Eden v Rubin [2011] EWHC 3090 (QB)

Case No HQ08X01687[2011] EWHC 3090 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 24 th November 2011
Before
MR JUSTICE COULSON
Between
Simon Gregory EdenClaimant/Frances RubinDefendant/
Mr Gregory Treverton-Jones QC (instructed by C.L.Clemo and Co Solicitors) for Claimant/AppellantMr Jonathan Watt-Pringle QC (instructed by DWF LLP) for Defendant/RespondentHearing Hearing date: 15 th November 2011
Judgment
[1]INTRODUCTION On 3 December 2010, Master Eyre made two Unless Orders against the claimant relating to:(1) the provision of a full and proper answer to the Part 18 Request for Further Information, and(2) the giving of full disclosure of all documents specified in a Schedule prepared some months earlier on behalf of the Defendant. The Orders specified that, if the claimant failed to serve this material by 1pm on 22 January 2011, his claim for loss of earnings (at £4 million, it was by far the largest head of claim which he advanced) would be struck out. It is common ground that, for a variety of reasons, the claimant failed to comply with both Unless Orders.[2]On 24 May 2011, the claimant’s application for relief from sanctions was refused by Master Eyre. In consequence, the claimant’s claim for loss of earnings stood struck out. On 1 August 2011, Nicola Davies J granted the claimant permission to appeal against Master Eyre’s order of 24 May, refusing relief from sanctions. The hearing of that appeal took place on 15 November 2011.[3]In order to deal with the substance of this application, it is necessary for me to set out certain matters by way of background (Section 2) and then to deal at some length with the procedural history (Section 3). At Section 4, I deal briefly with the relevant law. At Section 5, I analyse what I consider to be the fundamental matters raised by this application. Then, as required by the authorities, I go in greater detail through the relevant factors set out in CPR r3.9 (Section 6 below). There is a short summary of my Conclusions in Section 7 below.[2]BACKGROUND[4]On 19 December 2002, the claimant was injured in a road traffic accident. Proceedings were originally commenced in the Reigate County Court on 25 November 2005, less than a month before the expiry of the limitation period. The claim was said not to exceed £100,000. The defendant eventually admitted liability and judgment was entered, with damages to be assessed, on 11 April 2008. Significant issues of causation and quantum remain to be decided. These include a dispute as to whether or not the claimant’s meralgia paraesthetica was the result of the accident; a dispute as to whether or not the claimant’s ongoing mental difficulties were the result of the accident; and a significant dispute about the make-up and support for the claimant’s alleged claim for loss of earnings.[5]It appears that, prior to the accident, the claimant and his family enjoyed an enviable and wealthy lifestyle. In recent years, that lifestyle has all but disappeared. As already noted, the extent (if at all) to which that significant reversal in fortune can be laid at the door of the defendant remains very much in issue. But an entirely separate difficulty, which has bedevilled this case throughout, has been the claimant’s unwillingness to provide any proper information to the defendant in support of his large claim for loss of earnings. For example, the claimant has endeavoured to shroud in mystery how precisely he claims to have earned such large sums of money before the accident. He has given a bewildering number of different explanations of his role, including “a company director”; “an offshore agent”; “a consultant”; “marketing director-corporate hospitality”; “involved in a corporate hospitality partnership”; “negotiating sales for clients from the Gulf, Far East, USA and Europe”; “chartering yachts where the client did not wish his or her own name to be on any agreement”; “joining Legend Management Corporation, which undertook contracts for private clients including foreign governments”; “agent with Legend and Invesco 1994-2002”. At various times, he has alleged that he has signed the Official Secrets Act and/or that he was not at liberty to divulge his precise occupation for security reasons.[6]The truth seems rather more prosaic. The claimant now says that he earned his money by arranging parties on yachts for various named individuals, including Mohammed Al Fayed, Asil Nadir, Silvio Berlusconi, and various Saudi princes. There is no documentary evidence of any kind (beyond the Claimant’s own manuscript entries in a blue notebook, of which more later) to support the involvement of these people in the claimant’s business affairs, or the payments that they allegedly made to him. I note that it is now said that, in addition to yacht charter, the claimant arranged security, transfers (including private jets and helicopters), catering, alcohol, and “female company from top model agencies”. It has taken the best part of three years for the claimant to provide even this skeletal information in answer to the defendant’s original, basic question:
‘what did you do, before the accident, that allegedly earned you such large sums?’
