NOTES in RESPECT of TALKS to TRAINEE MANX ADVOCATES (Talk at 6Pm on 28 April 2014)

NOTES IN RESPECT OF TALKS TO TRAINEE MANX ADVOCATES (Talk at 6pm on 28 April 2014)

MANX CASE LAW

THE RULES OF THE HIGH COURT OF JUSTICE 2009

C O N T E N T S Pages

Precedent in Manx law ……………………………………………………………………………… 2 - 6 The overriding objective and the new litigation culture ………………………………… 6 - 20 Summary judgment and strike out …………………………………………………………….. 20 - 24 Split trials ………………………………………………………………………………………………… 24 - 32 Disclosure of information, pleadings, further information and expert evidence .. 32 – 38 Litigation privilege ……………………………………………………………………………………. 38 Amendment of pleadings ………………………………………………………………………….. 38 - 49 Interim payments …………………………………………………………………………………….. 49 Relief from sanctions ………………………………………………………………………………… 49 - 51 Second appeals in respect of the assessment of costs …………………………………. 51 - 58 Universalism and Rule 4.16(1)(b) ………………………………………………………………. 59 - 60 Litigation friends ………………………………………………………………………………………. 60 General Civil Restraint Order ……………………………………………………………………… 60 Penal notices …………………………………………………………………………………………… 61 Exclusion of evidence ……………………………………………………………………………..… 61 - 62 Rule 14.9(1) of the 2009 Rules and extension of time to appeal ……………….….. 62 – 63 Extension of time …………………………………………………………………………………….. 63 Compliance with court orders ……………………………………………………………………. 63 - 65 Jurisdictional issues in maritime claims ………………………………………………………. 66 - 67 Service out of jurisdiction and appropriate forum issues ………………………………. 67 - 69 Enforcement of executions ……………………………………………………………………….. 69 Setting aside default judgment ………………………………………………………………….. 69 Security for costs………………………………………………………………………………………. 69 - 70 Rules 2.43 and 2.44 and service ………………………………………………………………… 70 Stale matters …………………………………………………………………………………………… 71 Stays ………………………………………………………………………………………………………. 71 Letters of request …………………………………………………………………………………….. 71 - 72 Rule 14.14(2) ………………………………………………………………………………………….. 72 Offers to settle …………………………………………………………………………………………. 72 Costs in a small claims context ………………………………………………………………….. 72 Lord Dyson’s lecture in 2013 ……………………………………………………………………… 72 - 79 General ……………………………………………………………. ……………………………………. 79 – 81

Precedent in Manx law

1. Before turning specifically to Manx case law on the Rules of the High Court of Justice 2009 (the “2009 Rules”) reference should be made to precedent in Manx law. The Appeal Division in Dominator Limited v Gilberson SL (judgment 1 May 2009 subsequently referred to at paragraph 39 of the Appeal Division’s judgment in Hamblett delivered on the 12 September 2013) stated:

“91. We note that Mr Jacobs also made reference to Frankland v R [1987-89] MLR 65, at 80, where Lord Ackner observed that :

‘Decisions of English courts, particularly decisions of the House of Lords and the Court of Appeal in England, are not binding on Manx courts, but they are of high persuasive authority … Such decisions should generally be followed unless there is some provision to the contrary in a Manx statute, or there is some clear decision of a Manx court to the contrary, or exceptionally, there is some local condition which would give good reason for not following the particular English decision.’

92. For the purposes of this appeal it is unnecessary for this court to express any view as to whether or not such dicta have the same force today as they had over 20 years ago. However, even without the benefit of full argument on such issue, we are bound to express some doubt whether they do so in the context of a jurisdiction which is becoming increasingly independent of English statutes and procedure and is frequently choosing to be informed by or to adopt the common law and practices found in jurisdictions other than England.

93. Similarly it may be that this court`s decision in In the Matter of the Petition of Cussons [2001-03] MLR 539, at 548, where this court stated:

‘The correct approach seems to us to be to establish the English precedent … and to follow that precedent unless there is any justification to depart from it in line with Frankland v R.’

will need at some stage to be reconsidered.”

2. The following are extracts from Bitel v Kyrgyz Mobil (Deemster Doyle’s judgment 30 November 2007):

“Precedent

529. Counsel have referred to authorities from various jurisdictions including the Isle of Man, England and Wales, Jersey, Guernsey, the United States of America, Australia, Canada and the British Virgin Islands. In such circumstances it may be of some assistance to set out the Manx law position in relation to precedents from other jurisdictions.

530. If a point of law is covered by local Isle of Man authority especially if that authority is from the Appeal Division or the Privy Council dealing with an appeal from the Isle of Man then it is to that authority which the court should turn in the first instance.

531. If however there is no local binding authority then it is appropriate for counsel and the court to look beyond local frontiers.

532. Lord Ackner sitting in the Judicial Committee of the Privy Council in Frankland and Moore v R 1987-89 MLR 65 at page 80 stated:

"Decisions of English courts, particularly decisions of the House of Lords and the Court of Appeal in England, are not binding on Manx courts, but they are of high persuasive authority, as was correctly pointed out by Glidewell, J.A. in giving the judgment of the Staff of Government Division (Criminal Jurisdiction). Such decisions should generally be followed unless either there is some provision to the contrary in a Manx statute or there is some clear decision of a Manx court to the contrary, or, exceptionally, there is some local condition which would give good reason for not following the particular English decision. The persuasive effect of a judgment of the House of Lords, which has largely the same composition as the Judicial Committee of the Privy Council, the final Court of Appeal from a Manx court, is bound to be very high.”

533. Manx law has developed significantly since Lord Ackner uttered those words over twenty years ago now.

534. The traditional position in relation to English precedent in Manx law was briefly set out at pages 449-463 of Solly's Government and Law in the Isle of Man (1994). At page 463 a relatively young advocate endeavoured to summarise the position as follows:

"In summary, it is clear that English decisions are not strictly binding on Manx courts but that they are of high persuasive value and will frequently be followed in the absence of special circumstances or local precedent to the contrary.

It is to be hoped that Manx common law will develop independently in accordance with the needs, requirements and interests of the inhabitants of the Isle of Man and indeed the international community of which the Island is a part. It is to be hoped that Deemsters will not slavishly follow English decisions, which in certain cases may not be in the best interests of the Island, in areas where it would be more appropriate to develop Manx law in a different way to the way in which English law has developed and is developing.”

535. Judge of Appeal Hytner in Barr and Anglo International Holdings Limited 1990-92 MLR 398 at page 409 stated:

"Since this court is not in any way bound by decisions of the English courts it should not be assumed that we would follow dicta abandoned by Parliament.”

536. In City and International Securities Limited 2001-03 MLR 239 Deemster Cain had little difficulty in not following the majority judgments in Home Office v Harman [1983] A.C. 280 (House of Lords) which had been challenged before the European Commission of Human Rights.

537. In Aguilar v Anglican Windows (IOM) Limited 1987-89 MLR 317 at 325 an advocate endeavoured to persuade Deemster Corrin not to follow the Privy Council decision in Selvanayagam v University of W Indies on the grounds that it had been the subject of criticism and that their Lordships had confused remoteness and mitigation. Deemster Corrin at page 325 stated that the decision "is, nevertheless, a decision of the Privy Council and, if not actually binding, is very persuasive authority in this court, and I propose to follow it.”

538. Deemster Corrin in Cusack, Cotter v Scroop Limited (judgment 16th January 1997) stated at page 9:

"The Isle of Man is an active member of the Commonwealth and whilst historically it has tended to follow English law I feel quite free to look for guidance to other Commonwealth countries as there is no binding or persuasive authority to the contrary in England.”

539. The High Court of Australia in Cook v Cook (1986) 162 CLR 376 at 390 stated:

"…the history of the country and of the common law makes it inevitable and desirable that the courts of this country will continue to obtain assistance and guidance from the learning and reasoning of United Kingdom courts just as Australian courts benefit from the learning and reasoning of other great common law courts.”

540. Thanks in the main to Deemster William Cain and to Dr Alan Milner of Law Reports International the Island has had an excellent system of local law reporting for some many years now. Increasingly it is to our own local judgments that we are turning in dealing with the legal issues of the day.

541. In addition to applying our own local precedents Manx courts will also continue to benefit from the learning and reasoning of judgments of the English courts and "other great common law courts" including the High Court of Australia.”

3. Manx law has come a long way since the words written by Attorney General Ramsey B Moore in his useful book on The Isle of Man and International Law (September 1926). In his introduction the learned Attorney stated:

“It may be stated, as a general principle that the law of the Isle of Man is in most essential matters the same as the law of England and, generally, the principles of equity administered by English Courts are followed by the Courts of the Isle of Man unless they conflict with well established local precedents.”

4. At page 40 of the Isle of Man and International Law the learned Attorney refers to the words of Deemster Callow in 1911 in the case of Goldsmith that not to follow the English rule laid down in Fletcher v Ashburner and adopt a more equitable practice would “involve endless confusion, and would be to the prejudice of the Manx courts and legal profession. No one would know where they stood” and Ramsey B Moore adds: “English decisions have always been accepted in the Isle of Man in the absence of local laws to the contrary, to the great advantage and uniformity of legal practice.

But the Manx courts have never felt themselves bound to slavishly adhere to these principles”.

5. In Oxleys of Douglas Ltd 2003-5 MLR 57 Deemster Doyle referred to Frankland v R 1987-89 MLR 65 and Cusack v Scroop Ltd (Deemster Corrin’s judgment January 16 1997) and at paragraph 28 stated:

“The courts in the Isle of Man will no doubt be assisted by their own Manx jurisprudence, but they will also benefit from considering useful cases in other Commonwealth jurisdictions, such as England and Wales, and indeed other common law jurisdictions, especially when dealing with statutory provisions that are mirrored in those other jurisdictions...”

6. Decisions of the House of Lords and now the Supreme Court of the United Kingdom on similar statutory provisions are bound to be very persuasive authority in Manx law.

7. There have however, been occasions when, for good reason, the Manx courts have not followed decisions of the House of Lords. Deemster Cain, at the height of his judicial career, in 2002 in the case of City and International Securities Limited 2001-03 MLR 239 refused to follow the majority speeches in the House of Lords in Home Office v Harman [1983] AC 280 which had been challenged in the European Commission of Human Rights (such challenge being amicably settled on an undertaking from Her Majesty’s government to seek to change the law so that it would no longer be a contempt of court to make public material contained in documents compulsorily disclosed in civil proceedings once those documents had been read out in open court). Deemster Cain at paragraph 15 of his judgment stated:

“... I consider that the proper course for this court is to follow the minority judgments in the House of Lords in Home Office v Harman. Decisions of the House of Lords are not binding on this court, although they will generally be followed (see Frankland v R) ... I consider this is one of those exceptional cases where this court should not follow a decision of the House of Lords.”

8. Deemster Corlett in Hudson v Department of Health (1 May 2013) considered Rules 4.3 and 4.4 of the 2009 Rules and stated:

“10. It seems to me also that the general policy considerations which are set out in the Vinos case apply equally to the Isle of Man. There is absolutely no reason why this Court should apply a different approach to this matter than do the Courts in England. In my view the provisions which Mrs Smith has sought to pray in aid, that is the provisions dealing with relief from sanctions and the more general ability to disapply time limits simply do not apply in this case. Therefore Rules 2.59 and 2.5 are in my view not engaged.

11. Furthermore there is no issue of limitation before this Court and I am unable to venture any opinion as to whether, if Ms Hudson were to start new proceedings she would be statute barred and this is not a matter which I am able to determine in any way today.

12. I would merely add that one of the main reasons for the introduction of the 2009 Rules of Court was so that the Manx Courts could benefit from the tried and tested English Civil Procedure Rules and benefit from the decisions of the English

Courts on those rules. It was becoming increasingly difficult for this Court to reliably deal with applications under the old 1952 Rules. As I say one of the main reasons for the introduction was so that we could rely on English authority, bearing in mind always that the Court has an overriding ability in certain cases, where there is good reasons not to follow those decisions.

13. I would also stress that litigation must proceed more expeditiously than has been the case in the past and this is the reason why Rule 4.4 was introduced.

14. It is also particularly important that advocates are able to advise their clients with certainty as to what the law might be in particular case and it is undesirable in my view that this court is able to plough its own uncertain furrow in relation to such matters where there is a very clear expression of the law set out in English authority on identical Rules. Certainty is a most important aspect of the administration of justice. In all circumstances and for those reasons, the application for an extension of time to serve the claim form must be dismissed.”

9. English case law on similar rules of civil procedure will continue to have persuasive relevance in Manx law.

The overriding objective and the new litigation culture

10. The overriding objective of the 2009 Rules is to enable the High Court to deal with cases justly (Rule 1.2(1) of the 2009 Rules). Dealing with a case justly includes, so far as is practicable –

(a) ensuring that the parties are on an equal footing; (b) saving expense; (c) dealing with the case in ways which are proportionate to – (i) the amount of money involved; (ii) the importance of the case; (iii) the complexity of the issue; and (iv) the financial position of each party; (d) ensuring that it is dealt with expeditiously and fairly; and (e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases.

The court shall seek to give effect to the overriding objective whenever it exercises any power given to it by the 2009 Rules. The parties and their legal representatives are required to help the court to further the overriding objective. The court is required by Rule 7.1 of the 2009 Rules to further the overriding objective by actively managing cases.

11. Rule 7.1(2) and (3) of the 2009 Rules provides as follows:

“(2) Active case management includes - (a) encouraging the parties to co-operate with each other in the conduct of the proceedings; (b) identifying the issues at an early stage; (c) deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others; (d) deciding the order in which issues are to be resolved;

(e) encouraging the parties to use an alternative dispute resolution procedure if the court considers that appropriate and facilitating the use of such procedure; (f) helping the parties to settle the whole or part of the case; (g) fixing timetables or otherwise controlling the progress of the case; (h) considering whether the likely benefits of taking a particular step justifying the cost of taking it; (i) dealing with as many aspects of the case as it can on the same occasion; (j) dealing with the case or any aspect of it without the parties needing to attend at court; (k) making use of technology; and (l) giving directions to ensure that the trial of a case proceeds quickly and efficiently.

(3) The court may give directions for the management of a claim at any stage- (a) on an application by any party, or (b) on its own initiative.”

12. Rule 7.2(1) and (2) of the 2009 Rules provides as follows:

“7.2 Court’s general powers of management (3.1) (1) The powers in this rule are in addition to any powers given to the court by any other rule or by any other statutory provision or rule of law.

(2) Except where these Rules provide otherwise, the court may – (a) extend or shorten the time for compliance with any rule, practice direction or court order (even if an application for extension is made after the time for compliance has expired); (b) adjourn or bring forward a hearing; (c) require a party or a party’s advocate to attend the court; (d) hold a hearing and receive evidence by telephone or video link or by using any other method of direct oral communication; (e) direct that part of any proceedings (such as a counterclaim) be dealt with as separate proceedings; (f) stay the whole or part of any proceedings or judgment either generally or until a specified date or event; (g) consolidate proceedings; (h) try 2 or more claims on the same occasion; (i) direct a separate trial of any issue; (j) decide the order in which issues are to be tried; (k) exclude an issue from consideration; (l) dismiss or give judgment on a claim after a decision on a preliminary issue; (m) order any party to file and serve an estimate of costs; (n) take any other step or make any other order for the purpose of managing the case and furthering the overriding objective in rule 1.2.”

13. In Watson v Jolly (17 October 2011) the Appeal Division referred to the new culture under the 2009 Rules and the need for cases to be resolved expeditiously, fairly,

efficiently, within a short space of time and at a reasonable cost. The Appeal Division indicated that it would support Deemsters at first instance who robustly dealt with belated and misconceived applications to vacate trial dates.

14. Deemster Corlett in Gubay v Willers (judgment 22 June 2012) stated:

“4. … The Court has extensive powers to control the conduct of a case. The new Rules of Court embody a practice which has been apparent in this jurisdiction for some years and Deemsters have for many years carefully controlled the way in which cases are conducted so as not to waste Court time and to reduce, if at all possible, the enormous costs involved in litigation.

5. In particular, under Rule 8.1, the Court may control the evidence by giving directions as to the issues on which it requires evidence, the nature of the evidence which it requires to decide those issues and the way in which the evidence is to be placed before the Court and the Court may use its power under this Rule to exclude evidence that would otherwise be admissible. The Court may also limit cross-examination. It is no longer the case that the parties are simply allowed to pursue the case in whatever way they think fit. The Court must control matters.”

15. In the appeal from Deemster Corlett’s judgment the Appeal Division in Willers v Gubay (judgment 1 October 2012) stated:

“25. ... we have no doubt that this court should both encourage and support firm case management of litigation, even if it is robust, always of course provided that it is not plainly wrong. However, as Tattersall J A observed during argument, even the most robust case management adopted by a Deemster must also be fair to all parties...

Case management decisions by a Deemster at first instance

27. As was indicated by Deemster Doyle in Howell v DHSS [6 October 2009] the Rules of the High Court of Justice 2009 [`the 2009 Rules`] `encourage a new culture of cases being resolved expeditiously, fairly and efficiently within a short period of time and at a reasonable cost` and that whilst `the ultimate aim of the court must be the attainment of justice`, `justice must not be sacrificed in favour of active case management simply for the sake of active case management` because `courts are concerned to do justice to all litigants`. This court expressly approves such dicta.

28. At the heart of the 2009 Rules is Rule 1.2(1) which establishes that the Rules are a new procedural code with the overriding objective of enabling the High Court to deal with cases justly. But dealing with a case justly, includes, so far as is practicable the matters referred to in Rule 1.2(2).

29. Rule 7.2 of the 2009 Rules gives the court extensive general powers of case management, including the power to take any step or make any order for the purpose of managing the case and furthering the overriding objective in Rule 1.2. In particular Rule 8.1 gives the court wide powers to control evidence and provides, inter alia, that it may limit cross-examination.

30. The 2009 Rules adopt a similar policy of judicial case management to that contained in the Civil Procedure Rules implemented earlier in England and Wales. Thus it is material to note that at paragraph 32.1 of the Supreme Court Practice 2012 the following observations are made:

[a] Under the Civil Procedure Rules of England and Wales, the admissibility of evidence as to credit is very much a matter for the court to be determined in the light of the central issues and facts of the case, the nature of the evidence sought to be adduced and the reasons advanced for and against admissibility: see Anglo Eastern Trust Ltd v Kermanshahchi [2002] EWHC 1702 (Ch) - Neuberger J.

[b] There is no express limitation on the exercise by a trial judge of the power under Rule 32.1(2) to exclude admissible evidence. However, the exercise of such power must be exercised in accordance with the overriding objective of dealing with cases justly.

[c] Conceivably, cross-examination may be limited in two ways: firstly, by limiting the issues to be explored in cross-examination; secondly, by limiting the trial time to be devoted to cross-examination of particular witnesses.

[d] A refusal to allow cross-examination of a particular witness altogether may be considered compatible with Article 6(1) of the European Convention on Human Rights and Fundamental Freedoms where the court concludes that such cross-examination would not assist it : see X v Austria (5362/72) 43 CD 145. However such would be an extreme case.

31. We gratefully adopt the dicta of Thomas L J in L [2007] EWCA Crim 764, which we regard as equally applicable to a civil context, when he stated:

“Time is not unlimited. No one should assume that trials can continue to take as long or use up as much time as either or both sides may wish, or think, or assert, they need. The entitlement to a fair trial is not inconsistent with the proper judicial control over the use of time.”

32. There is nothing new or controversial in such observations: see Giannarelli v Wraith (1988) 81 ALR 417, where over 20 years ago Mason CJ, at 421, stated:

“In selecting and limiting the number of witnesses to be called, in deciding what questions will be asked in cross-examination, what topics will be covered in address and what points of law will be raised, counsel exercises an independent judgment so that the time of the court is not taken up unnecessarily, notwithstanding that the client may wish to chase every rabbit down its burrow."

33. Rule 14.14(4) of the 2009 Rules provides that the appeal court should allow an appeal where the decision of the lower court was (a) wrong or (b) unjust because of a serious procedural or other irregularity in its proceedings.

34. In Hayes v Transco plc [2003] EWCA Civ 1261, Clarke LJ, commenting on a similarly worded English rule [CPR 52.11(3)], stated:

`It follows that the question in this part of the case is whether the decision of the judge was unjust because of a serious procedural or other irregularity in the proceedings. It is not, however, sufficient that a serious irregularity should be shown or even that some collateral injustice should be established. The decision must be unjust. As I see it, whether the decision is unjust or not will depend upon all the circumstances of the case.”

16. See also Lord Neuberger’s judgment in Frey v Labrouche [2012] EWCA Civ 881:

“42. Further, on procedural and case management issues, trial judges should be encouraged to be robust. While it is the duty of this court to reverse a decision if it is wrong, that duty is only to be invoked when the decision is one which no reasonable judge could have arrived at, or was one arrived only by taking irrelevant material into account and/or by ignoring relevant material. It is not enough for an appellant to satisfy an appellate court merely that it would, let alone that it might, have reached a different conclusion from the judge. Even before the Woolf reforms, robustness of approach in procedural and case management decisions should have been supported, and now we are about to embark on the Jackson reforms, robustness in such cases is to be applauded.

43. However, even assuming that the decision in this case was a case management or procedural decision, it was simply unsustainable. It is fundamentally wrong for a judge to refuse to hear oral argument on behalf of a party whom the judge has decided to find against on reading the papers.”

17. Litigation culture was changing even before the implementation of the 2009 Rules. In Clucas Food Service Limited v Ice Mann Limited and others (15 December 2005) Deemster Doyle stated:

“12. Over more recent years litigants, lawyers and the courts have come to acknowledge that the confrontational and costs generating culture and climate in which legal proceedings are conducted must change if cost effective justice is to be achieved. Litigants who conduct legal proceedings unreasonably or for improper purposes and generate unnecessary costs should not expect to be able to get away with it cost free or without the disapproval of the court and adverse consequences flowing from their unreasonable and improper conduct.

13. In the Merk case [14th April 2005] I stated that litigation these days should be moving away from confrontation and more towards cooperation. Parties are being encouraged to engage in the mediation process rather than wasting valuable time and costs in court. People of commerce are fast coming to the sensible conclusion that time and money is best spent on constructive commerce rather than on lawyers and destructive litigation. Deemsters are engaging in more active case management. Costs orders are useful tools in that context. To my mind parties need to be discouraged from commencing or defending legal proceedings unreasonably. One effective way of concentrating the minds of the parties and providing that discouragement is by way of adverse costs orders.”

18. In Howell v DHSS (6 October 2009) Deemster Doyle referred to the new culture under the 2009 Rules. The following are extracts from the judgment:

“1. The 1st day of September 2009 was an important day in the history of the Manx legal system. On that day the Rules of the High Court of Justice 2009 ("the 2009 Rules") came into operation.

2. The new rules encourage a new culture of cases being resolved expeditiously, fairly and efficiently within a short period of time and at a reasonable cost. It is no longer acceptable for the parties to legal proceedings to dictate to the court the pace at which proceedings should be conducted, if that pace is slow.

