27 March 2014Print This Post

Relief from sanctions application is not a “free ride” for other side to oppose, judge warns

Time is money: opposition to application wasted court time

Parties opposing applications for relief from sanctions should not assume that they are going to get a “free costs ride” in opposing them, a High Court judge has warned.

Mr Justice Hamblen said that the guidance in Mitchell aimed to avoid endless satellite litigation, but “if parties consider that they can always come to court to oppose any application for relief, then there will be no end to that satellite litigation”.

He was dealing with the costs of the application for relief in Lakatamia Shipping Co Ltd v Su, which in February he granted on the basis that the breach in issue – essentially a 15-minute delay in the provision of disclosure – was trivial.

The claimant nonetheless submitted that the defendant should pay all of the costs of the application because they flowed from its original default. The defendant argued that it should be paid the bulk of its costs because it succeeded and the claimant’s conduct in opposing the application was unreasonable.

The judge found that the bulk of the costs incurred related to “the hard-fought half-day hearing”, and noted that the claimant’s position was “one of positive opposition”.

Hamblen J said: “In my judgment, the hard-fought contested hearing should not have been necessary because, once the factual materials were fully set out, this was a clear case for relief in accordance with the guidance given in the Mitchell case. This was, on any view, a trivial breach…

“I take the view that the opposition at the hearing was unreasonable in all the circumstances and that that was the cause of the substantial costs of the hearing, and in those circumstances, in the exercise of my discretion, the bulk of the costs relating to the hearing should be paid by the claimant.”

The judge rejected the submission that in any case where the other party is seeking relief from sanctions, the so-called ‘innocent’ party is entitled to come before the court and oppose it.

“The CPR is quite clear that parties should conduct litigation in a reasonable and realistic manner… In my judgment, in vigorously opposing this application at a hearing, the claimant failed to do so.”

He added: “I also consider that it is important that the message goes out that when a party applies for relief from sanctions, the other party should not assume that it is going to get a free costs ride in opposing that application.

“If the court considers that it was unreasonable to do so, then there will be cost consequences, and I consider that that is what should occur in this case. The Mitchell guidance was provided in order to help to avoid endless satellite litigation.”

By Neil Rose

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