[3]THE PROCEDURAL HISTORY[7]When the proceedings began in 2005, the Claim Form expressly pleaded that “it has not been possible to determine whether the claimant has suffered pecuniary losses to date and the extent to which pecuniary losses may continue in the future.” That is contrary to the claimant’s position now, to the effect that by 2005 he had suffered almost £1 million in lost earnings. Following the entering of judgment, after liability was admitted, an interim schedule of loss was served which sought to claim special damages in the sum of £6.7 million. The claim for loss of earnings was based on an assertion that, prior to the accident, the claimant had been working as an ‘offshore agent’ earning £325,000 a year, tax-free. Unsurprisingly, the defendant’s solicitors sought disclosure of the documents relied on in support such a large claim, together with other relevant information.[8]The claimant’s original answer to the Part 18 request, served on 29 January 2009, was plainly inadequate. In addition, the claimant failed to provide proper documentation to support the claim for loss of earnings. Thus, in the first part of 2009, his claim that he had earned, pre-accident, an average of £325,000 per year, tax-free, was apparently based solely on: a) Payments allegedly made to him in cash, totalling £377,500 for the years 2000-2002, which were wholly undocumented and unsupported; b) A further figure of £480,772 for the same period, which was the total of amounts credited in the bank statements of his two nominee companies, registered in Nevis and run from the Isle of Man, called Legend and Invesco. These companies were controlled by the claimant, although their day-to-day affairs were looked after by a Mr Robert Callin.[9]In an attempt to break the log jam, the Defendant unilaterally served a preliminary report by their forensic accountant, Mr Nicholas Fail. The figures set out in paragraph 8 above are actually taken from his report, in the section where Mr Fail identified what he understood to be the basis of the claimant’s claim, had there been any material to support it. But, as Mr Fail repeatedly said in the report, there was insufficient evidence to support any part of the claimant’s claim for loss of earnings, and nothing which allowed Mr Fail to prepare any alternative calculations. The absence of the necessary information is analysed in great detail and summarised at paragraph 5.1 of his report. It remains the defendant’s case that, in essence, the claimant has failed, even now, to make good these deficiencies.[10]On 6 May 2010, the defendant served a request for further information and a request for specific disclosure. The latter was made by reference to a Schedule of documents which was taken from and cross-referred to Mr Fail’s report. At the same time, the claimant issued an application for an interim payment. Originally this was put in the sum of £1.4 million although, by the time it came before Master Eyre on 13 May 2010, the sum claimed had been reduced to £480,000.[11]At the hearing on 13 May 2010, Master Eyre expressed his concern about the claimant’s failure to provide any real support for his claim for loss of earnings and warned that, if the claimant continued to provide such little support for the claim, there was a danger that his claim would be struck out. The claim for an interim payment was dropped. At a hearing on 12 July 2010, Master Eyre required the claimant to answer the request for further information and disclose the documents listed in the Schedule by no later than 1pm on 9 August 2010. Again, Master Eyre warned the claimant that his claim was “vulnerable and at risk of being struck out if the order was not complied with”.[12]The claimant failed to heed this warning. The material served on 9th August, in response to Master Eyre’s order, was patently inadequate, although there was, for the first time, a reference to a blue notebook which allegedly recorded the cash payments. This was not a document which had ever been disclosed, and copies were not provided in August either. No proper explanation has ever been given as to the claimant’s failure to comply with the order of 12 July.[13]This failure inevitably led to a further hearing on 3 December 2010 at which Master Eyre warned the claimant that he was “on the edge of a precipice”. He also said that he thought that the claimant was deliberately concealing matters from the court. He made an order in the following terms:
“1. The Claimant shall by 1pm on 22nd January 2011 provide a full and proper answer to the Part 18 Request for Further Information served by the Defendant under cover of the letter dated 6th May 2010 and provide copies of the documents requested in the Part 18 Request. 2. The Claimant shall by 1pm on 22nd January 2011 give full disclosure of documents, including (a) all documents specified in the Schedule of documents requested by the defendant under cover of the letter dated 6th May 2010 and (b) the blue notebook referred to in paragraph 3 of the Claimant’s Part 18 Response dated 9th August 2010, such disclosure to be verified by a statement of truth signed by the Claimant. 3. The Claimant shall by 1pm on 22nd January 2011 serve a detailed up-to-date Schedule of Loss and Special Damages specifying each head of loss claimed and identifying every document relating thereto, and thereafter file the same. 4. Unless the Claimant complies fully with the directions in paragraphs 1 and 2 hereof, his claim for past and future loss of earnings shall be struck out and dismissed and he shall be barred from claiming compensation in respect thereof. 5. The Claimant shall pay the Defendant’s costs of the Application issued on 21st October 2010, including the costs of today. 6. There shall be a further hearing at 2pm on 17th February 2011, listed for half a day before Mater Eyre. 7. At the hearing on 17th February 2011 further directions and the following issues relating to costs shall be considered: a) The Defendant’s costs of the applications heard on 29th March, 13th May and 12th July 2010 and the assessment thereof; and b) Whether the costs awarded in paragraph 5 herein shall be on the standard or an indemnity basis and the assessment thereof.” a) The Defendant’s costs of the applications heard on 29th March, 13th May and 12th July 2010 and the assessment thereof; and b) Whether the costs awarded in paragraph 5 herein shall be on the standard or an indemnity basis and the assessment thereof.”
