Gunn & Anor (t/a Chipperfield Garden Machinery) v Taygroup Ltd [2010] EWHC 1665 (TCC)

[2010] EWHC 1665 (TCC)Case No HT-10-60
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 6 th July 2010
Before
MR JUSTICE AKENHEAD
Between
(1) ANDREW GUNN (2) MARK LLOYD-WILSON (Trading as Chipperfield Garden Machinery)ClaimantsTAYGROUP LIMITEDDefendant
Ben Elkington (instructed by Kennedys) for ClaimantsPaul Infield (instructed by Horwich Farrelly) for DefendantHearing Hearing dates: 28 June 2010
JUDGMENT

Introduction

[1]This case has had a most unfortunate recent history but the issues with which I have to deal relate to the withdrawal in its Defence of admissions made earlier by the Defendant by its then solicitors. Primarily, the Claimant seeks to strike out those parts of the Defence which resile from earlier admissions of liability. The Factual Background[2]The Claimants were in business, selling repairing and servicing garden machinery at premises within a garden centre in Chapel Croft, Chipperfield, Hertfordshire. They had two units, A, which was the workshop office and storage area with some retail space and B, which was mainly a showroom for lawn mowers. On 11 May 2005 an articulated lorry driven by a Mr Hackett, a servant of Taygroup Ltd, the Defendant, which was making a delivery to the Garden Centre, came into contact with one or more overhead cables attached to Units A and B, which were consequently said to have been physically damaged. Part of the overall complex was adjacent to premises called “Garden Scene” of which the proprietors were Stephen and Richard Foskett. The Period between the Incident and the Issue of These Proceedings[3]The Claimants contacted their insurers after the incident who appointed loss adjusters, Questgates, who wrote to the Defendant on 13 May 2005 referring to damage caused to their insured’s property as a result of an incident involving its vehicle on 11 May 2005. The Defendant notified its insurers whose claims handling agents, TCM, wrote on 15 June 2005 to the Claimants referring to the incident on 11 May 2005 as follows:
“We have received a report of the above incident, for which our policyholder was responsible. Accordingly, we wish to minimise any inconvenience this incident has caused to you. Please contact us on the above number so that we can discuss how we may be of assistance to you.”
I will refer to this letter as the “First Admission Letter”, it being argued by the Claimants that it contained an admission of liability. It seems from a document headed “Agreed Statement of Facts” that the Defendant had filled in a form for its insurers on 7 June 2005 which amongst other things confirmed that it was Mr Hackett who was the driver, that the point of impact was the offside of the front trailer roof and that the driver had caught telephone cables above him causing damage to third-party property. Against the standard question "Were you responsible", the "Yes" has been ringed.[4]Questgates wrote to TCM on 5 July 2005 in the following terms:
“Telephone and data cables that stretched between two of the Insured’s buildings were struck by your Insured’s vehicle causing damage to the building, and severing the telecommunication cabling to the Insured’s building. As a result of the incident significant damage has been caused to the building and it was without a full telecommunication system for approximately 10 days after the incident. As a result of this essential repairs are required to the Insured’s building and it has suffered a significant loss of trade and further disruption is likely once repairs are carried out. On the basis of the information available at this stage we anticipate that the overall loss may exceed £150,000, although further details in support of the loss of being gathered. We currently await an engineer's report and full details in support of the loss of revenue suffered…”
[5]GAB Robins were appointed by the Defendant’s insurers and they e-mailed Questgates on 12 July 2005 confirming that they were appointed "without admission of liability to investigate and report on causation and quantum". Little seems to have happened for the next seven months although there was some telephone contact. Questgates wrote on 21 February 2006 saying that a final negotiated settlement had been reached between the insurers and the Claimants in the sum of £637,562, of which just over £500,000 related to business interruption and the balance damage to buildings and stock.[6]On 17 June 2006, GAB Robins e-mailed Questgates saying that their principals had indicated that they were "not fully satisfied re: liability and that they require further information on a number of points.” Questgates replied on 11 July 2006 expressing disappointment "that at this late stage liability issues still remain outstanding". GAB Robins identified in its e-mail of 18 July 2006 to Questgates a number of points upon which assistance and clarification was required. These points related to the Defendants vehicle being parked in a designated parking space outside the Claimant’s premises, to the possibility that the overhead cables were too low and that there were no signs to warn of an overhead cable danger. There were some further discussions and on 10 October 2006 Questgates wrote to GAB Robins answering in some detail these points and voicing their principals’ “disquiet that at this late stage some two years after your representatives and consultants original visits, these type of queries are being raised”.