Jersey Unreported Judgments

[2008]JRC086

royal court

(Samedi Division)

 

30^th May 2008

 

 

 

Advocate J. D. Kelleher for the second plaintiff.

Mr R. Weston, director representing the defendant.

judgment

deputy bailiff:

1.             This is an appeal by the defendant from a decision given on 30^th April 2008 by the Master whereby he refused to extend retrospectively the time for the defendant to comply with an 'unless' order dated 18^th March 2008, with the result that the defendant's Answer has been struck out and the second plaintiff is therefore entitled to seek judgment in the action.  I announced my decision at the conclusion of the hearing on 27^th May and now give my reasons.

Background

2.             In August 2004 the first plaintiff and the defendant entered into an agreement for the defendant to act as agent of the first plaintiff for the purpose of selling season tickets, other tickets and other goods and services relating to Leeds United Football Club.  There is no dispute that the defendant owes the first plaintiff £190,400 under that agreement. 

3.             Proceedings were issued by the first plaintiff in December 2005 seeking payment of the above sum.  Subsequently, the first plaintiff was placed in administration and, by an agreement dated 4^th May 2007, the administrators transferred its rights against the defendant to the second plaintiff.  On 26^th July 2007 the second plaintiff was joined to the action.  Amended particulars of claim (to take account of the addition of the second plaintiff) were filed on 31^st July 2007 and an Amended Answer was filed on 23^rd August.

4.             As already mentioned, the debt in the sum of £190,400 is admitted.  However, the agreement contained at Clause 9(f) a set-off clause which entitled the defendant to set-off from any monies it owed to the first plaintiff any sum owed for whatever reason by the first plaintiff (or by any parent, associate or subsidiary company of the first plaintiff) to the defendant (or to any parent, associate or subsidiary company of the defendant). 

5.             The defendant alleges in its Answer that the sum of £1,439,734 is owed by the first plaintiff and/or Adulant Force Limited ("AFL") and/or Romans Heavies Limited ("LUnewco") (each of the latter two being said to be a parent or associate of the first plaintiff) to Cope Industrial Holdings Limited ("Cope"), which is said to be an associate of the defendant; and that accordingly this sum may be set-off against that owed by the defendant to the first plaintiff.

6.             The trial will therefore turn on whether:-

(i)        any of the first plaintiff, AFL or LUnewco is indeed indebted to Cope as alleged;

(ii)       the relevant debtor company is a parent, associate or subsidiary of the first plaintiff; and

(iii)      Cope is an associate of the defendant.

7.             The defendant has throughout been represented by its director and beneficial owner Mr Robert Weston.  On 7^th December 2007 Carey Olsen, on behalf of the second plaintiff, sought further and better particulars of the defendant's Amended Answer.  By letter dated 17^th December Carey Olsen sought further discovery from the defendant.  The letter set out in detail what the second plaintiff sought and why it was relevant. 

8.             The second plaintiff subsequently issued a summons seeking orders for production of the further and better particulars and discovery which came before the Master on 4^th February 2008.  At the hearing the parties eventually agreed the order which is recorded in the Act of that date.  The defendant agreed to provide the further and better particulars requested and to provide certain of the discovery sought by close of business on 3^rd March 2008. 

9.             The defendant failed to comply with that Order and accordingly on 6^th March the second plaintiff issued a summons seeking an 'unless' Order requiring compliance within 24 hours. 

10.          This summons was heard on 18^th March.  By e-mail timed at 02.31 hours on 18^th March the defendant provided some of the further and better particulars requested.  However, by 10.00 a.m. that day, when the summons came before the Master, Advocate Kelleher had produced a document entitled 'Deficiencies in the defendant's response to the second plaintiff's request for further and better particulars'.   As the name suggests, the document listed the respects in which it was said the defendant had failed to give proper further and better particulars.  The defendant had still not given any discovery in accordance with the Order of 4^th February

11.          At the hearing the Master made the 'unless' Order.   The terms of the Act dated 18^th March provide:-

"Unless within 28 days the defendant complies with the terms of the Act dated 4^th February 2008..... the defendant's Answer shall be struck out without further order."