3. Parties to legal proceedings and their advisers will have to wake up to the new reality of civil litigation in the 21st century. More and more, courts will engage in active and robust case management. Litigants and advocates need to be aware that under the 2009 Rules there is a new culture to civil litigation in this country and they need to deal with cases more expeditiously and more efficiently than in the past.

4. Applications to vacate trial dates and late applications to amend pleadings will be dealt with in light of the overriding objective specified in the 2009 Rules.

5. Courts have in the past had to deal with many applications to vacate trial dates. These are sometimes left late. It occurs to the parties or their advisers that their pleadings need to be amended or further evidence needs to be obtained. In many cases the parties and their advisers have had months or even years to consider such matters but they have not focused upon them properly until they received their hearing dates. On occasions court ordered timetables were not complied with. Indeed in this very case which I am dealing with this afternoon the court ordered timetable (an order made by consent) was not complied with.

6. The court needs to make it plain that proposed amendments to pleadings left so late that trial dates need to be vacated will not be tolerated. The court needs to make it plain that applications to vacate trial dates on the basis that a previously laid down court ordered timetable has not been complied with will not be tolerated. Unnecessary delays and the incurring of unnecessary costs will not be tolerated. The parties and their advisers will not be permitted to waste valuable court resources.

7. The determination of civil disputes in the 21st century must be quicker, cheaper and more efficient than in previous centuries. It still, of course must be fair and just. In considering what is fair and just regard must be had to the position of the parties in the case before the court. The position of other litigants and other court users must also, however, be considered. The public interest in the efficient use of court resources is a relevant consideration in the exercise of judicial discretions to permit amendments and adjournments. The waste of public resources and undue delay should be taken into account in the exercise of judicial discretions.

8. The ultimate aim of the court must, of course, be the attainment of justice. I accept that justice must not be sacrificed in favour of active case management simply for the sake of active case management. Courts however are concerned to do justice to all litigants. Courts are also concerned to ensure that their

11 orders are complied with. What may be just requires account to be taken of other litigants, not just the parties to be proceedings in question. Speed and efficiency in the sense of minimum delay and expense, are essential to a just determination of the proceedings. Account must be taken of the adverse effects of undue delay upon the parties to the proceedings and upon other litigants who are also seeking the speedy and efficient determination of their cases.

9. The Australian High Court in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 (a case I referred to this morning when refusing yet another application to vacate trial dates in another case) recognised that the resolution of disputes serves the public as a whole not merely the parties to the proceedings. It was also recognised that the efficiency or inefficiency of the courts had a bearing on the health or sickness of commerce.

10. The courts in compact jurisdictions strive to do their best with limited resources. It is of paramount importance that the parties to legal proceedings use those limited resources efficiently and comply with court orders. The efficiency of the courts in this jurisdiction no doubt has an effect on the economic and general health of the community. Fairness and efficiency in legal proceedings are too important simply to be left to the parties to legal proceedings. Courts must impose strict timetables upon the parties to legal proceedings and should ensure that such timetables are adhered to and where, without good reason, they are not the parties and their advisers should not expect sympathy or further indulgence from the courts. If they do not receive what they perceive to be justice then they will only have themselves to blame for their inefficient use of court resources and for their failure, without reasonable excuse, to comply with court orders.

11. The courts in the Isle of Man are not alone in the quest to increase the efficiency of civil litigation.

12. The Deputy Bailiff in Jersey in Garfield-Bennett v Phillips 2002 JLR N42 stated:

"The whole approach towards the progress of litigation has changed in recent times. The Court of Appeal [that is the Jersey Court of Appeal] made it absolutely clear in The Esteem Settlement (2000) JLR N 41 that times had changed and that it now had to be appreciated by all who are involved in civil proceedings that their objective has to be to progress the proceedings to trial in accordance with an agreed or ordered timetable at a reasonable level of costs and within a reasonably short time.”

13. The judgment in Garfield-Bennett v Phillips was applied by the Royal Court of Jersey in Ybanez and Mompo v BBVA Privanza Bank (Jersey) Limited 2007 JLR N45.

14. The Australian High Court in Aon recognised the need to make efficient use of court time and to avoid vacation of trial dates. Aon concerned a late application for leave to amend pleadings in complex and cumbersome commercial litigation.

15. Rule 1.2 (1) of the 2009 Rules indicates that the 2009 Rules are a new procedural code with the overriding objective of enabling the High Court to deal with cases justly.

16. The following are extracts from Rule 1.2:

"(2) Dealing with a case justly includes, so far as is practicable - (a) ensuring that the parties are on an equal footing; (b) saving expense; (c) dealing with the case in ways which are proportionate to - (i) the amount of money involved; (ii) the importance of the case; (iii) the complexity of the issues; and (iv) the financial position of each party; (d) ensuring that it is dealt with expeditiously and fairly; and (e) allotting to it an appropriate share of the court's resources, while taking into account the need to allot resources to other cases. (3) The court shall seek to give effect to the overriding objective when it exercises any power given to it by these Rules. (4) The parties are required to help the court to further the overriding objective.” ”

19. In Shepherds Select Funds plc v Abraham and others (CHP 12/0057 judgment 22nd May 2012) Deemster Doyle stated:

“63. These applications have taken up a lot of court time. There was considerable time spent in reading into the case. It took a day to hear the applications and further time was taken in reflecting on the submissions, in considering the documentation provided under cover of the letter dated 25th April 2012 from Gough advocates and in reaching determinations and in preparing the judgment. I join with the judges from other jurisdictions in expressing concerns in respect of the judicial time and legal costs unnecessarily spent on requests for further information/clarification and specific disclosure. There should be more co-operation and less confrontation between litigants and their advocates. Under Rule 1.(4) of the 2009 Rules the parties are required to help the court to further the overriding objective. Rule 19(1) of the Advocates’ Practice Rules [2001] provides that advocates have an overriding duty to the court to ensure, in the public interest, that the proper and efficient administration of justice is achieved. They must assist the court in justice. I express the wish that in future litigants try a little harder to help the court to further the overriding objective of dealing with matters justly under the 2009 Rules and that advocates try a little harder in assisting the court in the proper and efficient administration of justice. Litigants and their advocates must enthusiastically take on board the new litigation culture under the 2009 Rules.”

[See Wing Fai Construction Co Ltd v Yip Kwong Robert [2011] HKCFA 85 (judgment 8th December 2011) in respect of strike out applications under the CJR 2009 and the change in litigation culture. See Lord Hope’s comments in ANS v ML [2012] UKSC 30 at 64: “It is the duty of the court to manage cases of this kind actively from the outset, by encouraging the taking of steps that will minimise delay and by giving directions as to how the proceedings are to be conducted. But it is the duty of the parties too, and their legal advisers, to do

everything they can to help the court to secure its objective. Not sitting back and waiting for the other party to act, co-operating with each other where possible, giving positive assistance in the setting of timetables and limiting the opportunity for delay between each stage in the process and during the hearings themselves are just some examples of steps that they may take to assist the court.”]

20. In Isis Investments Limited (in liquidation) (CHP 12/0001 & CHP 12/0003) in a judgment delivered on the 7 June 2012 Deemster Doyle again referred to the new litigation culture under the 2009 Rules. The case involved, amongst other matters, an application to consolidate two sets of proceedings. The following are extracts from the judgment:

“22. Although in terms Rule 1.2(4) of the 2009 Rules imposes a duty on “the parties” it is readily assumed that this encompasses their legal advisers including advocates. See the English White Book 2012 at page 2812 citing Gevera Trading Co Ltd v Skjevesland [2002] EWCA Civ 1567; [2003] 1 WLR 912 where at paragraph 37 of the judgment delivered on the 30th October 2002 Arden L J stated:

“... Under the CPR, it is the express duty of the parties, and hence their legal advisers (including advocates), to help the court to further the overriding objective in the CPR (CPR 1.3) ...”

23. The Hong Kong Chief Justice Geoffrey Ma in Wing Fai Construction Company Limited (in compulsory liquidation) v Yip Kwong Robert FACV No. 3 of 2011 (date of judgment 8th December 2011) at paragraph 34 of his judgment stressed the fundamental importance of the duty of the parties and their legal representatives to assist the court in furthering the objectives set out in Hong Kong’s civil procedural rules.

24. Rule 7.1(1) of the 2009 Rules in the Isle of Man provides that the court shall further the overriding objective by actively managing cases. Rule 7.1(2) of the 2009 Rules provides that active case management includes

“(a) encouraging the parties to co-operate with each other in the conduct of the proceedings; (b) identifying the issues at an early stage; (c) deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others; (d) deciding the order in which issues are to be resolved; (e) encouraging the parties to use an alternative dispute resolution procedure if the court considers that appropriate and facilitating the use of such procedure; (f) helping the parties to settle the whole or part of the case; (g) fixing timetables or otherwise controlling the progress of the case; (h) considering whether the likely benefits of taking a particular step justify the cost of taking it; (i) dealing with as many aspects of the case as it can on the same occasion; (j) dealing with the case or any aspect of it without the parties needing to attend the court;

(k) making use of technology; and (l) giving directions to ensure that the trial of a case proceeds quickly and efficiently.”

25. Under Rule 7.3(3) of the 2009 Rules the court may give directions for the management of a claim at any stage (a) on the application by any party, or (b) on its own initiative.

26. Dealing with a case justly includes, in particular, allocating to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases (Rule 1.2(e) of the 2009 Rules). Rule 1.2(3) of the 2009 Rules requires the court to seek to give effect to the overriding objective of dealing with cases justly when it exercises any power given to it by the 2009 Rules.

27. The court has wide case management powers under the 2009 Rules. The court has jurisdiction to dismiss a pre-trial application summarily on the ground that it is not an appropriate application to make because it is likely to add to the costs without any significant benefit to the conduct of the case, and is therefore contrary to the overriding objective. In Norwich Union Linked Life Assurance Ltd v Mercantile Credit Co Ltd [2003] EWHC 3064 (Ch) December 19, 2003 David Richards J stated:

“4. Dealing first with the grounds of the Deputy Master’s decision, I reject the Claimant’s submission that a Court cannot refuse to consider the merits of an interim application if it considers that making the application is contrary to the overriding principle of the CPR. It was submitted that the overriding objective applies only to how an application is dealt with, not whether it is dealt with, and that a Court has no alternative but to consider an application on its merits. I very much doubt whether that was true before the introduction of the CPR and it is certainly not the case now. The overriding objective is concerned not with procedural and other interim applications taken on their own, but with dealing fairly, expeditiously and economically with cases as a whole. If a Court considers that an application made by a party in a case will delay resolution of the case or add to costs or take up Court time, with no proportionate benefit to the conduct of the case, the Court is in my judgment fully justified in refusing to consider it. Whether this is an appropriate course in any case will depend on the particular circumstances of that case, and I will return to that issue at the end of this judgment.”

28. The observations of the Court of Final Appeal of the Hong Kong Special Administrative Region in Wing Fai Construction Company Limited (in compulsory liquidation) v Yip Kwong Robert FACV No 3 of 2011 (date of hearing 22nd November 2011 date of judgment 8th December 2011) are of considerable assistance. The Court of Final Appeal of the Hong Kong Special Administrative Region is one of the world’s leading common law appellate courts along with the Judicial Committee of the Privy Council and the High Court of Australia. The Hong Kong Court of Final Appeal is greatly assisted by the calibre and international judicial experience of the judges who sit on the Court of Final Appeal.

29. Chief Justice Ma at paragraph 31 of the judgment in the Wing Fa Construction Company Limited (in compulsory liquidation) case referred to the main purpose of their Civil Justice Reform (CJR) which came into operation in Hong Kong on 2nd April 2009 as “the intention to bring about a change in litigation culture”. Chief Justice Ma referred to the following principal themes of the CJR:

“(1) To ensure that parties to litigation are brought as expeditiously as possible to a resolution of their disputes, whether by way of adjudication or by settlement.

(2) To increase the cost effectiveness of the system of the civil procedure and to try to eliminate delays in litigation.

(3) To promote active case management by the courts and in doing so, not only facilitating the expeditious resolution of disputes, but also bearing in mind the position of other litigants and the courts’ own resources.

(4) To inculcate a culture among litigants and their legal representatives that there exists a duty to assist the court in furthering the principal themes of the CJR.

(5) To reduce, if not eliminate, those steps in proceedings, particularly interlocutory applications, which serve little purpose other than to prolong or render more costly civil proceedings.”

30. At paragraph 34 of the judgment Chief Justice Ma stated:

“34. Critical to the success of the CJR and its objectives is the realization that litigation is not to be treated as a game, but as a serious legal contest (to borrow a phrase used by Walton J in another context in Rightside Properties Limited v Gray [1975] Ch. 72 at 88 E-F). Here, O.1A r.3 is of fundamental importance, stating it to be the duty of parties to a litigation and (I would stress) their legal representatives to assist the court in furthering the underlying objectives set out in O.1A r.1. It is of course important to recognize, as stated in O.1A r.2(2) that the primary aim of exercising its powers is for the court to “secure the just resolution of disputes in accordance with the substantive rights of the parties”. This places in context the operation of the Rules under the CJR:- Rules do not exist for the sake of compliance with them as an end in itself; they exist for the purpose of ensuring that disputes before the courts are justly resolved. It does not, however, provide any excuse for parties or their legal representatives not to comply with the Rules or orders made by the court, nor does it relieve them of this duty under O.1A r.3. The emphasis must be placed on the word “just”.”

31. Chief Justice Ma at paragraph 47 of the judgment stated that:

“... all parties to a litigation have the obligation to progress an action so that they are brought closer to the resolution of their dispute, rather than be distracted by litigation tactics ...”

32. For the sake of completeness I should add that the underlying objectives set out in O1.A r 1 of the relevant procedural rules in Hong Kong are referred to at paragraph 32 of the judgment as follows:

“(a) to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court; … (d) to ensure that a case is dealt with as expeditiously as is reasonably practicable; (e) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings; (f) to ensure fairness between the parties; (g) to facilitate the settlement of disputes; and (h) to ensure that the resources of the Court are distributed fairly.”

33. The learned Chief Justice of Hong Kong at paragraph 32(3) of his judgment with which Mr. Justice Bokhary PJ, Mr. Justice Chan PJ, Mr. Justice Ribeiro PJ and Lord Scott of Foscote NPJ agreed) emphasised that:

“It will be through active case management by the courts, supported by the duty on the parties and their legal representatives to assist, that the just resolution of disputes will be achieved.”

34. One is also reminded of the words of Lord Collins in the Texan Management Limited case [2009] UKPC 46 at paragraph 1:

“It has often been said that, in the pursuit of justice, procedure is a servant not a master.”

35. And the words of Lord Phillips PSC in NML Capital Limited v Republic of Argentina [2011] UKSC 31 that:

“... procedural rules should be the servant not the master of the rule of law.”

36. As Chief Justice Ma said at paragraph 34 of his judgment in the Wing Fai Construction Company Limited case FACV No 3 of 2011 (date of judgment 8th December 2011):

“... Rules do not exist for the sake of compliance with them as an end in itself; they exist for the purpose of ensuring that disputes before the courts are justly resolved ...”

37. In the new litigation culture it is imperative that the parties and their legal representatives focus on the main areas of dispute between them which require judicial determination. Parties and their legal representatives must co-operate in narrowing the focus of the main areas of dispute. Those in dispute should first of all use their best endeavours to resolve their dispute without recourse to expensive and protracted legal proceedings. If legal proceedings are necessary then they should be dealt with expeditiously, fairly and efficiently within a short period of time and at a reasonable cost.

38. This court wishes to discourage unnecessary procedural jousting or to use Judge of Appeal Hytner’s words the unnecessary ploughing of extensive furrows through the field of interlocutory litigation and the ritual dance through the Rules. Issues in dispute should be dealt with on their merits in accordance with the substantive rights and legal obligations of the parties. If they cannot be resolved by sensible negotiation, mediation and settlement then judicial determination will be necessary. Legal proceedings should however normally be the last resort of the parties. Once legal proceedings are issued the parties and their legal advisers and representatives including advocates must do all they can to fairly and expeditiously progress the case and strictly comply with case management directions to ensure a judicial determination of the legal issues in dispute within a reasonable time and at a reasonable cost. The court will engage in active and robust case management in furtherance of the overriding objective of dealing with cases justly.

39. Where parties find themselves in dispute over purely procedural matters they are required to co-operate in making a real attempt to explore the significant narrowing of, or compromise of, the procedural dispute for the purpose of avoiding disproportionate expense and the taking up of excessive court time. In Lexi Holdings v Pannore and Partners [2010] EWHC 1416 (Ch) June 18, 2010, Briggs J stated:

“5.... Mr. Philip Marshall QC for the claimant explained that, in the claimant’s view (and, I infer, the view of its legal team) the defendants’ conduct of the case thus far had been characterised by an extravagant, improper and inappropriate attitude, including excessive requests for early disclosure, a misconceived summary judgment application, and repetitive requests for information, such that it was time for the defendants’ approach to be curtailed by what he described as “a good rap on the knuckles”.

6. The court was presented with no less than ten lever arch files of documents supposedly relevant to the application, one from the defendants and nine from the claimant, without any attempt by the claimant to confine their contents to what was either necessary or likely to be needed by the court. The result of the claimant’s apparent wish to enforce procedural rectitude on the defendants has been a hearing attended by leading counsel on both sides lasting more than half a day, a further day’s judicial preparation and judgment writing, and the expenditure of more than 150 hours of time by the parties’ solicitors and counsel, in relation to a purely procedural dispute which, so far as I have been able to ascertain, the parties made no attempt whatsoever either to compromise or significantly to narrow.

7. It ought not to be necessary, more than ten years after the introduction of the overriding objective and the CPR, to have to say that such an approach to the resolution of interim procedural disputes is wholly unacceptable. The litigation of issues of bad faith and dishonesty may of course generate intense feelings of bitterness on both sides, and a determination to leave no stone unturned, regardless of cost, and all the more so in high value cases such as this one. Nonetheless the parties and their legal teams are obliged by CPR 1.3 to help the court to further the

overriding objective. While a case is being prepared for trial this requires the parties and in particular their legal teams to put on one side their understandable feelings of mutual outrage and hostility, and to cooperate with each other in a process of preparation for trial which incurs only proportionate costs and uses no more than an appropriate share of the court’s resources.”

40. In the Shepherds Select Funds plc case (CHP 12/0057 judgment delivered 22nd May 2012) I stated:

41. Deemster Moran in the Bitel LLC case (ORD 11/0048 judgment 4th May 2012) referred at paragraph 81 to the “modern litigation environment” and the need for “a cost benefit analysis” and to consider whether the process involves “a proper use of Manx judicial resources”.

42. In this case I was of the view that it was not a proper use of limited Manx judicial resources to adjourn the application for consolidation. I was of the view that it was in furtherance of the overriding objective and a proper use of Manx judicial resources to make an order for consolidation without further adjourning the matter which would have involved further time and cost and taken up further judicial resources when this was not necessary. I was of the view that the order I was minded to make and after hearing submissions did make on the 23rd May 2012 would not prejudice the substantive rights of any of the parties to the claims. I was therefore content to proceed in the absence of three of the parties. Moreover the Arab Monetary Fund judgment gave me comfort that consolidation could be ordered prior to service providing the parties had an opportunity to apply for a deconsolidation order once served.”

21. Lord Hope in Ruddy v Chief Constable [2012] UKSC 57 at paragraph 32:

“... Rules of procedure should, after all, be servants, not masters, in matters of this kind.”

22. AM Personal Limited v Salazar Consulting Limited and others (Deemster Gough’s judgment 12 November 2012) at paragraph 32:

“The Court and the parties work together to secure justice ...”

Summary judgment and strike out

23. See Deemster Doyle’s judgment in Islamic Investment Company of the Gulf (Bahamas) Limited v Cains Advocates Limited 6 January 2012 [see Appeal Division judgment delivered on the 9 August 2013] and InterRetire Limited v HSBC Securities Services (Isle of Man) Limited 2 February 2012 in respect of summary judgment and strike out on the basis of no reasonable grounds for bringing the claim.

24. The Appeal Division (in the judgment delivered on the 9 August 2013) cited the following extracts from Deemster Doyle’s judgment in the Islamic Investment Company of the Gulf (Bahamas) Limited case:

“Strike out

28. Rule 7.3(2)(a) of the Rules of the High Court of Justice 2009 ("the 2009 Rules") provides that the court may strike out a statement of case if it appears to the court that the statement of case discloses no reasonable grounds for bringing or defending the claim.

29. Mr. Leech referred to the helpful judgment of High Bailiff Needham in Irving v Harding and others (judgment 27th May 2011) where the learned High Bailiff reviewed the relevant law. An application to strike out should not be granted unless the court is certain that the claim is bound to fail. In Davis v Radcliffe 1987-89 MLR 341 and 1990-92 MLR 52 it was held that a claim should not be struck out unless it is effectively unarguable, has no chance of succeeding and as such is a plain and obvious case.

Summary judgment

30. Under rule 10.46(a)(i) and (b) of the 2009 Rules the court may give summary judgment against a claimant on the whole of a claim or on a particular issue if it considers that the claimant has no real prospect of succeeding on the claim or issue and there is no other compelling reason why the case or issue should be disposed of at a trial.

31. Again High Bailiff Needham's judgment in Irving v Harding and others is of assistance. The learned High Bailiff referred to ED & F Man Liquid Products Ltd v Patel [2003] EWCA Civ. 472 and Three Rivers DC v Bank of England (No. 3) [2003] 2 AC 1. The courts have discouraged mini-trials in complex cases on disputed issues. The rule is designed to deal with cases that are not fit for trial at all.

32. Counsel referred to the judgment of Lewison J in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15]. The court must consider whether a

claimant has a realistic as opposed to a fanciful prospect of success. A realistic claim is one that carries some degree of conviction. This means a claim that is more than merely arguable. In reaching the conclusion the court must not conduct a mini-trial. This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in the factual assertions made, particularly if contradicted by contemporaneous documents. Moreover in reaching its conclusions the court must take into account not only the evidence actually placed before it on the application for summary judgment but also the evidence that can reasonably be expected to be available at trial. However it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the issue.”

25. See also Real Time Systems Limited v Renraw Investments Limited [2014] UKPC 6 in respect of the Civil Procedure Rules of Trinidad and Tobago and the “nuclear option” of a strike out for defective pleadings and proportionate solutions. Lord Mance delivered the judgment of the Judicial Committee of the Privy Council on 3 March 2014 and stated the following at paragraph 17:

“… There is no reason why the court, faced with an application to strike out, should not conclude that the justice of the particular case militates against this nuclear option, and that the appropriate course is to order the claimant to supply further details, or to serve an amended statement of case including such details, within a further specified period. Having regard to rule 26.6, the court would quite probably also feel it appropriate to specify the consequences (which might include striking out) if the details or amendment were not duly forthcoming within that period.”

26. In Interretire Limited v HSBC Securities Services (Isle of Man) Limited (judgment 2 February 2012) Deemster Doyle declined to take the “nuclear option” and strike out various claims or to grant summary judgment in favour of the Defendant. Deemster Doyle stated at paragraph 25:

“The case does however have to be properly and fully pleaded…”

At paragraph 47 Deemster Doyle stated:

“It would in the circumstances of this case be a disproportionate exercise of the court’s jurisdiction to strike out the claims. A proportionate response would be to deal with the concerns by ordering the Claimant to further amend its pleading. The Claimant will have to amend its pleading in order that the Defendant will be aware of the precise case against it in respect of all heads of claim.”

