Barratt Manchester Ltd v Bolton Metropolitan Borough Council

Applications to dismiss proceedings for want of prosecution generally require inordinate and inexcusable delay together with substantial prejudice or a substantial risk of an unfair trial. That approach applies to proceedings at every stage, including an inquiry as to damages.

Proceedings to enforce a cross-undertaking in damages are different. The undertaking is given to the court, creates no cause of action, and confers no right to damages. The court therefore has a flexible equitable discretion whether to permit enforcement. Prejudice remains highly material, but excessive and prolonged delay may justify dismissal even without proof of prejudice. On the facts, the delays did not justify discharging the undertaking.

The Attorney-General obtained a stay pending an intended appeal concerning the vacation of a restrictive land charge, giving a cross-undertaking in damages. The House of Lords refused leave to appeal, after which Barratt applied for an inquiry into losses allegedly caused by the stay.

Barratt delayed in progressing the inquiry and accepted that the delay was inordinate and inexcusable. The Attorney-General applied to strike out the inquiry for want of prosecution, arguing that the delay prejudiced his ability to investigate causation and quantum. The judge refused the application, finding no substantial prejudice or substantial risk of an unfair trial. The central issues were whether prejudice was a necessary requirement and how the court should exercise its discretion in relation to enforcement of a cross-undertaking.

1. Appeal dismissed. The inquiry into damages was permitted to proceed.
2. The principles in Birkett v James apply generally to proceedings before final judgment, including an inquiry as to damages. In an ordinary action, however, dismissal for want of prosecution ordinarily requires inordinate and inexcusable delay plus substantial prejudice or a substantial risk that a fair trial is impossible.
3. Enforcement of a cross-undertaking is materially different. The undertaking is given to the court, not the opposing party. It creates no cause of action and gives the applicant no legal right to damages. Enforcement is discretionary and equitable. The court may refuse enforcement if the application is not made promptly and may discharge the undertaking if the enforcement proceedings are not prosecuted with reasonable diligence.
4. All the circumstances must be considered, including the periods of delay, the complexity of the case, the likely prejudice, the strength of the claim and the consequences of dismissal. Prejudice is highly material and significant prejudice will ordinarily justify dismissal. Nevertheless, the longer and more excessive the delay, the less necessary it is to prove prejudice.
5. The judge was therefore wrong to treat the Attorney-General’s inability to establish prejudice as fatal to the application. Exercising the discretion afresh, the Court considered that the delays, although cumulatively about 20 months, occurred in a complex and difficult inquiry, caused no prejudice, and would cause Barratt to lose a substantial claim altogether if the inquiry were dismissed.

• Court of Appeal: dismissed the appeal from the order of His Honour Judge Gilliland QC dated 12 August 1996, which had refused to strike out the inquiry for want of prosecution.