The Master also specifically provided for liberty to apply. 

12.          The 28-day period for compliance with the 'unless' Order expired at close of business on 15^th April.  At 00.01 the following day Mr Weston sent an e-mail to Advocate Kelleher as follows:-

(i)        He attached a copy of 'the defendant's completed specific discovery documentation'.  In fact, what was attached was a draft affidavit of discovery with an accompanying list of documents. 

(ii)       He stated that the affidavit would be sworn sometime tomorrow (i.e. Wednesday 16^th April)

(iii)      He apologised for the discovery being a few hours late but explained that he had had to contend with continuing ill health and a two-day delay in returning from Hong Kong because the airline upon which he was booked to fly had gone into bankruptcy. 

(iv)      As to the further and better particulars he said he had "revised very substantially the defendant's response to the plaintiff's recent application for further and better particulars, following your criticism that we could have done better.  However the revised version is still a few working hours from completion and I propose to let you have the completed document by the weekend.  I trust that you will find this suitable.  If not, then you may either take the version already filed on 18^th March 2008 as the final version or I could let you have a substantially amended and improved but not quite completed revised version immediately on request".

13.          Carey Olsen replied by e-mail at 10.06 on 16^th April in which they said that they looked forward to receiving the sworn version of the affidavit and asked for copies of the listed documents, preferably that day.  With regard to the improved further and better particulars, Carey Olsen required these to be provided no later than close of business on Thursday 7^th April adding "As you are aware the Master gave the defendant a substantial concession in granting the time limit for compliance and this further extension of two days is provided as a gesture of goodwill on the strict undertaking [sic understanding] that there is no further delay in providing the same."

14.          Mr Weston responded by e-mail the same day timed at 11.18 indicating that he had prepared the file of discovery documentation and would deliver it with the signed affidavit as soon as it had been sworn, thus saving Carey Olsen the time of copying it all.  As to the further and better particulars he said this:-

"Regarding the revised F&BP I would reiterate the final paragraph of my last e-mail (see below) in which I point out that we have already filed our F&BP response and you have already received it.  So we have effectively complied already with the Master's Order of 4^th February 2008 in this regard.  The revision of our previously filed response document, which work I am presently trying to complete as quickly as possible, is actually by way of a courtesy.  It is an endeavour on the defendant's part to be helpful and to simplify the trial of this action, as far as may be practical, by reducing the issues in contention between the parties and minimising any mis-understandings.  I say all this because I seriously resent your pressing (typically) for the revised document to be delivered to you one day sooner than I already said I could supply it. 

In view of your pressure, I have re-assessed the time needed to complete the revision work and find that it cannot reasonably be guaranteed to be ready before next Monday morning.  You do not seem to appreciate or understand that, when you oblige me to invest time in responding to your entirely unnecessary additional pressure, you effectively oblige me to take time away from doing the important tasks.  I do wish you would restrain yourself and be more understanding.  I recommend that you try just saying 'ok' and 'thank you' occasionally.  I am sure you'll find that mutual co-operation will work much better, especially for the sake of just 24 hrs or so."

15.          By e-mail of the same date timed at 17.12 Carey Olsen indicated that, in light of the above communications, the defendant's Answer was deemed to be struck out in accordance with the 'unless' Order of 18th March. 

16.          The second plaintiff sought judgment before the Inferior Number on Friday 25th April but the Court adjourned the matter for a week in order to enable the defendant to apply for a retrospective extension of time from the master to comply with the 'unless' Order. 

The Master's decision

17.          This is the matter which came before the Master on 30th April.  The Master reminded himself of the principles as set out in the Supreme Court Practice (White Book) at paras 3/5/2 - 3/5/4, 3/5/9 and 3/5/10.  He quoted a number of extracts but we would refer to the following extract from 3/5/10:-

"The court observed that each case had to be considered on its own facts but the underlying approach might be encapsulated by the following:

1.  An unless order was an order of last resort, not made unless there was a history of failure to comply with other orders.  It was the party's last chance to put its case in order. 