[7]The Claimants’ insurers instructed solicitors, Davies Lavery, to pursue recovery of their outlay to their insured; they wrote to the Defendant on 13 February 2007 a letter of claim albeit they did not consider that the claim was covered by a pre-action protocol. The letter sets out the facts relating to the incident, the basis of claim (negligence), the relief claimed (£637,662) and calling for pre-action disclosure with regard to any accident or incident report.[8]That led to the Defendant’s insurers instructing Kennedys as their solicitors who wrote to Davies Lavery on 18 April 2007:
“…We confirm that liability in this matter is repudiated”
. Kennedys went on to say that on the morning in question the driver of the lorry parked overnight in a designated parking area in the Garden Centre was approached by a person believed to be a senior employee or director of the Garden Centre and told to drive from his parked position; as he was pulling away from his parked position the cables in question were snagged almost immediately. Liability was challenged therefore on the grounds that the cables had been installed too low, that there was an absence of proper signage to that effect and that he was pulled away from his position at the instruction of an employee or director of the Garden Centre. I have concluded from a witness statement from Ms Hopkins that at about this time a representative of Davies Lavery obtained a draft statement from Mr Foskett of Garden Scene.[9]Davies Lavery replied on 17 July 2007 saying that their clients’ representatives had not pursued enquiries into liability given the admission of liability made by the Defendant’s representatives. Kennedys responded on 23 July 2007 asking for a copy of the earlier admission of liability. Davies Lavery replied on 30 July 2007 referring to the First Admission Letter. On 6 September 2007, Kennedys wrote ("the Second Admission Letter"):
“We write further to our previous correspondence to confirm that liability in this matter is not in dispute…”
That was accompanied by another letter which addressed quantum matters and was prefaced with this sentence:
“As we explained liability is not in dispute in this matter…”
[10]Little seems to have happened over the next nine months until Davies Lavery wrote to Kennedys on 9 June 2008 dealing with quantum matters, saying for instance that the remedial works costs could be as high as £480,000. Suggestions were made that loss adjusters be appointed to narrow issues on quantum.[11]On 1 September 2008 Davies Lavery and Kennedys merged but it was agreed between the parties and the two former firms that personnel from Davies Lavery (now employed by Kennedys) should continue to act for the Claimants whilst Richard West who had acted for Kennedys for the Defendant would step down and that the files kept by Kennedys in acting for the Defendant would be sealed and, as and when requested, be made available to the new firm to be instructed on behalf of the Defendant. No objection of any sort was ever registered by the Defendant against this arrangement.[12]By February 2009, the Defendant had retained new solicitors, Horwich Farrelly, to act for them and they made contact with Kennedys that month. Mr Boylan was the senior solicitor put in charge of the case. It appears however that the new solicitors made no effort to liaise with Kennedys over the coming months; for instance they did not respond formally or informally to letters from Kennedys and dated 13 and 26 March 2009. There was a somewhat inconclusive telephone discussion between the two sets of solicitors on 18 June 2009 and various queries were raised, at least informally, by Horwich Farrelly which resulted in a letter dated 21 December 2009 setting out a quantum calculation which indicated that the total claim was now £3,460,988.91, of which some £2.75 million related to business interruption and loss of profit and just under £700,000 to damage to building and stock. No response was received apart from a holding one on 29 January 2010 (Mr Boylan being away on holiday). Mr Boylan did reply on 2 February 2010 saying that he was seeking instructions from his insurer clients.[13]Nothing more having been heard from Horwich Farrelly, the Claimants issued proceedings in the TCC on 17 February 2010. The accompanying Particulars of Claim set out details of the Claimants and the incident on 11 May 2005 asserting that the driver of the lorry had failed to exercise reasonable skill and care but also expressly relying on the admission in the Second Admission Letter. The bulk of the pleading relates to the consequences of the incident and the quantum.