[14]The date identified in the orders, 22 January 2011, was in fact a Saturday. In consequence, the obvious thing for the claimant’s solicitor to do, particularly given the chequered history of the litigation and the fact that these were Unless Orders, was to ensure that the answers to the request and the further disclosure were served by 4pm on 21 January 2011. Unhappily that did not happen, and the relevant documents were not provided until the morning of Monday, 24 January 2011. The explanation with which I have been provided was that this was a misinterpretation of the CPR by the claimant’s solicitor. I do find it very surprising, given the history, that such an error could have been made.[15]It is, however, unlikely that anything significant will turn on the failure to comply with the time element of Master Eyre’s Unless Orders. The reason for that is because it is accepted that the amended answers to the Part 18 request, and the statement dealing with disclosure, were both inadequate and therefore failed to comply with the substance of the Unless Orders. In my view, that is a much more important failure than the two day delay. Although the inadequacies are admitted, it is important to identify the more egregious defaults. a). The Amended Answers to the Part 18 Request[16]In my judgment, the answers provided on 24 January 2011 relating to the claimant’s previous employment were impossibly opaque. At one point he claimed that he could not divulge anything about the services that he provided because he had signed the Official Secrets Act, having been earlier recruited by the intelligence services. He refused to identify the clients or the services provided – even though many of the questions went to those matters - because “there was an extreme need for discretion”. He referred again to the blue notebook which contained, in his manuscript, a list of names (including nicknames) against which a sum of money was noted. No further information in relation to the claim for loss of earnings was provided. b). Disclosure[17]The claimant made no attempt whatsoever to deal with the Schedule that was at the heart of the Unless Order. He purported to rely on his solicitors’ letter of 9 August 2010, which had already been ruled as a wholly inadequate response. The only new information were photocopies of some pages from the blue notebook, the original of which, it was said, “will be made available for inspection by prior appointment”.[18]On 15 February 2011, the claimant’s solicitor served a schedule of loss. This schedule put the loss of earnings claim at just over £4 million. The loss of income claim was put in this way:
“The Claimant accepts the calculations in the report of Mr Nicolas James Fail, an accountant instructed on behalf of the Defendant. According to those calculations, the Claimant received a total of £858,272 in 3 years [2000-2002], an average of £286,091 per annum…”
Thus, the claimant’s claim for losses between 2003 and 2011 was calculated by taking the total figure identified by Mr Fail (the defendant’s forensic accountant), making a reduction for tax and increasing the figure each year by 3% to reflect inflation. The future losses are calculated in the same way. Thus, the claimant’s schedule of loss is entirely dependant on what were said to be the “calculations” in Mr Fail’s report.[19]However, the “calculations” by Mr Fail of the total sum of £858,272 (the total achieved by adding together the sums paid into the accounts of the two Nevis companies and the sums which the claimant was asserting had been paid to him in cash, as set out in paragraph 8 above) were expressly qualified in two ways, both of which the schedule of loss has ignored. First, as already noted, Mr Fail said that, in truth, the claimant had failed to provide any information which would allow him to properly value the claim. But secondly, those figures, produced at paragraph 3.18 of his report, were all calculated on the express basis that:
“Even if all of the amounts credited to the two Nevis company bank accounts in 2000-2002 were paid to Mr Eden and Mr Eden was able to produce evidence of the cash he has received in those years, his total income would be as follows:…”
Accordingly, it is wholly misleading to say that Mr Fail has ‘calculated’ any figures at all. On the contrary, he has said that, on the basis of the material with which he has been provided, the claimant cannot establish his claim for loss of earnings. All that Mr Fail has done is to say that, if all the credits in the bank statements could be shown to be payments to the claimant, and if the claimant’s assertion as to large cash sums could be proved, then this would be the maximum value of the claimant’s claim. Mr Fail was clear that, on the information that he had, neither assertion could be proved. In those circumstances, it is difficult to disagree with MrWatt-Pringle QC’s submission that the schedule of loss amounted to a cynical use of the defendant’s accountant’s report, whose only purpose was to try and get proper information from the claimant.[20]By reason of the claimant’s default, it was not possible for Master Eyre to have a sensible case management conference on 17 February 2011. Master Eyre did make a further unless order in relation to the schedule of loss in relation to the claim for past and future losses. Other than that, he ordered the claimant, if he wanted to apply for relief against the striking out of the claim for loss of earnings, following the failure to comply with the earlier Unless Orders, to make and serve such an application by 3 March 2011.[21]A new schedule of loss was provided on 25 February 2011. It contained some further information although the key element of the claim for loss of earnings, namely the reliance on Mr Fail’s figures and the claimant’s unsupported assertions, remained unchanged.[22]On 2 March 2011, the claimant issued his application for relief against sanctions. This application essentially took into account two further documents, also served on 2 March 2011. They were, first, the re-amended answers to the Part 18 Request and, secondly, a further statement on disclosure which dealt, for the first time, with the items in the original Schedule which Master Eyre had ordered him to address. Both documents are different to their counterparts served only a few weeks earlier. There is a dispute, dealt with below, as to whether or not these new documents complied with Master Eyre’s Unless Orders.[23]The application for relief against sanctions was heard on 12 May 2011. Master Eyre subsequently sent out a draft judgment and invited corrections and, at a hearing on 24 May 2011, he made some corrections to the draft and then handed it down in final form. He refused relief from sanctions and refused permission to appeal. As noted above, that permission was granted by Nicola Davies J on 1 August 2011.