27. The Appeal Division in The Slegaby Estate Limited v Lloyds Bank International Limited (judgment 21 February 2014) dealt with an appeal against orders made by the High Bailiff entering summary judgment under Rule 10.46 of the 2009 Rules and striking out Slegaby’s defence under Rule 7.3. The Appeal Division stated:

“28. After rehearsing the submissions made on behalf of the parties, the High Bailiff reminded himself of the legal principles to be applied on a strike out application. He said this:

`15. The application of these two rules is now well trodden ground. I have reminded myself of the cases of Davis v Radcliffe 1987-89 MLR 341; Corkill & Corkill v Walmsley /Summary Procedure/02.12.09; Mascarenhas and others v Bennett and others/Ordinary Procedure/17.05.10; Irving v Harding/Chancery Procedure/27.05.11; and, Islamic Investment Company of the Gulf (Bahamas) Ltd v Cains/Ordinary Procedure/06.01.12. As Deemster Doyle summarised in the latter case at paragraphs 29, 31 & 32:

[Strike out]

`An application to strike out should not be granted unless the court is certain that the claim is bound to fail…. a claim should not be struck out unless it is effectively unarguable, has no chance of succeeding and as such is a plain and obvious case.`

[Summary Judgment]

`The courts have discouraged mini-trials in complex cases on disputed issues. The rule is designed to deal with cases that are not fit for trial at all…. The court must consider whether a claimant has a realistic as opposed to a fanciful prospect of success. A realistic claim is one that carries some degree of conviction. This means a claim that is more than merely arguable. In reaching the conclusion the court must not conduct a mini-trial. This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in the factual assertions made, particularly if contradicted by contemporaneous documents. Moreover in reaching its conclusions the court must take into account not only the evidence actually placed before it on the application for summary judgment but also the evidence that can reasonably be expected to be available at trial. However it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the issue.`

29. We are satisfied that the High Bailiff cited the correct legal principles to be applied and neither Mr Alder nor Mr Hill submitted to the contrary. Moreover in Islamic Investment Company of the Gulf (Bahamas) Limited v Cains [9 August 2013] this court, albeit differently constituted, considered and approved the principles set out by Deemster Doyle in the court below, as cited by the High Bailiff, which had been agreed to be the correct by the parties. The issue in that case, as here, was whether the reasons given by the judge below were sufficient to justify the conclusions reached by him …

50. We have already approved the test for striking out / summary judgment as applied by the High Bailiff. We are in no doubt that, although a defence should not be struck out and summary judgment given unless a court is certain that a claim is bound to fail or effectively unarguable, where such a situation exists a court is fully entitled to strike out a defence and give summary judgment. A

party cannot be allowed to defend a case simply on the basis that by pursuing the matter to trial and cross-examining witnesses something may turn up which may have a bearing on the case. We thus repeat this court`s earlier endorsement of Deemster Doyle`s dicta in Islamic Investment Company of the Gulf (Bahamas) Limited v Cains. In our judgment the Appellants are seeking to adopt such a strategy in this case and, as hereinafter appears, they are not justified in doing so.

51. In our judgment there can be no justification for what Mr Alder describes as a `full trial` where the defences pleaded are too weak to justify such a trial and moreover, on the facts of this case, there can be no denial of justice to the Appellants by declining to allow there to be a full hearing of arguments as to imprudent lending when the court is satisfied, as are we, that there is no merit in such arguments. Accordingly, we are satisfied that the High Bailiff did not err by denying the Appellants the opportunity to adduce evidence in respect of a submission which he, and we, are satisfied was bound to fail. In particular it cannot be wrong in law or unjust not to allow an opportunity for cross examination of witnesses on an issue where the judge is satisfied that there can be no merit in the defence being contended for. This is even more so where the cross examination, namely that the Bank`s behaviour `was seriously below expected standards of prudent banking` is a wholly nebulous and unparticularised allegation.”

28. In Louis v Finegold (Deemster Doyle’s judgment delivered 27 February 2013) the following was stated:

“Strike Out

12. Rule 7.3 (2)(a) of the 2009 Rules in effect provides that the court may strike out a claim if it appears to the court that the claim discloses no reasonable grounds for bringing the claim. It is well established (see for example Irving v Harding and others judgment of the High Bailiff delivered on 27th May 2011 and my judgment in Islamic Investment Company of the Gulf (Bahamas) Limited v Cains Advocates Limited delivered on the 23rd February 2012) that an application to strike out should not be granted unless the court is certain that the claim is bound to fail. A claim should not be struck out unless it is effectively unarguable, has no chance of succeeding and as such is a plain and obvious case.

Summary Judgment

13. Under Rule 10.46(a)(i) and (b) of the 2009 Rules the court may give summary judgment against a claimant on the whole of a claim or on a particular issue if it considers that the claimant has no real prospect of succeeding on the claim or issue and there is no other compelling reason why the case or issue should be disposed of at a trial.

14. Again High Bailiff Needham's judgment in Irving v Harding and others is of assistance. The learned High Bailiff referred to EO & F Man Liquid Products Ltd v Patel [2003] EWCA Civ. 472 and Three Rivers DC v Bank of England (No. 3) [2003] 2 AC 1. The courts have discouraged mini-trials in complex cases on

disputed issues. The rule is designed to deal with cases that are not fit for trial at all.

15. I have also considered the judgment in Lewison J in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15]. The court must consider whether a claimant has a realistic as opposed to a fanciful prospect of success. A realistic claim is one that carries some degree of conviction. This means a claim that is more than merely arguable. In reaching the conclusion the court must not conduct a mini-trial. This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in the factual assertions made, particularly if contradicted by contemporaneous documents. Moreover in reaching its conclusions the court must take into account not only the evidence actually placed before it on the application for summary judgment but also the evidence that can reasonably be expected to be available at trial. However it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the issue.”

29. See also Corkill v Walmsley (2 December 2009 Deemster Corlett) and High Bailiff Needham’s judgment in Marlow Construction Limited v Morris and Rushbrook (30 July 2010) in respect of summary judgment.

30. In Mascarenhas (17 May 2010) and Logan v Bent Ham Limited and Tilleard (10 August 2011) Deemster Corlett dealt with issues concerning strike out applications.

31. See Irving and another v Harding and another (High Bailiff’s judgment delivered 27 May 2011) in respect of strike out and summary judgment and the Appeal Division judgment of the 24 February 2012.

32. See Manx Auto Rescue Club Limited and others v Mann & Partners and another (High Bailiff Needham’s judgment 16 May 2011) in respect of Rule 7.3 strike out, automatic stay Rule 15.16 and dormant claims Rule 2.62 and the subsequent judgments of the Appeal Division of the 13 November 2012.

33. See King Williams College v Megson (High Bailiff’s judgment 16 May 2012) in respect of Rule 7.3(2) (b) of the 2009 Rules and strike out applications where there has been a long delay in progressing cases. See also the Appeal Division’s judgments in that appeal and also in Manx Auto Rescue v Mann & Partners (judgments delivered 13 November 2012).

Split trials

34. Rule 7.2(2)(i) and (j) of the 2009 Rules provides that except where the Rules provide otherwise the court may direct a separate trial of any issue and decide the order in which issues are to be tried. See Deemster Moran’s judgment in Bitel LLC v Kyrgyz Mobil Tel Limited and others (10 February 2012) which contains a useful summary of the proper approach to be taken in respect of applications for the trial of preliminary issues. Deemster Moran refers to Deemster Doyle’s judgment in Teltscher v Rational Entertainment Enterprises Ltd (10 June 2008) and Neuberger J’s judgment in Steele v Steele [2001] 1 WL 542150.

35. The following are extracts from Deemster Moran’s judgment in respect of factors to consider when deciding whether to order a trial of a preliminary issue:

“The proper approach to such applications:

9. There is an embarrassment of riches in the guidance available as to the proper approach, in both the Manx and English authorities cited to me, to applications such as these. The extent of such guidance is matched only by the plethora of competing illustrations in the cases of when the selection and (more often) the formulation of an issue can go horribly wrong; and when it ought to occur or have occurred. I am mindful that the authorities will not provide a fair impression of the instances of successful and profitable (in terms of effective case management) trials of preliminary issues as those instances are unlikely to be reported. Counsel before me could not agree on the modern frequency of incidence of trials of preliminary issues or whether the restrictive principles expounded in some of the older authorities still held sway or whether the modern approach reflects a more willing attitude amongst judges to order such trials. In my judgment, such considerations are unhelpful in what is such a fact and case sensitive matter. Remembering, important as it is, that this is a case management decision, it would be disproportionate to conduct an extensive survey of the authorities placed before me highlighting the factual nuances, which led to the particular decisions in those many cases. I record that I have read them all and weighed all of the arguments of the parties founded upon them. I have found the most useful modern guidance in two cases in particular, which seem to me to set out perfectly the guiding principles in play and the range of considerations I should take into account.

10. The first of those cases is decision of His Honour Deemster Doyle in this Court in the case of Natalie Teltscher v Rational Entertainment Enterprises Ltd CA 2007/8 10 June 2008. The facts of the case concerned a dispute arising over entitlement to certain proceeds of gaming in which the Claimant claimed that the Defendant, in breach of trust and in breach of its fiduciary duty to account for the prize pool in accordance with the tournament rules or in breach of contract, did not pay to her the US$1.228m to which she claimed to be entitled as her winnings.

11. The Defendant to the action, by its application, sought a trial of preliminary issues relating to the meaning and effect of the defendant's terms and conditions on the basis of agreed facts, in which it was claimed the outcome would be determinative of the action. It is not necessary for me to recite the agreed facts or the framed issue, but it suffices to say that this was the most fertile of ground from which to harvest a worthwhile and productive (of saved time and costs) preliminary issue. Deemster Doyle accordingly did so.

12. In reaching his decision, he conducted a most helpful review of relevant Manx and English authority on the issue of when preliminary issues should be tried and of the advantages and pitfalls in that procedure. At paragraphs 31-36 of his judgment, he said as follows:

“Law and Procedure

31. Order 27 rule 12 of the Rules of the High Court of Justice of the Isle of Man and the power to order matters to be determined as preliminary issues (which is part of "the general power of the court to control the trial process" Appeal Division's judgment in Rawcliffe v Steele [1993-95] MLR 426 at 444) are useful weapons in the armoury of the courts to ensure that disputed issues are dealt with fairly, expeditiously and with the least delay, cost and complexity. Order 27 rule 12 provides that in every action the place and mode of trial may be varied by an order of the court made at or before the trial. In any action different questions or issues may be ordered to be tried at different places or by different modes of trial and one or more questions or issues may be ordered to be tried before the others.

32. The court has wide case management powers and a wide discretion in respect of deciding preliminary issues in advance of the main hearing. In some cases the determination of the preliminary issue may dispose of the need for a main hearing or may refine the issues for determination at the main trial.

33. As was stated in Royal & Sun Alliance Insurance plc v T & N Ltd [2002] EWCA 1964 the ability to order preliminary issues is a valuable case management tool. It must however be used with great care. A watchful eye has to be kept for the "treacherous short cut" which may lead to delay and expense. In particular it should not generally be used where the application of the relevant law will depend on the determination of the precise facts of the case and those facts have yet to be identified. See also Rawcliffe v Steele 1993-95 MLR 426 and Denning L J in Carl-Zeiss- Stiftung v Herbert Smith [1968] 2 All ER 1002 at 1004.

34. The potential for treacherous short cuts and the benefits of hindsight in respect of preliminary points were apparent from the Appeal Division's judgment in Boothman v KD Resources Limited 2005-06 MLR 174 at paragraph 11 where the following was stated:

"If it were believed that such agreed assumptions would facilitate the economic or expeditious determination of the parties' respective contentions, it was a belief which was and remains unfounded because they have served only to add unnecessary expense and whatever the determination of this court it is unlikely to prevent the need for a determination of the facts in dispute between the parties. With mature reflection, particularly with the benefit of hindsight, it might be considered that the wisest course would have been for the court to determine the facts and then stand back to identify what legal issues, if any, then required to be determined".

35. A court may order the hearing of a preliminary point if it is likely to save time and costs and confer benefit on the parties. A court may be prepared to deal with preliminary points if deciding them will substantially determine the case. An application for a preliminary hearing may have more chance of success if it is made shortly after the close of pleadings (Pavlovic v Kingsway Shipping Ltd 1996-98 MLR N4).

36. The court has wide powers to order certain questions or issues to be tried before other questions or issues raised on the pleadings are tried.”

13. Having identified that early resolution of the issue of contractual interpretation was a necessary and desirable route to determination of the claim based on the alleged holding of the winnings in trust (which claim was complicated by the possible entitlements of some 414 other participants to the proceeds of the gaming), Deemster Doyle expressed his conclusions succinctly in this manner:

“44. The courts have not hesitated to robustly exercise their case management powers in an endeavour to avoid delay, expense, unnecessary complexity and in an endeavour to decide the important and critical issues between the parties at an early stage. See in a different context Crossley v Crossley [2007] EWCA Civ 1491.

45. I accept that experience shows that sometimes what appears superficially to be a potential knock-out punch if decided one way subsequently reappears on full investigation to be a misdirected blow. In the circumstances of this case however it appears that the determination of the contractual issues at this stage will be of assistance to the parties and could save a great deal of time, expense and complexity. Dealing with the contractual issues before the trust issues is not so much a treacherous short cut but more of a necessary and appropriate journey to a half way destination (the determination of the contractual issues) to ascertain if it is necessary to complete the other half of the journey with 414 other participants to a further destination (the determination of the trust issues) or as to whether the journey can properly be regarded as completed without them if the determination of the contractual issues is in favour of the Defendant and the Plaintiff is not entitled to the monies.

46. The 414 other players were not parties to the contract between the Plaintiff and the Defendant. The contractual issues relate to the legal position between the Plaintiff and the Defendant and not between the existing parties to the litigation and the 414 other players. There is no necessity at this stage to join in the other 414 other players to enable the fair and proper determination of the contractual issues to be undertaken.”

14. The obvious feature emerging from this decision is that having reminded and directed himself perfectly of the possible advantages and pitfalls of trials of preliminary issues, he was able on the particular facts of this case, to map a clear and likely route to a complete resolution of the case by means of trying the preliminary issue suggested. Whilst he recognised that determination of the issue did not guarantee the complete resolution of all issues in the case, he rightly saw it as a worthwhile progression to what he pithily described, in colourful contrast to the doom laden epithet used in some cases to describe a "treacherous short cut", as "an appropriate journey to a half way destination". He was able so to conclude, even though that benefit would accrue only if the issue was decided in one particular way as opposed to it accruing if the decision went either way. It is, in my judgment, abundantly clear on the facts of the case, the terms of the contract and the terms of the defined preliminary issue, that Deemster Doyle was able to make a fair appraisal of the likely outcome of

27 the issue (without determining it) and thereby be satisfied of its potentially beneficial effect in saving time and costs and in achieving the speedy, fair and just resolution of the case. He also used another helpful and evocative phrase when reflecting on the danger of a wrongly chosen preliminary issue when he said, "I accept that experience shows that sometimes what appears superficially to be a potential knock-out punch if decided one way subsequently reappears on full investigation to be a misdirected blow". In this massively more complicated case, I am endeavouring to decide whether, on the facts and circumstances of this case, there would be on trial of the posited preliminary issues, a sufficiently likely prospect of a potential knock-out punch, such as Deemster Doyle so obviously recognized in Teltscher, or a potentially risky, costs-sapping, time and resources-wasting misdirected blow, which might land; but would be unwise to throw. I, of course, do not have the benefit of the hindsight alluded to by Deemster Doyle in making my judgment.

15. Embracing that overarching, practical guidance, I proceeded to find assistance in the more mechanical or systematic guidance to be found in the decision of Neuberger J, as he then was, in the case of Steele v Steele [2001] 1 WL 542150. The facts of the case are immaterial beyond recording that a Deputy Judge had of his own motion directed a trial of preliminary issues but Neuberger J, before whom the trial of the issues was listed for hearing, disagreed with the Deputy Judge's approach and refused to try them. In such circumstances, he felt compelled to give extensive and helpful guidance about the influencing factors and the proper approach to applications of the type now before the court. In the judgment there are ten points in number but in a helpful extraction, which appears at page 464 of the CMC bundle, that number is reduced to nine with the 4th and 5th from the judgment being elided. Thus Neuberger J indicated that when deciding whether to order determination of a preliminary issue, the Court should ask itself the following questions:

“1. Could the determination of the preliminary issue dispose of the whole case or at least one aspect of the case?

2. Could the determination of the preliminary issue significantly cut down the cost and the time involved in pre-trial preparation and in connection with the trial itself?

3. If the preliminary issue was an issue of law, how much effort, if any, was involved in identifying the relevant facts for the purpose of the preliminary issue? The greater the effort the more questionable the value of ordering a preliminary issue.

4. If the preliminary issue was one of law, to what extent was it to be determined on agreed facts? The more facts that were in dispute the greater the risk that the law could not be safely determined until the disputes of fact were resolved.

5. Whether the determination of the preliminary issue could unreasonably fetter either or both of the parties or the court in achieving a just result at trial.

6. To what extent was there a risk of the determination of the preliminary issue increasing costs and/or delaying the trial? In that regard the court could take into account the possibility that the determination of a preliminary issue might result in a settlement.

7. The extent to which the determination of a preliminary issue was relevant. The more likely it was that the issue would have to be determined by the court, the more appropriate it was to have it as a preliminary issue.

8. To what extent was there a risk that the determination of the preliminary issue, if apparently helpful in terms of saving costs and time, could lead to an application for the pleadings to be amended to avoid the consequences of the determination?

9. Was it just and right to order a preliminary issue?”

16. It is obvious that these are often uncertain, sometimes inter-dependent and sometimes competing factors. In my judgment, whilst all of these items must be weighed in cases where they arise, the starting point in most cases (and I am sure in this) must be to make an appraisal of item 1. The answers to the subsequent questions and their weight are substantially influenced by the view taken under that first item. The submissions before me were properly and principally focussed (and diametrically opposed) on this first question. In his submissions, Mr Smith QC, on behalf of the Alfa parties, went through the Judge's list, ticking off those considerations militating in favour of the trial of his preliminary issues. There could not be much dispute with those submissions – if, and it is of course a very big "if", the determination of the preliminary issues (including establishment of the disputed proposition in the first sentence of issue 1) was dispositive of the whole trial or a substantial part of it.”

[See also Deemster Moran’s judgment in Seaside Shipping Limited v DOI and IOMSPC 13 July 2012 re complex preliminary issues and points of law.]

36. In Shepherds Select Funds Plc (judgment 19 December 2012) Deemster Doyle was not persuaded that it was just and convenient to order a split trial on liability and quantum. The following are extracts from the judgment:

“2. I turn now briefly to the relevant law. I have considered the relevant law and procedural rules.

3. Rule 7.2(2)(i) and (j) of the Rules of the High Court of Justice 2009 provides that except where the Rules provide otherwise the court may direct a separate trial of any issue and decide the order in which issues are to be tried. I also consider this matter in the context of the overriding objective specified in Rule 1.2.

4. I have considered Deemster Moran's helpful judgment in Bitel LLC v Kyrgyz Mobil Tel Limited (10th February 2012) which usefully reviews some of the relevant authorities.

5. Assistance can also be gained from an English authority brought to the attention of the court by counsel namely Electrical Waste Recycling Group Ltd v Philips Electronics UK Ltd [2012] EWHC 38 (Ch) and in particular paragraphs 5 – 13 and 15 – 16 of the judgment:-

"5. Where the issue of case management that arises is whether to split trials the approach called for is an essentially pragmatic one, and there are various (some competing) considerations. These considerations seem to me to include whether the prospective advantage of saving the costs of an investigation of quantum if liability is not established outweighs the likelihood of increased aggregate costs if liability is established and a further trial is necessary; what are likely to be the advantages and disadvantages in terms of trial preparation and management; whether a split trial will impose unnecessary inconvenience and strain on witnesses who may be required in both trials; whether a single trial to deal with both liability and quantum will lead to excessive complexity and diffusion of issues, or place an undue burden on the Judge hearing the case; whether a split may cause particular prejudice to one or other of the parties (for example by delaying any ultimate award of compensation or damages); whether there are difficulties of defining an appropriate split or whether a clean split is possible; what weight is to be given to the risk of duplication, delay and the disadvantage of bifurcated appellate process; generally, what is perceived to offer the best course to ensure that the whole matter is adjudicated as fairly, quickly and efficiently as possible.

6. Other factors to be derived from the guidance given by CPR Rule 1.4, which reflect a common sense and a pragmatic approach, may include whether a split would assist or discourage mediation and/or settlement; and whether an order for a split late in the day after the expenditure of time and costs might actually increase costs.

7. All these sorts of factors seem to me to be potentially relevant and need to be taken into account in what is essentially a pragmatic balancing exercise in assessing how the case is likely to unfold according to whether there is or is not a split.

8. It follows that each case falls to be assessed by reference to its own facts, features and peculiarities. Further, the assessment has to be made before the Court can responsibly take any reliable view as to the prospects of success, and thus as to whether quantum will be a live issue or not.

9. Given the variety of circumstances, and the nature of the approach required, little definitive guidance can sensibly be culled from the cases beyond generalities such as I have expressed, except that experience has confirmed the importance of ensuring that there be careful demarcation, in the event of an order for a split trial, of the boundary between the two in terms of the issues to be deal (sic) with at each stage (and see per Morgan J in Bookmakers' Afternoon Greyhound Services Ltd and Others v Amalgamated Racing Ltd and Others [2008] EWHC 2688 (Ch), approved by the Chancellor, Sir Andrew Morritt CVO, in The Leaflet Company Ltd v Royal Mail Group Ltd [2009] UKCLR 323).

10. However, such cases do assist to prompt consideration of particular issues and to build up by experience a check list of matters that may be relevant. Thus, for example, the determining factors in favour of a split trial in The Leaflet Company case were that (a) the boundaries between liability, causation and quantum were tolerably clear (b) there were no significant issues of causation that could not safely be left to be dealt with at a second stage or trial (c) the trial slot and date would be likely to be lost if no split was made (d) a split would ease the burden on the Judge at trial, given that the infringement liability issues were "heavy enough" and, perhaps most important of all (e) there were 16 allegations of infringement, leading to what the Chancellor described as "an over-large number of possible permutations", such as both to complicate the expert evidence and increase the likelihood of the experts and the Court having to address a number of permutations that never in fact would arise according to whatever might be the determination on liability.

11. Some of these considerations obviously arise in the present case. For example, as in that case, so in this, the liability issues are complex; to add quantum will increase the burden on the trial judge as well as Counsel and the parties. Proliferation of issues can indeed lead to a lack of focus, as well as wasted expense. As always, if the Claimants fail, then time and money spent on quantum will be lost ...

13. In particular, I am not persuaded that the separation of causation from liability is realistic in a case (such as this) where, at least arguably, the evidence required to consider quantum is likely to overlap with the factual evidence in relation to liability, and where (as I understand from the Defendants may be true in this case) some of the same witnesses in the first part may have to be involved in the second part ...

