Maqsood v Mahmood & Anor

A court may strike out a statement of case under rule 3.4(2)(c) for serious failure to comply with rules or court orders. The power is draconian and must be exercised consistently with the overriding objective. Fairness extends to defendants as well as claimants.

Where repeated defaults leave a claimant unable to proceed at a properly listed trial, and an adjournment has rightly been refused, striking out may be proportionate even though part of the claim has a real prospect of success. A claimant cannot ordinarily undermine that result by relying on a novel argument which was neither clearly pleaded nor presented because of those same defaults.

The claimant paid the first defendant £77,500 under agreements concerning a restaurant business, its fixtures and fittings, and the intended assignment of a lease. He alleged breach of contract, total failure of consideration and a right to recover the money. He also alleged that money had passed to the second defendant and that property in her name was held on trust.

Following repeated failures to comply with case-management orders, the claimant sought an adjournment on the listed trial date. His counsel was not instructed to conduct the trial, no interpreter was present, and essential trial preparation had not been completed. His Honour Judge Seymour QC refused the adjournment, struck out both claims under Part 3.4(2)(c) of the Civil Procedure Rules and dismissed the action.

The claimant abandoned his challenge to the refusal of an adjournment. The central issue was whether the judge's assessment of the claims' merits had invalidated the discretionary decision to strike them out.

1. Appeal dismissed. The claimant's solicitors had known of the trial window for at least five months. They repeatedly failed to prepare the case and did not comply with orders governing witness statements, trial bundles and skeleton arguments. Their failures were egregious and justified striking out under Part 3.4(2)(c).
2. The power to strike out for procedural non-compliance is draconian and must be exercised in accordance with the overriding objective. Fairness is owed to defendants as well as claimants. Once the adjournment was rightly refused, the claimant was unable to conduct the trial and dismissal was inevitable. Permitting the appeal would unfairly give him the adjournment which he had accepted was properly refused.
3. The contractual claim against the first defendant was not as weak as the judge had assessed it. It had a real prospect of success because it was not fanciful, although its outcome remained deeply uncertain. The judge nevertheless could not be criticised for his assessment when the claimant's counsel was unable to address the merits and the judge was not required to search a late-filed trial bundle to construct the claimant's case.
4. The proposed proprietary claims did not invalidate the exercise of discretion. The relevant allegations were not readily apparent from the particulars of claim, and the suggested constructive trust arising from a total failure of consideration and the recipient's knowledge was far from clear in law. The court declined to decide whether such a claim existed. The policy recognised in Westdeutsche Landesbank was generally against introducing proprietary remedies into commercial contracts and thereby giving one contracting party proprietary security and priority.
5. The claimant's failure to articulate the proprietary case resulted directly from the procedural defaults on which the strike-out order rested. Even if the Court of Appeal exercised the discretion afresh, the prejudice to the defendants, the refusal of an adjournment and the claimant's inability to proceed justified striking out the claims.

Lloyd LJ and Jackson LJ agreed with Ward LJ. Lloyd LJ specifically endorsed Ward LJ's reasoning concerning the second defendant and the proprietary claim against the first defendant.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously. The court upheld the strike-out order despite concluding that the contractual claim against the first defendant had a real, though uncertain, prospect of success. [2012] EWCA Civ 251
2. High Court, Queen's Bench Division: His Honour Judge Seymour QC refused an adjournment, struck out the claims against both defendants under Part 3.4(2)(c) of the Civil Procedure Rules, dismissed the action and ordered the claimant to pay the defendants' costs. No neutral citation is stated.