THE LAW

[24]Although the CPR have given the court greater powers to control proceedings and a greater responsibility for ensuring that they are conducted fairly and efficiently, there is no significant difference between the approach to default adopted under the former Rules of the Supreme Court and that which is now embodied in the CPR: see paragraph 10 of the judgment of Moore-Bick LJ in Marcan Shipping (London) Ltd v Kefalas and Anther [2007] EWCA Civ 463, [2007] 1 WLR 1864. With that in mind it is worth noting the judgment of Ward LJ in Hytec Information Systems Ltd v Coventry City Council [1997] WLR 1666 where, in dealing with the position under the old Rules, he said:
“(1) An Unless Order is an order of last resort. It is not made unless there is a history of failure to comply with other orders. It is the party’s last chance to put his case in order. (2) Because that was his last chance, a failure to comply will ordinarily result in the sanction being imposed. (3) This sanction is a necessary forensic weapon which the broader interests of the administration of justice require to be deployed unless the most compelling reason is advanced to exempt his failure. (4) It seems axiomatic that if a party intentionally or deliberately (if the synonym is preferred) flouts the order then he can expect no mercy. (5) A sufficient exoneration will almost inevitably require that he satisfies this court that something beyond his control has caused his failure to comply with the order. (6) The judge exercises his judicial discretion in deciding whether or not to excuse. A discretion judicially exercised on the facts and circumstances of each case on its own merits depends on the circumstances of that case; at the core is service to justice. (7) The interests of justice require that justice be shown to the injured party for the procedural inefficiencies caused by the twin scourges of delay and wasted costs. The public interest in the administration of justice to contain those two blights upon it also weighs very heavily. Any injustice to the defaulting party, though never to be ignored, comes a long way behind the other two.”
[25]This approach finds an echo in the Court of Appeal decision in Marcan Shipping, in which it was held that the court had to be very careful in making an Unless Order, precisely because of the potentially draconian consequences of such a step, as outlined by Ward LJ in Hytec. Here, the original Unless Orders of December 2010 made by Master Eyre were not appealed and, until the hearing before me, it did not appear that the claimant disputed the appropriateness of such orders. Although Mr Treverton-Jones QC maintained, in answer to my question, that the Unless Orders were “harsh”, I cannot accept that submission. Indeed, given the inadequacies of the claimant’s pleaded case, and the express warnings which Master Eyre had given to the claimant at the hearings earlier in 2010, I find it mildly surprising that an Unless Order had not been made before.[26]The more recent cases concerned with Unless Orders and relief from sanctions make clear a general approach that “court orders and practice directions are there to be obeyed”: see Brooke LJ in Sayers v Clarke Walker (Practice Note) [2002] 1 WLR 3095 at 3100. The decision in Marcan Shipping can be seen as part of that trend. More recently, in The Attorney General of Trinidad and Tobago v Universal Projects Ltd [2011] UKPC 37, the Privy Council rejected an appeal by a defendant who, after a previous delay, failed to comply with an Unless Order. The defence was not served by the extended deadline and some three days thereafter judgment was entered. Relief from sanctions (under very similar provisions to r3.9) was not granted, despite the fact that the judgment was for in excess of $30 million. In relation to the rules regarding default judgment, Lord Dyson said that “in so far as the conditions are regarded as draconian, they serve the purpose of improving the efficiency of litigation.”[5]THE PRESENT CASE a). General[27]It is necessary for any court considering an application for relief from sanctions under r3.9 to go through the checklist in r3.9, item by item, to arrive at a conclusion. I undertake that exercise in Section 6 below. However, I am conscious that such an approach can often be somewhat formulaic, and the real issues can be at risk of getting lost along the way. It may be that r3.9 would benefit from being slimmed down, in order to emphasise what really matters, namely the balancing exercise between, on the one hand, the consequences of the failure to comply with a court order(s) and, on the other, the potential injustice that might arise if there is (or is not) relief from sanctions. b). Delay[28]If the only failure to comply with the Unless Orders was the failure to serve the documents on 22 January 2011, then I would have been minded to grant relief from sanctions. Although in Attorney General of Trinidad and Tobago the delay was three days and relief was not granted, there was no proper excuse for that delay. In the present case, the delay was slightly less (two days) but, more importantly, the claimant’s solicitor made plain that he – rather than the claimant – was at fault because he had erred in interpreting the CPR, and concluded that service could effectively be made on Monday 24th January. Although that seems to me to display a cavalier attitude to the conduct of a case that was the subject of Unless Orders, the mistake having been admitted, and the error being just about understandable, I would probably have granted relief from sanctions had that delay been the only default. c). Content[29]But, of course, delay was not the only default; far from it. It is admitted that both the amended answers to the Part 18 request, and the material provided in relation to disclosure, were inadequate and therefore did not comply with the Unless Orders of Master Eyre. It seems to me that, for a number of reasons, that default on the part of the claimant does not warrant relief from sanctions.