Walsham Chalet Park Ltd (t/a the Dream Lodge Group) v Tallington Lakes Ltd

A strike-out for non-compliance with a court order under the Civil Procedure Rules must be a proportionate sanction. The principles governing relief from sanctions are relevant to that assessment, but do not displace the distinct question whether strike-out should be imposed in the first place.

The court should assess the seriousness of the breach, any good reason for it, and all the circumstances. Those circumstances may include the applicant’s own defaults, non-cooperation, and conduct which has contributed to the loss of a trial date. A serious, unjustified default does not therefore compel strike-out. A party cannot ordinarily advance for the first time on appeal a case based on the automatic evidential sanction for late witness statements, particularly where a revised timetable has superseded the earlier deadline.

The claimant and defendant were parties to a terminated joint venture for the marketing and sale of caravans and lodges. Each advanced substantial claims arising from the termination, accounting, stock and alleged loss of profit.

HHJ Mackie QC dismissed the defendant’s applications to strike out the claim for the claimant’s late disclosure, late schedule of account and failure to meet the witness-statement timetable. He found that both parties had defaulted and made revised directions. He also refused the defendant’s application that he recuse himself for alleged bias.

The defendant appealed the order of 6 December 2013 and sought permission to appeal the substantially similar order of 7 February 2014. The central issues were whether the claim should have been struck out for procedural default, whether a new point under the Civil Procedure Rules could be raised on appeal, and whether the judge was biased.

1. Appeals dismissed. The court dismissed the appeal against the order of 6 December 2013. It granted permission to appeal against the dismissal of the later strike-out application on 7 February 2014, so that the issues could be dealt with together, but dismissed that appeal also. Permission was otherwise refused, including permission to add the allegation of bias.

2. The allegation of actual or apparent bias was wholly without merit. Applying the test in Porter v Magill [2001] UKHL 67, the question was whether a fair-minded and informed observer would conclude that there was a real possibility of bias. The orders, transcripts and reasons showed conscientious and fair case management. Dissatisfaction with judicial decisions was a matter for appeal, not recusal.

3. The defendant could not rely for the first time on Civil Procedure Rules rule 32.10. The strike-out applications below had been made under rule 3.4 and had not raised the consequences of late trial witness statements. That new case would have required consideration of relief from the evidential sanction and of each party’s position at trial. Moreover, the defendant had sought a revised timetable and the judge’s new timetable in practice extended time for both parties, so that any issue arising from the earlier deadline fell away.

4. In deciding whether to strike out under rule 3.4, the judge correctly treated the principles in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, as restated in Denton v TH White Ltd [2014] EWCA Civ 906, as relevant and important. But the issue was the proportionality of imposing strike-out, unlike relief from an existing sanction, which assumes that the sanction was properly imposed. Strike-out is a particularly powerful case-management sanction and should be imposed only where its consequences are justified.

5. The claimant’s breaches were serious and lacked a good reason. Nevertheless, all the circumstances justified refusal of strike-out. The defendant had also defaulted, had not acted constructively to progress the case, remained in breach of a costs order, and had encouraged delay before opportunistically seeking strike-out. The judge was entitled to conclude that allowing the action to proceed to trial was proportionate. There was likewise no basis to interfere with the costs orders, which were within his discretion.

• Court of Appeal (Civil Division): dismissed the appeal from the order of 6 December 2013. It granted permission to appeal against the dismissal of the strike-out application in the order of 7 February 2014, but dismissed that appeal; it otherwise refused permission and refused permission to add a bias ground.

• High Court, Queen’s Bench Division, Mercantile Court: HHJ Mackie QC dismissed the defendant’s strike-out applications, made further case-management directions, and refused the recusal application.