2.  Because it was the last chance, a failure to comply would ordinarily result in the sanction being imposed. 

3.  The sanction was a necessary forensic weapon which broader interests of the administration of justice required to be deployed unless the most compelling arguments were advanced to exonerate the failure. 

4.  It seemed axiomatic that if a party intentionally flouted the order he could expect no mercy. 

5.  A sufficient exoneration would almost invariably require that he satisfied the court that something beyond his control had caused the failure. 

6.  The judge would exercise his judicial discretion whether to excuse the failure in the circumstances of each case on its own merits, at the core of which was service to justice. 

7.  The interests of justice required that justice should be shown to the injured party for procedural inefficiencies causing the twin scourges of delay and wasted costs.  The public administration of justice to contain those blights also weighted heavily.  Any injustice to the defaulting party, though never to be ignored came a long away behind the other two (Hytec Information Systems Limited v Coventry City Council [1997] 1 WLR 1666, CA)."

18.          The Master therefore considered that he had to ask himself whether the defendant's failure to comply with the 'unless' Order was intentional and contumelious.  If the defendant could clearly demonstrate that there was no intention to ignore or flout the order and that the failure to obey was due to extraneous circumstances, then such failure to obey was not to be treated as contumelious and therefore did not disentitle the litigant. 

19.          He concluded that, on balance, he was not satisfied that the failure by the defendant was due to extraneous circumstances.  There were no compelling arguments to exonerate the failure and the defendant had had a considerable time in which to ensure that its house was in order.  Furthermore the defendant had not made proper use of the indulgence which it had been granted.  He considered that the defendant had chosen to ignore or disregard the orders he had made and was not persuaded that there were good grounds to exonerate his behaviour.  He therefore refused the application for an extension of time.  It is against that refusal that the defendant now appeals. 

20.          I should add that, following the hearing before the Master, the second plaintiff wrote on 13th May asking for the documents listed in the discovery affidavit and for the final version of the further and better particulars.  However the defendant has refused to supply these.  In an e-mail of the same date Mr Weston said, inter alia, the following:-

"In the interests of goodwill and good faith, we would be willing to deliver to you items (b) and(c) above [the file of specific discovery documents (Tuesday 15^th April 2008) and the defendant's revised version of the further and better particulars (Friday 18^th April 2008)] at this time.  However, based on our now having experience of the plaintiffs' tactics to date in this action, we are confident that, as soon as the documents are provided (i.e. provided early, as on the morning of 18^th March 2008), the plaintiffs will seek to use them against the defendants in some unforeseen way which would be materially disadvantageous to the defendant.  Indeed, in your e-mail, you say 'receipt of the copies will enable us to ascertain whether they comply with the consent order'.

We assure you that we have used our best endeavours to comply fully with the Order but it will always be a matter of opinion whether we have achieved 'perfection' in the eyes of the plaintiffs.  Therefore, if the requested documents are supplied early, we would ask for your prior written undertaking, firstly, not to take issue with them (or any lack thereof) and, secondly, not to use (or to otherwise refer to) any perceived defect in them in either of our two appeals presently before the Royal Court......."

Mr Weston went on to say that the documents would not be provided 'early' unless Carey Olsen gave the defendant a "written undertaking that none of the documents or information are passed to or shown to or otherwise revealed to your clients, before, during or after the trial, without our specific consent or the consent of the Court and they will be returned to us intact and un-copied when the action is over, howsoever determined".  

21.          These conditions were clearly wholly inappropriate and, not surprisingly, Carey Olsen so informed the defendant.  The documents have therefore not been supplied to Carey Olsen but I have been shown a receipt from the Judicial Greffier dated 13th May which suggests that a sealed envelope containing the specific discovery documentation and the improved further and better particulars was lodged with the Judicial Greffe on that day. 

Submissions

22.          Mr Weston submitted that it was not clear from the Act dated 18th March or from what was said during the hearing before the Master on that occasion that the defendant had to file an improved version of the further and better particulars supplied in the early hours of 18th March.  He said that he realised after 18th March that the particulars could be improved upon and that it would be desirable to do so but he was not clear that it was mandatory for him to do so. 