[30]First, as already noted, the Unless Orders in this case came at the end of a long and persistent series of defaults on the part of the claimant and/or his advisers. For a period of two years, the claimant had failed to comply with the orders of the court. The claimant had apparently considered that he could put forward a claim for millions of pounds without providing a shred of supporting material or answers to proper questions, and that orders from the court requiring the provision of that material and those answers could be routinely ignored. As already noted, the surprise was not that Unless Orders were made in December 2010, but that such orders had not been made some time before.[31]Secondly, I consider it highly relevant that both the amended answers and the disclosure statement served on 24 January 2011 were so obviously inadequate. In answer to the questions relating to the claimant’s former earnings (such as who paid him, for what, when and how), the claimant maintained an almost solid stone wall, relying on such patently untrue or irrelevant matters as the Official Secrets Act and the “extreme need for discretion and secrecy as the clients did not wish their identities to become known”. Other than a more detailed reference to the blue notebook, which is really no more than a number of photocopied sheets of manuscript with some figures and nicknames on, the amended answers provided no further information about the £4 million loss of earnings claim.[32]Precisely the same point can be made about the claimant’s witness statement of 21 January 2011, which was provided in answer to the Unless Order in relation to disclosure. There was no attempt to deal with each category in the Schedule, despite the clear terms of the order. There was no reference to any additional documents (other than the aforementioned extracts from the blue notebook) and no attempt to engage with the detail of the Unless Order and the reasons why that order had been made in the first place.[33]In my judgment, the scale of the claimant’s failure to comply with the Unless Orders is an important matter. That is partly because it demonstrates that the claimant’s uncooperative and wilfully unhelpful approach extended well into this year. Mr Treverton-Jones QC’s basic submission was that, although the claimant had been uncooperative in the past, his lack of cooperation came to an end late last year. The scale of his failure to comply with the Unless Order in the early months of this year demonstrates that that submission was unsustainable.[34]Moreover, the scale of the claimant’s failure to comply with the Unless Orders is one of the principal reasons why, in the round, I do not consider it appropriate to grant him relief from sanctions now. The loss of earnings claim was struck out on 22 January 2011 because the claimant had wholly failed to comply with the substance of the Unless Orders. Given the authorities noted above, it would therefore not be appropriate to grant relief from the sanctions which had been imposed because of his persistent default.[35]However, although I have reached a clear view on the nature and extent of the claimant’s failure as at 22nd January 2011, there are two further aspects of this case which serve to confirm my view that it would be inappropriate to grant the claimant relief from the effect of his failure to comply with Master Eyre’s Unless Orders. Those are(1) the important inadequacies that exist even in the reamended answers and the further revised disclosure statement served on 2 March 2011 (dealt with in sub-paragraph d) below), and(2) the inherently weak nature of the claimant’s case ( dealt with in sub-paragraph e) below). d). The Subsequent Documents[36]Although the reamended answers, and the further disclosure statement, go a small way towards meeting Master Eyre’s original Unless Orders, in my view they still fall a long way short of what was required. I deal with some of the most important inadequacies in brief below.[37]In relation to the reamended answers, it is true to say that now, for the very first time, the cash payment element of the previous earnings is supported by the provision of a list of names, dates and amounts. But requests 3c) and d) asked for details of the place of payment and the particular services which were provided to warrant each payment. Neither of those questions have been properly answered. Indeed, other than a general description, the services being provided remain unspecific, and unconnected to particular cash payments. Furthermore, since it appears to be alleged that all these payments were made in cash, and the claimant maintains in his answers that these sums were not paid into a bank account, and no tax was paid on them, a whole series of questions remain unanswered. To take a random example, it is apparently said that on 12 May 1998, Prince Bandar paid the claimant $48,000 in cash. How and where was this payment effected? A suitcase full of 10 dollar bills in a hotel room somewhere? What precisely was it being paid for and why? Where did the money go? What are the tax (and indeed the money-laundering) implications?[38]In truth, the reamended answers do not begin to answer these questions. They are nothing more than a typed up version of the claimant’s own manuscript blue notebook, the original of which has been provided very late in the day, and which is an entirely self-serving document.[39]There are also fundamental inadequacies in answer to questions 4 and 8. These questions relate to statements made by the claimant’s wife and former work colleague, the answers to which now seem to row back significantly from the statements that were made originally. Thus, the answer to question 4 deals with a company called Steamboat, which the claimant says was the vehicle through which the party arrangement business was run. His wife’s statement made plain that this company was run by the claimant. However, the reamended answers seek to distance the claimant from Steamboat, and give no helpful answers to any of the questions raised. Not a single document relating to Steamboat has been disclosed in these proceedings.[40]Similarly, in relation to question 8, the original statement of Ms Carr, who works at the Saudi Arabian Embassy in London, suggested that the claimant had provided services to or for her employers. The reamended answer provides no further information because it apparently denies the provision of such services.