15. Taking all the above considerations into account (and with the sort of factors I have adumbrated in paragraphs 4 and 5 well in mind), I have eventually concluded that, as matters stand, there is not sufficient reason to split this trial to outweigh the sense and prescribed objective of dealing with as many aspects of the case as possible on the same occasion.

16. Of particular influence on my thinking have been the following (a) my sense that the boundaries will become difficult to draw and abide by, especially on issues of causation; (b) the likely overlap of evidence accordingly; (c) the likelihood that quite a lot of expert work has already been done (given what was a fairly imminent trial on the original timetable); (d) the fact that under the new time-table there is presently no reason to suppose that quantum cannot be accommodated; (e) the comparatively narrow range of issues (though I accept they are individually complex); (f) my assessment that the permutations will be limited, and the quantum of the separate claims will not be dependent on other claims and can be individually addressed; (g) my concern about further delay before final resolution and also a bifurcated appeal process; and (h) my impression that mediation may be assisted by the parties having to bring more certainty to the money at stake; (h) generally, my feeling that the overriding objective is likely to be furthered by a single trial." ”

37. The Master of the Rolls in Rossetti Marketing Limited v Diamond Sofa Company Limited [2012] EWCA Civ 1021 at paragraph 79 referred to “the rather remarkable state of affairs in which we find ourselves.” At paragraph 1 the Master of the Rolls had referred to the appeal from Cranston J determining certain preliminary issues and stated:

“It represents yet another cautionary tale about the dangers of preliminary issues. In particular, it demonstrates that (i) while often attractive prospectively, the siren song of agreeing or ordering preliminary issues should normally be resisted, (ii) if there are nonetheless to be preliminary issues, it is vital that the issues themselves, and the agreed facts or assumptions on which they are based, are simply, clearly and precisely formulated, and (iii) once formulated, the issues should be answered in a clear and precise way.”

38. Rosetti was referred to in Fox v Jewell [2013] EWCA Civ 1152, Longmore L J stating:

“24. Of course, Mr Troup reminded us that this court only very occasionally interferes with what are case management decisions. Naturally one accepts that. But this court has now fairly considerable experience of how sometimes unsatisfactory preliminary issues can be, if they are not truly entirely separate and independent issues from other issues which are left to be tried later. In a case where, with respect to the judge, the reasons for ordering a split trial are not entirely logical, and it is clear that he himself had some doubt about the matter, it is, in my view, much better for this court to interfere at the present stage rather than later to moan about the unsatisfactory position which may have developed at the trial or after two trials.”

Disclosure of information, pleadings, further information and expert evidence

39. See Deemster Moran’s judgment (ORD 11/48 4 May 2012) in Bitel in respect of disclosure of information, pleadings, further information and restrictions on adducing expert evidence.

40. Deemster Moran at paragraph 77 of his judgment stated:

“The Court has a duty under Rule 8.51 of the Rules of the High Court to restrict expert evidence to that which is reasonably required for the just, efficient and economical resolution of the case before it.”

41. At paragraph 81 Deemster Moran added:

“I also have to consider, in making this case management decision, the effect that permission to adduce such evidence as this would have on the trial process, which of course includes increased time, trouble and cost to the parties and increased use of court resources. Inevitably, in the modern litigation environment, this involves a cost benefit analysis. I have no doubt that permission to adduce such evidence, will substantially add to the length and complexity of the trial even if I exert rigorous control (as I would) in limiting the scope of such evidence and the number of witnesses – all of which I have considered ... I also have to weigh whether it is a proper use of Manx judicial resources to expend them on a process, which in my judgment is unlikely to

provide any significant benefit in the decision making process – still less to be required. In short, I cannot see that whatever I might find as to the general existence of judicial corruption in Kyrgyzstan in a snapshot of time in 2005-2006, could add much to the acute analysis of the facts pertaining to the obtaining of these particular judgments, which I must undertake.”

42. At paragraph 82 Deemster Moran concluded his judgment under the heading “The application to adduce expert evidence as to the administration of justice, judicial independence and the existence or otherwise of judicial corruption in Kyrgyzstan” as follows:

“Weighing all of these matters and even taking account of my powers to restrict any evidence I might have permitted in this vein, I am satisfied upon applying Rule 8.51 that it is neither reasonably required nor in the interests of justice for evidence of the type under consideration to be adduced. For all of the foregoing reasons, I am not prepared to grant permission to any party to adduce expert evidence on the topic described in the heading to this section of my ruling.”

43. See also the Appeal Division’s judgment in Bitel (judgment 13 December 2012) in respect of (1) Deemster Moran’s refusal of permission to the parties to adduce at trial evidence as to the administration of justice, judicial independence and the existence or otherwise of judicial corruption generally in Kyrgyzstan (2) Deemster Moran’s refusal to issue a letter of request to the judicial authorities in Luxembourg and (3) Deemster Moran’s order requiring the Alfa Parties to undertake further steps in relation to disclosure. The Appeal Division dismissed the appeals. Deemster Moran in Bitel (judgment 21 December 2012) at paragraph 16 stressed the need for parties to litigation to behave constructively and sensibly in relation to disclosure issues under the 2009 Rules in order to further the overriding objective.

44. See Deemster Doyle’s judgment in Shepherds Select Funds Plc CHP 12/57 22 May 2012 in respect of pleadings, further information/clarification and specific disclosure. The following are extracts from the judgment in Shepherds Select Funds Plc:

“Law

Precise Pleadings

6. The need for precise pleadings has been regularly stressed by the courts (see for example Wardrop v Wardrop 2003-05 MLR 572 at 576 78 and Clarkson v Department of Infrastructure CHP 2009/16 judgment delivered on 29th September 2010).

7. Pleadings mark out the parameters of the case that is being advanced by each party. They identify the issues and the extent of the dispute between the parties. Pleadings should make clear the general nature of the case.

8. Skeleton arguments, written submissions and witness statements are not pleadings. The case should be pleaded in the pleadings. As Lord Dyson in Bernard v Seebalack [2010] UKPC 15 at paragraph 16 stated a detailed witness statement or a list of documents cannot be used as a substitute for a short statement of all the facts relied on by the claimant.

9. The pleadings should contain a concise statement of the nature of the claim and specify the remedies which are sought and should include a concise statement of facts on which the parties rely. Defendants and the court must be able to go to the Statement of Case to see the case which is being advanced by a claimant rather than having to piece together various other documents in an endeavour to put the various pieces of the jigsaw together to see exactly what case a claimant is making. A claimant’s case should be plain from a perusal of the claimant’s Statement of Case.

10. What is important is that the pleadings should make clear the general nature of the case of the pleader. The function of a pleading is to make allegations of the material facts necessary to support the case being made, not to identify all the evidence. That is not to say that, in order to know more precisely the case which it has to meet, a defendant may not be entitled to further information as to how the case is to be put.

11. As well as their expense and the time and delay involved in providing them, excessive particulars can however achieve directly the opposite result from that which is intended. They can obscure the real issues rather than providing clarification. Litigants and their advisers should focus on the core issues in dispute rather than prolonging the determination of those core issues with interlocutory skirmishes on ancillary matters of marginal relevance and significance that only serve to prolong proceedings and increase costs. Having said that there must be proper pleadings which concisely set out the respective cases of the parties and identify the core issues in dispute with sufficient particularity to enable each party to know what case he has to meet and to enable the court to decide what issues need to be judicially determined.

Further Information/Clarification

12. Under Rule 6.44(1) of the Rules of the High Court of Justice 2009 (the “2009 Rules”) the court may at any time order a party:

(a) to clarify any matter which is in dispute in the proceedings; or (b) to give additional information in relation to any such matter, whether or not the matter is contained or referred to in a Statement of Case.

13. Rule 6.44(2) of the 2009 Rules provides that Rule 6.44(1) is subject to any rule of law to the contrary. The power cannot be used to order the disclosure of information which, as a matter of law, cannot be compelled (for example on grounds of privilege).

14. A preliminary request for further information or clarification should be concise and strictly confined to matters which are reasonably necessary and proportionate to enable the party seeking the information or clarification to understand the case he has to meet and to prepare his own case. The regime for the provision of further information is based upon the tests of necessity and proportionality.

15. The commentary in the English White Book 2012 Civil Procedure on a similar rule of procedure at paragraph 18.1.2 refers to various English

34 authorities. The emphasis is on strictly what is necessary and proportionate and on the avoidance of disproportionate expense and use of time.

16. The duties of the parties and their legal representatives to help the court to further the overriding objective of dealing with cases justly and in particular the avoiding of disproportionate expense and the taking up of excessive court time, requires that they should co-operate in making a real attempt to explore the significant narrowing of, or compromise of, disputes as to the providing of further information. In Lexi Holdings v Pannone and Partners [2010] EWHC 1416 (Ch) the court deprecated the inordinate expense and court time taken up by unnecessary requests.

17. The purpose of the court’s powers under Rule 6.44(1) of the 2009 Rules is to ensure that the parties have all the information they need to deal efficiently and justly with the matters which are in dispute between them.

18. The wording of Rule 6.44 of the 2009 Rules should however be interpreted reasonably liberally. The “matter” upon which clarification or additional information is sought, though described as a matter “in dispute” need not be one on which there is a live disagreement between the parties, since on occasion parties are required to furnish information precisely for the purpose of discovering whether there is such disagreement. The whole thrust of the new approach to civil litigation enshrined in the procedural rules is to avoid waste of time and cost and to ensure swift and, so far as possible, proportionate and economical litigation. (Harcourt v Griffin [2007] EWHC 1500 (QB), Howell v DHSS (CLA 1998/155 judgment 6th October 2009); Watson v Jolly (2DS 2011/32 Appeal Division judgment 17th October 2011); Wing Fai Construction Company Limited (in liquidation) v Yip Kwong Robert (FACV3/2011 judgment of the Court of Final Appeal of Hong Kong delivered 8th December 2011)).

19. In West London Pipeline & Storage Ltd v Total UK Ltd [2008] EWHC 1296 (Comm) the claimant’s submission in a contribution claim that the court had power to order the defendant to give additional information about their insurance arrangements (even though no dispute as to insurance arose in the proceedings) was rejected. Details of insurance are a private matter between an insurer and an insured production of which would encourage speculative ‘deep pocket’ litigation (see however Henry v BBC [2006] 1 All ER 154 and Barr v Biffa Waste Services Ltd [2010] 3 Costs L.R. 291).

20. The commentary at page 520 of the English White Book 2012 also refers to McPhilemy v The Times Newspapers Ltd (Re-Amendment Justification) [1999] 3 All ER 775 commenting that the need for extensive pleadings including particulars should be reduced by the requirement that witness statements are now exchanged and that the identification of the documents upon which a party relies and the witness statements will make the detail of the nature of the case the other side has to meet obvious. The commentary continues:

“However, although sometimes a witness statement can supplement a pleaded case by putting flesh on the bones, and that is often a preferable course to ordering further information a claimant cannot proceed with a defective pleading and then serve an extensive witness statement leaving it for the defendant to find their way through it “without a map or a

compass”; see Delos Ltd v CAE Electronics Ltd February 21, 2001, unrep. (Eady J).”

21. In Bitel LLC v Kyrgyz Mobil Tel Limited and others (ORD 11/0048 judgment delivered 4th May 2012) Deemster Moran at paragraphs 10 and 11 of his judgment stated:

“10. ... Accepting as I readily do that in the modern litigation environment, the service of detailed witness evidence has in many cases lessened the need for the particularity in pleading that was once expected and required in a bygone age, where the pleading was the only means to prevent ambush and surprise at trial, that is not so in all cases. It is particularly not so, in my judgment, in cases where it is vital that the parties are tied down to a clear and fully particularised case, so that opposing parties and the Court need not fear subsequent nuances, ambiguities, doubt or hedging that might emerge – and if they do, to be able to recognise them as such.

11. At the top of the list of such cases are cases involving allegations of complex commercial fraud ...”

22. In McPhilemy it was stressed that litigation must be confined within manageable and economic bounds. Claims should not be allowed to descend into uncontrolled and wide-ranging investigations unless that was necessary to determine the real issues between the parties. Courts should strive to manage cases so as to minimise the burden on litigants of slender means and exclude all peripheral material which was not essential to the just determination of the real issues between the parties. Unless there is some obvious purpose to be served by fighting over the precise terms of a pleading contest over their terms are to be discouraged. Battles of tactics should be discouraged. There is a new emphasis on the need for proportionality. If a party, because of personal circumstances, wishes the court to restrain the activities of another party with the object of achieving greater equality, then that party must behave in such a way which makes it clear that such party is conducting the proceedings in a manner which demonstrates a desire to limit the expense as far as practical.

23. Requests for further information which are ‘merely fishing’ will not be allowed. These fishing expeditions include requests for information in which a party is trying to see if they can find a case, either a claim or defence of which they know nothing or which is not yet pleaded.

24. The overriding requirement appears to be that the request must be reasonably necessary to enable a party to prepare their own case or understand the case they have to meet.

25. When considering whether to make an order for further information/clarification the court should have regard to the overriding objective of dealing with cases justly and in particular (a) whether the provision of such further information/clarification is reasonably necessary to enable a party to prepare its own case or to understand the case it has to meet, (b) the likely benefit which will result if the information is given and (c) the likely cost and time involved in giving it.

Specific disclosure

26. Lord Bingham, with his great ability to weigh up and balance competing factors, in Tweed v Parade Commission for Northern Ireland [2006] UKHL 53 at paragraph 2 stated:

“The disclosure of documents in civil litigation has been recognised throughout the common law world as a valuable means of eliciting truth and thus of enabling courts to base their decisions on a sure foundation of fact. But the process of disclosure can be costly, time-consuming, oppressive and unnecessary ...”

27. Rule 7.41(1) of the 2009 Rules provides that the court may make an order for specific disclosure. The order for specific disclosure is an order that a party must do one or more of the following things (a) disclose documents or classes of documents specified in the order, (b) carry out a search to the extent stated in the order, (c) disclose any documents located as a result of that search.

28. An application for specific disclosure should set out the documents or classes of documents for which disclosure is sought or the extent of the search sought. If a class of document is specified the class should be carefully defined so it is limited to what is relevant and proportionate and so the disclosing party is in no doubt as to the scope of their obligation (see paragraph 31.12.1 of the English White Book 2012 and the English authorities referred to). There should be an explanation as to why it is reasonable and appropriate for that disclosure to be given or for the search to be done.

29. The court will take into account all the circumstances of the case and in particular the overriding objective and the concept of proportionality.

30. The rationale for the discretion to order specific disclosure is that the overriding objective obliges the parties to give access to those documents which will assist the other’s case.

31. The court has a discretion as to whether it makes the order. It may make an order at any time, whether standard disclosure has already occurred or not. Rarely will the court grant specific disclosure for the purposes of the determination of an interlocutory application. It may, exceptionally, make an order against a claimant before the service of the defence where it would assist the defendant to plead a full defence rather than an initial bare denial.

32. Disclosure will not be ordered for the purpose of “fishing”. There must be a proper basis for seeking an order for specific disclosure.

33. The court will need to be satisfied as to the relevance of the documents sought, and that they are or have been in the party’s control, or at least that there is a prima facie case that these requirements will be met. The relevance of the documents is analysed by reference to the pleadings, and the factual

issues in dispute on the pleadings. Where a claim is likely to turn on particular documents there is a stronger case for an order to be made.

34. In considering whether to grant an order for specific disclosure the court should have regard to the overriding objective of dealing with cases justly and in particular the court will take account of the:

(1) need to ensure that the parties are on an equal footing; (2) need to save expense; (3) amount of money involved; (4) importance of the documents sought (5) complexity of the issues; (6) financial position of each party; (7) need to ensure that cases are dealt with expeditiously and fairly; (8) need to allot to the case only an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases.”

45. See Deemster Moran’s judgment in Bitel (ORD 11/0048 26 June 2012) in respect of disclosure in complex claims including the issue of whether documents are within the “control” of a party and a request that the High Court of the Isle of Man should issue a letter of request to the judicial authorities of another country.

46. In Tarben Limited and others v KSI Hawk Limited and another (18 February 2011) Deemster Corlett dealt with an application for pre-action disclosure and Rule 7.45 of the 2009 Rules.

47. See Willers v Gubay (Appeal Division judgment 13 July 2012) in respect of specific disclosure, control of documents and documents going to credibility issues.

48. In Gubay v Willers (24 June 2011) Deemster Corlett dealt with specific disclosure, control of documents, connected companies and the 2009 Rules.

49. In Gubay v Willers (20 January 2011) Deemster Corlett dealt with issues in respect of disclosure and the reluctance of the courts to permit cross examination on witness statements at the interlocutory stage of proceedings.

Litigation privilege

50. See KFG Companies (Appeal Division judgment 8 April 2013) in respect of litigation privilege and waiver in the context of an application to ascertain the identity of an entity who gave one side an important piece of evidence. The judgment concerns privilege and the evidence gathering process.

Amendment of pleadings

51. See Interretire Limited v HSBC Securities Services (Isle of Man) Limited (Deemster Doyle’s judgment 5 September 2012) which concerned an application under rule 6.37(2) of the 2009 Rules for permission to amend pleadings. At paragraph 10 Deemster Doyle stated:

“10. I turn now to a brief summary of the relevant law. The commentary in the English White Book Civil Procedure 2012 Volume 1 paragraph 17.35 at page 505 refers to the general principles for the grant of permission to amend. The authorities confirm that in the exercise of its discretion the court should have regard to the overriding objective. The overriding objective is that the court should deal with cases justly. That includes, so far as it is practicable, ensuring that each case is dealt with not only expeditiously but also fairly. Amendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon provided that any prejudice to the other party caused by the amendment can be compensated for in costs and the public interest in the administration of justice is not significantly harmed. These general principles do not appear to be in dispute.”

52. At paragraph 24 Deemster Doyle added:

“24. The Claimant should be permitted to make the proposed amendments. The Defendant can respond to the pleading in its defence and the Claimant can reply. The issues in dispute can no doubt be further clarified prior to trial. Prior to trial skilled and experienced Counsel can no doubt agree, if need be with the assistance of the trial Deemster, a concise list of issues for determination by the court at trial.”

53. See Bitel (judgment 1 April 2013) where Deemster Moran referred to InterRetire Limited and Societe Generale v Cap-Marine Assurance et Reassurances & Other [2012] EWHC 3112 paras 71-74 and refused a late application for leave to amend. The authorities cited stressed that the days are long past when an amendment could be secured on payment of costs provided the amendment had a real chance of success. The courts have become and remain increasingly reluctant to grant late amendments, particularly when they are sought close to or at trial which has long been fixed. Allowing a last minute adjournment risks making a mockery of the careful timetabling that has preceded it. A heavy onus rests on a party who seeks a very late amendment. See also the Appeal Division’s judgment (20 May 2013) where it was concluded that the proposed amendment did not require to be pleaded. At paragraph 37 the Appeal Division stated: “... We can see no reason in principle why it should be necessary to plead issues which are the subject of expert evidence as to the valuation of a company and we believe that it would be unjust to hold against the Alfa Parties that they elected to plead such matters”. The Appeal Division added at paragraph 41 that if such matters should have been pleaded then Deemster Moran would have been correct in dismissing the late application to amend as “it would have been neither fair nor just to allow the proposed amendments”. Consider also Venulum Property Investments v Space Architecture [2003] EWHC 1242 and Re Atrium Training Services Limited [2013] EWHC 1562 (Ch). In the latter case Henderson J stated:

“50 After the hearing had concluded, Mr Robins drew my attention to a judgment handed down by Edwards-Stuart J on 22 May 2013 (the day of the hearing before me) in the case of Venulum Property Investments Limited v Space Architecture Limited and others [2013] EWHC 1242 (TCC). In that case the judge refused an application for permission to extend time for service of the particulars of claim, relying in part on the stricter approach that must now be taken by the courts towards those who fail to comply with rules since the changes which took effect on 1 April. The circumstances were, however, very different from those of the present case, because the application was not made

39 until after the relevant period had expired, and it was therefore necessary for the claimant to obtain relief from sanctions under CPR 3.9. In view of those differences, I do not find the case of much assistance; but it does provide an illustration of the increasingly strict approach of the court to cases of non- compliance with time limits. In that connection, Edwards-Stuart J referred at [49] to the decision of the Court of Appeal in Fred Perry v Brands Plaza Trading [2012] EWCA Civ 224, where Lewison LJ (giving the judgment of the Court) cited with approval paragraph 6.5 of the Jackson Report, which said:

“… courts at all levels have become too tolerant of delays and non- compliance with orders. In so doing they have lost sight of the damage which the culture of delay and non-compliance is inflicting on the civil justice system. The balance therefore needs to be redressed.”

51 In considering these submissions, I begin with the obvious point that this is an application for an extension of time made before the expiry of the relevant deadline under the November order. It is not an application for relief from sanctions under CPR 3.9, and in my judgment it would be wrong in principle to treat it as though it were such an application on the basis of speculation about what might have happened had I been persuaded to make an unless order last November. I consider that the guidance given by the Court of Appeal in Robert v Momentum Services Limited remains good law, with the result that the court must exercise its discretion (paragraph [33]):

“… by simply having regard to the overriding objective of enabling the court to deal with cases justly including, so far as practicable, the matters set out in rule 1.1(2).”

52 The matters set out in rule 1.1(2) now include, of course, the enforcement of compliance with orders. To that extent, it is no doubt the case that the court will scrutinise an application for an extension more rigorously than it might have done before 1 April, and that it must firmly discourage any easy assumption that an extension of time will be granted if it would not involve any obvious prejudice to the other side.

53 On the other hand, I think it is important not to go to the other extreme, and not to encourage unreasonable opposition to extensions which are applied for in time and which involve no significant fresh prejudice to the other parties. In cases of that nature, considerations of cost and proportionality are highly relevant, and the wider interests of justice are likely to be better served by a sensible agreement, or a short unopposed hearing, than by the adoption of entrenched positions and the expenditure of much money and court time in preparing for and dealing with an application that could have been avoided.

54 I would also observe that, although all court orders mean what they say, and must be complied with even if made by consent, there are some orders relating to the completion of specified stages in preparation for trial (such as disclosure, the exchange of witness statements or a timetable for expert evidence) where there may still be so many imponderables when the order is made that the date for compliance cannot sensibly be regarded as written in stone. Everything will always depend on the circumstances of the particular case, and the stage in the proceedings when the order is made, but in many

such cases it should be understood that there may be a need for reasonable extensions of time or other adjustments as the matter develops. It would, I think, be unfortunate if the new and salutary emphasis on compliance with orders were to lead to a situation where, in cases of the general type I have described, a reasonable request for an extension were to be rejected in the hope that the court might be persuaded to refuse any extension at all.”

54. Similar sentiments in respect of the co-operation of the parties and their advocates were expressed by Deemster Doyle in Central Asian Capital Projects Limited v Kazakhgold Group Limited (judgment 3 November 2009) as follows:

“1. A simple and straightforward request for an extension of time to file an application to dispute the court's jurisdiction appears to have generated a significant amount of unnecessary hostile and unhelpful correspondence between the advocates in this case. I have to say that this is not characteristic of the way in which Ms Hyde, who appears on behalf of the Defendant, and Mr Maher, who appears on behalf of the Claimant usually conduct cases and I can only assume that it is those entities behind them who have created these unhelpful exchanges.

