Hytec Information Systems Ltd v Coventry City Council

An unless order is a last opportunity to comply with procedural obligations. Its sanction will ordinarily follow a breach unless there is a compelling and adequately supported excuse. The court’s discretion is not confined to deliberate or contumacious disobedience. Negligence, incompetence or indolence may also justify strike-out where the breach is inexcusable.

The court must assess all the circumstances, including the history of default, responsibility for the breach, prejudice, delay, wasted costs and the public interest in effective justice. A litigant will ordinarily bear the consequences of failures by its legal representatives. A final, perfected order cannot ordinarily be reheard by the judge who made it unless the rules confer that power.

The claimant supplied computer software to the Council. It sued for sums due under the agreement. The Council defended the claim, alleged defects in the software and support services, and counterclaimed for repayment and damages.

After repeated orders for intelligible further particulars, including a final unless order, the Council served inadequate material. His Honour Judge Havery QC struck out the defence and counterclaim, and entered judgment for the claimant. He later refused an extension of time and refused to set aside the orders.

The Council appealed. The central issues were whether the judge could reopen the final order, the proper test for the sanction following breach of an unless order, and whether the Council could avoid the consequences of its lawyers’ failures.

1. Appeal dismissed unanimously. Lord Justice Ward held, with whom Lord Justice Auld and the Master of the Rolls agreed, that the judge had no jurisdiction to rehear the final, perfected order. The Council had deliberately remained present but unrepresented at the relevant hearing, so it could not invoke Order 32 rule 5(3). The appropriate challenge was by appeal.
2. An unless order is a measure of last resort, made after prior procedural failures. Non-compliance will ordinarily attract its stated sanction. The court retains a judicial discretion, exercised on the facts and in the interests of justice, but compelling grounds are required to excuse the default.
3. The guidance in Re Jokai Tea Holdings [1992] 1 WLR 1196 did not establish an inflexible condition that breach must be intentional and contumacious. Deliberate flouting is a powerful reason for strike-out, but a negligent, incompetent or indolent failure may also justify the sanction if it is without reasonable excuse. The court must not treat judicial guidance as exhaustive rules which displace the discretion conferred by the procedural rules.
4. The relevant assessment includes the history of non-compliance, whether circumstances outside the party’s control provide an adequate explanation, the need to do justice to the opposing party, and the public interest in avoiding delay and wasted costs. Ordinarily, a party bears the consequences of its advisers’ defaults. Exceptional facts may justify a different result, but the Council could not disassociate itself from counsel’s and solicitors’ conduct.
5. There had been four ineffective orders, no proper explanation and ample opportunity to comply. The Council’s representatives had acted contumaciously and negligently. The strike-out of the defence and counterclaim, and the judgment entered for the claimant, therefore stood. The appeal was dismissed with costs.

• Court of Appeal (Civil Division): The Council’s appeal was dismissed. The orders striking out its defence and counterclaim, entering judgment for the claimant, and refusing later relief remained effective.
• Queen’s Bench Division (Official Referee’s Business): His Honour Judge Havery QC struck out the defence and counterclaim on 9 June 1995 following breach of an unless order. On 28 July 1995, he refused an extension of time and refused to set aside the earlier order and judgment.