Travel and Holidays v Hajj Charter

Relief from an automatic strike-out sanction should be granted where a payment was made shortly after the deadline, the default was not intentional, the application was prompt, and refusing relief would disproportionately prevent determination of the claim on its merits. The court must consider the factors in Civil Procedure Rules 1998, rule 3.9, including the seriousness and effect of the breach, the explanation for it, compliance with other orders, responsibility for the default, and the effect on the parties. A weak explanation and other procedural delays do not necessarily outweigh the interests of justice. Appropriate relief may include a revised trial date and a costs order.

The claimant applied to reinstate its claim after an unless order provided that failure to pay £15,000 by 4.00 pm on 22 February 2013 would result in automatic strike-out. The claimant instructed a bank to make the payment before the deadline, but the funds were not received until the following working day. The claim was consequently struck out automatically. The central issues were whether the payment instruction constituted compliance, whether relief from the sanction should be granted, and, if so, on what terms and with what effect on the scheduled trial.

The application to reinstate the claim was granted. The court held that an instruction to a bank to make a payment was not equivalent to payment. Compliance required the money to be received by the deadline. The claim had therefore been automatically struck out at 4.00 pm on 22 February 2013.

1. Applying Civil Procedure Rules 1998, rule 3.9, the interests of justice overwhelmingly favoured relief. It was disproportionate for the claimant to lose its entire claim because £15,000 was received one working day late.
2. The default was caused by the claimant, but it was not intentional. The claimant had attempted to arrange payment before the deadline. The application for relief was made promptly.
3. There was no good explanation for leaving payment until the last minute. However, that fault was less serious than a deliberate or contumelious breach and was outweighed by the disproportionate consequences of refusing relief.
4. Delays in disclosure, exchange of witness statements and preparation of trial bundles did not materially justify refusing relief. They were relevant to the management of the trial and the time required for preparation.
5. The claimant was ordered to pay £15,000 towards the defendant’s costs arising from the default and the application. The claim was reinstated, and the trial was delayed by two days to begin on 6 March 2013.