2. Rule 1.2(4) of the Rules of the High Court of Justice 2009 (the "2009 Rules") provides that the parties are required to help the court to further the overriding objective. Under Rule 19(1) of the Advocates Practice Rules 2001 advocates have an overriding duty to the court to ensure that the proper and efficient administration of justice is achieved and they must assist the court in justice.

3. The parties and their advocates do not appear in their correspondence to have dealt with the request for an extension of time in a reasonable and proportionate way. Hostile and petty point scoring exchanges between the parties and their advocates are unhelpful and do not assist in the efficient administration of justice.

4. I appreciate that advocates are sometimes placed in a difficult position by the unreasonable pressure brought upon them by their clients and by those instructing them. The parties and their advocates must however appreciate that they are required to help the court to further the overriding objective in the new 2009 Rules. The way in which advocates conduct litigation must change. All litigants and their advisers need to appreciate that.”

55. The following are extracts from the English authority Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894 (2 December 1998). Walker L J gave the judgment of the English Court of Appeal (presided over by Lord Bingham whose mother’s family were Manx):

“Mr Brodie’s submission before the judge, and before us, was to the effect that it was almost as a matter of right that an amendment should be allowed at almost any time provided the other party could be compensated in costs, and he referred us to the notes in the Supreme Court Practice 1999 20/8/6 and the familiar dicta there quoted, particularly that of Bowen L.J. in Cropper v Smith (1884) 26 Ch.D. 700 at 710-711 where he said:-

"it is a well established principle that the object of courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights .... I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or grace.... It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right."

We are doubtful whether even applying the principle stated by Bowen LJ, the matter is as straightforward as Mr Brodie would seek to persuade us. But, in addition, in previous eras it was more readily assumed that if the amending party paid his opponent the costs of an adjournment that was sufficient compensation to that opponent. In the modern era it is more readily recognised that in truth the payment of the costs of an adjournment may well not adequately compensate someone who is desirous of being rid of a piece of litigation which has been hanging over his head for some time, and may not adequately compensate him for being totally (and we are afraid there are no better words for it) “mucked around” at the last moment. Furthermore, the courts are now much more conscious that in assessing the justice of a particular case the disruption caused to other litigants by last minute adjournments and last minute applications have also to be brought into the scales.

Take this very case. By attempting to make a last minute amendment a trial has had to be interrupted by argument over some days, the challenge to the judge’s order has had to be dealt with by the Court of Appeal as a matter of urgency with serious disruption to its list and other litigants, and if the amendment was allowed there would have to be a further delay in the trial coming on and/or a last minute lengthening of the trial which may cause serious inconvenience in the Commercial Court and thus to other litigants.

The appreciation of the injustice to other litigants and the damage to parties in trials being delayed which cannot adequately be compensated by an order for costs has led the court to a more interventionist approach in the management of trials, and has furthermore led to appellate courts being very reluctant to interfere with decisions of judges who with all those interests in mind have taken decisions at interlocutory stages. Mr Brodie referred us to the judgment of Millett LJ in Gale v Superdrug Stores Plc [1996] 1 W.L.R. 1089 at 1098E where he said this:-

"Litigation is slow, cumbersome, beset by technicalities, and expensive. From time to time laudable attempts are made to simplify it, speed it up and make it less expensive. Such endeavours are once again in fashion. But the process is a difficult one which is often frustrated by the overriding need to ensure that justice is not sacrificed. It is easy to dispense injustice quickly and cheaply, but it is better to do justice even if it takes a little longer and costs a little more.

The administration of justice is a human activity, and accordingly cannot be made immune from error. When a litigant or his adviser makes a mistake, justice requires that he be allowed to put it right even if this causes delay and expense, provided that it can be done without injustice to the other party. The rules provide for misjoinder and non-joinder of parties and for amendment of the pleadings so that mistakes in the formulation of the issues can be corrected. If the mistake is corrected early in the course of the litigation, little harm may be done; the later it is corrected, the greater the delay and the amount of costs which will be wasted. If it is corrected very late, the other party may suffer irremediable prejudice.

The general principles which govern the court’s approach to an application to amend the pleadings is to be found in the well known and often cited passage in the judgment of Bowen L.J. in Cropper v Smith (1884) 26 Ch.D. 700, 710-711, with which A.L. Smith L.J. expressed his “emphatic agreement” in Shoe Machinery Co. V Cutlan [1896] 1 Ch. 10, 112."

He then quoted the passage already set out above and continued:

"There are numerous other authorities to the same effect. In Clarapede & Co. v Commercial Union Association (1883) 32 W.R. 262, 263 Sir Baliol Brett M.R. said:

“however negligent or careless may have been the first omission, and, however late the proposed amendment, the amendment should be allowed if it can be made without injustice to the other side. There is no injustice if the other side can be compensated by costs; ...”

I do not believe that these principles can be brushed aside on the ground that they were laid down a century ago or that they fail to recognise the exigencies of the modern civil justice system. On the contrary, I believe that they represent a fundamental assessment of the functions of a court of justice which has a universal and timeless validity."

In the same case Thorpe LJ at 1101E said to rather different effect:-

"Authority as to the practice in the High Court more than a century ago cannot recognise the demands and exigencies of the civil justice system as it is today."

We share Millett LJ’s concern that justice must not be sacrificed, but we believe his view does not give sufficient regard to the fact that the courts are concerned to do justice to all litigants, and that it may be necessary to take decisions vis a vis one litigant who may, despite all the opportunity he or his advisers have had to plead his case properly, feel some sense of personal injustice, for the sake of doing justice both to his opponent and to other litigants.

The views of Lord Griffiths in Ketteman v Hansel Properties [1987] AC 189 at 220 A-H are pertinent. He said:-

"Mr. Ogden submitted that the authorities obliged a judge to allow an amendment no matter how late it was made nor for what reason provided the other party could be properly compensated by an award of costs. He relied upon the authorities set out in The Supreme Court Practice and in particular the decision of Brett M.R. in Clarapede & Co v Commercial Union Association, 32 W.R. 262, 263”:

Lord Griffiths then set out the passage we have already cited. He continued:

“This was not a case in which an application had been made to amend during the final speeches and the court was not considering the special nature of a limitation defence. Furthermore, whatever may have been the rule of conduct a hundred years ago, today it is not the practice invariably to allow a defence which is wholly different from that pleaded to be raised by amendment at the end of the trial even on terms that an adjournment is granted and that the defendant pays all the costs thrown away. There is a clear difference between allowing amendments to clarify the issues in dispute and those that permit a distinct defence to be raised for the first time.

Whether an amendment should be granted is a matter for the discretion of the trial judge and he should be guided in the exercise of the discretion by his assessment of where justice lies. Many and diverse factors will bear upon the exercise of this discretion. I do not think it possible to enumerate them all or wise to attempt to do so. But justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes, and the legitimate expectation that the trial will determine the issues one way or the other. Furthermore to allow an amendment before a trial begins is quite different from allowing it at the end of the trial to give an apparently unsuccessful defendant an opportunity to renew the fight on an entirely different defence.

Another factor that a judge must weigh in the balance is the pressure on the courts caused by the great increase in litigation and the consequent necessity that, in the interests of the whole community, legal business should be conducted efficiently. We can no longer afford to show the same indulgence towards the negligent conduct of litigation as was perhaps possible in a more leisured age. There will be cases in which justice will be better served by allowing the consequences of the negligence of the lawyers to fall upon their own heads rather than by allowing an amendment at a very late stage of the proceedings."

We recognise that there is the factual difference that the amendment was sought to be made at a later stage than in the present case, but the factors referred to by Lord Griffiths are relevant to the present case.

In MGN Pension Trustees Limited v Invesco Asset Management Ltd & others Lexis 20th December 1993 the Court of Appeal refused leave to appeal from a decision

44 refusing the amendment of pleadings by the judge who was to be in charge of a long trial. Henry L J said this:-

"In a case such as this the trial judge’s task is not only judicial but also managerial. The managerial responsibility is considerable, with the overall costs budget in millions. Consequently, that function is very important in an age where litigation of all sorts at every level is too expensive because unnecessarily long. So judges are not only entitled but encouraged to be pro-active in their trial management and interlocutory appeals are consequently discouraged.

I take as the principles to be applied three short citations from their Lordships in the case of Ashmore v Corporation of Lloyds [1992] 1 WLR 446, [1992] 2 Lloyd’s Rep 1. That involved their Lordships considering an interlocutory appeal in litigation roughly comparable in scale to this. First, from Lord Roskill at page 448:

“.... in any trial court it is the trial judge who has control of the proceedings. It is part of his duty to identify the crucial issues and to see they are tried as expeditiously and as inexpensively as possible. It is the duty of the advisers of the parties to assist the trial judge in carrying out his duty. Litigants are not entitled to the uncontrolled use of a trial judge’s time. Other litigants await their turn. Litigants are only entitled to so much of the trial judge’s time as is necessary for the proper determination of the relevant issues.”

At page 453 Lord Templeman said:-

“The parties and particularly their legal advisers in any litigation are under a duty to cooperate with the court by chronological, brief and consistent pleadings which define the issues and leave the judge to draw his own conclusions about the merits when he hears the case.”

Then his Lordship went on to deal with the over elaboration, and I need not read that passage. He then says:

“In Banque Keyser Ullman S.A. v Skandia (U.K.) Insurance Co. Ltd. [1991] 2 A.C. 249, 280, I warned against proceedings in which all or some of the litigants indulge in over-elaboration causing difficulties to judges at all levels in the achievement of a just result. I also said that the appellate court should be reluctant to entertain complaints about a judge who controls the conduct of proceedings and limits the time and scope of evidence and argument. So too, where a judge, for reasons which are not plainly wrong makes an interlocutory decision or makes a decision in the course of a trial the decision should be respected by the parties and if not respected should be upheld by an appellate court unless the judge was plainly wrong.”

In that passage his Lordship was re-phrasing an earlier passage at page 451 when he said:

“In my opinion, when a judge alive to the possible consequences, decides that a particular course should be followed in the conduct of the trial in the

interests of justice, his decision should be respected by the parties and upheld by an appellate court unless there are very good grounds for thinking that the judge was plainly wrong.”

The judge here had two points concerning the amendment of pleadings. Of course, the judge knows what the pleadings are for; they are to assist in the economical, expeditious and properly focused delivery of justice. It is clear from what he said that the judge thinks the pleadings are already longer than is necessary for that purpose. It seems to me he is the best judge of that."

There is no indication that either Ketteman, MGN Pensions or Ashmore was cited in Gale.

What was referred to in Gale was the Practice Direction (Civil Litigation: Case Management) issued on 24th January 1995 by the previous Lord Chief Justice and Sir Richard Scott V-C. reported at [1995] 1 W.L.R. 508. By paragraph 1 that direction states:-

"The paramount importance of reducing the cost and delay of civil litigation makes it necessary for judges sitting at first instance to assert greater control over the preparation for and conduct of hearings than has hitherto been customary. Failure by practitioners to conduct cases economically will be visited by appropriate orders for costs, including wasted costs orders."

Para 7 provides:-

"Unless the court otherwise orders, there must be lodged with the listing officer (or equivalent) on behalf of each party no later than two months before the date of trial a completed pre-trial check-list in the form annexed to this practice direction."

The check list follows the format used in the Commercial Court for some time and includes a question relating to any intention to amend the pleadings. The whole purpose of that is to prevent last minute amendments which invariably cause disruption to a trial and the listing of cases.

In a further decision of this court Thermaware v Linton & others Lexis Transcript 17th October 1995, Sir Thomas Bingham M.R. having referred to the Practice Direction and to the passages in Ashmore quoted by Henry LJ above said this:-

"Those observations in the House of Lords and the Practice Direction are to be read against growing recognition that the luxurious approach to the expenditure of court time which was indulged in in the past is something which, in the interests of litigants as a whole, simply cannot be any longer afforded. Of course it is true that a judge’s procedural decision need not save time or expense. If the learned Judge’s resolution of these issues is in favour of Thermawear Limited, it may lead to additional time and expense; so, too, if his decision is in favour of Citroen Wells and that decision is later the subject of successful appeal. But these are matters which fall fairly and squarely within the growing procedural decision-making area accorded to the trial judge."

Henry L J agreed and added:-

"Many critics believe that the adversarial system has run into the sands in that today delay and costs are too often disproportionate to the difficulty of the issue and the amount at stake. The solution now being followed to that problem requires a more interventionist judiciary, the judge as trial manager. It seems to me important that a judge so acting should be given proper freedom by this Court in which to exercise the powers contained in the practice direction and that the margin of appreciation allowed to him in the exercise of his discretion should be generous."

Thorpe L J agreed.

These observations not cited in Gale are we suggest also inconsistent with Millett L J’s approach.

On the appropriate attitude of the Court of Appeal we should finally refer to what was further emphasised by Hobhouse LJ in Bristol & West Building Society v Bhadresa & Co, Transcript 7th February 1997 when he said:-

"If case management is to be successful, both the litigants and the appellate courts must trust the judges who are in charge of that case management, and it is only suitable for this Court to review their decisions if it is quite clear that something has gone wrong. This is an application for leave to appeal and it ought not to be granted unless it is quite clear that something has gone wrong."

All the remarks quoted above were in fact concerned with trials outside the Commercial Court. In the Commercial Court the judges have for many years been particularly pro-active in managing litigation brought before it for the benefit of all users. The practice in the Commercial Court is set out in the Guide to Commercial Court Practice set out under Order 72 page 1367 of the Supreme Court Practice. That Guide, it should be stressed, recognises the well-established practice that amendments to pleadings will normally be allowed so as to reflect the true issues between the parties by encouraging consent orders. The last sentence of Rule 10.2 says for example “A party should consent to a proposed amendment unless he has substantial grounds for objecting to it”. But Rule 10.3 stresses “Late amendments should be avoided and may be disallowed if other parties are prejudiced in a way that a costs order will not adequately compensate.”

It is in order to avoid last minute problems which delay the start of trials, or prolong them, or cause adjournments, that the Commercial Court insisted even before the 1995 Practice Direction and still insists that each side’s solicitors produce 2 months prior to trial a pre-trial check list. As the Guide says, that is done to assist the parties to check their readiness for trial and “is an important aspect of the efficient organisation of the Commercial Court list” (see paragraph 18.1 of the Guide). It is for that reason also that in a substantial case orders are made for a pre-trial review just prior to the date for trial itself.

Approach to last minute amendments

Where a party has had many months to consider how he wants to put his case and where it is not by virtue of some new factor appearing from some disclosure only recently made, why, one asks rhetorically, should he be entitled to cause the trial to be delayed so far as his opponent is concerned and why should he be entitled to cause inconvenience to other litigants? The only answer which can be given and which, Mr Brodie has suggested, applies in the instant case is that without the amendment a serious injustice may be done because the new case is the only way the case can be argued, and it raises the true issue between the parties which justice requires should be decided.

We accept that at the end of the day a balance has to be struck. The court is concerned with doing justice, but justice to all litigants, and thus where a last minute amendment is sought with the consequences indicated, the onus will be a heavy one on the amending party to show the strength of the new case and why justice both to him, his opponent and other litigants, requires him to be able to pursue it.

Approach of the judge

What Mr Brodie must demonstrate is that it is arguable that the judge in this case misapplied the principles and/or was plainly wrong.

Far from him having misapplied any of the principles it seems to us that he directed himself in relation to them impeccably. He recognised that generally amendments will be allowed to reflect the true issues between the parties (page 11 transcript of judgment); he recognised that lateness may not be a ground for refusing leave itself (page 14); he was not persuaded that the consideration by the defendants was as substantial an exercise as Mr Scott QC for the defendants had argued, but thought it would be wrong to require the defendants to proceed to trial without a reasonable opportunity to consider and discuss the implications (pages 19, 21 and 24). He considered the merits of the newly pleaded case and concluded that the case was insubstantial on the basis that the amended pleading was in effect an allegation of an agreement to agree, and he did not feel it necessary to consider other points (page 28).

His view as to the merits of the case sought to be put by amendment seems to us an entirely justified view. Mr Brodie suggests that the original case was hopeless despite the fact that presumably someone thought that it was sufficiently strong to allow the client to swear an affidavit for Order 14 purposes. We are not at all sure if we had to choose between two very difficult ways of putting the plaintiffs’ case on the 3rd November letter that we see anything more arguable in the amended version than there was in the original version. The amended version suffers from the serious weakness that it pleads an agreement to agree in plain terms whereas the previous version pleaded that there was an agreement to be put into final form. This was the weakness that the judge identified.

Our view is that the amended version would also suffer from the serious weakness that it seems clearly to have been contemplated by the parties that any agreement between the defendants and the plaintiffs would expire after a certain period of 12 months if sanctions were not lifted and/or an agreement between ITP and the

defendants was not signed within that period. A purely advisory agreement of the kind pleaded seems to us to be most unlikely to be as open-ended as the plaintiffs now seek to allege.

We are quite unpersuaded that there is an arguable case either that the judge went wrong in principle or that he was plainly wrong in relation to the first order he made. There was however one point taken before us which was not taken before the judge with which we should deal before concluding our views on this aspect, but the point is better dealt with as a composite point relating to all three applications.”

56. For an example of a Jersey authority on leave to amend see Bailiff Birt’s judgment in Bagus Investments Ltd v Wilfred Kastening [2010] JRC 144:

“[58] Nevertheless, the general principle is that the court should allow all such amendments as are necessary to enable it to determine the real issues in dispute provided that no party to the action will thereby be unavoidably prejudiced. Furthermore this is not a case of a late application to amend shortly before a trial which is likely to mean the loss of a trial date. It seems to me that any prejudice to the defendant can be compensated by an award to costs.”

57. Consider also Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 in respect of the robust approach of the Australian courts to ensuring that there are no late amendments and that cases are dealt with in a reasonable time and that there are no unnecessary vacations of trials.

58. In Clarkson (29 September 2010) Deemster Doyle dealt with issues in respect of applications for permission to amend pleadings.

Interim payments

59. De Yoxall v Moore (Deemster Corlett’s judgment 25 September 2012) concerned interim payments and Rule 7.21.

60. In Bushy’s Limited v Williams (8 October 2009) Deemster Corlett dealt with issues in respect of interim payments. See also Deemster Allen’s judgment in Oakley v De Montfort Securities Limited (12 November 2010) in respect of interim payments and the subsequent judgment of Appeal Division delivered on the 8 March 2011.

Relief from sanctions

61. See Mondi Invest Limited v Vaes (Deemster Corlett’s judgment 7 December 2012) in respect of an unless order and relief from sanctions where various English authorities are considered including Marcan Shipping (London) Limited v Kefalas [2007] 1 WLR 1864 and Keen Phillips v Field [2007] 1 WLR 686 the basic principle being unless the party in default has applied for relief or the court itself (see Rule 2.4 of the 2009 Rules) decides there is some exceptional reason that it should act on its own initiative, the question whether the sanction ought to apply does not arise.

62. Deemster Christie in Lewin v Braddan Parish Commissioners (judgment 21 November 2012) refers to the court’s powers of case management under Part 7 of the 2009 Rules and in particular sanctions, relief from sanctions and judgment without trial after

striking out. Deemster Christie also referred to the English Court of Appeal decision in Marcan Shipping (London) Ltd v Kefalas [2007] 1 WLR 1864. Deemster Christie had regard to the matters set out in Rule 2.59 of the 2009 Rules in respect of relief from sanctions: the interests of the administration of justice, whether the application for relief has been made promptly, whether the failure to comply was intentional, whether there is a good explanation for the failure, the extent to which the party in default has complied with other rules, practice directions and court orders, whether the failure to comply was caused by the party or his advocate, whether the trial date or the likely trial date can still be met if relief is granted, the effect which the failure to comply had on each party, and the effect which the granting of the relief would have on each party.

63. See also Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, November 27, 2013. The following are extracts from the judgment:

“40. We hope that it may be useful to give some guidance as to how the new approach should be applied in practice. It will usually be appropriate to start by considering the nature of the non-compliance with the relevant rule, practice direction or court order. If this can properly be regarded as trivial, the court will usually grant relief provided that an application is made promptly. The principle "de minimis non curat lex" (the law is not concerned with trivial things) applies here as it applies in most areas of the law. Thus, the court will usually grant relief if there has been no more than an insignificant failure to comply with an order: for example, where there has been a failure of form rather than substance; or where the party has narrowly missed the deadline imposed by the order, but has otherwise fully complied with its terms. We acknowledge that even the question of whether a default is insignificant may give rise to dispute and therefore to contested applications. But that possibility cannot be entirely excluded from any regime which does not impose rigid rules from which no departure, however minor, is permitted.

41. If the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the court to grant relief. The court will want to consider why the default occurred. If there is a good reason for it, the court will be likely to decide that relief should be granted. For example, if the reason why a document was not filed with the court was that the party or his solicitor suffered from a debilitating illness or was involved in an accident, then, depending on the circumstances, that may constitute a good reason. Later developments in the course of the litigation process are likely to be a good reason if they show that the period for compliance originally imposed was unreasonable, although the period seemed to be reasonable at the time and could not realistically have been the subject of an appeal. But mere overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason. We understand that solicitors may be under pressure and have too much work. It may be that this is what occurred in the present case. But that will rarely be a good reason. Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all. This may seem harsh especially at a time when some solicitors are facing serious financial pressures. But the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner. If

departures are tolerated, then the relaxed approach to civil litigation which the Jackson reforms were intended to change will continue. We should add that applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event …

42. … In short, good reasons are likely to arise from circumstances outside the control of the party in default …

46. The new more robust approach that we have outlined above will mean that from now on relief from sanctions should be granted more sparingly than previously. There will be some lawyers who have conducted litigation in the belief that what Sir Rupert Jackson described as "the culture of delay and non- compliance" will continue despite the introduction of the Jackson reforms. But the Implementation Lectures given well before 1 April 2013 were widely publicised. No lawyer should have been in any doubt as to what was coming. We accept that changes in litigation culture will not occur overnight. But we believe that the wide publicity that is likely to be given to this judgment should ensure that the necessary changes will take place before long …

59. We therefore dismiss the appeals against both orders. The Master did not misdirect herself in any material respect or reach a conclusion which was not open to her. We acknowledge that it was a robust decision. She was, however, right to focus on the essential elements of the post-Jackson regime. The defaults by the claimant's solicitors were not minor or trivial and there was no good excuse for them. They resulted in an abortive costs budgeting hearing and an adjournment which had serious consequences for other litigants. Although it seems harsh in the individual case of Mr Mitchell's claim, if we were to overturn the decision to refuse relief, it is inevitable that the attempt to achieve a change in culture would receive a major setback.

60. In the result, we hope that our decision will send out a clear message. If it does, we are confident that, in time, legal representatives will become more efficient and will routinely comply with rules, practice directions and orders. If this happens, then we would expect that satellite litigation of this kind, which is so expensive and damaging to the civil justice system, will become a thing of the past.”

64. See also Males J in Rattan v UBS AG [2014] EWHC 665 (Comm) at paragraph 1 “the Commercial Court will firmly discourage the taking of futile and time wasting procedural points.”

