Wednesday Law Report: Incomplete list complied with order

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The Independent Culture
2 December 1998

Realkredit Danmark A/S and another v York Montague Ltd and another

Court of Appeal (Lord Justice Morritt and Lord Justice Tuckey) 26 November 1998

AN ACTION should not have been struck out on the basis of failure to comply with an "unless" order requiring service of a list of relevant documents where the list had been served by the due date, but it was alleged that the list was incomplete.

The Court of Appeal allowed the appeal of the plaintiffs against an order striking out their claim against the defendants for failure to comply with an "unless" order.

The plaintiff lenders had brought consolidated actions against the first defendants for negligent valuations. The proceedings were commenced on 8 November 1995. On 24 July an order was made that lists of documents be served by the parties within 28 days of the service of further and better particulars.

Further and better particulars were served on 13 October 1996, but neither party served their list of documents in accordance with the order. The first defendants served their list on 28 January 1998, and on 18 February issued a summons for an "unless" order.

On 25 February by consent it was ordered that:

Unless the plaintiffs serve a list of documents setting out in proper form all relevant documents that are or have been in their possession custody or power by 4pm on 4 March 1998 [the action] against the first defendants be dismissed.

The plaintiffs served their list within the time specified, but the first defendants applied, inter alia, for an order that the actions be dismissed by reason of the plaintiffs' failure to comply with the "unless" order. The judge concluded that the plaintiffs' discovery was "still woefully inadequate", that the list served by them contained "obvious and substantial" lacunae, and that there was no reason why, in the exercise of his discretion, the sanction set out in the "unless" order should not be applied.

The plaintiffs appealed, contending, inter alia, that the judge had erred in law in rejecting their submission that, on its proper construction, the "unless" order had been complied with when a list of documents, which was not either a colourable evasion or a sham, was served by the due date; and that he should have held that allegations of incompleteness in the list, which might have founded an application for specific discovery, could not found an application to strike out for non-compliance with the "unless" order; and further that he had effectively reversed the burden of proof by requiring the plaintiffs to prove that they had complied with the "unless" order by providing a complete list of documents.

Nicholas Elliott QC (Taylor Joynson Garrett) for the plaintiffs; Barbara Dohmann QC and Stuart Catchpole (Rowe & Maw) for the first defendants.

Mr Justice Tuckey said that the first defendants had not sought an order for specific discovery, but had instead invited the judge to embark on a wide-ranging critique of the list served by the plaintiffs and to conclude that it did not comply with the "unless" order.

The judge should not have accepted that invitation. The "unless" order had required service of a list. The list had been served and it had not been suggested to the judge that that had been done otherwise than in good faith.

On the appeal the first defendants had said that the list served by the plaintiffs was not a proper list, seeking to equate it with one served otherwise than in good faith. Applying the language of Reiss v Woolf [1952] 2 all ER 3, however, the list served by the plaintiffs could fairly be described as a list, even if a further application for specific discovery requiring further documents could be made.

The judge had, therefore, adopted the wrong approach in dismissing the plaintiff's claim. Had he approached the matter correctly, he would have decided that the plaintiffs had complied with the "unless" order. Instead, he had embarked on a protracted exercise to show that they had not complied with the requirement for discovery.