In this article, we explain the reasoning behind the High Court’s reversal of an order for strike out, in the case of Akita & Anor v Governor and Company of the Bank of Ireland  EWHC 1712 (QB).
The order was originally granted by Recorder Mitchell, at Truro County Court, under the court’s powers of case management. Pursuant to CPR 39.3, the court may strike out a claimant’s claim if there is a failure to attend the trial.
In this instance, the 2-day trial was listed to begin at 10 a.m. on 23 August 2017.
By 10.40 p.m. on the day before trial (22 August), ‘the parties were in active negotiation’ and ‘had almost reached agreement’, with the defendant having emailed through draft settlement, but ‘there appeared to be two key points that still needed to be resolved’, which is why the trial still went ahead as scheduled.
However, the 2nd claimant was not present at the outset. The court transcript recorded defendant counsel’s reaction to the claimants’ tardiness:
‘It is the claimants’ claim and if they are not here prosecuting their claim, I have to apply for it to be, for judgment to be entered against the claimants for the claim to be dismissed’.
Whereas, the Recorder considered that it would be ‘a trifle harsh’ to take this course of action, as the court had been notified (by the 2nd claimant) that the delay (potentially until 11 a.m.) had been caused by traffic.
Eventually, the 2nd claimant arrived at the Court around midday, but notwithstanding his concerns, the Recorder had already taken the decision (at 11.35 a.m.) to dismiss the claimants’ claim on their ‘non-attendance’.
As recourse to the court’s interference, CPR 39.3(3) permitted the claimants to apply for the Recorder’s order to be set aside, but their application was unsuccessful, when judged against CPR 39.3(5) criteria, and permission to appeal against that order was refused.
However, the claimant was subsequently granted permission to launch a substantive appeal against the original order.
On appeal, claimant counsel submitted that the 1st instance decision was one of ‘significant unfairness’ and that strike out had been ‘too draconian’, when a ‘lesser’ costs order would have been more ‘proportionate’. It was further argued that the Recorder’s discretion should have been exercised, in accordance with the overriding objective, and that, ‘in all the circumstances … the judge’s order was inappropriate and … he pulled the trigger too soon…’
By contrast, defendant counsel asserted that ‘it would be a most unusual case where a party having applied to set aside and having failed in that application, and where the judge dismissing that application (in this case District Judge Richards) had decided that the claimants had failed to persuade the court that there had been a good reason for not attending the trial, for the claimants then to be able to succeed on an appeal in relation to the original order made’. It was therefore contended that ‘the court’s power under Part 39.3 should be looked at in the light of the right to apply to set aside and the fact that the rule provides a party with the safety net which allows a litigant to say that a mistake has been made and that the claim should be reinstated’.
Did the claimant’s late attendance amount to ‘non-attendance’?
Mr Justice Spencer emphasised that there must be a clear-cut separation between ‘not attending’ and failing to attend trial ‘on time’:
‘It seems to me that it cannot mean simply failure to attend on time, otherwise a party who attended a trial listed for ten o’clock would at 10.05 be a party who had failed to attend trial, and that cannot be right’.
In devising an objective standard to determine where the end point should be set, he went on to reason that:
‘... a failure to attend trial is in the context of a failure to attend by the time the judge who is due to try the case effectively decides not to wait any further’.
Applying this test to the present case, the High Court judge concluded that:
‘... it was inappropriate and premature in those circumstances for the recorder to have triggered his power under Part 39.3 when even attendance by two o’clock would still have allowed the case to proceed and be completed within the time allowed by the court. Thus, to have waited that long would not have caused serious inconvenience to other parties or to these parties who had allowed two days in any event’.
Ultimately, Spencer J considered that ‘... this was not a case of wilful non-attendance but a case of a party being late’.
Accordingly, the High Court allowed the appeal, finding in favour of the claimants and reinstating their claim.
Full text judgment can be accessed here.
Aside from undertaking an assessment of ‘risk to the trial timetable’, Spencer J’s ruling was also motivated by the ‘absence of evidence of an intention not to attend’. Absence, which was not deemed to be the fault of the 2nd claimant.
Acknowledging the fact that ‘… [the defendant] having had no contact ... was not necessarily the same as ... [the defendant] not being able to make contact ...’ the judge insinuated that the defendant and the Recorder were expected to make ‘reasonable enquiries’ to ascertain the 2nd claimant’s whereabouts, which would have ameliorated any uncertainty over their time of arrival and provoked the Recorder to afford extra time.
Criticising their conduct as ‘reactive and passive rather than proactive’, it begs the question whether defendants should be duty bound to correct their opponents’ errors?
In the context of resisting applications for relief from sanctions (for late witness statements, late payment of hearing fee and late costs budget), The Master of the Rolls and Vos LJ found, in the case of Denton & Ors v TH White Ltd & Ors  EWCA Civ 906, that:
‘... it is wholly inappropriate for litigants or their lawyers to take advantage of mistakes made by opposing parties ... The court will be more ready in the future to penalise opportunism ...’
What is more, when the defective service case of Barton v Wright Hassall LLP fell before the Court of Appeal,[i] Floyd LJ remarked that ‘technical game-playing by a defendant will count against him [per Abela v Baadarani  UKSC 44]’, though Lord Sumption, at the Supreme Court,[ii] ruled that this principle could not apply where there was little time (before the limitation period expired) to ‘rectify any mishap’.
More recently, Lady Justice Asplin followed Barton, in the factually similar (defective service) case of Woodward & Anor v Phoenix Healthcare Distribution Ltd  EWCA Civ 985:
‘Lord Sumption made clear at para 22 of his judgment that even if there had been time to warn, there was no duty to advise of the error’.
The Court of Appeal judge expanded on the Barton ruling, by taking into consideration ‘the effect of the duty to further the overriding objective as giving rise to a duty to warn the opposing party of its mistakes’. She concluded that:
‘Although Lord Sumption did not expressly mention CPR r 1.3 ... It seems to me that the emphasis placed upon the prejudice which would arise and the lack of a duty to warn in such circumstances is entirely inconsistent with a positive duty under CPR r 1.3’.
All in all, the highest of binding case authorities make a strong argument in support of non-proactive defendant behaviour, contrary to Spencer J’s comments, in Akita.