Lakatamia Shipping Co Ltd v Nobu Su & Ors

Relief from sanctions will usually be granted where the relevant non-compliance is trivial and the application is prompt, even if the defaulting party has previously failed to comply with other orders. The court must focus on the default that triggered the sanction. Earlier defaults remain relevant circumstances but cannot transform a trivial default into a serious one. A disclosure order made in “unless” terms is complied with where a list is served by the deadline and is genuine rather than illusory. Deficiencies may instead support an application for further disclosure. The absence of prejudice, the ability to maintain the trial date and the other circumstances of the case may reinforce the grant of relief.

The defendants applied under CPR 3.9 for relief from the sanction imposed by an order of Cooke J. Their defence and counterclaim would be struck out unless standard disclosure was provided by 17 January 2014. The order did not specify a time of day. The Commercial Court Guide indicated that, absent express provision, compliance was required by 4.30 pm.

The defendants served a disclosure list shortly after that time. The claimant argued that the default was serious, relying on the defendants’ earlier non-compliance and alleged deficiencies in the disclosure. The issues were whether the delay and disclosure were trivial, whether there was a good reason for the default, and whether the overall circumstances justified relief.

1. The application was granted. The defendants’ defence and counterclaim were relieved from the sanction imposed by the unless order.

2. Under CPR 3.9, the court must consider all the circumstances, giving particular importance to the need for efficient and proportionate litigation and enforcement of compliance with rules and orders. Following Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, the starting point is that the sanction was properly imposed. Relief will usually be granted where the non-compliance is trivial or there is a good reason for the default. Other circumstances generally carry less weight.

3. The 46-minute delay was trivial. It was a narrow miss measured in minutes, caused no prejudice and did not threaten the trial date. The court had to assess the default that triggered the sanction. Earlier defaults were relevant circumstances, but did not alter the character of the particular default.

4. The disclosure list amounted to real compliance. Applying the principle identified from Realkredit Danmark v York Montagu and discussed in Dinsdale Moorland Services Ltd v Evans [2014] EWHC 2 (Ch), an unless order requiring disclosure is complied with where a list is served and is not illusory. A deficient list may be addressed by an application for further disclosure. The later disclosure of eight further emails did not make the earlier list illusory.

5. There was no good reason within the strict sense used in Mitchell v News Group Newspapers Ltd, because the default resulted from the solicitors’ mistake about the deadline. Nevertheless, the explanation was understandable. The application was prompt, the claimant had also failed to serve its list by the deadline, no prejudice resulted, and previous non-compliance had substantially been reflected in the making of the unless order.