[41]Finally, there is the complete failure to answer question 2(c). Question 2(c) was concerned with the identity of the clients for which the claimant was allegedly acting, and who may have paid money into the accounts of his nominee companies, Legend and Invesco. Thus, this question went, not to the cash element of the claimant’s previous earnings, but to the wholly separate element which was allegedly channelled through the accounts of these two companies. The defendant not unreasonably wanted to know what clients had paid money into those accounts, and for what services. Those questions were of direct relevance because the claimant’s loss of earnings claim presupposes that all sums paid into those accounts were his earnings.[42]However, the reamended answers wholly fail to answer these questions. Instead, they say that the clients are the clients listed in the blue notebook. That is plainly and obviously wrong: on the claimant’s own pleaded case, the clients noted in the blue notebook are the people who allegedly paid the claimant in cash, (the second and separate element of his alleged previous earnings), not those who made payments into the bank accounts of the two companies. Thus the failure to answer question 2(c) means that the defendant has been provided with no further information about the companies’ earnings, which are a major element of the calculation of the sums claimed as previous earnings in the years 2000-2002. There were also no details of the services provided for each payment into the bank accounts.[43]In relation to disclosure, it again seems to me that the further material has not addressed the substance of the Unless Order. In essence, there are no documents relating to Legend and Invesco, other than a set of bank statements from 2000-2002 only Originally, these were redacted, but by the time of the Unless Orders, the redactions had largely been removed. , and a secondary document, apparently prepared by Mr Callin, who ran these nominee companies in the Isle of Man. This purports to identify the relevant items from the companies’ bank statements. There are no other documents of any kind emanating from these companies, and certainly no financial accounts or other records. The position in relation to Steamboat is even worse: there is not a single document emanating from Steamboat anywhere, despite the claimant’s wife’s confident assertion that Steamboat was the company run by the claimant in pursuance of the party-arrangement business that was apparently so lucrative.[44]Mr Treverton-Jones QC accepts the paucity of documents but submits that the claimant has done all that he can to provide the documentation requested, and that he should not now be criticised because so few documents are available. I do not accept that submission. The subsequent list of documents, provided on 2 March 2011, is a fundamentally flawed document. In particular, it makes plain that the claimant has limited his search to documents going back to 1998 (but not beyond); has only looked for financial records (however those may be defined); and most important of all, has only carried out a search at his home. Since the claimant has apparently destroyed all the relevant documents that he kept there, including his own bank statements and credit card records, any search limited to his home was inevitably going to produce a tiny number of documents.[45]The claimant owned two companies (Legend and Invesco) and is said by his wife to have run a third (Steamboat). These companies were apparently at the heart of his core business. In support of the claimant’s claim for loss of earnings, I would therefore have expected to see documents emanating from all of those three companies and, failing that, at least some sort of detailed explanation, from Mr Callin and/or the relevant accountants, of where the companies’ documents were, what attempts had been made to find them, and what had happened to any that were now missing or destroyed. If the search had not been so artificially limited, I consider that at least some of that information would have been provided. There is no evidence before the court that the claimant has made any proper attempt to find any of these documents, wherever they might be.[46]In my view, the absence of any such statement from Mr Callin, who was apparently the person running the companies, is significant. He was perhaps the only person who could have offered a coherent explanation for the dearth of the documentation sought in the Schedule that formed part of the Unless Order. In the absence of anything from him, and given the absence of any other material, there is nothing which could lead me to conclude that a proper attempt had been made to identify and provide the documents which were the subject of the Unless Order.[47]It is important to remember that, as long ago as May 2010, the defendant provided the Schedule of documents to be disclosed by the claimant which was cross-referred to Mr Fail’s report, because those were the documents which the accountant had identified as being necessary for him to be able to provide a proper analysis of the claimant’s claim. Large parts of this Schedule have still not been answered by the claimant. These include categories such as credit card statements, which the claimant has not kept and which he only sought from the credit card companies more than 6 years after the relevant event, a time at which (as is well-known) such records are destroyed by the banks and credit card companies. Other categories of documents which have not been provided include bank statements from Legend and Invesco (other than from the years 2000-2002) and communications concerning payments to the claimant by Legend or Invesco, and their detailed accounting records. These documents have not been provided, nor is there any part of the new list of documents which explains the circumstances in which (if relevant) these documents were destroyed.