The Firm was successful in resisting the Defendant’s application to strike out the Claimant’s claim for damages on the grounds that a delay of 4 years and 7 months in applying for a Case Management Conference. The application was heard in the High Court of Justice Business and Property Courts of England and Wales London Circuit Commercial Court.
Brief facts of the case
The Claimant, Alba Exotic a company registered in Albania, had issued legal proceedings with his previous Solicitors against the Defendant, MSC Mediterranean Shipping Company in relation to a consignment of bananas delivered in Albania in May 2013. Alba Exotic claimed losses of just under USD150,000 for goods that were damaged during transit, namely a consignment of bananas.
The bill of lading required Alba Exotic to commence legal proceedings within one year of the date of the delivery of the goods as is common in maritime law. Alba Exotic started legal proceedings in April 2014 and then served those proceedings on MSC. In response, MSC denied liability and filed a counterclaim alleging that as a result of the failure of Alba Exotic not accepting delivery for the damaged goods, they had in fact suffered a loss, namely, the costs of destroying the cargo as well as ancillary charges. At that stage, the civil procedural rules required Alba Exotic to apply for a Case Management Conference to be fixed. Alternatively, the Defendant could also have applied for a Case Management Conference.
Neither of the parties applied for a Case Management Conference but instead, Alba Exotic’s previous legal representatives served a Reply and Defence to Counterclaim setting out its position from MSC. This was in 2014. Thereafter, there was no further action taken by either party and the matter sat in abeyance.
In 2018, following a conference with the client our firm had taken conduct of Alba Exotic’s claim and applied to amend the original claim that had been filed. MSC applied to strike out the claim, and for security for costs. MSC submitted that Alba Exotic’s claim should be struck out on the grounds that a) Claimant's delay was intentional and contumelious in full awareness of the consequences; and (b) Claimant did not make a conscious decision to maintain but not to progress the claim until a time convenient to it (referred to in the relevant cases as "warehousing").
Decision
HHJ Rawlings sitting as a High Court Judge held that, although Alba Exotic’s delay applying to fix the Case Management Conference was inordinate and inexcusable, it had not resulted in serious prejudice to MSC, and did not mean that a fair trial was no longer possible.
The Judge therefore refused to strike out the claim as an abuse of process under CPR 3.4(2)(b). Following the guidance in Walsham Chalet Park Ltd (t/a Dream Lodge Group) v Tallington Lakes Ltd [2014] EWCA Civ 1607, regarding the application under CPR 3.4(2)(c), the judge applied CPR 3.9 to decide on a sanction for the claimant’s failure to comply with Practice Direction 59.7.2.
The Judge emphasised the need for a proportionate response to the default, considering strike out to be too draconian where MSC could have applied to fix the Case Management Conference itself, and where he had found that a fair trial was still possible.
Although the risk of the MSC being unable to enforce a costs award against the Claimant, an Albanian company, was not sufficiently serious to justify an order for security for costs under CPR 25.12, it was a fair and proportionate sanction to impose for the claimant’s serious default, which had delayed and increased the costs of the litigation.
The Judge held that it would not be proportionate and just to strike out the claim in all the circumstances. The appropriate sanction would be the payment of security for costs in the sum of £100,000.
Conclusion
Application for security for costs granted. Application for strike-out dismissed
Case details:
Solicitor responsible: Zoheb Chaudhry
Citation: Alba Exotic Fruit SH PK v MSC Mediterranean Shipping Company SA [2019] EWHC (Comm)
Related article: http://www.9goughchambers.co.uk/news/1607/