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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Fred Perry (Holdings) Ltd v Brands Plaza Trading Ltd & Anor [2012] EWCA Civ 224 (01 February 2012) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2012/224.html Cite as: [2012] 6 Costs LR 1007, [2012] FSR 28, [2012] EWCA Civ 224

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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE MANN)

		Royal Courts of Justice Strand, London, WC2A 2LL
		1st February 2012

Lord Justice Lewison:

1. Fred Perry Holdings Limited is a well-known manufacturer of sportswear, which has substantial reputation and goodwill. It is the proprietor of a number of registered trademarks connected with its products. It sued Brands Plaza Trading Limited and Mr Ivan Genis for infringement of trademarks and for passing off.
2. The essential allegation was that Mr Genis as sole trader and, after the incorporation of his business, Brands Plaza had been dealing in counterfeit Fred Perry sportswear although there might have been some parallel imports as well.
3. In the course of the proceedings Brands Plaza and Mr Genis failed to comply with an unless order. The effect of the non-compliance was that their defences were automatically struck out and judgment for Fred Perry with costs entered against them. Mann J dismissed an application for relief against sanctions under CPR 3.9. This is an appeal against his decision brought with the permission of the Master of the Rolls.
4. The procedural chronology is as follows. Fred Perry served its proceedings on the two defendants on 14 January 2010, although at that time Mr Genis was joined not as sole trader but as an alleged joint tortfeasor with Brands Plaza. In breach of the CPR the defendants failed to acknowledge service in time, so Fred Perry applied for judgment in default of Acknowledgement of Service in February 2010. The defendant staved off that application by serving a defence on the morning of the hearing.
5. On 14 April 2010 Arnold J made an order by consent. That order amongst other things required Mr Genis to inform Fred Perry by 20 April 2010 which of two defences he was relying on and required both defendants to serve a statement of costs in accordance with the practice direction by the same date.
6. The defendants failed to comply with that order and on 21 June 2010, sitting at first instance, I made a further order requiring compliance with those parts of Arnold J's order by 28 June 2010. In addition the defendants had failed to comply with an order for disclosure made by Master Teverson and I also ordered them to make standard disclosure by 12 July 2010.
7. The defendants then failed to comply with my order and Fred Perry applied for a further order, which was made by consent by Master Pia on 9 August 2010. That order was an unless order, which had the effect that failure to comply would result in the defendant's defences being automatically struck out and judgment entered for Fred Perry.
8. The defendants still failed to comply with the order for disclosure. That resulted in the application to Henderson J for a further unless order, which he made on 26 November 2010. That order required the defendants to search electronic documents by reference to certain key words and to make disclosure of documents revealed by that search by 20 December 2010. They were also required to give specific disclosure of certain documents specified in the order. Those parts of the order were also subject to an unless order, which had the effect that failure to comply would result in the defendant's defences being automatically struck out and judgment entered for Fred Perry with costs.
9. 20 December came and went and still the defendants failed to comply, nor did they appeal against Henderson J's order or apply for an extension of time or for relief against the sanctions. Accordingly, on 20 December 2010, the defendant's defences were automatically struck out and judgment entered for the claimants with costs. But although Henderson J's order said that if the defences were struck out judgment would be entered to Fred Perry, that could not be done administratively because Fred Perry were claiming injunctions and other non-monetary relief. So Fred Perry issued an application for judgment in default of defence. That application was issued and served on the 11 February 2011 and was listed for hearing on 2 March 2011.
10. In the evidence which was filed in support of the application witness statements were made by both Mr Andrew Stone, Fred Perry's solicitor, and also by Mr Ichinose, the assistant to Fred Perry's directors.
11. In the course of his statement Mr Stone set out a number of respects in which Fred Perry alleged that the defendants had failed to comply with the orders for disclosure. In his witness statement Mr Ichinose said that Fred Perry had obtained through its own investigation a number of invoices created by the defendants evidencing further dealings in purported Fred Perry garments which the defendants had failed to disclose. He went on to say that Fred Perry were continuing to discover, through its own anti-counterfeiting procedures and investigations, further invoices relating to sales of purported Fred Perry garments by the defendants which they had failed to disclose in the proceedings. Those were the allegations contained in the evidence that were before the judge.
12. In the intervening period between the issue and service of the application and the eve of the hearing the defendants took no step to apply for relief against sanctions. It was only on the day before the hearing, on 1 March 2011, that the defendants served an affidavit sworn by Mr Genis. It had been drafted with the help of his solicitor, Mr Fenton. In that affidavit Mr Genis asked for relief against sanctions. He acknowledged that he had been in breach of court orders in the past. He said that although he had previously been ordered to pay costs in the sum of £10,000 he was unable to pay because of cash flow issues. He said that the failure to comply with the unless order was not intentional and explained, in effect, that the defendants had run out of money and asserted that the defendants had a genuine defence. He said that the case had been a nightmare for him and that he had been struggling to cope with running his business and dealing with the litigation at the same time. He said that to deny the case an opportunity for full trial would be against the interests of justice. He accepted that there had been an impact on Fred Perry but suggested that an appropriate sanction would be a costs order made against the defendants.
13. CPR 3.9 provides:

"(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order the court will consider all the circumstances including –

(a) the interests of the administration of justice;

(b) whether the application for relief has been made promptly;

(c) whether the failure to comply was intentional;

(d) whether there is a good explanation for the failure;

(e) the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant preaction protocol^(GL);

(f) whether the failure to comply was caused by the party or his legal representative;

(g) whether the trial date or the likely trial date can still be met if relief is granted;

(h) the effect which the failure to comply had on each party; and

(i) the effect which the granting of relief would have on each party.

(2) An application for relief must be supported by evidence."

14. It is obvious that the power to grant relief against sanctions is a discretionary power. It is equally obvious that the discretion is that of the first instance judge and not that of the appellate court. An appellate court can only interfere with the discretion of the first instance judge if he has made an error of principle or if he is plainly wrong.
15. In his report on costs in civil litigation Jackson LJ discussed case management decisions in one section of his report. He said in paragraph 6.5 of the relevant section that:

"...courts at all levels have become too tolerant of delays and non-compliance with orders. In so doing they have lost sight of the damage which the culture of delay and non-compliance is inflicting on the civil justice system. The balance therefore needs to be redressed."

16. In paragraph 7.2 of the same section he put forward the view that he regarded it as vital that the Court of Appeal supports first instance judges who make robust but fair case management decisions. I agree with both those points.
17. In Woodhouse v Consignia Plc [2002] EWCA Civ 275; [2002] 1 WLR 2558 Brooke LJ set out the approach which should be adopted in cases concerning CPR 3.9. He pointed out that the rule was a good example of the way in which the draftsman of the rules had tried to collect in one place the various matters which the court will normally take into account when deciding to exercise its discretion. He went on to say in paragraph 33:

"The circumstances in which a court may be asked to make a decision of this kind are infinitely varied. This is why the rule instructs the court to consider all the circumstances of the particular case, including the nine listed items. On the other hand, the rule would lose much of its praiseworthy purpose of encouraging structured decision-making if courts did not consciously go through the exercise of considering all the items on the list when determining how, on balance, it should exercise its discretion. Provided it does so, and in this way ensures that the risk of omitting any material consideration is minimised, it is most unlikely that an appeal court will interfere with its decision. If it fails to do so, an appeal court may not be able to detect that it has taken all material matters into account, and it may be obliged to exercise its discretion afresh for this reason."