[48]Accordingly, for these reasons, I consider that the reamended answers and the further disclosure statement, although an improvement on what had been provided on 22 January, still failed to comply with the letter and the spirit of the Unless Orders. The overwhelming impression is of a claimant grudgingly providing the bare minimum (if that) in the hope that he might keep the claim afloat. The latest material appears to pay no regard to the nature and effect of the original Unless Orders. For these reasons, not only was the claimant in default in failing to comply with the Unless Orders in January, but that default is ongoing. In such circumstances, there can be no question of any relief from sanctions. e). The Inherent Weakness of the Claim for Loss of Earnings[49]The other essential factor of this case is the inherent weakness of the claimant’s case for loss of earnings. As is apparent from my analysis above, that claim in not supported by any third party material at all. In relation to the sums paid into the accounts of Legend and Invesco, the whole claim is predicated on the claimant’s assertion that every penny paid into their accounts were his earnings. The payments themselves are unclear and evidenced only from bank statements. As to the cash payments, there is no record of those cash payments at all, save for the recently-disclosed pages of the blue notebook, in the claimant’s own handwriting. There are no documents to link these payments to the activities of Steamboat, the company allegedly providing the services.[50]There is a further weakness inherent in the claimant’s claim as presently advanced, which I put to MrTreverton-Jones QC during argument. Even if the monies paid to Legend and Invesco, and the cash paid to the claimant, were the ‘income’ side of his personal balance sheet, where was the ‘expenditure’ column: the costs to the claimant of hiring the yachts, the transfers, the female company? There was no real answer to this. The faint suggestion that those expenses were paid out by Steamboat, whilst the payments in were made to the claimant or his companies, would mean that Steamboat was an entirely loss-making company, a suggestion which only confirms my view that this claim is an unrealistic attempt by the claimant to claim the income and ignore the expenditure. And any suggestion that the sums paid to the two companies and in cash somehow represented net profits (ie after the total expenses had been deducted from the total payments in) suffers from numerous difficulties: such a case is not pleaded, nor is it advanced in any of the claimant’s numerous witness statements. And it would require proper documents (which have not been provided) to demonstrate, for each transaction, how these net profits had been calculated.[51]Ultimately, this unsupported claim depends entirely on the assertions of the claimant, a man who, according to the evidence, remains mentally ill. There are no documents which support any element of this loss of earnings claim other than those few documents which the claimant has himself completed, and the bank statements (which are in any event neutral, because they do not say what the payments related to). Whilst this is not a Part 24 application, the fact that the claimant’s claim for loss of earnings cannot be regarded as anything other than inherently weak is a factor that I should take into account when undertaking the exercise under CPR r 3.9.[6]THE FACTORS NOTED IN r.3.9[52]CPR 3.9 is in the following terms:
“(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 including – (a) the interests of the administration of justice; (b) whether the application for relief has been made promptly; (c) whether the failure to comply was intentional; (d) whether there is a good explanation for the failure; (e) the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant pre-action protocol; (f) whether the failure to comply was caused by the party or his legal representative; (g) whether the trial date or the likely trial date can still be met if relief is granted; (h) the effect which the failure to comply had on each party; and (i) the effect which the granting of relief would have on each party.”
I deal with each of these headings in turn briefly below. a). The Interests Of The Administration Of Justice[53]It is in the interests of the administration of justice that court orders are obeyed and that sanctions for disobedience take effect, unless solid grounds are advanced for the court to grant relief against sanctions: see paragraph 171 of the judgment of Christopher Clarke J in JSC BTA Bank v Ablyazov [2011] EWHC 2506. This is only a restatement of the principles in Hytec and the other cases cited above. There can be no doubt that a consideration of the interests of the administration of justice in the present case favours allowing the Unless Orders to take effect.[54]The evidence is that the defendant has spent £150,000 in trying to get the claimant to provide a proper and coherent case. The Unless Orders came at the end of a period in which the claimant had failed to have regard to previous court orders and were an entirely appropriate response to that persistent default. The claimant had been repeatedly warned and yet failed, and continues to fail, to heed those warnings. The proper administration of justice could not countenance granting relief from sanctions which had been so fairly imposed. b). Whether The Application For Relief Was Made Promptly[55]It is accepted that the application was made reasonably promptly. That is a factor in the claimant’s favour, although even that must be tempered by the knowledge that the claimant’s further documents of 2 March 2011 were prompted by, and designed to meet, the particular criticisms made by Mr Watt-Pringle QC in his skeleton argument prepared for the hearing on 17 February. Again therefore, the claimant’s conduct can be fairly categorised as reactive rather than pro-active. c). Whether The Failure Was Intentional[56]The late service was the result of an error. But the failure to comply with the substance of the unless orders was deliberate, because it was all part of a longstanding pattern of conduct on the part of the claimant to do the bare minimum – and usually not even that – to keep the claim afloat. The failure to comply with the Unless Order was merely the most obvious way in which the claimant has failed to get to grips with the reality of his claim.[57]For these reasons I consider that the claimant’s obstructive attitude continued into 2011 and continues to this day. The failure was intentional and deliberate. That is a factor in the defendant’s favour and operates against granting relief from sanctions.