Glauser International SA v Khan (t/a Khan Design Consultants)

A claim may exceptionally be struck out in a form which leaves the claimant to begin again with a properly presented claim, but such cases are rare. Normally, the court’s process should be engaged only once in relation to the subject matter. Before striking out finally, the court must consider the purpose and probable effect of the order, weigh the competing interests, and assess whether the result would be proportionate. A short extension to cure defective pleading may be required where final strike-out would prevent a genuine claim from ever being heard. The decision whether to strike out a second claim is discretionary and fact-specific. The expression “special reason” is guidance, not a formula or additional legal requirement.

The appellant brought proceedings concerning allegedly defective professional engineering services. Its original particulars of claim inadequately pleaded causation and quantum. Following a case management order requiring proper particularisation, the appellant failed to serve amended particulars by the deadline. On 3 November 2000 the Technology and Construction Court struck out the first claim under Civil Procedure Rules 1998, Part 3.4(2)(c).

The appellant then issued a fresh, properly particularised claim. On 22 June 2001 the judge struck it out as an abuse, applying the approach in Securum Finance Ltd v Ashton [2001] 1 Ch 29 and Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 1 WLR 1426. The central issue was whether the second claim should proceed and whether permission should be granted to challenge the first strike-out.

1. Outcome. The original appeal was dismissed. The court extended time, granted permission to appeal against the order of 3 November 2000, allowed that appeal, and set aside the first strike-out. The second claim was duplicative and was to be struck out.
2. A judge may, in rare cases, strike out a prematurely or defectively presented claim while leaving open the possibility of fresh properly presented proceedings. The court cannot fetter a future court’s discretion. If final termination is intended, that intention carries considerable weight when any later claim is considered.
3. Final strike-out is a severe measure. The judge must examine its purpose and effect, consider the probable consequences, and balance them against the available alternatives. Proportionality is particularly important where a short extension would probably cure the defects and allow a genuine claim to be determined. The right of access to a court, reinforced by Article 6 of the Convention, is relevant.
4. Where a first claim is struck out within the limitation period, the court must bear in mind that a second claim may later be struck out as misuse of court resources. If the first order is intended to preclude further proceedings on the same claim, the judge should say so and explain why that course is appropriate.
5. The approach to a second claim is fact-specific. The requirement for a “special reason” derives from cases involving serious delay and misconduct, but is not a ritual incantation or a separate statutory test. The court must consider all the circumstances, including private and public interests and court resources. The approach in Johnson v Gore Wood [2001] 2 WLR 72 was applicable by analogy where the second action was not merely an abusive attempt to revive proceedings conducted with flagrant delay.
6. On the facts, the first action had been commenced prematurely and without adequate preparation, but the appellant had taken energetic steps to rectify the defects and required only a short further extension. The judge’s criticism of the post-order conduct lacked foundation, and final strike-out was disproportionate and wrong. The second claim could not appropriately be allowed to continue instead. Its particulars were to stand, with suitable amendment of the claim number, as amended particulars in the first action. Costs were to be imposed for the defective pleading and duplication of proceedings, with credit for £25,000 already paid.

• Technology and Construction Court, Queen’s Bench Division: HHJ David Wilcox struck out the first claim on 3 November 2000 for failure to comply with a court order, and struck out the fresh claim on 22 June 2001 as an abuse of process.
• Court of Appeal (Civil Division): The appeal against the second strike-out was dismissed in its immediate form. Time was extended for appealing the first strike-out; permission was granted; that appeal was allowed and the first strike-out was set aside.