the important factors which may, in the end, be determinative of the application.

In this case there was an agreement between the parties in the terms of the order agreed and signed by the solicitors. The order was phrased in terms requiring exchange of Witness Statements with, it is common ground, the final day for compliance being Good Friday. I bear in mind that the order did not require compliance on Good Friday and that this date was the final date for compliance and the difficulties could have been overcome by the wiser course of service in advance of the last day. However the parties agreed that exchange on Good Friday would be compliant with their agreement. They failed to specify a date under CPR 2.9 but it must have become apparent that Good Friday was the final date for compliance and there were no arrangements to deal with the practical difficulties of being able to “exchange” Witness Statements on a date when solicitors’ offices would generally be closed for the Bank Holiday. Had the order been expressed in terms which required Witness Statements to be exchanged and filed, which I note was the form of words in the order of 9 September 2010, then it seems that the provision of CPR 2.8(5) would have applied and the Witness Statements would have been filed within time.

This case therefore has some unusual features. The solicitor made a mistake based on CPR 2.8(5) and instead of exchanging witness statements on Good Friday he served them by 1:00pm on the next working day. Had the order been in the form of “serve and file” it seems that the service would have been in time. The order requiring exchange meant that the other parties had to participate so as to effect exchange, something which, in fact, could not happen on Good Friday without special arrangements. It is not suggested that the parties deliberately chose the unusual course for the order to expire on Good Friday; it only occurred because the agreed period of 14 days expired then. The order did not comply with CPR 2.9, the purpose of which is to avoid this sort of situation by stipulating a particular date and time, thereby making time limits for compliance clear so that there is no room for mistakes.

Are these circumstances sufficiently unusual for the court to take the equally unusual course of granting relief from sanctions despite the fact that the agreed order was contained in a consent order and represented part of the agreement by which the trial date was vacated? I have come to the conclusion that the form of the agreed order, the lack of compliance with CPR 2.9 and the fact that unintentionally the period for compliance expired on Good Friday mean that this is a case where, if the other factors in CPR 3.9(1) show that it would otherwise be just to grant relief, the court should not refuse relief despite the existence of the consent order. In this case, whilst the agreement between the parties has great importance and the court should clearly be slow to grant relief where there is a consent order, given the particular unusual circumstances of this case I would be prepared to exercise my discretion and grant relief.

I now consider the other factors under CPR 3.9(1). I consider that the interests of the administration of justice (sub-paragraph (a)) are overall neutral. It is clearly in the interests of justice for a court order to be complied with and given effect to. Equally, though, I consider that it is generally in the interests of administering justice for a party to have its claim determined on the merits rather than dealt with by way of a default judgment. This is a case where there will be arguments as to the underlying cause of the flooding but where the current evidence would show that there is a good arguable case that the leak from the Anglian Water service pipe had a causative effect and Wates strongly support this as the cause. There are the direct claims made by the First Claimant against Wates for damage to pipes which are currently denied and I do not consider that these claims or the contingent claim against Fairhurst are not arguable claims.

This is a case where it is accepted that the application for relief was made promptly (sub-paragraph (b)). It was made within two days and supported by a detailed Witness Statement. I do not consider that the failure to comply with the order was intentional (sub-paragraph (c)). In other words there was no intention deliberately not to comply with the order. I accept the evidence of the solicitor from Mayer Brown that it was thought that service on the next working day would be good and would comply with the terms of paragraph 12 of the consent order. Evidently most actions are intentional in the sense that it was intended not to serve the Witness Statements on Good Friday but this is not a case where there was a deliberate non-compliance with the order.

I consider that there has been a good explanation for the failure (sub-paragraph (d)). The circumstances where the final date for compliance was Good Friday gave rise to an understandable mistake in calculating when there would be good compliance with an order which provided for exchange of Witness Statements on that day.

Apart from the Service of the Witness Statements I consider that there has generally been compliance with the other orders (sub-paragraph (e)). There was, though, late service of the Amended Defence and the Amended Fourth Party Statement of Claim in part due to the illness of the solicitor at Mayer Brown. However the discovery of the leak in the Anglian Water service pipe and its subsequent repair in November 2010 was a matter which was raised in the Amended Defence and then had a major impact on the litigation. Had it not been raised in the Amended Defence then a further re-amendment would have been necessary had the Amended Defence originally been served as Ordered. The illness does provide mitigation for this failure.

