RC Residuals Ltd v Linton Fuel Oils Ltd

On an application for relief from a sanction, the court must consider all the circumstances and systematically address every factor in rule 3.9(1) of the Civil Procedure Rules 1998. The factors must then be balanced rather than treated in isolation.

Strict compliance with an unless order is important. Relief may nevertheless be appropriate where the default was minor and unintentional, genuine efforts were made to comply, the trial date remains secure, the opposing party suffers no prejudice, and refusal would deprive the defaulting party of a substantial claim. Parties should comply as soon as possible and no later than the prescribed deadline.

The claimant sought substantial damages for plastic products damaged by an oil spillage at the first defendant’s warehouse. Liability was admitted, but the parties differed greatly over quantum. After earlier procedural defaults had caused the original trial date to be vacated, His Honour Judge Seymour QC made an unless order requiring the claimant to serve its expert reports by 4 pm on 12 April 2002.

The reports were served 10 and 20 minutes late. The judge refused relief from the sanction, which prevented the claimant from calling the experts. The claimant appealed from the Technology and Construction Court. The central issue was whether the judge had properly exercised his discretion under rule 3.9(1) of the Civil Procedure Rules 1998 and, if not, whether relief should be granted.

1. Appeal allowed unanimously. Kay LJ gave the leading judgment. Sir Swinton Thomas and Brooke LJ agreed. The judge’s refusal of relief could not stand because he had not performed the balancing exercise required by rule 3.9(1) of the Civil Procedure Rules 1998.

2. A court considering relief from a sanction must address all the circumstances, including each listed rule 3.9(1) factor, systematically. The judge properly considered the importance of enforcing unless orders, the administration of justice and the claimant’s earlier defaults. His reasons did not show that he had weighed the factors pointing towards relief, including the absence of intentional default, prejudice or risk to the trial date.

3. The Court of Appeal therefore exercised the discretion afresh. Strict compliance with court orders, particularly unless orders made close to trial, was essential. Parties must take steps to comply as soon as possible and cannot treat the specified day as the day on which performance should begin.

4. Relief was nevertheless justified on the particular facts. Further evidence showed genuine efforts to comply and explained why the experts completed their reports late. The delay was only 10 and 20 minutes, caused no prejudice to the defendants, did not disrupt preparation, and did not endanger the fixed trial date. Refusal would prevent the claimant from pursuing a substantial part of its claim. The balance therefore strongly favoured permitting the expert evidence.

5. Brooke LJ added that electronic service ordinarily required compliance with rule 6.2(1)(e) and paragraph 3.3 of the relevant Practice Direction. Although solicitors could adopt a general policy against accepting service by email, rigid adherence to it during an emergency might weaken their resistance to an application for relief.

6. The appeal was allowed and relief from the sanction granted. There was no order as to the costs of the appeal.

1. Court of Appeal: Allowed the claimant’s appeal unanimously, set aside the refusal of relief and granted relief from the sanction. No order was made as to the costs of the appeal: [2002] EWCA Civ 911.

2. Technology and Construction Court: His Honour Judge Seymour QC refused relief from the sanction on 26 April 2002 after the claimant served two expert reports shortly after the deadline in an unless order. No citation is stated.