Cockell (t/a Cockell Building Services) v Holton (No 2)

Relief from sanctions should be refused where a party persistently breaches an order requiring a properly particularised pleading, serves defective particulars late, and thereby threatens unfair prejudice and disruption to the trial timetable. The court should apply the three-stage approach in Denton v TH White Barnes Limited [2014] EWCA 906: assess seriousness and significance, consider the reason for default, and evaluate all the circumstances. A last-minute clerical error may be the final consequence of earlier persistent non-compliance. Striking out a defective counterclaim does not prevent a defendant from relying on the same defects, so far as necessary, by way of abatement or defence to a claim for the price of defective work.

The defendant sought relief from sanctions after failing to file an amended Defence and Counterclaim by the deadline in an unless order. The pleading was emailed to the claimant within time, but an incorrectly typed court email address meant that it was filed several days late and was automatically struck out.

The court found that the defendant had also delayed for about two months and that the pleading served was unclear and materially short of the particularity required by an earlier order. The defendant sought to restore a substantial defects counterclaim. The central issues were the seriousness of the breach, the adequacy of the explanation, the prejudice caused by allowing the counterclaim to proceed, and whether the defects could instead be relied on as a defence to the claimant’s underpayment claim.

1. Relief refused. The defendant’s application for relief from sanctions failed. The defects counterclaim was struck out in the specified paragraphs and parts of the pleading.
2. The earlier order required a fully particularised pleading which would not need clarification by requests for further information. The pleading served on 20 March 2015 lacked clarity, was in places incoherent, and fell far short of the degree of particularisation required at trial. The fact that it had been served on the claimant within the deadline did not establish compliance.
3. The court applied the three-stage approach in Denton v TH White Barnes Limited [2014] EWCA 906. The breach was serious and significant. The defendant had been in continuing breach since January, and the late filing was the culmination of that default. The explanations for the delay were unsatisfactory. The necessary information had been left until the last moment, and the resulting prejudice could not fairly be cured within the existing trial timetable.
4. The need for efficient and proportionate litigation, and the need to enforce compliance with court orders under CPR 3.9(1), strongly favoured refusal. Those responsible for necessary steps being left until immediately before the deadline must bear the risk of a final clerical failure.
5. Nevertheless, the defendant could rely on the alleged defects by way of abatement or defence to the claimant’s claim for the balance of the price. Under Mondel v Steel (1841) 8 M&W 858, that was a defence rather than a counterclaim and could be used only to the extent necessary to defeat the claimant’s claim. Permission was given to amend the Defence accordingly, subject to excluding the new electrical and interior-work allegations.

The issues for trial were confined to the alleged overcharging and agreements, and whether any further sum was recoverable for the work having regard to the alleged defects.