In relation to the request for further information, I am not persuaded that, in the context of this litigation the non-provision of one item should weigh against the granting of relief. The two requests were contained in Kimbells’ letter of 20 January 2011 but were not pursued, no order was obtained and they were not one of the orders made in the consent order. On 19 April 2011 the Claimants have now issued an application for the information. The first request relates to the identity of a sub-contractor referred to in Wates’ Defence and this has not been answered. The other request relates to the damage which the First Claimant alleges was caused to the drainage to her restaurant. This has been responded to by the Witness Statements served by Wates. Overall I do not consider that this is a significant factor.

The most serious default was undoubtedly the failure to serve the Witness Statements prior to the consent order and this was the failure that continued up to 22 April 2011. It is explained by the illness of the solicitor at Mayer Brown and this mitigates what otherwise, on the face of the documentation, was a serious and continuing failure to serve the Witness Statements.

The failure to comply was caused by the legal representative, not the party (sub-paragraph (f)). That is clear from the evidence of the solicitor at Mayer Brown. It was the mistake by the legal representative as to the treatment of Good Friday which led to the failure to comply with the date on Good Friday. As the notes to The White Book state at paragraph 3.9.2, citing what Peter Gibson LJ said in Training and Compliance Limited v Dewse [2001] CP Rep 46 at [66], in general the action or inaction of a party’s legal representative must be treated under the Civil Procedure Rules as the action or inaction of the party himself. However, when it comes to consider who caused the failure to comply, it is evident 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. Whilst the party may have a remedy against its legal representatives that does not provide a party with a complete solution because of the “loss of a chance” element in the assessment of loss. In this case the fact that the error was made by the legal representative is a factor which I take into account as providing support for the grant of relief against sanctions.

This is a case where the trial date can still be met if relief is granted (sub-paragraph (g)). The trial was adjourned to October 2011 for other reasons and there is no suggestion that the trial cannot be met if relief is granted.

The effect which the failure to comply had on each party (sub-paragraph (h)) is minimal. The Witness Statements were received before 1 pm on the first working day after Easter and there is no suggestion that this was the case where any party needed to work on the case over the Easter Weekend.

The effect of granting relief (sub-paragraph (i)) will, so far as the other parties are concerned, deprive them of the effects of the agreed unless order so that the First Claimant will have to prove her direct claim against Wates, Waitrose will have to prove their third party claim against Wates based on any liability to the Claimants and Wates will have the opportunity to pass their fourth party claim down to Fairhurst, as necessary.

On the other hand, if relief were granted Wates would be permitted to defend the direct claim by the First Claimant and the contingent claim by Waitrose and would have the possibility of passing on any claim to Fairhurst. It is true that even if relief is not granted the Claimants’ claim against Waitrose would only succeed to the extent that the flood had been caused by matters for which Waitrose was liable and similarly Wates’ liability to Waitrose would still have protection to that extent but Wates would not themselves be able to make a case based on their expert evidence. Wates would therefore be deprived of defending the claims and passing on any claim to Fairhurst based on the merits.

In this case, taking into account the specific factors under CPR 3.9(1) alone but without the important factor of the consent order, I would have granted relief. The most important factor against the exercise of discretion is the failure to comply with the previous order in relation to the Witness Statements which is explained by the evidence of the solicitor at Mayer Brown. Otherwise I consider that the other factors are either neutral or would favour granting relief and, on balance, the specific factors mentioned under CPR 3.9(1) would strongly favour the grant of relief.

Overall, taking account of the specific factors in CPR3.9(1) and given the conclusion that I have reached in relation to the fact of the consent order, I have come to the conclusion that this is one of the limited number of cases where, despite the consent order, I should exercise my discretion to grant relief from sanctions. Accordingly, I grant the necessary extensions so that instead of compliance with the order requiring exchange of Witness Statements on Good Friday I order that service of the Witness Statements which occurred on the next working day, 26 April 2011 should be good compliance.

On that basis I invite the parties to make submissions as to costs and any necessary ancillary orders.