[14]The Defence, served on 16 March 2010, denies liability in some detail in effect on a not dissimilar basis to that put forward by the Defendant’s then solicitors in 2007. In effect, it was asserted that Mr Hackett had been beckoned forward by an employee or agent of the Claimants and that, in consequence, the lorry which he was driving snagged the cable; it was asserted that there were no warning signs of any low cables and that the driver had no reason to check for any suspect low cables. Contributory negligence was also pleaded on the basis particularly that the employee or agent was wholly or partly to blame. It was not accepted that there was a previous admission of liability but, if there was, the Defendant should be entitled to withdraw it on a number of grounds.[15]The Claimants requested clarification and further information in April 2010 in relation to the Defendant's case. There was a Case Management Conference held on 16 April 2010 attended by Counsel for both parties. The large bulk of the directions were agreed so that there should be a trial starting on 6 December 2010 with the time estimate of eight days. The Claimants’ Counsel made it clear that his clients were seriously considering applying to strike out the denials of liability on the grounds that it would be inappropriate for the Defendant to withdraw its earlier admission or admissions. The Court ordered that in the meanwhile the Defendant should by 30 April 2010 serve a list of documents in relation to certain classes of document which went to the question of the admission; in effect what was sought to be elicited was whether anything which might be categorised as an admission was made on an informed basis. The Court also ordered that the Defendant respond to the Claimants’ Request for Further Information by 10 May 2010. The Defendant’s solicitor served its list of documents on 30 April 2010 in effect saying that all of the documents in the Loss Adjusters’ file and three statements from Mr Hackett, Mr Blundell and a Ms O’Hara were privileged. On 7 May 2010, Kennedys wrote complaining that the List was wholly deficient and casting substantial doubt about whether privilege was properly claimed.[16]It was only on 12 May 2010 that the Defendant’s solicitors first asked for the file of papers which Kennedys had retained from the time when they acted for the Defendant and which had apparently been kept sealed ever since. On or by 24 May 2010, Kennedys had passed on the sealed file to the Defendant’s solicitors.[17]Belatedly, on 17 May 2010, the Defendant served its Replies to the Request in which it accepted, albeit somewhat obliquely, that the employee of the Claimants who was said to have beckoned Mr Hackett forward may have been a director or employee of the adjacent firm “Garden Scene” and that there were "errors of fact in the Defence which have now come to light". It now sought to add a different point that this person used a “U” shaped attachment on a wooden pole to lift the low cables to allow the lorry to pass and then re-pass; thus, it was at least hinted at that he and his lorry did not make contact with the cable at all.[18]On 21 May 2010, Kennedys wrote to Horwich Farrelly complaining that the replies to the Request were deficient and that they intended to issue an application for an order striking out those parts of the Defence which were factually incorrect and which related to the purported withdrawal of the admission. They repeated this statement of intention in a further letter dated 26 May 2010 complaining that the Claimants could not be expected to incur costs by reference to a Defence accepted by the Defendant to be factually inaccurate.[19]By 28 May 2010, Horwich Farrelly had decided that certain documents in their client’s or their insurers’ files could or should be disclosed namely the witness statements of Ms O’Hara and Mr Blundell and the "Agreed Statement of Facts". They wrote in an e-mail that their Counsel had “promised” to produce an Amended Defence within a few days and asked for time until 4 June 2010 to transmit the Amended Defence.[20]No Amended Defence having been filed, the Claimants issued an application pursuant to CPR Part 3.4(2) (a) and (b) to strike out those parts of the Defence which were an abuse of process or which failed to disclose a reasonable grounds for defending the claim and also for an order for Specific Disclosure. The return date was 18 June 2010. No witness statement in response was served by or on behalf of the Defendant although an unsigned witness statement from Mr Boylan was produced at the hearing by Leading Counsel instructed by the Defendant. He was only instructed on the afternoon before the hearing and was unable to produce a skeleton argument until about an hour before the hearing. At the hearing, Leading Counsel sought to argue primarily that there was and had continued to be a conflict of interest so far as Kennedys were concerned and that in effect the admissions relied upon could not safely be relied on in those circumstances. He did not go so far as to say that Kennedys had as such acted improperly but that in effect the admission was "tainted". He candidly and properly accepted that he did not have all the relevant papers and that he was not aware that Mr Boylan’s draft statement had not been served. That draft statement suggested a delay to the procedural timetable of some two months and the real possibility that the Defendant would wish to bring third party proceedings against the proprietors of Garden Scene.[21]I considered at this hearing that the Defendant’s position had not been properly or effectively presented, through no fault of Leading Counsel, and that the arguments about conflict and taint were fanciful and without any effective evidential base. I adjourned the matter for a further 10 days on an indemnity costs basis against the Defendant. The agreed note of my observations states:
“Each side will note that unless there is a clear supported application by the Defendant with signed statements, served by no later than 12pm on 23 June, then the Court will proceed to adjudicate on these strike out application. I would expect to see a properly pleaded draft Amended Defence which is supported by a statement of truth and which will reflect a material weakening of the Defendant’s case on liability as indicated by its answers to the Claimants’ Part 18 Request. I would wish to see some evidence of any conceivably good grounds of why the apparent admissions made can and should be withdrawn. At the moment I am not impressed by what Mr Boylan has said. I am not sure he has answered the point. I am also looking for positive steps from the Defendant to get the matter to trial to reflect the delay that has occurred. If the Defendant wants to avoid an order of the disclosure, I would expect a statement from Mr Boylan saying that he had personally examined the files in question and had confirmed the entirety of them was privileged, or alternatively their disclosure. If these steps are not taken, I will not be sympathetic. The fact that Mr Boylan is busy is not an excuse.”
[22]On 23 June 2010, Horwich Farrelly lodged a signed statement from Mr Boylan but lodged no application for leave to amend the Defence, let alone supplied a draft Amended Defence. That statement suggested that following further enquiries it was thought that a Mr Steven Foskett of Garden Scene was the person who directed the driver on the day of the incident and that permission would be sought to bring a third-party claim against that firm. No draft Amended Defence was produced to the Court or to the Claimants until the morning of the last hearing on 28 June 2010. An application was faxed to the Court on 25 June 2010 by Horwich Farrelly seeking leave to amend the Defence and add as Third Parties Garden Scene in accordance with a supposedly attached draft (which was not attached). Junior Counsel was instructed by them on 25 June but he was only able to finalise his skeleton at some stage on Sunday, 27 June 2010 and it was not available to the Court until the morning of the hearing.[23]At the hearing, the Defendant’s Counsel produced a draft Amended Defence; he accepted in effect that it had not been provided before and that it did not contain a signed Statement of Truth. The draft pleading was not drafted by him and does not appear on its face to have been drafted by other Counsel although I was informed that it had been. The amendments abandon the plea that it was an employee or agent of the Claimants who sought to assist Mr Hackett but now assert that it was an employee or agent of Garden Scene who did so. Whilst it is accepted in Paragraph 5 that the vehicle did snag the cable, it is asserted that the Garden Scene person used a "U" shaped attachment to lift the cables to enable the vehicle to pass under and that therefore Mr Hackett can not be considered to have been negligent. Paragraph 10 adds a Third Party Claim against Stephen and Richard Foskett (trading as Garden Scene) in effect blaming them for inadequately shepherding Mr Hackett’s vehicle under the cable. The Legal Criteria[24]CPR Part 3.4.2 states that: “The court may strike out a statement of case if it appears to the court- (b) that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings…” “Statement of case” includes a Defence.[25]It is accepted that the relevant legal criteria with regard to the withdrawal of pre-action admissions are summarised in the case of Stoke-on-Trent City Council v Walley [2006] EWCA Civ 1137. Lady Justice Smith said in that case: “34. On this issue, I accept the submissions of Mr Block. I agree that, for a claimant to show that the withdrawal of an admission would amount to an abuse of the process of the court, it will usually be necessary to show that the defendant has acted in bad faith. That could not be said here. There was before the court a statement from the solicitor for the Council providing a full explanation of why it had been decided to withdraw the admission made earlier by Mr Yates. The loss adjusters who employed Mr Yates had concluded that he was incompetent and had made a thoroughly bad decision. The history suggested that the loss adjusters did not manage their staff as well as they should, but it could not be said that they had acted in bad faith. 