Second appeals in respect of the assessment of costs

65. The following are extracts from the Appeal Division’s judgment in Willers v Gubay (6 March 2013) which dealt with a second appeal in respect of the assessment of costs:

“The relevant law and rules

31. We now turn to the relevant law and rules.

32. Section 19A(1) of the High Court Act 1991 (the "1991 Act") provides that rules of court may provide that any right of appeal to the Appeal Division may be exercised only with leave. Under section 19A(2) of the 1991 Act it is provided that rules of court may make provision as to:

(a) the classes of case in which a right of appeal may be exercised only with leave; (b) the judge or court which may give leave for the purposes of the section; (c) any consideration to be taken into account in deciding whether leave should be given; and (d) any requirements to be satisfied before leave is given.

33. Section 25(4) of the 1991 Act provides that rules of court shall be laid before Tynwald as soon as practicable after they are made, and if Tynwald at the sitting at which the rules are laid or at the next following sitting resolves that they shall be annulled, they shall cease to have effect. The 2009 Rules were duly laid before Tynwald and no resolution was passed that they be annulled. They remain in effect.

34. Rule 11.39(5) of the 2009 Rules provides that on an appeal from a costs officer in detailed assessment proceedings "the court shall –

(a) re-hear the proceedings which gave rise to the decision appealed against; and (b) make any order and give any directions as it considers appropriate."

35. Rule 11.39(6) of the 2009 Rules provides that:

"No appeal, except on a point of law, shall lie from the decision of the judge."

36. Rule 14.4(1) of the 2009 Rules provides that permission is required from the Appeal Division for any appeal to that Division from a decision of the Civil Division which was itself made on appeal. The decision of Deemster Roberts falls within that category. This was the Appellant's attempt at a second appeal in respect of costs.

37. Rule 14.4(2) of the 2009 Rules provides that the "Appeal Division shall not give permission unless it considers that:

(a) the appeal would raise an important point of principle or practice; or (b) there is some other compelling reason for the Appeal Division to hear it."

38. Rule 14.4(2) of the 2009 Rules is similar to English Civil Procedure Rules ("CPR") 52.13. The commentary to the English White Book Civil Procedure Volume 1 2012 page 1737 refers to the fact that one level of appeal should be the norm. This principle reflects the need for certainty, reasonable expense and proportionality. Where there has already been an appeal to a court below the Appeal Division a further appeal should only be allowed in special circumstances : it was not sufficient that the appeal was "properly arguable" or "had a real prospect of success". In Clark (Inspector of Taxes) v Perks [2001] 1 WLR 17 the Court of Appeal emphasised, at paragraph 17, that:

"... the whole thrust of the new appellate reforms ... is to use the time and resources of the judges of the Court of Appeal, and of the lawyers and staff who support them, on matters which really merit the attention of a court of this stature in the judicial hierarchy."

39. The commentary at paragraph 52.13.3 states:

"The first criterion for granting permission for a second appeal is stated in ... CPR r 52.13(2)(a), namely that the appeal would raise an important point of principle or practice. This means an important point of principle or practice that has not yet been established. An appeal concerning the correct application of a principle or practice whose meaning and scope has already been determined by a higher court does not satisfy ... r 52.13(2)(a). See Uphill v BRB (Residuary) Ltd ... [2005] 1 WLR 2070."

40. In Uphill v BRB (Residuary) Ltd [2005] EWCA Civ 60 the English Court of Appeal offered some guidance as to the operation of CPR 52.13 and it is helpful to refer to various passages in the judgment of Dyson LJ who delivered the judgment of the court:

"17. ... It is only in an "exceptional" case that a second appeal may be sanctioned. The general rule is that the decision of the appeal court on the first appeal will be the final decision. It is no longer possible to pursue a second appeal merely because the appeal is properly arguable or has a real prospect of success. The principle embodied in CPR 52.13(2) reflects the need for certainty, reasonable expense and proportionality."

"Important point of principle or practice"

18. In our judgment, it is clear that the reference in CPR 52.13(2)(a) to "an important point of principle or practice" is to an important point of principle or practice that has not yet been established. The distinction must be maintained between (a) establishing and (b) applying an established principle or practice correctly. Where an appeal raises an important point of principle or practice that has not yet been determined, then it satisfies CPR 52.13(2)(a). But where the issue sought to be raised on the proposed appeal concerns the correct application of a principle or practice whose meaning and scope has already been determined by a higher court, then it does not satisfy CPR 52.13(2)(a). We cannot accept the submission of Mr. James that the question whether an established point of principle or practice has been properly applied in an individual case itself raises an important point of principle or practice. Were the position to be otherwise, the door would be open to second appeals in all cases which concern the application of an important principle or practice. That is clearly not what was intended."

"Some other compelling reason"

19. What is contemplated here is an appeal which does not raise an important point of principle or practice. "Compelling" is a very strong word. It emphasises the truly exceptional nature of the jurisdiction." ...

24. (1) A good starting point will almost always be a consideration of the prospects of success. It is unlikely that the court will find that there is a compelling reason to give permission for a second appeal unless it forms the view that the prospects of success are very high. ... This necessary condition will be satisfied where it is clear that the judge on the first appeal made a decision which is perverse or otherwise plainly wrong. It may be clear that the decision is wrong because it is inconsistent with authority of a higher court which demonstrates that the decision was plainly wrong. ...

(2) Although the necessary condition which we have mentioned at (1) is satisfied, the fact that the prospects of success are very high will not necessarily be sufficient to provide a compelling reason for giving permission to appeal. An examination of all the circumstances of the case may lead the court to conclude that, despite the existence of very good prospects of success, there is no compelling reason for giving permission to appeal. For example, if it is the appellant's fault that the first appeal was dismissed, because he failed to refer to the authority of a higher court which demonstrates that the decision on the first appeal was wrong, the court may conclude that justice does not require this court to give the appellant the opportunity to have a second appeal. There is a reason for giving permission to appeal, but it is not compelling, because the appellant contributed to the court's mistake. ...

(3) There may be circumstances where there is a compelling reason to grant permission to appeal even where the prospects of success are not very high. The court may be satisfied that there are good grounds for believing that the hearing was tainted by some procedural irregularity so as to render the first appeal unfair. Suppose, for example, that the judge did not allow the appellant to present his or her case." …

41. In Esure Insurance Ltd v Direct Line Insurance plc [2008] EWCA Civ 842 the complexity of the case and the real prospect of showing that the judge had incorrectly exercised his appellate function were held to constitute "compelling reasons" for permitting a second appeal. "Compelling" means "legally compelling" (see R CPR (Sri Lanka) v Secretary of State for the Home Department [2011] EWCA Civ 988).

Determination

42. We declined to give permission for the appeal to proceed for the following reasons.

43. No matter how he endeavoured to express it Mr. Wannenburgh's essential submission was that Deemster Roberts identified the correct legal principles, which were uncontroversial as between the parties, but misapplied them. It is crystal clear from the considered and comprehensive judgment of the English Court of Appeal in Uphill (which we treat as highly persuasive) that the question whether an established point of principle or practice has been properly applied in an individual case itself does not

54 raise an important point of principle or practice within the meaning of those phrases in the 2009 Rules limiting second appeals.

44. We were not persuaded that the appeal raised an important point of principle or practice or that there was some other compelling reason for us to hear it. In our judgment Mr. Wannenburgh failed to identify any important points of principle or practice raised by this appeal.

45. The fact that this was the first appeal to this court on a costs assessment under the 2009 Rules did not mean that it was an appeal on a point of law or that it was an appeal which raised an important point of principle or practice or that there was some other compelling reason for the Appeal Division to hear it. The fact that the Appellant or others would like some guidance from this court in respect of costs assessments generally under the 2009 Rules did not mean that this appeal raised a point of law or an important point of principle or practice worthy of the attention of this court or that there was some other compelling reason for this court to hear this second appeal on its merits.

46. The law in respect of costs assessments under the 2009 Rules is straightforward and it was this law that was applied by Deemster Roberts.

47. Rule 11.4(2) of the 2009 Rules (similar to CPR 44.4(2)) provides that "where the amount of costs is to be assessed on the standard basis –

(a) only costs which are proportionate to the matters in issue shall be allowed; and

(b) any doubt which it may have as to whether costs were reasonably incurred or reasonable and proportionate in amount shall be resolved in favour of the paying party."

48. Rule 11.5(1) of the 2009 Rules (similar to CPR 44.5(1)) provides that: "The court shall have regard to all the circumstances in deciding whether costs were (a) if it is assessing costs on the standard basis –

(i) proportionately and reasonably incurred; or (ii) proportionate and reasonable in amount ..."

49. Rule 11.5(3) of the 2009 Rules (similar to CPR 44.5(3)) provides that the court must have regard to –

"(a) the conduct of all the parties, including in particular –

(i) conduct before, as well as during, the proceedings; and

(ii) the efforts made, if any, before and during the proceedings in order to try to resolve the dispute;

(b) the amount or value of any money or property involved;

(d) the particular complexity of the matter or the difficulty or novelty of the questions raised;

(e) the skill, effort, specialised knowledge and responsibility involved;

(f) the time spent on the case; and

(g) the place where and the circumstances in which work or any part of it was done."

50. We agree that the judgment of the English Court of Appeal in Home Office v Lownds [2002] EWCA Civ 365, a judgment on similar rules of court, provides useful guidance which should be followed in this jurisdiction. This was the guidance followed by Deemster Roberts. We set out below extracts from the judgment of the English Court of Appeal:

"31. In other words what is required is a two-stage approach. There has to be a global approach and an item by item approach. The global approach will indicate whether the total sum claimed is or appears to be disproportionate having particular regard to the considerations which Part 44.5(3) states are relevant. If the costs as a whole are not disproportionate according to that test then all that is normally required is that each item should have been reasonably incurred and the cost for that item should be reasonable. If on the other hand the costs as a whole appear disproportionate then the court will want to be satisfied that the work in relation to each item was necessary and, if necessary, that the cost of the item is reasonable. If, because of lack of planning or due to other causes, the global costs are disproportionately high, then the requirement that the costs should be proportionate means that no more should be payable than would have been payable if the litigation had been conducted in a proportionate manner. This in turn means that reasonable costs will only be recovered for the items which were necessary if the litigation had been conducted in a proportionate manner. ...

36. Based on their experience costs judges will be well equipped to assess which approach a particular case requires. In a case where proportionality is likely to be an issue, a preliminary judgment as to the proportionality of the costs as a whole must be made at the outset. This will ensure that the Costs Judge applies the correct approach to the detailed assessment. In considering that question the costs judge will have regard to whether the appropriate level of fee earner or counsel has been deployed, whether offers to settle have been made, whether unnecessary experts had been instructed and the other matters set out in Part 44.5(3). Once a decision is reached as to proportionality of costs as a whole, the judge will be able to proceed to consider the costs, item by item, applying the appropriate test to each item."

51. See also Ross v Stonewood Securities Ltd [2004] EWHC 2235 (Ch) and the authorities referred to in that judgment including Giambrone v JMC Holidays Ltd [2002] EWHC 2932 (QB) and Ortwein v Rugby Mansions Ltd [2003] EWHC 2077 (Ch).

52. In Osiris Trustees Limited v Oakley (10th May 2005) Deemster Kerruish had to consider an appeal against the decision of the Assessor in respect of costs, such assessment being conducted under the 1952 Rules as amended. There was an objection to the fees of English counsel it being argued that the Appellant should not be entitled to recover costs of English counsel advising in the matter generally. It was argued that if the work of English counsel was to be allowed the same ought to be assessed at an hourly rate equivalent to a Manx advocate. Deemster Kerruish considered old Order 48A Rule 12(1) and in particular the phrase "all costs reasonably incurred" and concluded at paragraph [31] of his judgment as follows:

"If a person instructs an advocate to act on his behalf in connection with proceedings and relevant to such proceedings the advocate instructs his clerk to carry out certain work, it would not be unreasonable for the advocate to charge the client the cost of such work but at the clerk's rate, not that of the advocate. Further, upon assessment, provided the clerk's costs were reasonable, for example, taking into account the hourly rate, the time taken, compared with that which would be taken by an advocate, it would not be unreasonable to assume that the Assessor would allow such costs. What then is the difference, if an advocate decides not to undertake a particular part of the work himself but to instruct Counsel to do so? If the work would have otherwise been undertaken by the advocate, for example, not a second opinion, if the time expended is assessed as being not more than that which the advocate would have taken, if there is no duplication of work, or allowance for items consequent upon use of Counsel, and if the fees charged by, or allowed to Counsel do not exceed that which would have been allowed to the advocate, then why should not the fees of Counsel be allowed."

53. It was not necessary for this court to give any further guidance on the issues raised in this appeal. The appeal did not raise an important point of principle or practice. Neither was there some other compelling reason for us to hear it. On the contrary this attempted second appeal was simply a waste of valuable court time. Mr. Wannenburgh did not persuade us that the decision of Deemster Roberts was plainly wrong.

54. It was for these reasons that we did not give permission for the appeal to proceed and that we dismissed the appeal.

55. In an endeavour to discourage similar misconceived and wasteful appeals on costs in the future we add the following.

56. In Giambrone v JMC Holdings Ltd [2002] EWHC 2932 (QB) Morland J, in determining an appeal against the decision of a Costs Judge, stated:

"3. This appeal has revealed in stark terms a trend in litigation, which in my judgment I condemn as deplorable, satellite litigation about costs which is hugely wasteful of both professional time and expensive resources. If the trend were allowed to continue, it would tend to render nugatory the "overriding objective" of the C.P.R ….

56. By way of postscript I express the hope that it should be almost never necessary to appeal the preliminary decision, at the first stage, of proportionality. I would advocate active discouragement of such appeals."

57. In Ortwein v Rugby Mansions Ltd [2004] 1 Costs LR 26 Lloyd J at paragraph 26 stated:

"I would echo what Morland J said in paragraph 56 of Giambrone where he deplored the idea of appeals on the preliminary decision as to proportionality."

58. In Clucas Food Service Limited (15th February 2007) Deemster Doyle had to deal with a review of the decision of an Assessing Officer and referred to various English authorities where the courts sought to discourage satellite litigation on costs matters thus:

"64. In Burstein v Times Newspapers Ltd [2002] EWCA Civ 1739 at [29] Latham LJ ended the judgment of the court with these words:

"... The Deputy Costs Judge is to be commended for ensuring that the detailed assessment did not become an excuse for further expensive litigation at the behest of a disappointed but persistent litigant. Satellite litigation about costs has become growth industry, and one that is a blot on the civil justice system. Costs Judges should be astute to prevent such proceedings from being protracted by allegations that are without substance."

65. In Hollins [Hollins v Russell [2003] EWCA 718] the English Court of Appeal having referred to Latham LJ's comments added at paragraph 226:

"In future district judges and costs judges must be equally astute to prevent satellite litigation about costs from being protracted by allegations about breaches of the CFA Regulations where the breaches do not matter. They should remember that the law does not care about very little things, and that they should only declare a CFA unenforceable if the breach does matter and if the client could have relied on it successfully against his solicitor.""

59. This attempted second appeal by the Appellant as to the assessment of costs took up a considerable amount of the time of this court and of counsel. In future cases we may not give appellants the same indulgence we gave to the Appellant in this case over two hearings before this court. We have no doubt that such wasteful second appeals on costs should be firmly discouraged. Potential appellants and their legal advisers should think long and hard before filing an appeal and then a second appeal in respect of a costs assessment. If further second appeals are filed which plainly do not meet the very high hurdles set by Rule 14.4(2) of the 2009 Rules, we will not hesitate in appropriate cases to impose indemnity costs and/or wasted costs orders against advocates. The Appeal Division must be left to deal with important points of principle or practice and should not be invited to descend into the detail of costs assessments.”

Universalism and Rule 4.16(1)(b)

66. Deemster Doyle in Interdevelco Limited v Waste2energy Group Holdings Plc (judgment 10 October 2012) stated:

“1. This judgment concerns Rule 4.16(1)(b) of the Rules of the High Court of Justice 2009, forum non conveniens and the principle of universalism. Rule 4.16(1)(b) provides in effect that a defendant who wishes to argue that the court should not exercise its jurisdiction may apply for an order declaring that it should not exercise such jurisdiction. In simple terms, the principle of universalism in Manx law provides that personal and corporate insolvency should be unitary and universal. There should be a unitary insolvency proceeding in the appropriate lead jurisdiction which receives worldwide recognition and applies universally to all of the insolvent’s assets. The assets of the insolvent entity should be distributed to creditors under a single universally applicable system of distribution. In simple terms, forum non conveniens in Manx law provides that legal proceedings should be conducted in the most convenient or natural forum i.e. that with which the proceedings have the most real and substantial connection.

2. An unnecessary duplication of substantive insolvency proceedings in more than one jurisdiction is undesirable. It inevitably involves further delay, expense and inconvenience. The substantive insolvency proceedings should be confined to one jurisdiction with other courts worldwide, where necessary, acting in an ancillary capacity and recognising and assisting the jurisdiction of the primary court in an orderly progression and conclusion of the substantive insolvency proceedings.

3. As Michael Kirby (a former Justice of the Australian High Court) has stressed we should see “the challenges of our time through the world’s eye” (Through the World’s Eye 2000). The Roman poet Terentius also put it succinctly and profoundly when he stated “I am human and nothing human is foreign to me”. Whether the courts are dealing with a human or corporate entity in insolvency cases universalism must prevail. We must not take an insular and isolationist approach. We must take a global and universalist approach. In that way substantial justice will be done on an international basis. We as a global community should approach matters as internationalists rather than in a parochial way. We all need to see international insolvency matters in the global context in which they arise. ...

101. There should in the circumstances of this case be one unitary and universal insolvency based in the US, the jurisdiction with which the group of companies including the Defendant have close connections or to put it in other words “the centre of their main interests” or their “nerve centre”. The Defendant and the other companies do not have any real substantive connection with the Isle of Man. They are simply incorporated here. That simple formal fact should not prevent the well advanced insolvency proceedings in the US from proceeding to their conclusion without additional substantive insolvency proceedings being commenced in the Isle of Man. There is nothing in Manx law or Manx public policy that requires this court to disregard the proceedings before the US Bankruptcy Court. This court should not seek to unravel or duplicate all the good work done by the US Bankruptcy Court. Substantial justice is not best

served by starting fresh substantive insolvency proceedings in the Isle of Man. Substantial justice is best served by permitting the proceedings before the US Bankruptcy Court, involving companies and creditors with substantial connections with the US, to progress to their conclusion.

102. If the Claimant, which is a company registered in Guernsey, is a genuine creditor of the Defendant then it should have nothing to fear from the proceedings before the US Bankruptcy Court which like insolvency proceedings in all sophisticated jurisdictions are designed to assist genuine creditors to obtain a fair share of the assets. The insolvency proceedings in this case should be permitted to proceed in the US. There is no need for additional substantive winding up proceedings to take place in the Isle of Man. The Claimant will, of course, be at liberty to seek whatever relief it considers appropriate in the proceedings before the US Bankruptcy Court. If the Trustee requires the recognition and assistance of the High Court in the Isle of Man he can, no doubt, make whatever applications he considers appropriate and any interested parties may be given an opportunity to make any relevant representations and such applications can be considered on their merits.”

[This judgment should be read in the light of the judgments of the UKSC delivered on the 24th October 2012 in Rubin v Eurofinance SA [2012] UKSC 46. See also Notes on International Judicial Co-operation].

67. In Silina v Lyubomska (Appeal Division judgment 24 May 2013) the Appeal Division at paragraph 2 of the judgment stated: “... The Irish Court has made various orders against the Second Respondent which require the payment of monies to the First Respondent. Absent any appeal from the orders of the Irish Court the Second Respondent should comply with those orders and the funds in his account at Nationwide International [in the Isle of Man] should, subject to any legitimate claims as to ownership by others, be used to discharge his liabilities under the orders of the Irish Court.”

Litigation friends

68. See Silina v Lyubomska (Appeal Division judgment 24 May 2013) which briefly dealt with Rule 3.13 of the 2009 Rules (litigation friend) and commented that in respect of a minor it would not permit a minor to proceed without a litigation friend where “other parties are trying to complicate matters and there are suggestions that the [minor] is being manipulated by others...” (paragraph 22 of the judgment).

General Civil Restraint Order

69. In Fletcher v Wildman and others (20 December 2011) Deemster Roberts made a general civil restraint order under Rule 2.57(1) of the 2009 Rules. Rule 2.57(1) provides that a general civil restraint order may be made by a Deemster where the party against whom the order is made persists in issuing claims or making applications which are totally without merit, in circumstances where an extended civil restraint order would not be sufficient or appropriate. See also the Appeal Division’s judgment in Holmes v H M the Queen [2 April 2013] dismissing an appeal against the judgment of Deemster Roberts of the 23 October 2012 whereby Deemster Roberts made a general civil restraint order pursuant to Rule 2.57(1) of the 2009 Rules.

Penal Notices

70. See Tilleard v Carter (ORD 10/52 Deemster Doyle 30 April 2012) re penal notice and Rule 10.14 of the 2009 Rules.

Exclusion of evidence

71. See Deemster Corlett’s judgment of the 23 May 2013 in Gubay v Willers in respect of Rule 8.1(2) of the 2009 Rules and the power of the court to exclude evidence that would otherwise be admissible. At paragraph 13 Deemster Corlett stated:

“... While no doubt the judge requires a degree of bravery, there is in fact no reason why a judge who has a firm grasp of the issues cannot in my view readily exercise the right to exclude evidence in advance of the trial in exercise of his or her case management powers particularly if as here he Judge will be the trial Judge and has been seized of the case for some time. Indeed there is much to commend and encourage such an approach in order to save court time at the final hearing and reduce costs.”

72. See also the approach of Moses L J in Ace European Group Limited v Chartis Insurance UK Ltd [2013] EWCA Civ 224 where he felt that the appellant ought never to have been permitted to rely on some photographs (paragraph 37) and the judge had every right to invoke the overriding objection and exclude the evidence of the photographs pursuant to CPR 32.1(2) ...” (paragraph 42).

73. In Gubay v Willers (judgment 10 January 2014) Deemster Corlett dealt with an application under Rule 8.1(2) of the 2009 Rules under which the court may use its power to exclude evidence that may otherwise be admissible. The following are extracts from Deemster Corlett’s judgment in respect of the law:

“14. In determining this Application I of course remind myself of the relevant law. I have already referred to Rule 8.1. I also refer to Rule 8.4(1) which states that "a witness statement is a written statement signed by a person which contains the evidence which that person would be allowed to give orally."

15. I have also refreshed my memory about the law as set out in the White Book 2013 paragraphs 32.4.20 and 21.

16. I have also recalled the important statements in decided English cases to which I referred in my judgment of 23rd May 2013. In particular as Mr Wannenburgh reminded me there is the important statement in Wilkinson v West Coast Capital [2005] EWHC 1606 where Mann J said this "In my view I should only strike out the parts of the witness statements which I am currently considering if it is quite plain to me that no matter how the proceedings look at trial the evidence will never appear to be either relevant or if relevant will never be sufficiently helpful to make it right to allow the parties in question to adduce it. With evidence of this nature that is likely to be quite a heavy burden."

