Social Welfare Lawyers in the Centre of Birmingham

Summit Navigation -v- Generali Romania Asigurare

Summit Navigation v Generali Romania Asigurare [2014] EWHC 391, 21 February 2014

This case is not about Gypsy or Traveller matters but is important from the point of view of the line of cases following on from the Mitchell judgment on the question of compliance with Court Orders.

Summit Navigation is a commercial case. There was an Order that the Claimants provide further security for their costs. The Order was as follows:-

1.       By 5.00 pm on 5th December 2013 the Claimants provide further security for the Defendants’ costs of the claim in the sum of £100,000 by one of the following methods:…

 2.       In the event that such security is not provided by the said date the action be stayed.

The Claimants provided the further security on 6th December 2013 and the action was thus stayed. They applied to lift the stay. The Defendants argued, effectively, that the case should be struck out. Leggatt J accepted that this was an application for relief from a sanction, so Civil Procedure Rules (CPR) Part 3.9 applied. CPR 3.9 (as amended) provides that on such an application:-

The court will consider all the circumstances of the case so as to enable it to deal justly with the application, including the need-

           (a)     for litigation to be conducted efficiently and at proportionate costs;

          (b)     to enforce compliance with rules, practice directions and orders.

 Leggatt J drew an important distinction between such an Order as in this case and an Unless Order:-

It does not follow, however, from the fact that the stay of proceedings imposed in this case is a “sanction” that all sanctions are equal and are to be treated as equivalent to one another for the purposes of CPR 3.9. There is, in my view, a significant difference between an order which specifies the consequence that proceedings are to be stayed if security for costs is not provided by a specified date and an Order that, unless security is provided by a specified date, the claim will be struck out. Such “unless” orders are of course commonly made when security of costs is not provided but not, at any rate in the Commercial Court before the party ordered to provide the security has first failed to do so within the specified time (para 31).

He continued:-

To apply the same approach to an application to lift a stay which takes effect when security is not provided on time as to an application for relief from the sanction of striking out the claim for failure to comply with an “unless” order would collapse the important distinction between those two different kinds or order, with the different gradations of seriousness which they are generally understood to signify…(para 34).

The reasonable expectation is that, to debar the claimant’s permanently from continuing with the action, a further order from the court would be needed thereby ensuring that the claimant has been given a proper choice between putting up the security and losing the right to pursue the claim for good (para 35).

On costs he stated:-

Save for the costs incurred by the Claimants in issuing their application, which were necessitated by their default, I also order the Defendants to pay the Claimants’ costs of both applications. The Defendants seem to have used their opposition to the stay being lifted as a potentially free ride whereby, if successful, they would obtain a fortuitous dismissal of the claim without a trial and, if unsuccessful, would still have their costs paid by the Claimants as the defaulting party. It is important to discourage that approach. Quite apart from the fact that the Claimants are the successful party, I think it right that the order for costs should reflect the Defendants’ unreasonable conduct in refusing to agree to the stay being lifted and a waste of time and money which that entailed (para 63 – our emphasis).  See: Summit Navigation -v- Generali Romania Asigurare Judgment