Excalibur & Keswick Groundworks Ltd v McDonald [2023] EWCA Civ 18 – An important decision concerning the filing of a notice of discontinuance on or shortly before the day of trial.
The facts
Mr McDonald fell from a ladder at work. His particulars of claim pleaded: “In the course of his employment, the Claimant was climbing a ladder to put a string line on the roof in order to put drainage under the roof. The ladder was tied to scaffolding by a piece of string…”
His witness statement served for use at trial stated: “I didn’t try to move it because I assumed that it was tied on even though I do not subsequently believe it was…. I don’t know if it hadn’t anything on the bottom to keep in in place. I climbed up about 5 to 7 rungs (about halfway up) when my accident happened.”
Within the medical records one entry suggested that he had tripped over a pavement on the construction site, while another entry stated that he had fallen off scaffolding.
The proceedings below
On the morning of trial the District Judge raised issues as to the ownership of the ladder, and the inconsistency in the claimant’s account as between his pleaded case, his witness statement and the entries in the medical records. After being stood down for half an hour, the Claimant choose to discontinue the claim and notices of discontinuance were filed that morning.
Counsel for the Defendants then applied to set aside the notice of discontinuance and to strike out the claim under CPR 3.4(2)(b) – that the Claimants conduct had obstructed the just disposal of proceedings. This was a transparent attempt to avoid the Claimants QOCS protection by relying upon one of the exceptions to QOCS protection by relying on CPR 44.15(c). CPR 44.15(c) provides that QOCS protection does not apply where a claim has been struck out for being likely/having obstructed the just disposal of proceedings. A claim cannot be struck out if it has already been discontinued – firstly the discontinuance must be set aside.
The District Judge allowed both of the Defendants applications, appearing to assume that the notice of discontinuance would be set aside. She held:
“ The matter has been drawn out and I am satisfied costs have incurred needlessly. I am entirely satisfied that had his case been pleaded in accordance with the facts known only to the Claimant, as clarified this morning by Counsel on his behalf, the inevitable consequences would have included, from a significantly earlier time, the prospects of either being struck out on application for summary judgment or, indeed, of the court’s own motion… progressive of the overriding objective, including but not limited to dealing with matters proportionately having regard to the amounts involved, and use of court resources, …. that it is just and convenient that the court exercise its discretion to set aside the notice of discontinuance with the consequence of disallowing the Claimant protection from costs that would otherwise avail ….”.
The Claimant appealed to HHJ Freedman. HHJ Freedman allowed the appeal holding that the District Judge was wrong to allow the notices of discontinuance to be set aside and wrong to strike out the claim on the grounds of obstructing just disposal.
The Defendants then appealed to the Court of Appeal.
Before the Court of Appeal
Permission was given for a total of 11 grounds of appeal but they boiled down to three questions.
(1) The circumstances in which it is legitimate for the court to set aside a Notice of Discontinuance under CPR 38.4 in a QOCS case;
(2) Whether it is permissible for the court to use CPR 3.1(2)(m), 38.4 and 44.15 purposively to enable QOCS to be disapplied if that is consistent with, and further, the overriding objective.
(3) The proper approach to the power of the court to strike out a claim if “the conduct of the claimant … is likely to obstruct the just disposal of the proceedings ” (CPR 44.15(c));
Questions 1 and 2 – The Notice of Discontinuance
The Court cited Sheltam Rail Company (Proprietary) Ltd v Mirambo Holdings Ltd [2008] EWHC 829 & High Commissioner for Pakistan in the United Kingdom v National Westminster Bank [2015] EWHC 55 (Ch) as authority that the power to set aside a notice of discontinuance should be exercised purposively in line with the overriding objective.
The Court briefly rejected the idea that the Court should approach the setting aside of notice of discontinuance in QOCS cases differently to other cases:
“I do not accept the defendant’s contention that a court is required to approach CPR 38.4 differently in a personal injury claim to which QOCS applies. If that were so, it would in my view defeat the purpose of the QOCS regime which is an attempt to correct the financial imbalance as between claimants and defendants in personal injury claims.”
The Court also held that the use of the power to set aside a notice of discontinuance grants a broad discretion but that discretion should only be used where there is:
“…evidence of abuse of the court’s process or egregious conduct of a similar nature is required on an application which has the effect of depriving a claimant of his right to discontinue.”
In dealing with the particular facts of this case the Court held:
“The defendant’s purpose in seeking to set aside the Notice of Discontinuance was in order to facilitate an application to strike out the claim and thereafter seek an order for costs in favour of the defendant.
What the claimant did…was to recognise inconsistencies as between his witness statement and the pleaded case, weigh up his prospect of success and…made the decision to discontinue. It is a course of conduct taken by many litigants and in my judgment does not begin to provide the powerful reasons upon which a Notice of Discontinuance could or should be set aside.” (Emphasis added)
Question 3 – Strike out – Is pursuing a weak claim likely to obstruct the just disposal of proceedings
The Court cited a number of concurring authorities, most notably Arrow Nominees v Blackledge and others [2001] BC 591. Which held that before a claim can be struck out for obstruction of just disposal of proceedings there must be conduct which either:
- Corrupts the trial process; or
- Creates a substantial risk of injustice.
In reaching this conclusion, particular reliance was placed on Arrow at paragraph 56:
“whether the appellant’s conduct in this case rendered the just or fair trial impossible or whether his conduct corrupted the trial process so that a just result could not be achieved”.
At paragraph 50 of the judgment in Excalibur, the Court summarised the Claimant’s conduct:
“What this claimant did was to give a different account in his witness statement from that which was contained in the Statement of Case. It was a material inconsistency…which had the potential to undermine…the viability of his claim. What it did not do was to demonstrate a determination by the claimant to pursue proceedings with the object of preventing a fair trial. If this claimant’s conduct is to be regarded as obstructing the just disposal of the proceedings, the same could be said of the conduct of many litigants who present claims for personal injuries”.
The ratio of the decision is then delivered at paragraph 51:
It follows, and I so find, that the claimant’s conduct did not meet the test of being likely to obstruct the just disposal of the proceedings. It is regrettable that consideration of his differing accounts had not taken place at an earlier stage but the defendant was in possession both of the claimant’s witness statement and the Statement of Case and could have applied for summary judgment. Of course, had summary judgment been obtained pursuant to CPR 24, the claimant would be entitled to QOCS protection.
The takeaway point
One would be forgiven for thinking that this decision is only relevant to QOCS cases. However, we at Your Advocacy think that this decision has wider ramifications. The Court roundly rejected that the power to set aside a notice of discontinuance should be exercised for anything less than very serious misconduct. They also rejected the argument that QOCS should be treated as a special case when considering applications to set aside notices of discontinuance. The reasons given for rejecting different treatment (that it would defeat the purpose of QOCS protection) are in our view, equally applicable to other forms of cost protection – such as those found on the small claims track under CPR 27.14.
We at Your Advocacy from time to time find ourselves advising that small claims should be discontinued for lack of merit very late in the day. Frequently upon receiving the notice, the Defendant will then contact the Court and ask that the trial date be preserved for a CPR 27.14(2)(g) and/or wasted costs application to be heard. We are usually successful in rebuffing attempts by defendants seeking orders for costs as a result of alleged unreasonable conduct, but this adds another very solid argument against even setting aside the notice of discontinuance, before even dealing with the application for costs.