[58]It is appropriate to deal at this point with a matter put forward by Mr Treverton-Jones QC on more than one occasion, to the effect that the claimant was and remained mentally ill. It was not wholly clear where this point went. It was not said that this explained the claimant’s failures to comply with the Unless Orders, either in January or in March 2011, nor could it. The claimant has throughout been advised by solicitors and counsel. They have stressed at previous hearings that the claimant’s mental condition was not an excuse for his default, and it seems to me that that is plainly right. In addition, the claimant’s lawyers have said that there was no question of the claimant not having the necessary capacity to bring and maintain the claim. Accordingly, it does not seem to me that the claimant’s mental condition has any real relevance to the issues on this appeal. d). Whether There Is A Good Explanation For The Failure[59]As Lord Dyson pointed out in Attorney General of Trinidad and Tobago, there cannot be a ‘good explanation’ in circumstances where there was real or substantial fault on the party seeking relief from sanctions. In this case there has been real or substantial fault on the claimant’s part, for the reasons which I have given. The failures cannot be regarded as being due to matters beyond his control. In the light of the warnings provided to the claimant by Master Eyre, I consider that no good or proper explanation has been given for the failures, which were instead the result of the claimant’s deliberate default. In those circumstances, this is also an important factor that operates in favour of the defendant and against the claimant. e). The Extent To Which The Claimant Has Complied With Other Rules, Practice Directions, Court Orders And Any Relevant Preaction Protocol[60]Again, this factor operates against the claimant and wholly in favour of the defendant. I have endeavoured to set out in Section 3 above a short summary of the claimant’s repeated defaults. f). Whether The Failure To Comply Was Caused By The Claimant Or His Legal Representative[61]The delay in service was the responsibility of the claimant’s solicitor, but is not causative of my decision to dismiss this appeal. Responsibility for the other failures to comply, in the absence of a good explanation to the contrary, lies with the claimant, because they are a reflection of the claimant’s own unco-operative approach to this claim. g). Whether The Trial Date Can Still Be Met If Relief Is Granted[62]There is no trial date. Although Mr Treverton-Jones QC said that, if relief from sanctions was granted, there could be a prompt trial, I am not persuaded of that. The Experts’ Joint Statement is not a helpful document, perhaps because it was compiled after a telephone conference, not a face-to-face meeting. It is clear, on reading the reports of the medical experts, that serious causation issues remain between them, which have perhaps become rather overlooked in the light of the ongoing problems with the loss of earnings claim. If the claim had been allowed to continue, those would have had to have been addressed by the experts in a face-to-face meeting, a further Joint Statement, and possibly another round of reports. In addition, for the reasons that I have given, there is no further substantive information which could allow Mr Fail, the forensic accountant, to revise his original opinion that there was not enough material to allow him to undertake a proper evaluation of the claim for loss of earnings. The claimant has apparently instructed a forensic accountant but, perhaps for understandable reasons, does not rely on such a report at trial. h). The Effect Which The Failure To Comply Has Had On Each Party[63]The defendant has been put to large expense and deprived of a prompt trial date by the Claimant’s repeated failures. Although £25,000 has been paid towards the costs ordered by Master Eyre, a sum of almost £10,000 remains outstanding. The lengthy delays are the claimant’s fault but their effect has been to cause prejudice to the defendant. I have already referred to their estimated costs of £150,000. This is therefore another factor in the defendant’s favour. i). The Effect Which The Granting Of Relief Would Have On Each Party[64]The granting of relief to the claimant at this stage would have a significant impact on the defendant because it would deprive the defendant of the strike out of the loss of earnings claim, which was triggered as long ago as January 2011. It would probably mean more expenditure on their part in trying to obtain a proper claim. As for the claimant, the granting of relief would allow the claimant to carry on with the claim for loss of earnings but, in circumstances where that claim remains opaque (for the reasons identified by Mr Fail), and is inherently weak in any event, this too is not a factor in the claimant’s favour.[65]Accordingly, for all the reasons that I have identified, it is appropriate to refuse the claimant relief from sanctions and to allow the Unless Orders of January 2011 to take effect. Accordingly, the appeal against Master Eyre’s order of 24 May 2011 is dismissed.[7]CONCLUSIONS[66]For the reasons set out in Section 5(c) I have concluded that the claimant’s failures to comply with the Unless Orders of December 2011 were extensive, and deliberate.[67]For the reasons set out in Section 5(d) I have concluded that both the reamended answers to the Part 18 request, and the further disclosure, do not comply with Master Eyre’s Unless Orders. Accordingly, the Claimant remains in default of those Orders.[68]For the reasons set out in Section 5(e) above, I have concluded that the claimant’s claim is inherently weak, principally because it is unsupported by any third party documents at all, and is instead based on unlikely assertions advanced by the claimant without corroboration.[69]For the reasons set out in Section 6 above, I have concluded that, on a consideration of the factors in CPR 3.9, the balancing exercise overwhelmingly favours the defendant and militates against granting relief from sanctions.[70]For all these reasons, therefore, I conclude that Master Eyre was right to reject the claimant’s application for relief from sanctions. The appeal against Master Eyre’s order of 24 May 2011 is therefore dismissed.