Rio Guadalete SA Of Panama v Hopwood & Ors

A procedural breach does not require automatic strike-out, but the court may strike out a stale claim where delay creates a real risk that a fair trial is no longer possible. The court must assess the likely fairness of the trial, the reasons for delay, the parties’ interests and whether strike-out is a proportionate exercise of the case-management discretion. An appellate court should not interfere merely because another order might have been available. Intervention requires misdirection, failure to apply the relevant principles, or a decision that is plainly wrong.

The claimant appealed from the decision of Toulson J in the Commercial Court, which struck out its claim under CPR 3.4 for failure to comply with the rules. The breach was admitted.

The claim concerned the loss of a fishing vessel and an insurance claim against the defendant underwriters. Proceedings were issued shortly before limitation expired, but the claimant then failed for more than a year to serve a reply or answer requests for further particulars. The central issue was whether, in those circumstances, strike-out was just and proportionate, particularly given the risk that the evidence had deteriorated and a fair trial was no longer possible.

1. Appeal dismissed. The strike-out order was upheld, with costs here and below. Permission to appeal to the House of Lords was refused.
2. The claimant’s breach had caused delay of more than a year in an already stale claim. The relevant question was the extent to which a fair trial was now likely to be possible, rather than whether the court could prove that a fair trial was impossible.
3. The judge was entitled to find a real risk of an unfair trial. The early witness statements did not address important factual matters, including the vessel’s previous condition and maintenance, and had been taken before the claim was formulated. The central factual and expert issues therefore could not be resolved solely through expert evidence.
4. The claimant’s lack of funds provided some explanation, but it did not justify the prolonged silence following the request for security for costs. The claimant could have resisted or addressed that request earlier.
5. Although the Civil Procedure Rules permitted flexible responses to procedural default, alternative orders such as a tight timetable or an order affecting interest were matters for the judge’s discretion. In the absence of misdirection, the Court of Appeal could not say that strike-out was obviously wrong.
6. The possibility of pursuing related proceedings in Italy did not make continuation of the English proceedings fair to the defendants. The court applied the appellate restraint principle stated in Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926.

• High Court, Queen’s Bench Division, Commercial Court: Toulson J struck out the claim under CPR 3.4 on 14 July 2000 for failure to comply with the rules.
• Court of Appeal (Civil Division): The appeal was dismissed with costs here and below. Permission to appeal to the House of Lords was refused.