23.          He accepted that the 'unless' Order undoubtedly applied to the discovery but submitted that he was only in default of this part of the Order by a matter of hours.  He had supplied the draft affidavit of discovery and the accompanying list of documents moments after midnight on 15th April (the day upon which the 'unless' Order expired) and he had said that he would supply the sworn affidavit and the documents themselves later on 16th August.  He submitted therefore that he was at most only some 24 hours late in being able to comply with the Order.  He accepted that he had not in fact supplied the documents and the sworn affidavit to Carey Olsen but this was because they had refused to agree any extension of time and he did not wish to supply the documents to the second plaintiff at a time when his application to the Master and subsequently his appeal to this Court might be unsuccessful.  He said that those behind the second plaintiff had disclosed confidential material on previous occasions. 

24.          Furthermore, in relation to the further and better particulars, even if he was wrong and they were the subject of the 'unless' Order, he had been in a position to file them by close of business on Friday 18th April.  He was therefore only 3 days out of time.  The second plaintiff had been willing, through Carey Olsen, to grant him an extra 2 days and he submitted therefore that it would be unreasonable to visit the drastic sanction of striking out the Answer merely because of a further delay of 24 hours in complying with the Order. 

25.          He emphasised that his failure to comply with the Order had not been intentional or contumelious.  He had striven as hard as he could to comply with the Order but had been defeated by a combination of circumstances.  Firstly, the condition of his 92 year old mother had deteriorated considerably in mid-March.  Although she had been in poor health following a fall in December 2007, her condition had worsened substantially following an infection of her right leg which began in mid-March.  She lived next door to Mr and Mrs Weston and they had to spend considerable periods looking after her.  Sadly, her condition had continued to worsen and she had died on 25th May 2008, a matter of days before the hearing of this appeal.  The intense level of care which Mr and Mrs Weston needed to devote to Mr Weston's mother had not been foreseen at the time of the original Order and the 'unless' Order. 

26.          Secondly, as the Master had been told at the hearing on 18th March, Mr and Mrs Weston had a pre-booked holiday in Hong Kong in late March/early April.  During this time they had employed fulltime carers to look after Mr Weston's mother.  Although they had originally intended to return to Jersey on 12th April after a two-day stay in England following arrival from Hong Kong, they had decided to forego the stay in England because of the need to comply with the 'unless' Order and accordingly had intended to return to Jersey on the morning of 10th April.  Unfortunately, when they checked in at Hong Kong airport, they discovered that the airline upon which they were flying had gone bankrupt.  There was then a delay in re-booking seats on a different airline with the result that they did not get back to Jersey until late on the evening of 11th April.   They had effectively lost two working days and they were also very tired because of the lack of sleep resulting from these changed arrangements. 

27.          Thirdly, whilst in Hong Kong, Mr Weston had developed severe toothache.  This had to be treated in Jersey and the pain had adversely affected Mr Weston's ability to concentrate and work effectively. 

28.          In response to the suggestion that, if these matters were building up so as to prevent the defendant from complying with the 'unless' Order, he should have taken advantage of the 'liberty to apply' provision so as to seek an extension of time in advance of any non compliance, Mr Weston replied that he believed that, if he concentrated on the discovery and the particulars, he should just about be able to comply with the Order.  Conversely, he felt that, if he spent time in preparing an application for an extension of time, this would distract him from the main task and result in his definitely failing to comply with the 'unless' Order in circumstances where he would still not be certain of gaining an extension.  Accordingly he decided to devote all his efforts to trying to comply with the Order.  

29.          Mr Kelleher emphasised that the defendant had had ample time to comply with providing the particulars and giving the additional discovery.  The requests had originally been made by letters dated 7th and 17th December respectively.  The summons had not been heard until 4th February and accordingly the defendant had had the period between the requests and 4th February to begin work on the two matters.  Furthermore, the Order of 4th February had been by consent.  Mr Weston had clearly thought that the 28-day period until close of business on 3rd March was sufficient for what he had to do on the defendant's behalf.  Even following the default on 3rd March, the defendant had in fact had a further two weeks in which to comply because the next summons was not heard until 18th March; yet despite this there was no compliance save for production of the inadequate further and better particulars in the early hours of 18th March. 

