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1 Neutral Citation Number: [2013] EWHC 2668 (QB) IN THE HIGH COURT OF JUSTICE QUEEN S BENCH DIVISION BEFORE: Case No: QB/2013/0325 Royal Courts of Justice Strand, London, WC2A 2LL 31 July 2013 HIS HONOUR JUDGE JEREMY RICHARDSON QC (SITTING AS A JUDGE OF THE HIGH COURT) BETWEEN: BAKER Claimant - and - HALLAM ESTATES LTD AND ANOTHER Defendant MR JONATHAN SHERLOCK (Solicitor) (instructed by Girlings) appeared on behalf of the Claimant MR M STAINER appeared In Person Approved Judgment Court Copyright Digital Transcript of Wordwave International, a Merrill Communications Company 101 Finsbury Pavement London EC2A 1ER Tel: Fax: Web: (Official Shorthand Writers to the Court)

2 JUDGE JEREMY RICHARDSON QC: 1. The culture of civil litigation is in the process of change. Resources are not limitless and a more pro-active regime of case management at all stages of litigation is now adopted. This is coupled to an insistence on parties complying with case management orders and the provisions of the Civil Procedure Rules. If asked to indicate how the court is now required to act; I would say, sensibly and robustly. Recent rule changes provide the lodestar for this approach. 2. This is an appeal brought with the permission of Openshaw J against a decision of Master Gordon-Saker of 29 May 2013 when he refused to set aside an ex parte order of 16 May 2013 made by him. That first order permitted the claimants an extension of time in which to file points of dispute in respect of detailed cost assessment proceedings. That was unquestionably a case management decision. The issue in this appeal is procedural and turns exclusively upon CPR Part By way of background information, the litigation was about an allegation that the defendant had defamed the claimant by asserting there had been mismanagement of a property company. I am not concerned with the facts of that case at all. The case was resolved by Tugendhat J and an order for costs in favour of the defendant was made. Consequently, in this case the claimant became the paying party and the defendant became the receiving party. A detailed assessment of costs was directed by the judge. 4. A receiving party (the party who is to be paid the costs) commences the process by serving upon the paying party (the party who has to pay) a notice of commencement and a copy of the bill of costs. This must be done within three months of the date of judgment. If that is not done the paying party may apply for an order requiring the receiving party to commence proceedings within a time limit. CPR Part 47.9 provides as follows: "(1) the paying party and any other party to the detailed assessment proceedings may dispute any item in the bill of costs by serving points of dispute on - (a) the receiving party; and (b) every other party to the detailed assessment proceedings. (2) The period for serving points of dispute is 21 days after the date of service of the notice of commencement. (3) If a party serves points of dispute after the period set out in paragraph (2), that party may not be heard further in the detailed assessment proceedings unless the court gives permission. (4) The receiving party may file a request for a default cost certificate if -

3 (a) the period set out in paragraph (2) for serving points of dispute has expired; and (b) he has not been served with any points of dispute. (5) If any party (including the paying party) serves points of dispute before the issue of a default costs certificate the court may not issue the default costs certificate." 5. The rule is straightforward: 1. The paying party has 21 days after commencement to enter points of dispute. 2. If that party is in default and is outside that period, that party may not be heard in the detailed assessment unless permission is sought. 3. If that is not done, the receiving party may involve the default costs procedure. 6. On 15 May 2012 Tugendhat J gave judgment in favour of the defendant. He awarded costs against the claimant and compelled the defendant to make an interim payment on account of a detailed assessment of costs. This was not paid and a statutory demand was issued. The interim costs order has now, belatedly, been paid. 7. The defendant was notified on 21 September 2012 that the claimant would accept a solicitors' schedule of costs. This was done on 11 October 2012 detailing the costs. There was no negotiation, nor indeed was there any response at all. The defendant wrote on 2 November 2012 to inform the claimant a bill of costs would be prepared. On 18 April 2013 the defendant served a notice of commencement of assessment of bill of costs, together with a deadline for points of dispute for 14 May There was an inclusive request by the claimants for an extension of time as they would not agree to the terms requested by the defendant. The deadline for delivery of the points of dispute was 14 May That day the claimant made an ex parte application for an extension of time to 18 June. It was, however, not issued until the following day which was outside the 21 day limit. 8. On 15 June 2013 the defendant requested a default cost certificate be issued. In complete ignorance of that fact Master Gordon-Saker granted the claimant's application for an extension as a paper determination. An application was made by the defendant to set aside the Master's decision. That application was refused (again as a paper determination). The Master observed: "The second claimant's applications (is) for an extension of time, not for relief from sanctions there being no sanction from which to seek relief. An application for extension of time may be made retrospectively: see CPR 3.1(2)(a). Given the significant delay by the defendant in commencing detailed assessment proceedings, the extension of time sought by the second claimant was not unreasonable. In making the order dated 16 May 2013 the court had assumed that the defendant had refused to agree an extension of time otherwise the application would not

