Craig Lloyd v Richard Hayward & Anor

Grovit abuse is not established by delay alone. The court must determine whether post-commencement inactivity was caused by an intention not to progress proceedings, assessed objectively by reference to the reason for the delay and its duration.

If abuse is established, strike-out is not automatic. Under the Civil Procedure Rules 1998, the court must consider all the circumstances, the overriding objective, available sanctions and proportionality. Absence of prejudice is irrelevant to whether abuse exists, but may affect the appropriate response.

The defendants applied under CPR r. 3.4(2)(b) to strike out the claimant’s claim as an abuse of process. They alleged that the claimant had continued proceedings without a genuine intention to take them to trial.

The claim concerned an alleged partnership or joint venture for developing SA1 Business Park. The proceedings had been stayed for one month, but the court did not then list a costs and case management conference. Substantial inactivity followed between 2021 and December 2023.

The issues were whether the claimant’s conduct amounted to Grovit abuse and, if so, whether strike-out was a just and proportionate response.

Application refused. The claim was not an abuse of process, and the costs and case management conference was directed to be re-listed.

1. Existence of abuse. The relevant period was post-commencement inactivity. The central question was whether the claimant lacked an intention to bring the proceedings to a conclusion. Mere delay, however prolonged, does not itself establish Grovit abuse. The court must distinguish warehousing from undue delay by examining intention, while guarding against undue assumptions and assessing the objective reason for the delay and its duration.
2. The court’s failure to list a costs and case management conference, and its failure to specify what should happen after the stay, left the proceedings in limbo. That did not excuse the claimant’s inactivity, but it was relevant to the inferences properly drawn from it. The defendants’ own failure to progress the proceedings was also relevant.
3. The claimant’s evidence of gathering witness evidence, communications about mediation, and voluntary request for a case management conference supported an intention to pursue the claim. The claimant had not proved abuse.
4. Response if abuse had been established. The court must exercise its discretion under the CPR by reference to the overriding objective and all the circumstances, making a just and proportionate order. It must consider its full range of powers, including sanctions short of strike-out. There is no binding requirement that a Grovit abuse must be struck out unless compelling reasons are shown. Strike-out may be appropriate, but it is not automatic. Prejudice is unnecessary to establish abuse, although its presence or absence may be relevant to the sanction.
5. Pre-commencement delay may inform the inference as to post-commencement intention. It has no further logical relevance to the existence of Grovit abuse where the necessary intention is not established, although it may affect the proportionate response.