Clearway Drainage Systems Ltd v Miles Smith Ltd

An application for relief from sanctions must be determined by the three-stage approach in Denton. The court assesses the seriousness and significance of the breach, considers why it occurred, and evaluates all the circumstances so as to deal justly with the application.

Keeping the trial date is not the sole measure of seriousness. A breach may be serious because it disrupts the efficient and proportionate conduct of litigation. At the third stage, compliance with rules, practice directions and orders, and the efficient conduct of litigation, require particular weight. Promptness is also relevant. An appellate court will not interfere with a case-management decision merely because another judge might have balanced the factors differently.

The claimant sued its former insurance broker for breach of contract and duty arising from the arrangement of commercial motor insurance. It failed to serve three witness statements and a witness summary by the date ordered. The documents and applications for relief were produced more than two months late, after two pre-trial hearings had been disrupted.

Her Honour Judge Moulder, sitting in the Queen's Bench Division in the Manchester District Registry, refused relief from sanctions. The claimant appealed, arguing that the judge had misapplied Denton, had given excessive weight to compliance and efficiency, and had failed to account for the respondent's allegedly opportunistic conduct. The central issue was whether the judge had erred in principle or reached a decision outside the permissible scope of her case-management discretion.

1. Appeal dismissed. The judge had conscientiously and correctly applied the principles in Denton v TH White Ltd [2014] EWCA Civ 906. She addressed the seriousness and significance of the defaults, the absence of a good reason and all the circumstances relevant to justice.

2. The fact that the trial date could still be maintained did not prevent the breaches from being serious or significant. The first-stage inquiry is broader than whether a future hearing is imperilled. The prolonged failure to serve evidence, late and inaccessible service, and two adjourned pre-trial hearings had impaired the efficient and proportionate conduct of the litigation.

3. There was no good reason for the defaults. If disclosure or the availability of a witness prevented timely service, the proper course was to seek an extension before the deadline or make a prompt protective application. Pressure from other professional commitments would rarely justify non-compliance. The claimant's solicitor could not disregard the order and decide unilaterally what timetable was acceptable.

4. At the third stage, the court must evaluate all the circumstances. The matters identified in Rule 3.9(1)(a) and (b) of the Civil Procedure Rules 1998 are not paramount, but they are of particular importance and require particular weight. Promptness, proportionality, the consequences of refusing relief and overall justice also remain relevant. The judge had considered those matters, including that refusal would effectively end the claim.

5. The allegation that the respondent had set a tactical trap did not excuse the continuing default. Its letter of 18 April made its objection unmistakable. A request for an agreed extension, followed if necessary by a prompt application, would have clarified whether it intended to call witnesses. Opportunistic and unreasonable resistance to such an application could have been addressed through relief and costs.

6. Appellate courts should not lightly interfere with robust and fair case-management decisions. Different judges may attach different weight to relevant factors. Intervention requires an error of principle, the omission or consideration of a material matter, or a balance that is plainly untenable. None was established.

1. Court of Appeal (Civil Division): The claimant's appeal was dismissed. The refusal of relief from sanctions was upheld: [2016] EWCA Civ 1258.

2. Queen's Bench Division, Manchester District Registry: Her Honour Judge Moulder dismissed the claimant's applications for relief from sanctions concerning three witness statements and a witness summary. No neutral citation is stated.