M A Lloyd & Sons Ltd (t/a KPM Marine) v PPC International Ltd (t/a Professional Powercraft)

Relief from sanctions is unlikely where a party’s failure to comply with an order is serious, cannot be characterised as trivial, and has no good reason. A party should raise anticipated non-compliance promptly and apply for an extension before the deadline expires. Where a rule, practice direction or order specifies the consequences of default, the parties cannot extend time by agreement alone. The court must actively manage litigation and may make a debarring order of its own initiative to secure compliance with orders and the overriding objective.

The claim concerned alleged breaches of a confidentiality agreement and passing off. The claimant also challenged the defendant’s legal existence and entitlement to litigate in England and Wales. Walker J ordered the claimant to file and serve evidence and a skeleton argument addressing those issues by 25 October 2013, with the defendant responding thereafter.

The claimant failed to comply and did not apply for an extension before the deadline. The defendant sought an extension of its own time for responding and permission to adduce expert evidence on Brunei law. The claimant proposed a revised timetable but did not attend the first day of the hearing. The central issues were the consequences of the claimant’s default, the availability of relief from sanctions, and the court’s power to manage the proceedings.

1. Relief from sanctions. The claimant’s nearly three-month delay was serious and plainly non-trivial. No good reason for the default had been shown. Applying the approach in Andrew Mitchell MP v News Group Newspapers Ltd [2013] EWCA Civ 1537, there was no realistic prospect of relief from sanctions.
2. The claimant should have raised its inability to comply before the order was made or, if the difficulty emerged later, applied promptly for an extension before the deadline. Awaiting further disclosure without making a formal application did not justify non-compliance. Practice Direction 23A required applications to be made as soon as it became apparent that they were necessary or desirable.
3. Under CPR 32.10, the claimant was precluded from calling witnesses at trial in relation to the issues identified in Walker J’s order unless permission was granted. The court left open the broader question whether the rule could prevent a witness giving evidence on matters outside the scope of the unserved statement.
4. Because CPR 32.10 specified the consequence of default, CPR 3.8(3) prevented the parties from extending time by agreement. Court approval was required. The court was required actively to manage the case under CPR 1.4 and could make orders of its own initiative under CPR 3.3.
5. The defendant’s obligations were sequential and arose in response to compliant material from the claimant. The defendant therefore might not itself have been in default. Nevertheless, the court declined to grant the defendant’s requested indulgence and, acting of its own initiative, debarred the claimant from raising at trial issues concerning the defendant’s existence or entitlement to litigate in the jurisdiction.

The judgment records an earlier case-management order made by Walker J on 11 October 2013. This was a first-instance case-management decision; no appellate history is stated.