35. I also accept that, in order to show that the withdrawal of a pre-action admission is likely to obstruct the just disposal of the case, it will usually be necessary for the claimant to show that he will suffer some prejudice which will affect the fairness of the trial. Examples of this kind of prejudice were discussed during the hearing. In the light of an admission, the claimant might agree to the destruction of an item of real evidence; he might agree that an expert's inspection is not necessary and it might no longer be possible for one to take place. Witnesses might have died or lost contact. The possibilities are legion. Funding difficulties might also give rise to real prejudice, if the evidence were to show that the claimant had changed his position in reliance on the pre-action admission. However, in this case, there was no evidence that that was the case. Such evidence should have been put in at the outset, as it would have been relevant whether the judges below were exercising a general discretion under Part 14 or were applying the more restricted test under CPR rule 3.4. Speaking for myself, I would be prepared to take judicial notice of the fact that after the event insurance is more expensive when entered into after a pleaded denial of liability than if taken out at an early stage. However, after the event insurance is available to claimants without the need to pay the premium in advance. Accordingly, I do not think that any effect on the funding of the withdrawal of the admission would be likely to obstruct the fair disposal of the case. There remains Mr Walley's disappointment. I do not underestimate the severity of this; the loss of an admission of full liability must create a sense of uncertainty, turmoil, even despair. However, I do not think that those feelings could ever be said to obstruct the just disposal of the case. Discussion[26]I will address in this part of the judgement the arguments put forward by the parties. It is first necessary to consider what admissions there were and the context in which they were made. As for the First Admission Letter from the Defendant’s insurers’ claims handling agents, it talks of the Defendant being "responsible" for the incident. The word "responsible" could be taken to mean liable in law and in fact, alternatively it could mean that the Defendant accepted that it had caused the incident, namely the cable damage to property. It is a reasonable inference that the author of the letter was aware of the Agreed Statement of Facts filled in by the Defendant in which the "Yes" had been circled opposite the question:
“Were you responsible?”
Although the First Admission Letter is ambiguous but could be construed as an admission, it was clear within weeks and over the next two years that liability was not admitted. GAB Robbins write on 12 July 2005 "without admission of liability" and again on 17 June 2006 that they were "not fully satisfied re: liability". That stance was maintained until the Second Admission Letter of 6 September 2007. I therefore consider that it is difficult to treat the admission, if that is what it was, as an effective admission because, even if it was made in June 2005, it was clear within a few weeks that liability was not being admitted and indeed as time went on that it was being positively challenged.[27]The Second Admission Letter is accepted, properly, to be an admission of liability which was never withdrawn expressly or by implication until the Defence was filed in March 2010. However the context of the Second Admission Letter was that the quantified claim was £637,662 plus excess and uninsured losses; little detail of that claim had been provided other than some £130,000 related to damage to buildings and stock and some £506,000 related to business interruption. Nine months after the Second Admission Letter, the Claimants’ solicitors were saying that the remedial work costs alone would be some £480,000 and that without giving any quantification the business interruption was split into two sections, the first being the straightforward loss of sales arising from the fact that the premises were more limited than before and the second being the loss of servicing business flowing from the sales that were not made.[28]It was only shortly before Christmas 2009, a further 18 months later, that the Claimants’ solicitors quantified the total claim at over £3.4 million which represented a more than five fold, and in any event a very substantial, increase in the claim. Mr Boylan says that it was only when his firm received this substantially increased claim that he, his client and its insurers began seriously to reconsider the admission previously made in September 2007. I have to say that the reconsideration exercise was not conducted with any real expedition; if it had been, the first part of the exercise would and should have involved a request from Kennedys for the production of the sealed files stretching back to the time when Kennedys, prior to the merger with Davies Lavery, were acting for the Defendant; it took the Defendant and its advisers some five months before they did so. The production of the Defence, although supported by a Statement of Truth from Mr Boylan, must have been, at least to a significant extent, a "cobbled together" effort, without access to the sealed files. Certainly, investigations were not sufficiently progressed to determine whose employee or agent it was who is said to have assisted Mr Hackett in his manoeuvring of the vehicle in question.