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Court of Appeal considers CPR 3.9 and Mitchell in Chartwell v Fergies

In Chartwell Estate Agents Ltd v Fergies Properties SA, the Court of Appeal upheld Globe J’s first instance decision granting relief from sanction for late service of witness statements where the non-compliance was not trivial and there was no good reason for the default.

This decision acknowledges the role of case management discretion when applying the tests in CPR 3.9 and Mitchell v News Group Newspapers Ltd.

Procedural history in Chartwell v Fergies

Chartwell’s claim was for commission under an estate agency contract in respect of the sale of Fergies’ property in Knightsbridge. Chartwell introduced a purchaser who went on to buy the property for £25 million. The transaction completed in April 2013.

The claim form was issued and served in May 2013. At the first CMC in October 2013 the order made included a direction for simultaneous exchange of witness statements on 22 November 2013. The trial was subsequently fixed in a trial window commencing on 29 April 2014.

By 22 November 2013, neither party had served its witness statements nor sought an extension of time from the court. In correspondence prior to this deadline, Chartwell contended that it was unable to finalise its witness statements until Fergies provided full and proper disclosure. (Prior to the CMC, the parties had exchanged lists of documents and Chartwell had raised a number of issues concerning the scope of Fergies’ disclosure.)

Fergies eventually provided further disclosure on 16 January 2014.

CPR 3.8, 3.9 and 32.10

CPR 32.10 imposes a sanction for failure to serve a witness statement on time, namely “the witness may not be called to give oral evidence unless the court gives permission”. CPR 3.8(1) provides that any sanction, “has effect unless the party in default applies for and obtains relief from the sanction”.

Therefore, on 27 January 2014, Chartwell applied for an extension of time for service of witness statements and for relief from sanction under CPR 3.9.

CPR 3.9(1) provides that, on an application for relief from sanction:

“…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.”

Globe J’s first instance decision

Chartwell’s application came before Globe J on 18 February 2014. In an ex tempore judgment (which the Court of Appeal described as “conspicuously thorough and clear”), Globe J granted both parties relief from sanction in relation to their failure to exchange witness statements by the November deadline.

Globe J had regard to the Mitchell guidance as to how the new approach to seeking relief from sanction under CPR 3.9 should be applied in practice.

Not trivial

Globe J held that Chartwell’s non-compliance with the October 2013 order could not be regarded as trivial in the sense explained in Mitchell. Both parties were at fault for what happened, but “if specific blame were to be attached, there is greater fault on the part of [Chartwell’s] solicitors because they were the ones who were dissatisfied with disclosure”.

The issues relating to disclosure had arisen prior to the CMC, but they were not addressed at it. Also, no application was made for specific disclosure or to extend time for exchange of witness statements prior to the 22 November deadline. Indeed, no application to extend time was made until weeks after the deadline had passed.

No good reason

Globe J also rejected Chartwell’s argument that there was “good reason” for the default, namely Fergies’ continuing failure to provide proper disclosure. The judge said the difficulty with that submission was twofold:

  • Chartwell could have served its statements in time and, if necessary upon full disclosure being given, then sought leave to file supplemental statements.
  • No justifiable reason had been advanced for failing to seek an extension of time prior to the November deadline.

Other considerations

However, Globe J held that Chartwell’s default could not be seen in isolation. There had been default on both sides. Fergies’ attitude in correspondence had not been helpful and it eventually gave disclosure without explaining why the documents it provided were relevant. That approach could have been taken at a much earlier stage.

“Most important”, the order provided for simultaneous exchange of statements. Neither party had served its statements on time and neither party had applied to the court for an extension of time. Fergies conceded that it had not been ready to serve its statements by 22 November and was not even ready to do so by 21 January 2014.

Globe J had regard to the requirement of the overriding objective to deal with a case justly and at proportionate cost. He noted that the trial date remained and both parties were able to exchange statements almost immediately, and certainly within seven days. Refusal to grant relief from sanction would, effectively, have meant the end of the action. That would have been too severe a consequence and would have been an unjust result when considered against the background history of default occurring on both sides, the fact the trial date could be maintained and the absence of significant additional cost implications (as the judge refused to increase costs budgets and made no order for costs on the application).

