Home Information Cases Watford Petroleum Ltd & Ors v Interoil Trading SA & Ors (2003)

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Watford Petroleum Ltd & Ors v Interoil Trading SA & Ors (2003)

Summary

An order made without notice providing for the disclosure of documents after exchange of witness statements gave one party an unjustified procedural advantage.

Facts

Appeal by Interoil ('IT') from an order of Lloyd J of 1 April 2003, allowing Watford Petroleum Ltd ('WPL') to delay the provision of certain documents until after the exchange of witness statements and requiring IT to agree not to serve further statements once the documents had been received. The parties had entered into a joint venture agreement in 1999. As a result of disputes various actions were commenced, which were consolidated in 2003. On 1 April 2003, following orders establishing a timetable for disclosure and exchange of statements, Lloyd J granted WPL's without notice application for an order, inter alia, enabling it to delay providing certain documents until after the exchange of witness statements. The following day IT applied to the court to vary the order on the basis that it was procedurally wrong. However the judge, aware that it was an unusual order to make, was not convinced. IT appealed submitting that: (i) the procedure adopted was wholly unfair and gave WPL an advantage in the proceedings contrary to the basic principle of fairness and the normal sequence of case management events; (ii) IT suffered even greater unfairness as it had been forced to respond to an application without knowledge of the basis on which the application was made; and (iii) the order was an exceptional departure from ordinary procedure, was wholly unprecedented and had caused exceptional unfairness to IT. WPL argued, inter alia, that this was a matter of case management and the judge was entitled to take the view he did as this was an unusual case with a background of fraud and the possibility of manufactured evidence.

Held

(1) The order was wholly exceptional and unprecedented. The background to the litigation and the possible risk that evidence might be manufactured had never been thought great enough to depart from the usual procedure or justify this exceptional course. The judge had given insufficient weight to the likely consequences of his order, which had led to tight deadlines being disrupted and contravened the fundamental principle that a party should know the case against it. The practicality of the matter should have ruled this out as a proper method of proceeding. (2) It was unusual for an appellate court to interfere with procedural matters but it could do so where directions were wrong in principle. CPR 3.1(2) provided that the court should make directions for disclosure in accordance with the overriding objective. CPR 32.4 required that disclosure and inspection of documents precede the service of witness statements. The circumstances of the instant case did not meet the necessary threshold for making an exceptional order. The order had given WPL a procedural advantage that was not justified.

Appeal allowed.

Court of Appeal
Laws LJ, Dyson LJ, Carnwath LJ
Judgment date
25 September 2003
References

​LTL: 25/9/2003