[29]There can be no doubt that, since the CMC of 16 April 2010, the Defendant and its legal advisers have not proceeded with the expedition required to maintain the timetable set on that occasion. For instance, if the trial of 6 December 2010 was and is to be maintained, a draft Amended Defence needed to have been lodged within 2 to 3 weeks after 16 April 2010; if third party proceedings were to be pursued, they needed to be issued and served within the same sort of timeframe. It can simply be no excuse for the Defendant’s solicitors to say that, until they received the sealed files, they could not initiate those exercises because they should have asked for those files months before; in any event, they received those files within about 12 days of asking for them. Having then promised the draft Defence for the first week of June 2010, the draft arrives in the last week of June 2010 with no excuse or explanation for such late arrival. Without finally deciding the point, if the Defendant is granted leave to amend its Defence and bring in Garden Scene as Third Parties, it may well be that insufficient time is left between now and the December 2010 trial date to enable that date to be maintained. If that is the case, the fault will be the Defendant’s and/or its legal advisers.[30]That said, it is accepted that, as it is not asserted by the Claimants that there is any bad faith on the part of the Defendant, the Court can not strike out all or parts of the Defence on the grounds of "abuse of process" within the meaning of CPR Part 3.4.2(b). It is only therefore if the Defence is otherwise likely to obstruct the just disposal of the proceedings and if the Claimants can show, borrowing Lady Justice Smith’s words in the Stoke-on-Trent case, that they will suffer some prejudice which will affect the fairness of the trial, that the requisite parts of the Defence can be struck out.[31]One of the two limbs to the Claimants’ argument is that, unless and until the Defence is amended to reflect the different factual defence raised in the Replies to the Claimants’ Request for Further Information, that will affect the fairness of the trial because the Claimants will not know which of the two cases is being pursued. That would be a fair point except that it is clear that this lacuna between the Defence and the Replies can effectively be dealt with by an amendment. The draft amendments put forward, albeit at the 12th hour, do just that. Therefore, this limb of the argument fails because the conflict between the two pleadings can easily be cured.[32]The second limb represents a stronger argument and stems at least in part, as the Claimants’ Counsel put it, from a justified feeling that the Defendant or its legal advisers were "messing about". The real issue flowing from both the original Defence and the proposed Amended Defence arises from what is undoubtedly the withdrawal of the admission of liability made in the Second Admission Letter in September 2007; applying the relevant legal criteria, I need to consider whether the Claimants have established that it has suffered or will suffer real prejudice from the withdrawal of the admission. The legal authorities on withdrawal of pre-action admissions must at least in substantial part be founded on the principles of equity and estoppel in that a pre-action admission is intended to be relied upon and, if it is relied upon by the party to whom it is made to its significant detriment, the basis of estoppel and prejudice is established.[33]It is interesting therefore in this context to see the evidence relied upon by the Claimants so far as prejudice is concerned. All that Mr West says in his witness statement (submitted to support a disclosure application at the CMC in April 2010) is in Paragraph 53: “Clearly, until the Claimants have received and properly considered the documents requested as part of this Application for Specific Disclosure, they will not know what prejudice they will have suffered as a result of this late attempt to withdraw the admission(s) and/or whether there has been any bad faith on the part of the Defendant." That evidence has as such not been added to by the Claimants. However, Counsel for the Claimants urges me to infer that key evidence has or may have been lost or deteriorated. Thus, for example, he argues that witness recollection may well have dimmed since 2005 or 2007, that relevant documents may have been lost and that it may be difficult to track down relevant witness or documentary evidence from British Telecom, whose cable it was which was damaged.