30.          Even then, the Master had granted further indulgence.  As the transcript of the hearing on 18th March showed, he was originally minded to give the defendant only 21 days to comply with the 'unless' Order but at the last moment he was persuaded by Mr Weston to extend this to 28 days in order to allow for the pre-booked trip to Hong Kong.  The Master had emphasised the importance of complying with the 'unless' Order and advised Mr Weston to take advantage of the 'liberty to apply' provision if necessary. 

31.          The second plaintiff was of the view that the correspondence showed that the defendant wished to defer the trial date from 23rd June and its constant failure to comply with the Order for discovery and particulars was part of a plan to ensure that the trial date became unrealistic. 

Decision

32.          The test on appeal from a decision of the Master is well established.  The Royal Court must reach its own conclusion whilst having due regard to that of the Master. 

33.          The applicable principles in relation to 'unless' Orders are correctly stated in the passage from the White Book quoted at para 17 above.  In particular, an 'unless' Order is a party's last chance to put its case in order and failure to comply with such an order will ordinarily result in the sanction referred to in the Order being imposed. 

34.          However, there is a discretion to extend time retrospectively which, however rarely, may in the particular circumstances of the case be exercised where the Court is satisfied that the failure to comply with the 'unless' Order was not intentional and contumelious. 

35.          I have had the advantage of more detailed material than was available before the Master.  I have been persuaded that this is one of those rare cases where the interests of justice tip in favour of granting the defendant the extension of time.  My reasons are essentially those put forward by Mr Weston but I would summarise them as follows:-

(i)        I think that there may well have been some uncertainty in Mr Weston's mind as to whether the provision of further and better particulars was a requirement of the 'unless' Order or simply a desirable objective.  I have read the transcript of Mrs Weston's notes of the hearing on 18th March and I think there was some lack of certainty as to whether the defendant had to provide improved further and better particulars or whether the Master was simply advising that that was desirable.  The Act itself did not clarify matters because it referred merely to complying with the Act of 4th February without indicating whether there had been any partial compliance (by production of the particulars) already. 

(ii)       I accept that Mr Weston soon came to the conclusion that he should provide improved further and better particulars and that this should be done within the 28-day deadline but it was still not absolutely certain that he had to do so in order to avoid the consequences of the 'unless' Order.

(iii)      The defendant was undoubtedly in breach of the 'unless' Order in relation to discovery but  this was only by a modest amount.  It would seem that the defendant was in a position to supply both the sworn affidavit of discovery and the documents themselves not more than 24 hours after the deadline.  I do not wish to be thought to be saying that missing the deadline in an 'unless' Order by a small amount entitles a person to avoid the consequences of such an Order.  On the contrary, an 'unless' Order means what it says.  Nevertheless the short period by which non compliance occurred is a factor which can be considered in support of the other matters relied upon by the defendant.

(iv)      I am satisfied from what I have heard that Mr Weston's failure to comply with the 'unless' Order was not intentional and contumelious.  I accept that, in the three respects referred to earlier, circumstances changed in a way which made it more difficult for Mr Weston to comply with the Order than was originally envisaged.  I accept that his mother became more ill and required greater care and that this was a matter of priority to him.  I also accept that he lost nearly two days through the bankruptcy of the airline in Hong Kong and that his own health problems also adversely affected the position.

(v)       I also accept Mr Weston's reasons for not making an application under the 'liberty to apply' provisions.  I accept that he hoped against hope that he would be able to meet the deadline if he was not distracted by spending time on making additional applications to the Court.

36.          In all the circumstances I consider that enforcing the 'unless' Order so that the defendant is precluded from defending the claim, would be a disproportionate sanction for Mr Weston's failings in this case and I therefore allow the appeal.  There is no reason why the documents and the improved particulars should not be made available to the second plaintiff immediately and I therefore granted an extension of time until close of business on 28th May. 

Authorities

Supreme Court Practice (White Book) at paras 3/5/2 - 3/5/4, 3/5/9 and 3/5/10.