Suez Fortune Investments Ltd & Anor v Talbot Underwriting Ltd

An extension of time is inappropriate where compliance is futile, particularly where the applicant deliberately created the inability to comply. Relief from sanctions under CPR 3.9 starts from the premise that the sanction was properly imposed. The Denton three-stage approach remains applicable, but an uncured and deliberate breach of an unless order will rarely justify relief. A sealed order may be varied under CPR 3.1(7) principally where circumstances have materially changed or the original decision rested on misstated facts. The rule does not permit a party simply to adduce further evidence and invite reconsideration. Parties must preserve relevant documents and maintain control sufficient to enable their solicitors to discharge disclosure obligations.

The owners’ war-risk insurance claim had been struck out after they failed to comply with an unless order requiring delivery of the complete and unredacted Worldwide Green Tankers electronic archive to their solicitors or the bank’s solicitors. They applied for an extension of time, relief from the sanction under CPR 3.9, and variation of the order under CPR 3.1(7).

The owners alleged that the archive had been handed to a third-party lawyer and could not be recovered. They also relied on alleged confidentiality concerns and conduct by the insurers’ investigators. The central issues were whether the default could be excused, whether the unless order should be varied, and whether the claim should remain struck out.

1. Applications dismissed. The owners’ claim remained struck out. No extension of time was granted, and relief from sanctions and variation of the unless order were refused.

2. The court found that the account of transferring the archive to Mr Grigorakis, retrieving and returning it, and then being unable to recover it was fabricated. The owners had always been unwilling to provide the archive to their own solicitors. Alternatively, even accepting their account, they had unnecessarily, deliberately and knowingly placed the archive outside their legal control, despite advice that their solicitors required access to all electronic documents.

3. The court applied the ordinary approach to extensions of time identified in Hallam Estates v Baker [2014] EWCA Civ 661, but held that any extension would be futile. The archive could not realistically be recovered on the owners’ own case.

4. Under CPR 3.9, the starting point was that the sanction had been properly imposed, applying Mitchell v News Group Newspapers [2013] EWCA Civ 1537. Applying the three-stage test in Denton v White [2014] EWCA Civ 906, the breach was extremely serious and significant, deliberate, and incapable of justification in the circumstances. The sanction had not been remedied and compliance could not properly be dispensed with.

5. An unless order must be assessed together with the underlying breach. Its non-compliance is a strong indicator of seriousness, as explained in Oak Cash & Carry Ltd v British Gas Trading Ltd [2016] EWCA Civ 153. This was an especially strong case because the order was tailored to the disclosure failure and the allegations of fraud.

6. CPR 3.1(7) did not assist the owners. Applying Tibbles v SIG Plc [2012] EWCA Civ 518, there had been no material change of circumstances and no misstatement of the facts underlying the order. The rule did not permit reconsideration merely because further evidence had become available.

7. The owners’ disclosure obligations required preservation of relevant documents and sufficient access for their solicitors to investigate and supervise disclosure. The court relied on the principles approved in Hedrich v Standard Bank London Ltd [2008] EWCA Civ 905.

The judgment concerned applications following earlier interlocutory disclosure and unless orders in the same proceedings. The court recorded that permission to appeal from the 12 January 2016 order had been refused at first instance, with an application for permission lodged in the Court of Appeal.