[34]I do not consider however that it is proper to infer that such prejudice has occurred. First, there was no effective admission of liability until September 2007 some 28 months after the incident; therefore, it might well have been thought desirable for the Claimants and those advising them to have secured basic witness statements and other documentary evidence which went to liability. Secondly, as Ms Hopkin, has said, at least some steps were taken, probably in 2007, by the Claimants’ solicitors to collate evidence about the involvement of someone from Garden Scene on the morning of the incident; she says that a draft witness statement was taken from Mr Foskett. There has been no evidence that this evidence collation exercise has not provided an adequate answer to the points now made by the Defendant in its draft Amended Defence; it would be wrong in those circumstances to infer that prejudice has been incurred. Thirdly, I would expect there to be some expressed evidence to be produced to the court that there was a real possibility that documents which went to liability had been lost following the admission in September 2007; again it would be wrong in the absence of such evidence to infer such loss. Fourthly, the Claimants are not obviously without “ammunition” to respond to the "new" defence; they have, at least, the draft witness statement of Mr Foskett and they have what are arguably material differences in the new defence which has belatedly emerged compared with the Agreed Statement of Facts and earlier explanations of what may or may not have happened. Fifthly, of course the Claimants have the benefit of the admission made in the Second Admission Letter which may conceivably prove to be of significance at the trial.[35]I specifically gave the Claimants, through their Counsel, the option of a further adjournment to provide express evidence of prejudice. However, on instructions, he made it clear that the Claimants wished me to rule on their application on the information and evidence put before the Court.[36]There is a final overall point in relation to fairness to both parties to which one must have regard under the overriding objective which is that at the time that the admission was made the claim, although significant in quantum terms, was less than a fifth of what is now claimed. It is not at all unlikely that, if in September 2007, the Defendant, its then solicitors and its insurers had known that it faced a claim of over £3.4 million, it would not have admitted liability so readily if there was an arguable defence on the facts. It seems, on balance, somewhat unfair to hold a defendant to an admission of liability on a claim then specifically quantified at something over £600,000 when the claim over two years later is increased fivefold.[37]There is of course some prejudice caused by the delay in the making by the Defendant of its application(a) to amend its Defence and(b) to add in Garden Scene as a third party and its or its advisers’ generally poor performance in May and June 2010. So far as the amendment is concerned, it was clear from about 17 May 2010 when it served its Replies to the Request for Further Information that the Defendant would have to amend its Defence to reflect those Replies. So far as the impact of any adjournment of the trial date and postponement of the various timetable steps are concerned, these can be accommodated within the TCC without any great difficulty or prejudice. If there has to be an adjournment of the trial, that need not be for more than three or four months; subject to any argument which the third party may have, and without finally deciding the point, I would have thought that that additional period of time would be sufficient for all the parties effectively to get ready for trial.[38]Part of the Claimants’ application was for specific disclosure on the basis that there must still be further documents particularly from the files of the insurers dating back to 2005 which were disposable. An indication had been given on 18 June 2010 that it was thought that privilege applied; that is why when adjourning on that occasion, I made it clear that there needed to be a witness statement verifying that. Mr Boylan has, somewhat surprisingly, said that, other than the three documents disclosed in May 2010, all the other documents on the insurers’ files are privileged. Given that there was little or no argument on this point, this should be deferred top the hearing of the Defendant’s application for leave to amend its Defence and add the third party. Decision[39]I therefore dismiss the Claimants’ application to strike out any part of the Defence. It was accepted that the Defendant’s application to amend its Defence would have to be dealt with on a separate occasion, at least one reason for it being that having heard the parties at 9 am on 28 June 2010, I had to rise at 10.30 am to enable a two week trial to commence; another reason was that the Draft Defence was not supported by an application for which any fee had been lodged and that it was not supported by a Statement of Truth. I made it clear at the end of that hearing that I would find it difficult to blame the Claimant for taking and maintaining the line which it had done given the imperfect performance of the Defendant and its advisers in May and June 2010.

Cited in 1 later judgment