17. Also in that case I referred to Neuberger J's judgment in Anglo Eastern Trust Limited v Kemanshahghi and I have also referred to the recent decision of the Chancellor of the Chancery Division in England in the case of JD Weatherspoon Plc v Jason Harris [2013] EWHC 1088 and in particular

paragraphs 32 to the end of the judgment which discuss the exclusion of a witness statement and deals with the practical application of the Rules to a particular case.

18. Of course, there are also wider considerations to be taken into account. There are the costs of the parties in this long running litigation. There is the need to conserve or shepherd judicial time which is very constrained particularly in these times of Governmental cut backs.

19. There is the matter of the interests of other Court users and the need to prevent unnecessary waste of judicial and court time. All of this of course is to a large extent encapsulated in the overriding objective and the need to deal with matters proportionately, allotting an appropriate share of the Court's resources to a case, while bearing in mind the interests of other Court users.”

Rule 14.9(1) of the 2009 Rules and extension of time to appeal

74. Rule 14.9(1) of the 2009 Rules provides that an application to vary the time limit for filing an appeal notice must be made to the appeal court.

75. The Appeal Division in Breeze v Flexton Limited (judgment 21 January 2014) considered this rule and the relevant law pre the 2009 Rules including Sturgeon v Raad (30 November 2007) which stated that it was entirely within the discretion of the court to grant or refuse an extension of time for the serving of a notice of appeal and that the factors which are normally taken into account in deciding whether to grant such an extension of time are:-

(1) the length of the delay; (2) the reasons for the delay; (3) the chances of the appeal succeeding if the application is granted and (4) the degree of prejudice to the potential respondent if the application is granted.

Ultimately and overriding or embracing all factors which go into the exercise of discretion is the question of what the interests of justice require on the facts of a particular case. In Breeze the Appeal Division added:

“11. Rules and time limits are there to be observed and complied with to assist in the efficient administration of justice. This is especially important in a compact jurisdiction with limited resources.

12. In the future it may be necessary for this court to consider in an appropriate case whether the position outlined in Sturgeon v Raad may require modification subsequent to 2009 Rules, and the earlier English Civil Procedure Rules, and the new litigation culture where the emphasis is on compliance with rules and time periods and most appropriate use of court resources and time : see for example, albeit in a different context, the observations of Lord Dyson MR in Mitchell v News Group Newspapers Limited [2013] EWCA Civ 1537 in respect of the importance generally of complying with time limits and the need to discourage delay.

13. Moreover, we remind ourselves of what this court, as presently constituted, stated in Manx Auto Rescue Club v Mann and Partners [13 November 2012], namely that excessive indulgence should not be extended to litigants in person : see Tinckler v Elliott [2012] EWCA Civ 1289 in which Maurice Kay L J , stated, at paragraph 32 of his judgment :

"I accept that there may be facts and circumstances in relation to a litigant in person which may go to an assessment of promptness but, in my judgment, they will only operate close to the margins. An opponent of a litigant in person is entitled to assume finality without expecting excessive indulgence to be extended to the litigant in person. It seems to me that, on any view, the fact that a litigant "did not really understand" or "did not appreciate" the procedural courses open to him for months does not entitle him to extra indulgence. Even if one factors in Mr Elliott's health problems, the evidence shows that between April and July 2010 he was active in this litigation. The fact that, if properly advised, he would or might have made a different application then cannot avail him now. That would be to take sensitivity to the difficulties faced by a litigant in person too far. In my judgment, this is where Sharp J went wrong. She regarded this to be "a special case on its facts" but it could only be considered such if one goes too far in making allowances for a litigant in person. For these reasons, I do not consider that it was open to her to find the promptness requirement satisfied."”

76. The Appeal Division in Breeze at paragraph 41 stressed that the rules in respect of the time period are clear, publicly available and should be well known. At paragraph 42 the Appeal Division added:

“42. There is not one set of laws and rules for litigants in person and another set of laws and rules for legally represented litigants. If the Appellant had been represented his application for an extension time would not have been granted. The fact that the Appellant was a litigant in person should make no significant difference in the circumstances of this case otherwise legally represented litigants would be put at an unfair disadvantage.”

Extension of time

77. In Valasquez v Scottish Life International Insurance Company Limited (26 October 2009) Deemster Sullivan dealt with leave to file proceedings out of time under the 2009 Rules. See now Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537 at paragraph 42.

78. In Gubay v Willers (28 October 2009) and Central Asian Capital Projects (3rd November 2009) Deemster Doyle dealt with applications for extensions of time.

Compliance with court orders

79. There is Manx civil and criminal case law on the importance of complying with court orders. For example, in Howell v DHSS (judgment 6 October 2009) Deemster Doyle stated:

“10. The courts in compact jurisdictions strive to do their best with limited resources. It is of paramount importance that the parties to legal proceedings use those limited resources efficiently and comply with court orders. The efficiency of the courts in this jurisdiction no doubt has an effect on the economic and general health of the community. Fairness and efficiency in legal proceedings are too important simply to be left to the parties to legal proceedings. Courts must impose strict timetables upon the parties to legal proceedings and should ensure that such timetables are adhered to and where, without good reason, they are not the parties and their advisers should not expect sympathy or further indulgence from the courts. If they do not receive what they perceive to be justice then they will only have themselves to blame for their inefficient use of court resources and for their failure, without reasonable excuse, to comply with court orders.

80. In the criminal context see pages 186 – 196 of Doyle’s Manx Criminal Law and Procedure (2010). In R v Glover, Glover & Priestnal (judgment 25 August 2006) Deemster Doyle stressed at paragraph 121 that:

“Advocates should not treat court orders including case management directions as simply pieces of paper which can be ignored or compliance with them delayed to suit their convenience. Orders and directions … should be strictly complied with. Serious consequences can follow if they are not. The efficient and fair administration of justice depends on advocates and the parties complying strictly with court orders … It is not reasonable to say I did not comply with the court order because I was too busy or I was only a few days late or other matters took priority. Compliance with court orders should take priority.”

81. It is important under the new culture, reinforced by the 2009 Rules, that orders should be strictly obeyed and complied with. The following are extracts, in a family law context, from the forceful judgment of Sir James Munby, President of the Family Division in W (a child) [2013] EWCA Civ 1177:

“51. …Orders, including interlocutory orders, must be obeyed and complied with to the letter and on time. Too often they are not. They are not preferences, requests or mere indications; they are orders …

52. The law is clear. As Romer L J said in Hadkinson v Hadkinson [1952] P 285, 288, in a passage endorsed by the Privy Council in Isaacs v Robertson [1985] AC 97, 101:

“It is the plain and unqualified obligation of every person against, or in respect of whom, an order is made by a court of competent jurisdiction, to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it to be irregular or even void.”

For present purposes that principle applies as much to orders by way of interlocutory case management directions as to any other species of order. The court is entitled to expect – and from now on family courts will demand – strict compliance with all such orders. Non-compliance with orders should be expected to have and will usually have a consequence.

53. Let me spell it out. An order that something is to be done by 4 pm on Friday, is an order to do that thing by 4 pm on Friday, not by 4.21 pm on Friday let alone by 3.01 pm the following Monday or sometime later the following week. A person who finds himself unable to comply timeously with his obligations under an order should apply for an extension of time before the time for compliance has expired. It is simply not acceptable to put forward as an explanation for non-compliance with an order the burden of other work. If the time allowed for compliance with an order turns out to be inadequate the remedy is either to apply to the court for an extension of time or to pass the task to someone else who has available the time in which to do it.

54. Non-compliance with an order, any order, by anyone is bad enough. It is a particularly serious matter if the defaulter is a public body such as a local authority. And it is also a particularly serious matter if the order goes to something as vitally important as Judge Barclay’s order did in this case: the right of a parent facing the permanent loss of their child to know what case is being mounted against them by a public authority.

55. The explanation put forward on behalf of Bristol City Council after we asked Ms Pitts what had happened was most unsatisfactory. The order was sent, appropriately, to the address the local authority had given on the application form, addressed by name to the social worker in the case. It was sent on 12 April 2013, a Friday. The local authority accepts that the envelope was delivered and signed for at that address on 15 April 2013, the following Monday. The order, it seems, was never seen by or drawn to the attention of the legal department. Ms Pitts, as she told us, knew nothing about it until she arrived at court on 29 April 2013. Investigations by the local authority have proved fruitless as to what happened to the order after it was signed for. I propose to state only what is obviously: local authorities must have systems in place to ensure that all those departments and officers who need to know are made immediately and properly aware of the existence, terms and effect of any order that has been served on the authority.”

82. In Lewin v Braddan Parish Commissioners (judgment 6 February 2014) Deemster Christie dealt with issues of compliance with a court order and the consequences of any non-compliance. There was reference to Rules 2.58, 2.59 (relief from sanctions), 7.2(2), 7.3(2), 10.38(2) and 10.46, and Howell v DHSS (judgment 6 October 2009). Deemster Christie at paragraph 91 stated:

“91. I set out above some extracts from the judgment of Deemster Doyle in Howell. I remind myself, in particular, of paragraphs 8 and 10 of that Judgment. Orders of the Court must be complied with strictly and within the time periods specified. This is not merely an administrative issue. Non-compliance by one party can cause prejudice to the other party but it can also affect other litigants. It is not for any given party to decide, unilaterally, whether it will comply with a Court Order and, if so, when. The overriding objective provides that cases must be dealt with fairly and justly, taking into account the competing interests of the parties but also dealing with cases expeditiously, saving expense and allocating resources which are proportionate to the case.”

Jurisdictional issues in maritime claims

83. In Baltic Highway Limited (judgment 7 January 2014) Deemster Doyle dealt with jurisdictional issues regarding a maritime claim. There was an application which raised issues under Rule 4.16(1)(b) and Rule 7.2(2)(f) of the 2009 Rules. At paragraph 31 the Deemster referred to the Spiliada/Assisi principles. In Assisi Investments Limited v Jones (judgment 19 February 2004) the Appeal Division stated:

“24. In determining whether to stay the proceedings on the ground of forum non conveniens, Deemster Kerruish cited the principles derived from the judgment of Goff LJ in Spiliada Maritime Corp v Cansulex [1987] 1AC 460 as set out in Dicey & Morris : the Conflict of Laws [13th edition] at 395. Such principles may be summarised thus –

[1] Generally the legal burden of proof that there ought to be a stay lies on the defendant who seeks the stay, although the evidential burden of proof rests on the party seeking to establish matters which will assist him in persuading the court to exercise its discretion in his favour.

[2] Once a court is satisfied that there is another available forum which is prima facie the appropriate forum for the trial, the burden shifts to the claimant to show that there are special circumstances by reason of which justice requires that the trial should nevertheless take place in England.

[3] The burden on the defendant is to establish that there is another forum which is clearly or distinctively more appropriate than England : it is insufficient merely to establish that England is not the natural or appropriate forum.

[4] The court will consider what factors exist which suggest that another forum is the ‘natural forum’ ie that with which the action has the most real and substantial connection. Such factors include convenience, expense, availability of witnesses, the law governing the transaction and where the parties reside or carry on business.

[5] If, at that stage, the court concludes that there is no other available forum which is clearly more appropriate for the trial, the court will ordinarily refuse a stay.

[6] If, by contrast, the court concludes that there is some other available forum which is prima facie more appropriate for the trial, it will ordinarily grant a stay unless there are circumstances [including those which go beyond those taken into account when considering connecting factors with other jurisdictions] by reason of which justice requires that a stay should not be granted.

[7] A stay will not be refused simply because the claimant will thereby be deprived of ‘a legitimate personal or juridical advantage’ provided that the court is satisfied that substantial justice will be done in the available appropriate forum.

25. Both the Appellant and Mr Long accept, as we do, that such principles were the appropriate legal framework in which the Deemster had to determine the Third Parties’ application as forum conveniens.”

84. At paragraphs 69 – 73 of the judgment in Baltic Highway Limited Deemster Doyle dealt with Rule 8.4(1) of the 2009 Rules and held that the witness statements should not have contained legal argument. Deemster Doyle stated:

“70. The parties appear to have attempted to argue this case out in the witness statements. The witness statements should not have contained legal argument.

71. In JD Weatherspoon plcv Harris and others [2013] EWHC 1088 (Ch) Sir Terence Etherton, the Chancellor of the English High Court, at paragraph 33 described as "abusive" those parts of a witness statement which contained "a recitation of facts based on the documents, commentary on those documents, argument, submissions and expressions of opinion…". At paragraph 39 the Chancellor stated that the witness "would not be allowed at trial to give oral evidence which merely recites the relevant events, of which he doesn't have direct knowledge, by reference to documents he has read. Nor would he be permitted at trial to advance arguments and make submissions which might be expected of an advocate rather than a witness of fact…".

72. Rule 8.4(1) of the Rules of the High Court of Justice 2009 provides that: "A witness statement is a written statement signed by a person which contains the evidence which that person would be allowed to give orally."

73. The witness statements in this case should simply have contained facts. The place for legal argument is skeleton arguments and oral submissions.”

Service out of jurisdiction and appropriate forum issues

85. In Hirco v Hiranandani (judgment 21 February 2014) Deemster Doyle dealt with the issue as to whether in all the circumstances the Isle of Man was clearly the appropriate forum for the trial of the dispute and whether in all the circumstances the court ought to have exercised its discretion to permit service of the proceedings out of the jurisdiction. The Deemster’s principal task was to identify the place in which the case could be tried for the interests of all parties and for the ends of justice. The Deemster considered Altimo Holdings v Kyrgyz Mobile Tel Ltd [2011] UKPC 7 and the Appeal Division’s judgment in Assisi. It was common ground that on an application to serve a party out of the jurisdiction the applicant had to satisfy three requirements. First, that there was a serious issue to be tried on the merits. Second, that there was a good arguable case that the claim fell within one or more of the “gateways” specified in Rule 2.41(1) of the 2009 Rules. Third, that in all the circumstances the Isle of Man was clearly the appropriate forum for the trial of the dispute and that in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction.

86. At paragraphs 107 – 116 of the judgment Deemster Doyle dealt with the position in respect of delays in India. At paragraphs 117 to 121 the Deemster dealt with the application for a case management stay pending arbitration in Singapore as follows:

“117. I come now to the request for a case management stay.

118. Mr Salter referred to the importance of the Exclusivity Agreement and submitted that the arbitration in Singapore will in effect resolve all the issues between the parties and in particular the crucial issue of the honesty or otherwise of Mr Hiranandani.

119. I have considered the authorities including Reichhold Norway ASA v Goldman Sachs International [2000] 1 WLR 173 and Isis Investments Limited v Oscatello Investments Ltd and others [2013] EWHC 7 (Ch).

120. I am not persuaded that there are any rare and compelling circumstances or indeed any good reasons for a case management stay. Plc and Mrs Priya Hiranandani-Vandrevala are not parties to the Singapore arbitration and will not be directly bound by the results of the Singapore arbitration. The Singapore arbitration will not be determined until after June 2015. The Singapore arbitration will not finally resolve all the issues between the parties or significantly assist this court in determining the issues between all parties in these proceedings. I do not grant a case management stay.

121. This dispute between the parties involving as it does a Manx Plc and parties acting as directors of a Manx Plc should be dealt with expeditiously before the High Court of Justice of the Isle of Man. Although it is entirely a matter for the arbitrators in Singapore I would hope they would see the good sense in staying the Singapore arbitration until the issues between all the parties have been finally determined in the Isle of Man. It is plainly undesirable in justice to have the Singapore arbitration proceeding in parallel with these legal proceedings in the Isle of Man.”

87. Deemster Doyle dealt with the need for expedition as follows:

“122. Detailed letters before claim together with appendices were sent to both Defendants in December 2012. These proceedings were issued in the Isle of Man on 6 February 2013 and served on both Defendants out of the jurisdiction as long ago as June 2013. We are now in February 2014. A lot of time has been spent on this jurisdictional challenge. These proceedings in the Isle of Man involving as they do serious allegations must now be progressed with expedition. The parties and their legal representatives are duty bound to assist this court in achieving the overriding objective of dealing with cases justly (Rule 1.2 (4) of the Rules of the High Court of Justice 2009). Advocates have an overriding duty to the court to ensure, in the public interest, that the proper and efficient administration of justice is achieved (Rule 19 (1) of the Advocates Practice Rules 2001).

123. I require counsel for the Claimants and both Defendants to constructively engage and co-operate with each other and to file within 21 days from the delivery of this judgment, if possible on an agreed basis if not then separately, a draft of a proposed directions order which will bring this case on for trial in the Isle of Man within the next 16 months. The court could make time available later this year for a trial if the parties are ready. The parties and their legal representatives are duty bound to cooperate with each other to assist the court in achieving an expeditious hearing of this dispute. The parties should not

engage in any more unnecessary time and cost wasting interlocutory skirmishes.”

88. In Simker (28 October 2009) Deemster Doyle dealt with issues in respect of applications for permission to serve out of the jurisdiction under the 2009 Rules.

89. See also the judgment of the Supreme Court of the United Kingdom in Abela v Baadaani [2013] UKSC 44 in respect of rules 6.37(5)(b) and 6.15(2) of the Civil Procedure Rules and the circumstances in which a court may make an order retrospectively declaring that steps taken by a claimant to bring a claim form to the attention of a defendant should be treated as good service. The question for decision in the appeal was whether there had been good service of the claim form in the action.

Enforcement of executions

90. See High Bailiff Needham’s judgment in Campbell and Webb v Le-Roy Beck and Dowty (4 December 2013) in respect of Rules 12.27 and 12.33(5) of the 2009 Rules and the enforcement of an execution. The dispute, principally between the Claimant and the Third Party, was whether there was an “amount of any debt due or accruing due … to the judgment debtor from the Third Party.” The learned High Bailiff referred to paragraph 72.2.1 of the English White Book and applied various English authorities on a similar English rule. The High Bailiff also made reference to promissory estoppel and the relevant Manx case law.

91. See Deemster Corlett’s judgment in Quirk v Kelly (3 May 2013) in respect of whether the judgment and execution in that case was a regular one (under Rule 10.25) and whether under Rule 10.35 of the 2009 Rules the court may in its discretion set aside that judgment on the assumption it is regular.

Setting aside default judgment

92. Holmes v Zellmer (judgment 1 December 2009) setting aside default judgment under the 2009 Rules.

93. In Castle Aviation Services Limited v Manhattan Aviation Services Limited (25 February 2011) High Bailiff Needham dealt with Rule 10.35 of the 2009 Rules and an application to set aside a default judgment.

Security for costs

94. In Montpelier Tax Planning (Isle of Man) Limited (in Liquidation) v Jones (judgment 12 December 2013) the Appeal Division dealt with interlocutory appeals in respect of security for costs. Reference was made to Rule 1.2(2) of the 2009 Rules in respect of the overriding objective of enabling the court to deal with cases justly, Rules 7.27 and 7.28 of the 2009 Rules in respect of security for costs and the conditions to be satisfied, and to Rule 7.29 of the 2009 Rules in respect of security for costs other than from the Claimant. The Appeal Division set out the court’s jurisdiction to order security for costs but noted two matters at the outset. Firstly, it is important to recognise that any award of security made by way of payment into court would be returned to Montpelier in the event that Montpelier was ultimately successful (paragraph 22). Secondly, where it is contended by a party that an award of security

for costs will have the effect of stifling their claim, the onus is on the party to adduce full, frank and clear unequivocal evidence to support such claim (paragraph 23).

95. Flexton Limited v Breeze (Deemster Corlett’s judgment 29 January 2013) dealt with applications for security for costs under Rule 7.28. Deemster Corlett considered Rules 7.27, 7.28(2)(b), section 336 of the Companies Act 1931 and Jirehouse Capital v Beller [2008] EWCA Civ 908. Deemster Corlett at paragraph [31] of his extempore judgment stated:

“... There is no rule of thumb as to the refusal of an order for security where both claims and counterclaims are raised. The purpose of granting security for costs is to give costs protection to a defendant who is forced into litigation at the election of someone else.”

96. Montpelier Tax Planning (Isle of Man) Limited v Jones and Morris (Deemster Melton’s judgment 25 October 2012 and Appeal Division judgment 12 December 2013) concerned the issue of security for costs under Rule 7.29 of the 2009 Rules against a non-party. Deemster Melton at paragraph 28 stated:

“In my judgment, Rule 7.29 stands alone and when an application is made under that Rule, there is no separate requirement that the conditions set out in Rule 7.28 should also be met ...”

97. See Louis v Cambridge Place Securities Limited (Deemster Doyle’s judgment 14 June 2013) in respect of applications for security for costs pursuant to Rules 7.27 and 7.28 of the 2009 Rules.

98. See also Deemster Doyle’s judgment in InterRetire Limited v HSBC Securities Services (Isle of Man) Limited (11 April 2014) in respect of Rules 7.27 and 7.28 of the 2009 Rules and whether there was reason to believe that the Claimant (a company incorporated in the British Virgin Islands) would be unable to pay the Defendant’s costs if ordered to do so and if such condition was satisfied whether the court was also satisfied, having regard to all the circumstances of the case, that it was just to make an order for security for costs against the Claimant. The Deemster also considered the circumstances in which it may be permissible to draw inferences.

Rules 2.43 and 2.44 and service

99. In Cruz City 1 Mauritius Holdings v Unitech Limited (Deemster Doyle’s judgment 13 December 2013) the main issue in dispute between the Claimant and the First Defendant was whether Rules 2.43 and 2.44 of the 2009 Rules were in effect mutually exclusive. Deemster Doyle concluded that they were not, and that the courier service in India in that case pursuant to Rule 2.43 of the 2009 Rules was good service in that it was permitted by Indian domestic law and it was not against the law of India. Deemster Doyle further held that it was not necessary for the Claimant to proceed down the Rule 2.44 route and also effect service via the Hague Service Convention. At paragraph 77 of his judgment Deemster Doyle stated:

“77. In my judgment Rule 2.44 of the 2009 Rules does not require a litigant, who wishes permission to serve out of the jurisdiction on an entity in a jurisdiction which is a party to the Hague Service Convention, to pursue the Rule

2.44 route. The litigant may, if he so wishes and if the court grants an order in that respect, pursue the Rule 2.43 route …”.

100. See Andrew Dickinson Service Abroad – an inconvenient obstacle? (2014) 130 LQR 197.

Stale matters

101. Deemster Gough in Marine & General Limited v McKenzie (judgment 7 January 2014) stated:

“6. The matter was stale when presented to the Court. The passage of time and the obvious cost of these proceedings such that the parties had no legal help during the trial also meant that I had to hear a complex case without the benefit of professional legal assistance from qualified advocates. Although I attempted to guide the parties through the trial process I was at great pains to avoid giving either side any unfair assistance. It will be seen from this Judgment though that I have given the Claimants and the Defendants latitude that would probably not have been afforded to advocates had they been representing the parties …

191. At the start of this Judgment I made some remarks about the time it has taken to get this matter to trial and the possible consequences of the delay. I also observed that these equally intransigent parties had agreed that an arbitration clause be included in the Agreements. That provision has been ignored, I am sure to the detriment of both sides. Either side could have insisted on arbitration and it is likely any proceedings before this Court, if commenced, would have been stayed to accommodate the arbitration provisions in the Agreements. I have no doubt that this dispute could have been settled by arbitration many years ago. I note that an attempt at mediation failed …

199. … Time has in many ways passed by this dispute …”

102. This case is a good example of the need for parties to proceed with due expedition once a dispute has arisen. If they have agreed to arbitration then they should normally go to arbitration. If there is no agreement to arbitrate then they should normally endeavour to resolve their dispute by mediation. If that fails, then as a last resort they may have to litigate. If legal proceedings are commenced the parties should pursue those proceedings expeditiously. Stale claims are to be discouraged.

