IN THE BIRMINGHAM COUNTY COURT Case No: 3YK 77641 App Ref: BM30181A The Birmingham Civil Justice Centre, The Priory Courts, 33, Bull Street, Birmingham B4 6DS Before : HHJ WORSTER - - - - - - - - - - - - - - - - - - - - - Between : Date: 30 January 2014 Aliasghar Porbanderwalla - and - Daybridge Limited Claimant/ Appellant Defendant/ Respondent - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Nicholas McDonnell (of Just Costs) for the Claimant John Appleyard (of Browne Jacobson) for the Defendant Hearing date: 23 January 2014 - - - - - - - - - - - - - - - - - - - - - I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.... HHJ WORSTER
HHJ WORSTER: 1. This is the Claimant s appeal from the order of District Judge Musgrave made on 3 October 2013. The appeal is supported by the Defendant. I heard oral submissions on 23 January 2014 and reserved judgment. 2. The history is this. The Claimant issued a claim form on 18 April 2013. The issuing court was the CCMCC at Northampton. The claim is for damages quantified at 42,000 odd, being mostly credit hire charges. Both parties act by solicitors. Service was acknowledged and a Defence filed on 20 May 2013. An accident was admitted; liability and quantum were in issue. 3. On 28 May 2013 Notice of Proposed Allocation to the Multi-Track (N149C) was sent to the parties. It appears to be in a standard form. After noting that the claim was now defended, it provided that: 2. It appears that this case is suitable for allocation to the multi track. If you believe that this track is not the appropriate track for the claim, you must complete box D2 on the Directions Questionnaire (Form 181) and explain why. 3. You must by 28 June 2013 a) complete the Directions Questionnaire (Form 181) and file it with the court office [the address is then given] and serve copies on all other parties; and b) attempt to agree directions with the other parties; and c) file proposed directions in accordance with CPR 29.1(2) (whether or not agreed) with the Directions Questionnaire 4. By the same date, the allocation fee of 220 is due.... There is no reference on that form to a costs budget or to any requirement to file a costs budget by a specified date. 2
4. On 25 June 2013 both parties sent their Directions Questionnaires to the Court with their suggested directions. Section H of the questionnaire includes this: If your claim is likely to be allocated to the Multi Track form Precedent H must be filed in accordance with CPR 3.13 Neither filed a costs budget. The Claimant s solicitors sent a covering letter which ended with these words: We are not enclosing Precedent H with this letter. It will be filed as/when directed by the Court in advance of the Case/Costs Management hearing. 5. The claim was transferred to the Birmingham County Court, and on 4 September 2013 upon considering the statements of case and questionnaires filed District Judge Musgrave made the following orders: 1. Both parties having failed to submit budgets in Form H, the recoverable costs for each party shall be limited to the Court fees incurred by each pursuant to CPR 3.14. 2. This Claim is allocated to the Multi Track. There followed a series of comprehensive directions designed to take the matter to trial. The order was drawn on 3 October 2013. The Claimant s appealed. The Appellant s Notice is dated 23 October 2013. Permission to appeal was granted on 29 November 2013 by His Honour Judge Oliver-Jones QC. 6. The relevant Civil Procedure Rules are rule 26.3 and rules 3.12, 3.13 and 3.14, all of which were amendments made to the CPR following the Jackson Report and which came into effect on 1 April 2013. 26.3 (1) If a defendant files a defence (a) a court officer will 3
(i) (ii) provisionally decide the track which appears to be most suitable for the claim; and serve on each party a notice of proposed allocation; and (b) the notice of proposed allocation will (i) (ii) (iii) (iv) (v) specify any matter to be complied with by the date specified in the notice; require the parties to file a completed directions questionnaire and serve copies on all other parties; state the address of the court or the court office to which the directions questionnaire must be returned; inform the parties how to obtain the directions questionnaire; and if a case appears suitable for allocation to the fast track or multi-track, require the parties to file proposed directions by the date specified in the notice. Practice Direction 26 paragraph 2.1 provides that the notice of proposed allocation referred to in rule 26.3(1) will be... in the multi track in form N149C. 3.12(1) This Section and Practice Direction 3E apply to all multi-track cases commenced on or after 1st April 2013, except... [none of the exceptions apply] 3.13 Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets as required by the rules or as the court otherwise directs. Each party must do so by the date specified in the notice served under rule 26.3(1) or, if no such date is specified, seven days before the first case management conference. 3.14 Unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees. 7. The Claimant s case is that the District Judge was wrong to make the order at paragraph 1 of his order of 3 October 2013. There are two lines of argument. Firstly that CPR Part 3.12 provides that this section of the CPR applies to multi track 4
cases. This case was not allocated to the multi track until 3 October 2013; indeed the order drawn on that date is headed Notice of Allocation to the Multi-Track. Thus the argument is that it was not a multi track case when the rule 26.3(1) notice was served, rule 3.13 does not apply, and there was no requirement for the parties to file and exchange budgets prior to the order of 3 October 2013. 8. The argument has the attraction of simplicity. How could the claim be a multi track case prior to allocation? To describe it as such for the purposes of this rule on the basis that it probably was, or that it was likely to be allocated to that track leads to uncertainty. It is easy to imagine cases where there is room for two genuinely held but diametrically opposite views on the subject. This case may be an example, for whilst in terms of value it is a multi track case, the content and time estimate (1 day) are such that it could easily be heard on the fast track. If it is not a multi track case, how can this section apply? 9. The answer lies in the words of rule 3.13 which expressly provides that a budget should be served and filed... by the date specified in the notice served under rule 26.3(1) or, if no such date is specified, seven days before the first case management conference. That will be before allocation. This is the specific rule governing the procedure at this point, and the terms of the rule are clear. If I accepted the Claimant s argument, it would be to ignore those clear terms, and to make a nonsense of the rule and the procedure it provides for. To apply the clear terms of rule 3.13 however, does not deprive rule 3.12 of meaning or effect, for it is only if the case is (subsequently) allocated to the multi track, that the provisions of rule 3.14 and those rules which follow have operation. In that sense this section of the rules does apply to multi track cases. But rule 3.13 operates prior to that allocation. This ground of appeal fails. 5
