Williams & Co Ltd v Carolan & Anor

An action may exceptionally be struck out for want of prosecution before expiry of the applicable limitation period. The court must consider whether dismissal would confer a practical benefit on the defendant, including a real possibility that no fresh action will be brought or pursued. A claimant remains responsible for progressing proceedings, even where court administration has caused delay, and must make reasonable inquiries when something has gone wrong. Prejudice is not confined to impairment of a fair trial. In an exceptional case, serious stress and anxiety, particularly where fraud and personal reputation are in issue, may support dismissal.

The claimant brought proceedings arising from the purchase of a company, alleging breach of warranty and fraudulent or negligent misrepresentation based on alleged understatement of losses in the company’s accounts. The proceedings suffered several periods of delay, including delay after an order transferring the action from Manchester to London was not implemented by the court service.

A Master struck out the action for want of prosecution. The Deputy High Court Judge dismissed the claimant’s appeal, finding inordinate and inexcusable delay, prejudice to the defendants, and a sufficiently small prospect of fresh proceedings despite the contractual claim remaining within its limitation period. The claimant appealed to the Court of Appeal. The central issues were whether the delay was attributable to the claimant, whether it caused prejudice, and whether the claim could exceptionally be struck out before limitation expired.

The Court unanimously dismissed the appeal with costs. Ferris J gave the principal judgment; Judge LJ and Peter Gibson LJ agreed and added reasons.

1. Responsibility for delay. Although implementation of the transfer order was the court service’s duty, the claimant retained the duty to progress the action. It could wait briefly for the transfer, but it could not remain inactive indefinitely. By the end of September 1997, a reasonably diligent claimant should have made elementary inquiries with the court offices. The resulting seven-month period was therefore inordinate and inexcusable.
2. Prejudice. The defendants were prejudiced because earlier progress could have enabled Mrs Carolan to attend trial before her health deteriorated. The court adopted a broad, realistic assessment rather than attempting precise calculations of the hypothetical trial date. Stress and anxiety could also constitute prejudice. Although anxiety alone would rarely suffice, this was exceptional because the proceedings had lasted more than ten years and involved allegations of fraud attacking the honesty of Mrs Carolan and her late husband.
3. Limitation period. Birkett v James [1978] AC 297 established a general rule, not an absolute prohibition, against striking out before limitation expired. Following the approach in Wright v Morris [1997] FSR 218, the question was whether the defendants would be better off if the action were dismissed and the claimant left to decide whether to begin fresh proceedings. The Deputy Judge was entitled to conclude that a fresh action was sufficiently unlikely, having regard to the limited recoverable damages, the defendants’ resources and the costs already incurred.
4. The warranty claim was therefore rightly struck out notwithstanding the unexpired limitation period. The misrepresentation claim was also properly struck out: it was already statute barred, involved the same underlying facts and allegations of fraud, and could not survive merely on the back of the warranty claim.
5. The abuse of process issue was academic and did not require determination.

• High Court, Chancery Division: The Deputy High Court Judge dismissed the claimant’s appeal from the Master’s order striking out the action for want of prosecution.
• Court of Appeal (Civil Division): The appeal was dismissed with costs. The order striking out the action was upheld.