The judge granted relief from sanction and extended time for both sides to exchange witness statements.

Court of Appeal decision

Davies, Sullivan and Laws LJJ unanimously found that Globe J was entitled to decide the matter as he did. Davies LJ reiterated that a tougher and more robust approach to rule compliance is called for following the Jackson reforms and the Mitchell decision. The starting point has to be the terms of CPR 3.9 itself, which has to be read and applied in accordance with what was said by the Court of Appeal in Mitchell.

The Mitchell guidance was summarised as follows:

  • It is necessary to consider whether the nature of the non-compliance is such that it can be regarded as trivial.
  • If the non-compliance is not trivial, it is necessary to consider whether there is a good reason explaining the non-compliance.
  • The promptness (or otherwise) of an application to court for an extension of time and relief from sanction for these purposes will be material.
  • If the non-compliance is not trivial and if there is no good reason for the non-compliance then the “expectation” is that the sanction will apply. The court has power to grant relief but, if the non-compliance is not trivial and if there is no good reason for it, the expectation is that the factors mentioned in (a) and (b) of the rule will “usually trump other circumstances”.

Globe J was justified in finding that Chartwell’s non-compliance was not trivial and that no good reason had been advanced to explain the non-compliance. Nevertheless, the judge was still required under CPR 3.9 to consider “all the circumstances of the case” so as to enable him to deal with the application justly. Those circumstances included:

  • The “important fact” that the trial date would not be lost if relief was granted and a fair trial could still be had.
  • No significant extra cost would be occasioned if relief was granted.
  • Refusal to grant relief from the sanction in CPR 32.10 would effectively have meant the end of the claim since the burden of proof was on Chartwell to prove its case and it would have had no evidence.
  • Fergies was in default and also needed relief from sanction if it was to rely on its witnesses at trial. It had not made an application, yet it could expect to be granted relief from sanction if Chartwell’s application succeeded. Fergies also stood to gain if Chartwell’s application was dismissed as Chartwell would bear the burden of proving its claim without witnesses. That, when set in the light of the intervening correspondence, would be a most unattractive result.

Notwithstanding the paramount importance and great weight to be given to the two factors in CPR 3.9(1), here those matters were outweighed by all the other circumstances. In Mitchell, the Court of Appeal said that those two factors will “usually” trump other circumstances, but it did not say that they always will.

Further, in considering applications under CPR 3.9, courts do not and should not have as their sole objective a “display of judicial musculature”:

“The objective under CPR 3.9 is to achieve a just result, having regard not simply to the interests of the parties but also to the wider interests of justice.”

There was no error in Globe J’s approach and the appeal was dismissed.


Chartwell v Fergies demonstrates that an application under CPR 3.9 will not necessarily fail even where the non-compliance is not trivial and no good reason has been given. The court is still required to consider all the circumstances of the case so as to deal justly with the application. While other circumstances will usually be trumped by the two factors in CPR 3.9(1), that will not always be the case, and the wider interests of justice (in the sense described in Mitchell) will not always prevail over the need to achieve justice between the parties.

Laws LJ described this result as “an unusual one”, driven by its particular facts.

Thus, in circumstances where the non-compliance is not trivial and no good reason has been given, first instance judges may need to consider whether the circumstances of the case are sufficiently unusual to justify granting relief. That said, provided a judge correctly directs himself, adopts the correct approach in principle and takes all the circumstances into account, an appellate court is unlikely to interfere with a case management decision under CPR 3.9.

First instance judges will welcome Davies LJ’s observation that the Court of Appeal will support robust, fair case management decisions not only where relief from sanction has been refused, but also where relief has been granted.

Litigators may take less comfort from the reminder that the only sure way to avoid satellite litigation of this kind is to comply precisely with rules, practice directions and orders and, where that really cannot be done, to seek from the court an extension of time and relief from sanction at the earliest moment.

Michele De Gregorio, instructed by SGH Martineau LLP, appeared for Chartwell before Globe J and in the Court of Appeal.

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