10. The Claimant s second line of argument is that because no date was specified in the notice served under rule 26.3(1) for the filing of costs budgets, and there was no case management conference, the requirement for the filing of budgets pursuant to rule 3.13 was never triggered. 11. On my first reading of rule 3.13 I thought that was right. But the words of the second sentence of rule 3.13 do not actually say that the parties must file and exchange budgets by the date specified in the notice for the filing of budgets; simply that they must do so by the date specified in the notice served under rule 26.3(1). So the rule can be read as requiring a budget to be filed and served by the date specified in the notice here 28 June 2013, even though that is a date by which other specified matters are to be complied with. That must be how the District Judge understood the rule. He is in good company. 12. The Claimant drew my attention to two matters. Firstly the use of the word specified after date in the second sentence of rule 3.13. Secondly, that rule 26.3(b)(i) requires that the notice of proposed allocation will specify any matter to be complied with by the date specified in the notice [my emphasis]. The link between these two rules is plain, and they should be read together. 13. The principal point of construction which has persuaded me is as follows. The notice envisaged by rule 3.13 is a notice which will specify any matter to be complied with by the date specified in the notice. Those words are apt to include the requirement for the exchange and filing of a costs budget. Rule 3.13 adopts the date in the notice as a trigger in that context in other words on the basis that the notice will specify when that matter is to be complied with. I construe rule 3.13 as referring to a rule 26.3(1) notice which specified a date by which the costs budget was to be filed. 6
14. Further, the second sentence rule 3.13 is to be read with the first sentence. The words must do so refer back to the requirement to exchange and file budgets in the first sentence. The words by the date specified in the notice can also be read in the context of a requirement to exchange and file budgets. It is by no means clear, but does the rule really mean that there is a requirement to file a budget by the date specified in the notice for doing something different - here the filing of Directions Questionnaires and the like? It makes more sense to refer (back) to a requirement to exchange and file a budget, than to a requirement to do something else. 15. I also have in mind that the failure to comply with the requirement of rule 3.13 is the potentially serious sanction provided for by 3.14. The more serious the sanction, generally the greater the need for clarity. Whilst it is not the determinative point in my decision, and would give way to positive arguments of construction, a genuine ambiguity in the rules ought to be resolved in favour of the defaulter. 16. If the alternative construction were adopted, section H of the Directions Questionnaire and the notice of the proposed allocation to the multi track may provide a practical answer to the problem encountered in this case, for the notice tells the litigant that the case is likely to be allocated to the multi track, and the DQ prompts him to file and serve his budget. That said: (i) the terms of the Questionnaire refer back to rule 3.13, which makes the point a rather circular one; and (ii) what happens if the rule 26.3(1) notice makes a provisional allocation to the fast track and the parties decide as a result not to file a budget, only for the Judge to allocate the case to the multi track, regard the rule 7
26.3(1) notice as a trigger for the provisions of rules 3.13 and apply rule 3.14. There is scope for an application for relief from sanctions, but that is unsatisfactory, particularly when the parties are being held strictly to the rules. 17. Whilst I can see that the words of rule 3.13 can be read in a way which justifies the order appealed against without doing any particular violence to the language used, the more natural reading of the rule is that contended for by the Claimant. Absent a requirement for the exchange and filing of a budget in the rule 26.3(1) notice or a CMC, the requirement is not triggered. The appeal is allowed on that ground. Paragraph 1 of the order of 3 October 2013 is set aside, and I make the orders sought as to the exchange and filing of budgets and for the case to be listed for a Costs Management hearing. 18. I was also referred to the form N149C presently available on the Court Service website. This form is different to the one sent to the parties in this case. The website indicates that this form was last modified in April 2013. That was when the form came into effect; thus it appears to be the form (or rather a form) which has always been in circulation. In addition to the provision for the filing of Directions Questionnaires and so forth by a specified date, this form makes express provision under a separate paragraph 4 in the following terms: You must by [date] file and exchange costs budgets as required by CPR 3.13 This version of form N149C appears to coincide with my reading of the requirements of rule 26.3(1)(b)(i), and its use should deal with the problem which arose in this case. 8
19. The Claimant sought to argue that the court officer who issued the form in this case must have deliberately removed the requirement for the filing of a budget from the Court s standard form, and deliberately not required that a budget be filed. However, the costs lawyers who appeared in this case told me that they have come across a number of cases where a form such as the one used in this case has been sent to them by the Court. There is nothing of relevance on the Court file to suggest that there was some amendment of the standard form by the court officer. The more likely explanation is that there is more than one version of N149C in circulation; one providing for a costs budget to be filed by a specified date, and the other not. That is most undesirable, particularly at a time when the profession and the Courts are working out the effects of these new rules. 20. Finally I should add that had I refused this appeal I would have been minded to grant both parties relief from sanction. Each case will turn on its particular facts, but this was not a case where the parties were refusing to engage with the requirements for cost budgeting. Their approach to the requirements of the rule was understandable, they had otherwise complied with all the orders and directions of the Court, the Claimant had indicated that it would file a budget as and when directed to in the covering letter I refer to, and the appeal was brought promptly. The default would not have been a trivial one, but there was a good reason for it. 9