Circuit Systems Ltd & Anor v Zuken-Redac (UK) Ltd

Under the Civil Procedure Rules, compliance with court-imposed timetables and orders is an important aspect of the overriding objective. The court may require a party to reformulate an unintelligible pleading and may impose a final or virtually final opportunity to do so. If the party fails to comply, the court may strike out the claim, even where the underlying claim appears to have merit and a fair trial would otherwise be possible. The discretion must be exercised by considering all relevant circumstances, including the administration of justice, promptness, explanation for default, compliance with earlier orders, the effect on the trial timetable, and prejudice to each party. Article 6 protects a right to a fair hearing within a reasonable time for both parties.

Circuit Systems Ltd and Mr Basten brought long-running claims concerning defective computer hardware and software supplied by Zuken-Redac (formerly Racal-Redac). Following earlier proceedings concerning assignment and abuse of process, the Technology and Construction Court required Mr Basten to serve a substituted statement of claim meeting specified objectives and imposed a sanction of strike out for non-compliance.

The substituted pleading was served but did not comply with the order. The judge refused permission to serve a further pleading, struck out the claim and permitted the defendant to enter judgment. The applicants sought an extension of time to appeal the earlier case-management order and permission to appeal the later order. The central issue was whether the judge had exercised his case-management discretion on wrong principles or reached a plainly wrong result.

1. Applications dismissed. The application for an extension of time to appeal the order of 25 June 1999 was refused because an appeal would serve no useful purpose. That order was appropriate: the case was old, the pleading was unfit for trial, and the judge was entitled to require a substituted statement of claim within a structured timetable.
2. The June and August 1999 judgments had to be read together. The judge had jurisdiction under the Civil Procedure Rules 1998 to strike out for failure to comply with a rule or court order. He understood that he retained a discretion and was not automatically bound to impose the sanction.
3. In exercising that discretion, the judge was entitled to consider the circumstances identified in CPR 3.9, even if that rule did not directly apply. Relevant matters included the administration of justice, the explanation for default, prior opportunities to comply, the effect on the fixed trial date, and the prejudice to both parties.
4. The failure was not treated as intentional, but there was no adequate explanation for the continuing deficiencies. A further seven-day adjournment would probably have required the six-week trial to be vacated and would have caused further cost and delay. The judge had also taken account of the serious consequence that strike out would prevent the claim proceeding.
5. Lord Woolf MR’s reasoning in Biguzzi v Rank Leisure Plc supported the conclusion that, under the CPR, court-imposed time limits have increased importance, although strike out remains a discretionary and proportionate remedy.
6. The reliance on article 6 was misconceived. The right is to a fair hearing within a reasonable time, and the defendant also had that right. The judge’s decision was neither plainly wrong nor based on wrong principles. Permission to appeal was therefore refused.

• Technology and Construction Court: Orders dated 25 June and 31 August 1999 required a substituted statement of case and ultimately struck out the claim, with permission for the defendant to enter judgment.
• Court of Appeal (Civil Division): The application for an extension of time to appeal the 25 June order and the application for permission to appeal the 31 August order were refused.