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Khatib v Ramco International & Ors, Court of Appeal, 18 May 2011

25 May 2011
The issues

Striking out – sanctions – relief from sanctions – CPR 3.9

The facts

The Claimant brought a claim against seven Defendants claiming sums due by way of commission under an oral agreement with the Seventh Defendant in the course of a business relationship between 1989 and 2003 in the course of which he claimed to have acted as a sales manager. The matter had been listed for Trial in October 2007 but the Trial date went off and the long history of procedural steps ensued with resulting delays.

In the course of a complicated set of procedural events the Claimant found himself subject to a debarring Order in respect of his claim and in respect of his Defence to a Part 20 claim brought against him. The matter ultimately came before the High Court Judge who, in an ex tempore Judgment at the end of the Hearing, noted that he had not found the case easy to resolve but had decided that the circumstances did not justify relieving the Claimant of the sanction of striking out his claim but that it would be right to allow him to defend the Part 20 claim despite breaches of the Court’s previous Orders, but also in the lack of any particular prejudice alleged by the Defendants. The Judge had noted that although the Claimant’s conduct had been deeply unattractive, tending to do everything at the last minute, nonetheless, the Court had to balance that against what was effectively an entry of Judgment against him.

The Claimant Appealed.

The decision

As had been recognised in the authorities, the circumstances in which a Court had to apply Rule 3.9 (Relief from Sanctions) varied very greatly. One of the great de-merits of the former procedural regime had been: “That simple rules got barnacled with case law” (Woodhouse v Consignia per Brooke LJ). If a Judge in a process of structured decision making consciously considered all the items on the list when determining how it should exercise its balance, it was most unlikely that an Appeal Court would interfere with its decision. Roth J had given an ex tempore Judgment. Claimant’s Counsel had invited the Court of Appeal to hold that the Judgment was flawed because the Judge, giving Judgment as and when he did, did not expressly go through a checklist of the successive elements in the Rule and, as it were, tick off those that were relevant on the facts, putting them to one side or other of the balance and then directed himself to stand back and review the case as a whole. This criticism was rejected. What was clear from the Judgment in the circumstances in which it was given was that the Judge had had his attention drawn to the relevant Rule, the principle relevant decided authority on the point, and all of those factual matters to which either party contended that he should have regard. It was clear that from what the Judge said that he took into account those matters which clearly were relevant and did so in an appropriate manner.

The Claimant’s Counsel had also criticised the Judgment on the basis that the Judge had failed to refer specifically to the absence of any prejudice to the Defendant. The primary point was the protracted and inadequately explained delay on the part of the Claimant in making payment of costs ordered against him. If the Defendant’s had sought to say that they had suffered any additional prejudice then clearly the Judge would have needed to have mentioned that and taken it into account. They had not done so. Therefore, there was nothing to include in the list of material factors in this respect. It was not obligatory for the Judge to refer expressly to the fact that nothing was relied on by way of additional prejudice.

If the Judgment was to be taken as flawed because a checklist approach had not been applied by the Judge, this would impose an unrealistic, inappropriate and unduly formalistic burden on those who had to determine Applications under Rule 3.9 in the first instance. A Judge had to be aware and it had to be reasonably apparent that he was, of Rule 3.9 and of the particular factors said on either side to be relevant according to the evidence and the circumstances of the case. He had to conduct an appropriate review and balancing exercise. In this case the Judge was aware of the relevant Rule and the applicable principles and had referred to those factual matters which were said on either side to be relevant. There was no real doubt that he had applied his mind to those matters in accordance with the relevant principles.

It would be wrong to insist on a more fully formulated Judgment at the minimum required in order to demonstrate that the Judge’s task had been properly discharged. If a different approach was taken it would have two undesirable consequences. One is that Judgments would be reserved more frequently, which would add unreasonably to the burden of first instance Judges and lead to delay and addition cost for the parties. Secondly, Judges might be more demanding as regards to the time allowed for a Hearing. In this case, the Judge had made a number of comments in the course of argument about the preparation of a case and what had been supplied for pre-reading and as to the time estimate. There was a degree of urgency to the Application but the Judge would have been justified in refusing to hear the case on that day and requiring it to be listed for a longer Hearing time. That would have led to undesirable delay and additional cost for the parties. To impose too rigorous an approach to the manner in which a Judge had to express his reasoning in relation to an Application under Rule 3.9 was undesirable in principle and unnecessary in practice.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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