Stays

103. See L M Moore SP Investments Limited v SV Company Limited and others (Deemster Corlett’s judgment 17 June 2011) in respect of Rule 14.10 and stays pending appeals. See also Appeal Division judgment delivered on the 24 November 2011 upholding Deemster Corlett’s order to discharge the receivership order.

Letters of request

104. On jurisdictional issues and letters of request it may be worth noting that in Capita Asset Services (London) Limited v Gulldale Limited (judgment 9 January 2014) Deemster Doyle considered the relevant law and exercised his discretionary

jurisdiction in favour of the Claimant. The Deemster issued a letter of request to the High Court in England to hear and determine an application for an administration order in relation to Gulldale Limited pursuant to the provisions of the English Insolvency Act 1986. On 4 April 2014 Deemster Doyle also granted orders recognising the appointment of joint administrators under English law and provided further ancillary relief to ensure the effective conduct of the administration in England.

Rule 14.14(2)

105. In Harben v Penn (11 January 2010) the Appeal Division referred at paragraph 22 of the judgment to Rule 14.14(2) of the 2009 Rules and concluded that it was not in the interests of justice to hold a re-hearing.

Offers to settle

106. In Traditional Builders v Modena Lifestyles Ltd and Paul Mellor (15 January 2010) Deemster Corlett dealt with offers to settle. See also High Bailiff Needham’s judgment in Emea Oil Limited v Petrodel Resources Limited (27 October 2010) in respect of costs, interest, offers to settle and payments on account of costs.

Costs in a small claims context

107. In RPS Consultants Ltd v Hexagon Enterprises Ltd (27 August 2010) Deemster Roberts dealt with costs in the context of small claim cases under the 2009 Rules.

Lord Dyson’s lecture in 2013

108. The following are extracts from Lord Dyson’s lecture delivered on the 22 March 2013 entitled “The Application of the Amendments to the Civil Procedure Rules 19th Lecture in the Implementation Programme District Judges’ Annual Seminar Judicial College”:

“The overriding objective

7. The starting point is the overriding objective. As you know its wording has been revised. From 1 April we have a Mark II overriding objective. CPR 1.1 will read as follows:

‘1.1(1) These Rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost.

(2) Dealing with a case justly and at proportionate cost includes, so far as is practicable . . .

(f) enforcing compliance with rules, practice directions and orders.”.’ (Post-April 2013 additions in bold.)

The rule has therefore been revised to emphasise (i) the centrality of dealing with cases at proportionate cost and (ii) the fact that the overriding objective requires the court to place a greater weight than it might have done previously on enforcing compliance...

9. The argument that the amendments are superfluous might be put in this way. The overriding objective, as originally drafted, was intended to ensure that the court, when applying the specific provisions of the CPR and when actively managing cases, generally did so in order to ensure that cost and delay was reduced. More specifically, it was intended to ensure that litigation costs would become proportionate. The entire thrust of the Woolf reforms, as is readily evident given the frequent references to both disproportionate costs and proportionate costs in, for instance, the Final Woolf Report, make this abundantly clear. Equally, it is evident from the fact that Lord Woolf made the very point that the concept of dealing with cases justly expressed, amongst other things, a commitment to proportionality. Given this fact, it could be said, that adding an express reference to proportionate cost is superfluous; superfluous because dealing with cases justly already requires the court to ensure that cases are managed so as to ensure no more than proportionate costs are incurred. In other words, a commitment to proportionate costs is already implicit in the overriding objective.

10. A similar argument could be made regarding the addition of the reference in CPR 1.1(2)(f), to enforcing compliance with rules, PDs and orders. It can be said that proper enforcement of rules, such as procedural time limits, or of court orders, such as unless orders, is inherent in the idea of dealing with cases justly. If an individual claim is to be dealt with justly, it requires such compliance and, if necessary, enforcement. As Lord Phillips MR put it in the Flaxman-Binns case, sometimes the court is faced with the question ‘. . . whether the overriding objective of dealing with this case justly calls for us to bring these proceedings to an end . . .’ Flaxman-Binns v Lincolnshire County Council (Practice Note) [2004] 1 WLR 2232 at [41]. In order to ensure that cases are dealt with justly requires enforcement of rules and court orders. Enforcement is, like the commitment to proportionate cost, already implicit in the overriding objective.

11. Why then make explicit what is already implicit? The CPR whether they refer to the procedural case tracks, court control of expert evidence, time limits within which to serve claims or directions that specify when evidence should be exchanged and so on, serve to provide a just framework. That framework is intended to ensure that all litigants have fair access to the courts and a fair opportunity to proceed to judgment.

12. Obviously that framework must be adapted to the circumstances of the immediate case. Flexibility and discretion within that framework are always necessary. In this respect, the use of the phrase “so far as practicable” is of some significance. Such flexibility must however be applied so as to achieve two things. These are (i) to ensure that parties do not expend more than proportionate costs in conducting their own litigation and (ii) to ensure that parties do not expend more of the court’s time and resources than is proportionate given the need to ensure that all other court-users can have fair access to the courts within a reasonable time.

13. This may mean that in some cases parties will have to be denied the opportunity to adduce certain evidence if they have failed to exchange in accordance with case management directions. Doing so may be justified in order to ensure that they do not expend more than proportionate costs on their own

73 litigation. Equally, this might be justified in order to ensure that all other court- users have fair access. In others it may mean that a claim that could otherwise continue to trial might have to be come to a premature end due, for instance, to a failure to comply with an ‘unless order’.

14. This may all seem rather harsh. It may certainly appear to amount to a denial of justice to the parties. The court’s refusal to grant relief from a sanction, for instance, may appear to be a denial of the need to ensure that justice is done as between the parties. Faced with an apparent conflict between the need to do justice to the parties, to secure a decision on the merits, and the need to secure proportionality it is easy to see why the former might – and often has – prevailed. The courts exist to do justice: where justice and proportionality come into conflict, the former should be given greater weight. Intuitively this seems obviously correct. After all, is a judge not required by his or her oath “to do right by all manner of people, after the law and usages of this realm, without fear or favour, affection or ill will’?

15. Here lies the answer to the superfluity question as well as the remit question. Dealing with a case justly does not simply mean ensuring that a decision is reached on the merits. It is a mistake to assume that it does. Equally, it is a mistaken assumption, which some have made, that the overriding objective of dealing with cases justly does not require the court to manage cases so that no more than proportionate costs are expended. It requires the court to do precisely that; and so far as practicable to achieve the effective and consistent enforcement of compliance with rules, PDs and court orders.

16. The Court of Appeal, has emphasised on a number of occasions that justice goes beyond simply looking at the immediate parties to the proceedings. Lord Woolf made this very point in the pre-CPR case of Beachley Property Limited v Edgar; pre-CPR but looking forward to the approach that would be applied post- 1999. In refusing the allow a party to adduce evidence that had not been served in time, he explained how,

‘It is no use the party coming forward and saying, “The evidence will help our case. . . You have to consider the position not only from the plaintiff's point of view, but also from the point of view of the defendant, and with a view to doing justice between other litigants as well.’ (CA 21 June 1996) at (6).

The court has to consider three things: the claimant’s perspective, the defendant’s perspective and, importantly, the perspective of other court-users. It is not enough to consider the need to secure justice as between the parties. The same point was made by Lord Justice Ward in UCB Corporate Services Ltd (formerly UCB Bank Plc) v Halifax (SW) Ltd, when he explained that, when considering a party’s failure to prosecute claims timeously, the court had not just to take account of the effect of any decision on the parties, and thus their claim to obtain justice. The court also had to

‘take into account the effect of what has happened on the administration of justice generally (which) involves taking into account the effect of the courts ability to hear other cases if such defaults are allowed to occur.’ [1999] C.P.L.R. 691

Lord Justice Ward emphasised this point again in Arrow Nominees Inc & Another v Blackledge & Others. In that decision he made the point that, when considering whether a claim should be struck out for rule non-compliance, the court had to go beyond the question of securing a decision on the merits for the parties. It had to consider the need to ensure that sufficient court resources were allotted not just to the immediate parties but also to other court users [2000] CP Rep 59; [2001] BCC 591 at [73]. As he went on to say,

“The trend of the authorities before C.P.R. was increasingly to support the notion that as the court became more pro-active, so greater importance was given to the need to emphasise and protect the court’s interest in administering justice fairly not only as between the parties before the court but to all other others using the court service. Access to the courts was open to all but the time of the courts was a precious resource which needed to be managed rigorously in order to be fair to all. The C.P.R. is the apotheosis of those ideals.” [2000] CP Rep 59; [2001] BCC 591 at [69].

17. Doing the proper administration of justice goes beyond the immediate parties to litigation. It requires the court to consider the needs of all litigants, all court-users. This idea finds expression in the overriding objective. Unfortunately the courts have not always acted consistently with this idea. Perhaps this is not surprising, as the court does not address case management questions, questions of relief from sanctions and so on in the abstract. It does so in the context of a particular case.

18. In such circumstances it is easy to see why, not least given the long heritage we have of striving to secure justice on the merits in each case and the intuitive understanding that doing justice is to reach a decision on the merits, mistaken assumptions took hold. This was compounded by the failure to make explicit in the overriding objective that it includes a duty to manage cases so that no more than proportionate costs are incurred and so as to enforce compliance. By making these features explicit the Rule Committee has clarified the meaning of the overriding objective. And they have done so exactly as Sir Rupert was required: the reform to the rules will improve practice and procedure consistently with Woolf’s commitment to proportionality. They are as such neither superfluous nor beyond the Jackson remit. They are in fact necessary to underline the requirement that both courts when actively managing cases and litigants in assisting the court to do so, are required to do so consistently with the need to further the proper administration of justice, where that goes beyond the interests of the immediate parties. We have a managed system. That system must be managed for the needs of all litigants. The new emphasis in the overriding objective on proportionate cost and compliance is intended to make sure the wider public interest remains at the forefront of all our minds.

19. This takes me to the revision to rule 3.9. The famous – or perhaps I should say infamous – checklist has gone. The rule will now read as follows:

‘3.9(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will

consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need-

(a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders.’

The new rule thus explicitly refers back to the overriding objective, stressing the need in dealing with a case justly to take account of proportionate cost and the need to enforce rule compliance. As such it expressly refers back to the need to ensure that questions concerning relief from sanctions are not simply considered by reference to the immediate litigation, but to the wider public interest. Why has this change to been made to rule 3.9?

20. First of all the rule change implements an often-forgotten aspect of the Woolf reforms, the need to simplify the rules. The previous checklist approach was less than ideal. It was cumbersome, and often difficult to apply in practice. I have no doubt that it often became an exercise in ticking-off the various elements. That was almost inevitable. As the Court of Appeal’s recent decision in Ryder Plc v Dominic James Beever [2012] EWCA Civ 1737 shows, it was not a means of securing clarity in decision-making, which in itself is a recipe for satellite litigation. The removal of the check-list should improve things.

21. Secondly, and more importantly it is intended to underline and reinforce the importance of conducting and managing litigation so as to ensure that no more than proportionate costs are incurred as between the parties and that no one piece of litigation is permitted to utilise more of the court’s resources than is proportionate, taking account of the needs of other litigants. It thus requires the court to focus much more clearly and consistently than it has in the past on these essential aspects of case management in the light of the overriding objective. This point has of course rightly been emphasised by Lord Justice Jackson (who else?) in the recent Court of Appeal in Fred Perry (Holdings) Ltd v Brands Plaza Trading Ltd [2012] EWCA 224 at [1] where he said this,

‘Non-compliance with the Civil Procedure Rules and orders of the court on the scale that has occurred in this case cannot possibly be tolerated. Any further grant of indulgence to the defendants in this case would be a denial of justice to the claimants and a denial of justice to other litigants whose cases await resolution by the court.’

22. As I have said, one of the problems that has undermined the efficacy of case management has been too great a desire to err on the side of individual justice without any real consideration of the effect that has on the justice system’s ability to secure effective access to justice for all court-users. The Court of Appeal has been as guilty of this error as any other court. That the Court of Appeal could in 2011 in Swain-Mason & Others v Mills & Reeve LLP [2011] 1 WLR 2735 comment that early, robust, decisions by the Court of Appeal that emphasised the need to take account of the needs of all court-users and not just those of the immediate parties had been lost from view makes the point. The revised rule 3.9, by referring back to the overriding objective, is intended to ensure that such issues cannot become lost again post-April.

23. Thirdly, consistently with this, the revised rule is intended to put a stop to what Lord Justice Jackson referred to recently in Mannion v Ginty as the ‘culture of toleration o delay and non-compliance with court orders. .. .’ [2012] EWCA Civ 1667 at [18]. That the Court of Appeal could call for such a culture to be brought to an end, as Jackson LJ did in that case, demonstrates just how far we have moved away from the approach that the CPR and the overriding objective were intended to establish in 1999. In this regard it is another irony that five years earlier than the Mannion decision Lord Justice Brooke felt the need to remind the courts and practitioners that, as he put it,

‘The Civil Procedure Rules, with their tough rules in relation to requiring compliance with court orders, were introduced to extinguish the lax practices which existed before the rules were introduced’ Thomson v O’Connor [2005] EWCA Civ 1533 at [17].

Tough rules but lax application; tough rules but a culture of toleration; and lax application and toleration are all fatal to the new philosophy. By emphasising the need to take account of the new explicit elements of the overriding objective, rule 3.9 is intended to eliminate lax application and any culture of toleration.

24. I should deal with one specific criticism of a tough approach to relief from sanctions at this point. It has been said by some that a tough approach, one which hardens its heart and refuses to allow a party to adduce probative evidence that has not been exchanged at the required time, or which strikes out a claim or defence for non-compliance with an unless order, is one which is inimical to justice. It has been said that such an approach improperly deifies compliance; and that it transforms rules into tripwires for the unwary and the incompetent, as Dame Janet Smith recently put it in the Ryder case, [2012] EWCA Civ 1737 at [62] or equally into procedural weapons for the unscrupulous. It has also been said such an approach is fundamentally at odds with the position outlined in Lord Esher MR’s famous dictum in Coles v Ravenshear (1907) [1907] 1 KB 1. Lord Esher MR said this,

‘… a Court cannot conduct its business without a code of procedure, I think that the relation of rules of practice to the work of justice is intended to be that of handmaid rather than mistress, and the Court ought not to be so far bound and tied by rules, which are after all only intended as general rules of procedure, as to be compelled to do what will cause injustice in the particular case’ [1907] 1 KB 1 at (4).

These words must be viewed with great caution in the 21st century. They are based on an idea that was rejected by the Woolf reforms – that justice is not subject wider policy considerations. If the justice system, and the public interest in the proper administration of justice, was solely concerned with one set of proceedings that approach might be justifiable. It is not. It is a system that has to command public confidence through securing for the majority, many of whom have limited resources, access to a system that itself must operate with limited resources. Doing justice in the individual case can only be achieved through a fair procedure operated in a way that is fair to all.

25. In order to achieve this, the Woolf reforms and now the Jackson reforms were and are not intended to render the overriding objective, or rule 3.9, subject

77 to an overarching consideration of securing justice in the individual case. If that had been the intention, a tough application to compliance would have been difficult to justify and even more problematic to apply in practice. The fact that since 1999 the tough rules to which Lord Justice Brooke referred have not been applied with sufficient rigour is testament to a failure to understand that that was not the intention.

26. The revisions to the overriding objective and to rule 3.9, and particularly the fact that rule 3.9 now expressly refer back to the revised overriding objective, are intended to make clear that the relationship between justice and procedure has changed. It has changed not by transforming rules and rule compliance into trip wires. Nor has it changed it by turning the rules and rule compliance into the mistress rather than the handmaid of justice. If that were the case then we would have, quite impermissibly, rendered compliance an end in itself and one superior to doing justice in any case. It has changed because doing justice is not something distinct from, and superior to, the overriding objective. Doing justice in each set of proceedings is to ensure that proceedings are dealt with justly and at proportionate cost. Justice in the individual case is now only achievable through the proper application of the CPR consistently with the overriding objective.

27. The tougher, more robust approach to rule-compliance and relief from sanctions is intended to ensure that justice can be done in the majority of cases. This requires an acknowledgement that the achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations. Those obligations not only serve the purpose of ensuring that they conduct the litigation proportionately in order to ensure their own costs are kept within proportionate bounds. But more importantly they serve the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately, and that the court enables them to do so.

28. This may mean that in some cases, or some classes of case (such as those allocated to the small claims or fast track), that the court must reach a decision at trial on less evidence than it might have done in the past. To some extent, this has already been happening as a result of the introduction of case tracks. It also means that, where we exclude evidence because of a failure to comply with rules, PDs or orders, we must determine the cases on less evidence than we would have done in the pre-Woolf and pre-Jackson days.

29. That we have to do so stems from our commitment to proportionality, and the need to secure a fair distribution of court resources amongst all those who need to come to the courts in order to vindicate their rights. We have limited resources. Demand for those resources outstrips that limit. We have to cut our cloth accordingly. The wider public interest in the proper administration of justice requires us to do so. For that reason we have no choice but to take a more robust approach to rule compliance and relief from sanctions than previously. Our approach in the case immediately in front of us has consequences wider than for the parties themselves.

Conclusion

30. Where does this leave us as far as the underlying philosophy of the Jackson reforms is concerned?

31. It seems to me that we can draw a number of conclusions:

(i) first, that the revisions to both the overriding objective and rule 3.9 are designed to ensure that the courts, at all levels, take a more robust approach to ensuring that proceedings are managed so that no more than proportionate costs are incurred by the parties to those proceedings. They do so because proceedings must be managed in the public interest to ensure that individual parties do not expend more than is proportionate on their own claims; but as importantly, that they do not, through being permitted to expend more than a proportionate amount of the court’s time and resources, impinge on the rights of other litigants to have fair access to the courts;

(ii) secondly, that those revisions require a more robust approach to the enforcement of compliance and a more restrictive approach to relief from sanctions. This is not based on a dogmatic insistence on compliance for its own sake. It is done because, again I stress, the wider public interest demands it. The effective administration of justice requires it; and

(iii) thirdly, the approach required by the overriding objective will not simply apply to questions of rule-compliance and relief from sanctions. It will apply to case management, costs management and costs budgeting. Those commentators who perceive, for instance, the decision in Henry v News Group Newspapers Ltd [2013] EWCA Civ 19 as some form of signal from the Court of Appeal that the new rules will not be applied robustly are wrong. Henry was decided under the Mark I overriding objective. As Lord Justice Moore-Bick made clear in Henry future decisions on costs budgeting etc will take place under the new rules that come into force on 1 April. As he put it

‘(Those rules) impose greater responsibility on the court for the management of the costs of proceedings and greater responsibility on the parties for keeping budgets under review as the proceedings progress.’ [2013] EWCA Civ 19 at [28].

They do and so does the Mark II overriding objective.”

General

109. See also two rare judgments of the Judicial Committee of the Privy Council on procedural rules. The Attorney General v Universal Projects Limited [2011] UKPC 37:

“27. Rule 26.2(1) provides that the court may strike out a statement of case or part of a statement of case if it appears “(b) that the statement of case or part to be struck out is an abuse of the process of the court; or (c) that the statement of case or the part to be struck out discloses no grounds for bringing or defending a claim.” The rules contemplate that an application under rule

26.2(1) will be made while the proceedings are on foot, ie before judgment is entered. If a default judgment is entered, the rules provide that the defendant can apply to have it set aside, but only if the conditions set out in rule 13.3(1) or rule 26.7 (whichever is applicable) are satisfied. There is no scope for recourse to the inherent jurisdiction of the court. The territory is occupied by the rules. The court’s inherent jurisdiction cannot be invoked to circumvent the express provisions of the rules. As the Board said in Texan Management v Pacific Electric Wire and Cable Co Ltd [2009] UKPC 46 at para 57:

“The modern tendency is to treat the inherent jurisdiction as inapplicable where it is inconsistent with the CPR, on the basis that it would be wrong to exercise the inherent jurisdiction to adopt a different approach and arrive at a different outcome from that which would result from an application of the rules.”

The argument that Mr Knox seeks to advance is an attempt to circumvent the stringent conditions to which rule 26.7 is subject. It cannot be accepted.”

110. The Attorney General v Keiron Matthews [2011] UKPC 38:

“11. More recently, the implied sanction doctrine has been reasserted by the Court of Appeal [of the Republic of Trinidad and Tobago] in The Attorney General of Trinidad and Tobago v Regis (Civ App No 79 of 2011) (unreported) 13 June 2011. In a comprehensive judgment, the court considered and rejected the objections to the court’s previous interpretation of rule 26.7. The court said at para 29 that the consequence of the court’s earlier decisions and its approach “has resulted in an observable shift away from a cancerous laissez-faire approach to civil litigation to a more responsible and diligent one.” It noted that, as recently as 25 May 2011 and conscious of the court’s jurisprudence, the Rules Committee had nevertheless agreed to retain rule 26.7 without amendments. At para 32, the court said:

“The aforesaid decisions of the Court of Appeal on Part 26.7 reflect the exercise of the indigenous court’s interpretative function as it develops a local jurisprudence relevant to existing needs and circumstances. While it is acknowledged that other jurisdictions and other cultures may adopt different approaches to similar problems, it is hoped that regard will be paid to the experiences and insights of local judges to know what best suits the needs of local society as they seek, in the exercise of their independent sovereignty and constitutional mandate, to interpret and apply the laws of Trinidad and Tobago in ways that are purposeful for their people.”…

19. The Board is conscious of the overriding objective and the court’s obligation to give effect to it when it interprets the meaning of any rule. The jurisprudence developed by the Court of Appeal emphasises the fact that the overriding objective of dealing with cases justly includes dealing with cases in ways which are proportionate and dealing with cases expeditiously. It also makes the point that an element of discretion is inherent in the preconditions specified in rule 26.7(3). The Board is alive to these considerations and fully respects the views of the Court of Appeal which have been expressed most clearly and cogently in the cases to which reference has earlier been made. The Board certainly has no

wish to impede the court’s commendable desire to encourage a new litigation culture or to undermine the steps that it is taking to rid Trinidad and Tobago of the “cancerous laissez-faire approach to civil litigation”.

20. Nevertheless, if the language of the rules admits of only one interpretation, it must be given effect. For the reasons set out above, the Board cannot accept that, where a defendant fails to file a defence within the period prescribed by the rule, it is subject to an implied sanction imposed by the rules. Rule 13.3 sets out the conditions that a defendant must satisfy if he wishes to have a default judgment set aside. If the Rules Committee wishes to impose the rule 26.7(3) conditions as additional requirements for the setting aside of a default judgment, then this should be done expressly by an appropriate amendment of rule 13.3.”

[Doyle April 2014]