Phelps v Button

Delay alone does not amount to abuse of process. Abuse may arise where delay is combined with a further factor, such as an intention not to conclude proceedings or significant prejudice affecting a fair trial. Failure to comply with court orders engages the strike-out jurisdiction under Civil Procedure Rules 1998, rule 3.4(2)(c). Serious breaches, without good explanation, together with substantial prejudice and loss of a fair trial may justify strike-out. A party is ordinarily bound by acts of solicitors acting within their authority. Costs cannot compensate for a trial process that has become unfair.

The claim arose from the collapse of the PNN Group of bars and nightclubs and a failed bid made through Ryeheath Ltd. At a 2006 trial, liability was determined and a breach of contract was established, while the issue of wasted expenditure and quantum was left for later determination.

Directions for disclosure and evidence on quantum were made in 2007 and 2010, but were not complied with. In 2016 the Applicant sought directions for a quantum hearing. The Respondent applied to strike out the claim under rule 3.4(2)(b) and (c) for abuse, delay and failure to comply with court orders. The central questions were whether strike-out was justified and whether a fair quantum trial remained possible.

The Respondent’s strike-out application was granted. The Applicant’s application to list a quantum hearing therefore did not arise.

1. Under rule 3.4(2)(b) of the Civil Procedure Rules 1998, delay alone, even very long delay, is insufficient to establish abuse of process. An additional factor is required, such as an intention not to bring proceedings to a conclusion or significant prejudice affecting a fair trial.
2. Rule 3.4(2)(c) gives the court discretion to strike out for failure to comply with a rule, practice direction or court order. Although this was not an application for relief from sanctions under rule 3.9, the court should consider whether relief would have been granted. If relief would have been granted, strike-out would generally be inappropriate.
3. The two consent orders requiring disclosure and evidence on quantum involved serious breaches. They were central to preparation for a fair trial, and no good explanation was given. The Applicant remained bound by acts of his solicitors within the scope of their authority; dissatisfaction with representation was not a sufficient explanation.
4. The delay was unexplained and exceptionally long. The Respondent had lost the opportunity to obtain relevant third-party documents, including administrators’ files. A formal hearing remained possible, but it would not have the same quality or fairness as a timely trial. The Respondent’s failure to take further steps did not remove the Applicant’s primary responsibility for advancing the claim, and costs could not cure the unfairness.
5. The modern need for litigation to be conducted efficiently and at proportionate cost, with compliance with rules and orders enforced, supported strike-out. The claim was struck out.

First-instance decision. No appellate history is stated in the judgment.