4 have been required. The court having already ordered payment on account of costs, it would not be appropriate to make further order. The defendant may apply for an interim costs certificate once the request has been made for a detailed assessment hearing." 9. It is right to observe that pursuant to the order extending the period, the claimant served their points of dispute on 17 June The following day the defendant commenced these appellate proceedings. 10. On 25 June 2013 Openshaw J granted permission to appeal, observing inter alia there had been material non-disclosure of facts when making the application on an ex parte basis. The pivotal fact is that on the deadline day for serving the points of dispute the claimant made an ex parte application to extend the time for service of the points of dispute. Simultaneously, or more or less simultaneously, the defendant invoked the default costs procedure. 11. The basis of the appeal is really very straightforward when stripped of much surplusage: 1. The Master was wrong in law that there was no sanction from which the claimant could seek relief and therefore he failed to consider whether relief should have been granted; and, 2. The Master ignored the claimant's failure to comply with the rules, thereby allowing them to circumvent CPR Part 47.9(1) and granted an extension of time without any good reason. 12. I should add that there are other grounds of appeal relating to an assertion the Master inaccurately analysed the facts and erroneously felt a second interim payment cost could not be made. 13. Mr Stainer, who is the second claimant, addressed the court on behalf of both claimants. I was a little concerned that he did not have authority to represent the corporate claimant. However, he assured me he was the sole director (which seemed odd) and he had authority. As he was a claimant himself and there was a community of interest between claimants, I accepted, with a little reluctance, he could appear and make submissions. His proposition was simple; he said he had made his application to extend just in time. He was querying the costs and had difficulties with his own solicitors who were once representing him. He called my attention to his witness statement. He stated this at paragraph 6 in the statement placed before the Master requesting an extension of time: "In order to avoid having to waste the time of the court, I respectfully request further time in order to enable our costs draftsman to make a thorough examination of our solicitors Gaby Hardwicke's files and compare it with each item in the defendant's bill of costs to enable any challenge to be placed on a proper examination of the documentation. These files were made available yesterday." That statement was dated 14 May 2013.

5 14. I have also read the statement of Mr Jonathan Sherlock, who is the defendant's solicitor, which challenges, in some detail, the basic factual assertions of Mr Stainer. It is right to observe immediately that Mr Stainer did not call the full details, indeed hardly any details at all, to the attention of the Master. There was without doubt a failure to disclose all material facts when making his extremely belated ex parte application which, if successful, would have had serious consequences for the defendants. Indeed, did so. 15. On that basis alone I am far from convinced the order can stand. When an application is made of any kind there must be open, honest and full disclosure of material facts so that a judge or master may make an informed decision. That is of enhanced importance when an application is made on an ex parte basis. The witness statement of Mr Stainer does not begin to accurately set out the history or give the proper basis for the Master to make a decision. There is not one mention of the claimant's non-compliance with the order of Tugendhat J. The clear suggestion is that the fault rests with the defendant. 16. CPR 47.9(2) is of pellucid clarity. The period for serving the points of dispute is 21 days. There is no provision for extension within that rule itself. However, the costs Practice Direction at section 35.1 makes it clear that the parties may agree to lengthen or shorten that period and "a party may apply to the appropriate office for an order under rule 3.1(2)(a) to extend or shorten (the 21 daytime limit)". Accordingly, it was open to the claimants to apply under CPR Part 3.1(2) to extend the 21 daytime limit for serving their points of dispute and such an application can be made after that period has expired. CPR Part 3.8(1) provides: "Where a party has failed to comply with a rule practice direction or court order, any sanction for failure to comply imposed by the rule, practice direction or court order has effect unless a party in default applies for and obtains relief from the sanction." 17. If a party does not comply with a time limit by reason of a rule of court the party must apply for relief from sanction and an extension of time, providing always there is a sanction for non-compliance. In this case the sanction is clear. The party who does not serve his points of dispute may not be heard further in the detailed assessment proceedings unless permission is granted. It is inconceivable that could be characterised as anything other than a sanction. Whilst I am truly reluctant to differ from a master with all the procedural savoir faire associated with that office, I feel that the Master, absent as he was argument on the point, fell into error. Furthermore, I am convinced that had the Master known the facts as they are, rather than the less than full scenario presented to him by the claimants, I am convinced he would have not granted the extension nor granted thereby relief from sanction. 18. Attention was called to the new provision within the overriding objective at CPR Part 1.1(2)(g) where greater regard must be paid by courts to enforcing compliance with rules. His Honour Judge Pelling QC said this in Fons HF v Corporal Ltd [2013] EWHC 1278 Chancery:

