Keith Ivan Eugene Sweetman v Bernard Robert M Shepherd & ORS (2007)
Where a claimant had issued proceedings in 1997 and had persistently failed to comply with directions and orders and had not progressed the litigation for long periods of time to the extent that his conduct of the case amounted to an abuse of process, it was just to strike out his claims.
The defendants (N, R and W) applied to strike out the case of the claimant (S) in three separate actions. S was a property developer, specialising in options for purchase of land with development potential. The actions related to the same facts but involved different parties. In 1991 S had been introduced by his former solicitor, N, to a land purchase deal. S took out loans based on a valuation of the land that erroneously assumed that planning permission was in place. S and N provided false information to the bank in order to obtain the second loan and the bank subsequently obtained judgment against them in deceit. As the land was not purchased, no repayments were made on the advances. S was made bankrupt on the bank's ensuing debt action, as were other defendants who were sued by the bank in negligence in 1993. In 1997, S started negligence proceedings against N but the writ was defective so S commenced proceedings against his solicitors, W. He also brought proceedings against a solicitor, R, who had put forward details of a property company in which he had a controlling interest as a purchaser for the land. He had misled S as to the nature of that company and its financial assets. S had commenced the three actions just before the time limit for doing so was to expire. He had repeatedly failed to comply with time limits for service and had failed to provide information timeously. The issues were whether the proceedings could properly and justly be tried, and the question of delay. S argued that his inactivity was due to his lack of funds. He claimed loss due to the negligent failure of his solicitor to discover the absence of planning permission. He also claimed loss consequential to his bankruptcy, which he argued was caused by the debt action following his failure to repay the loans advanced to buy the land.
(1) S's resources as an individual businessman were less than those of the defendants, who in reality were insurance companies. Similarly S's solicitor had fewer resources available than the large firms that represented the defendants. However, there had been no frank or detailed disclosure by S of his means, only general assertions. Since N, R and W had issued their applications S had managed to pay his solicitors for their past work, enabling him to set out to defend the applications. The natural inference from that was that he had not paid them for some time but was able to do so rapidly when it seemed in his interest to do so. The pattern of breach of time limits, inactivity and delay appeared much more tactical than the result of lack of funds. That pattern, set against the extreme length of the life of the cases, combined with the lack of any convincing detail as to his financial difficulties, led to the conclusion that impecuniosity was not the true reason for the delays. (2)(a) The bank had recovered a significant amount of its losses and if S were to recover monies on the instant claims it could be seen as double recovery, S taking advantage of the insurer's payouts to the bank. It was also the case that S had obtained the second loan by his own fraud. S's position in relation to loss was very weak but it was not possible to say that there was no arguable loss arising from such a claim. (b) Although S's bankruptcy had followed swiftly on the judgment in the bank's debt action, he already had significant debts aside from that. It would be for S to show that he would not in any event have been made bankrupt at about the same time. That would in turn depend on him showing the detail of his finances and financial prospects in or around 1993. S had failed to do that already, failed in disclosure and, by prolonging the proceedings, rendered any trial of that issue virtually impossible. That had to be the context in which to consider the applications to strike out the claims. (3) It was appropriate to consider whether there was a substantial risk that a fair trial was impossible by reason of delay, rather than just a possibility. In more serious cases, striking out was appropriate where it was what justice required, Taylor v Anderson (2002) EWCA Civ 1680 , (2003) RTR 21 and Asiansky Television Plc v Bayer Rosin (A Firm) (2001) EWCA Civ 1792 applied. The delays in each case had been very long indeed and there was no valid excuse for most of them. Proper regard had to be given to parties' means but S had not justified the assertion that he had been precluded from advancing the cases by a lack of means. Even if he had done so, the delay in the cases had been so long and the failures to comply so repeated that lack of means would be unlikely to justify prolonging the litigation. The already complicated and difficult litigation would be almost impossible to try fairly as documentary evidence would not give a complete picture; witnesses would be relying on their memories of events of 1991; pleadings were not closed; and disclosure had not happened. S's conduct amounted to an abuse of the court's process. The only just outcome was to strike out the cases.