6 "...the amended Civil Procedure Rules now require the court to play close attention on the failure of parties to comply with rules, directions and orders. A failure to comply with a rule, direction or order is of itself a clear breach of the overriding objective and is likely to result in severe sanctions... However, all parties and the wider litigation world should be aware that all courts at all levels are now required to take a very much stricter view of the failure by parties to comply with directions, particularly where the failure to comply is likely to lead to a waste of the limited resources made available to those with cases to litigate." 19. Historically the court broached the subject of non-compliance with a rather broad concept of balancing fairness and prejudice. There was a focus upon compliance, but perhaps not always the strictest view upon compliance. There is now much greater focus upon compliance. The rules are not a procedural menu from which a party may select those parts with which he intends to comply. Court resources are limited and must be husbanded with care. There is now much greater of emphasis on compliance in all areas of the court's affairs in each division. Procedural rules and time limits are not advisory. They demand compliance. There is no slide rule available to be adjusted at will. It is my view that rules must be firmly and sensibly applied. Time limits are exactly that. When there has been non-compliance, particularly when it involves a late application on an ex parte basis relating to a time limit, an application for an extension of time or relief from sanction demands scrupulous examination. 20. In this case there was material non-disclosure of relevant information to the Master to enable him to make a decision. The application was issued out of time, even though it was made just in time. Even though the Master had the power to extend time after the expiry of that time limit, he needed to consider relief from the sanctions set out at CPR Part 47.9(3). Whichever way one looks at the application, it needed to be subjected to the rigorous scrutiny that is now demanded. The Master was misled and through no fault of himself was not aware of the full facts. This was unquestionably the fault of the claimant. I have little doubt, had the Master been as fully apprised of the facts as I have been in this appeal, he would never have made the order he did. 21. The simple fact is the claimants have been dilatory and the asserted problem they had with their solicitors simply does not adequately meet the demands of the timetable. They each should have put in points of dispute and amended them or have made an immediate and timely application for an extension of time with a candid recital of the facts. That was not done. 22. Those who wait to the 59th minute of the eleventh hour to take steps only have themselves to blame if something goes wrong. The consequence is clear: the points of dispute filed pursuant to the Master's erroneous decision were not in fact points of dispute at all. At the time they were entered the defendant should have been entitled and would almost certainly have obtained a default costs certificate. Because of an error that was not done. The defendant should

7 not be deprived of that to which he was entitled had the erroneous order not been made. 23. One is required to backtrack to make sense of these appellate proceedings. The document filed on 17 June 2013 by the claimant was a purported points of dispute. Had the error not been made, CPR Part 47.9(4) would have activated and the certificate issued. The defendant has taken all the necessary steps to seek the certificate. The order made by me on Friday, 19 July 2013 gave directions to give effect to this judgment, the decision in respect of which was announced so as to place the parties in the position they would have been had the erroneous order not been made. The orders of the master that are the subject of this appeal are reversed. 24. This appeal is allowed.

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