18. It cannot be stressed too strongly, however, that a decision whether or not to grant relief against sanctions is an exercise of discretion. That is not a question of ticking boxes or adding up the score of each party under the various paragraphs, in some cases some of the factors will have greater weight than others and in some cases some of the factors will not apply at all.
19. Mr Genis's affidavit in support of his application for relief against sanctions did not deal systematically with the factors listed in CPR 3.9. However, in the course of the hearing, Mann J caused Mr Genis, who was by now appearing in person representing both himself and Brands Plaza, to be provided with a copy of the rule; and he took Mr Genis through the rule paragraph by paragraph, inviting Mr Genis to make submissions on each one. Those submissions in fact went beyond mere submissions but included factual material and explanations on which Mr Genis wanted to rely but which, in breach of CPR 3.9(2), had not been put in evidence. Thus the judge gave Mr Genis much more latitude than would have been given to a legally represented party.
20. Having heard submissions from both parties the judge faithfully followed the guidance in Woodhouse v Consignia and in his judgment went through the paragraphs of Rule 3.9 one by one. To summarise his conclusions.

Paragraph (a): The administration of justice generally requires the parties comply with court orders. This factor is even more weighty when the order in question is an unless order. The interests of the administration of justice would also involve the question whether the trial date could still be met.

Paragraph (b): The application for relief against sanctions had not been made promptly. It was triggered by Fred Perry's application for judgment in default and even then was made at the very last minute.

Paragraph (c): The failure to comply was intentional, not in the sense of being a flagrant and deliberate flouting of the court order but in the sense that the failure to comply was the inevitable result of a deliberate course of action.

Paragraph (d): There was no good explanation for the failure to comply. Although a lack of funds might be an explanation it was not a good one, particularly since there had been no real attempt to comply with the order.

Paragraph (e): There was a history of non-compliance with court orders. The defendant's track record was a bad one. The failure to comply with the unless order fitted into a pattern of previous failures to comply with court orders and time limits contained in the rules.

Paragraph (f): The failure to comply was not caused by the defendant's legal representatives. It was caused by the defendants themselves.

Paragraph (g): The trial date, which was some three weeks away, could not be met. The effect of the grant of relief would mean that resolution of the dispute would be postponed for many months.

Paragraph (h): The effect on the defendants of failure to comply was that they had de facto exonerated themselves from the work they should have done. The effect on Fred Perry was that it had not had the disclosure for which it was entitled and thus had a serious adverse effect on its ability to pursue its claims.

Paragraph (i): The effect on the defendants of the grant of relief would allow the defendants to contest liability despite their past failures to comply. The effect on Fred Perry would be to wait seven or eight months longer than it ought to have waited for its trial

21. Having gone through these factors the judge then considered them in the round. He said that all the factors came down in the scales against the relief of sanctions. He then took into account all the circumstances including what Mr Genis had told him in the course of the hearing and decided that the balance was firmly against the grant of relief against sanctions.
22. What, one may ask, is wrong with that?
23. Mr Genis and Brands Plaza have sought to put in fresh evidence in support of the appeal. It is agreed that whether that fresh evidence is to be admitted must be decided according to the guidelines in Ladd v Marshall, which still apply to the CPR. The first criterion is whether the evidence could have been available at the hearing below. In my judgment it plainly could have been. All the evidence relates to material which could and should have been before the judge and which seeks to answer in part the complaints about failures to disclose made in Fred Perry's evidence which was before the judge and in part to explain the attempts to comply with the order and the consequences of the refusal of relief against sanctions. In my judgment that evidence fails at the first hurdle. I might also add that it was served on the very eve of this appeal despite the fact that the appeal has been on foot for many months. It is, yet again, an example of the defendant's taking action at the very last minute. I would refuse to allow the new evidence to be adduced on this appeal.
24. Mr Engelmann, appearing with Mr Considine for the defendants, says that the judge was wrong in his approach to the interest of the administration of justice under paragraph (a). They point out that, in his affidavit, Mr Genis said that to deny the opportunity for a full trial would be against the interests of justice and that a strike-out is a particularly draconian sanction. However, there is no reason to suppose that Henderson J was unaware of the seriousness of the sanction when he imposed it. The seriousness of the sanction is a matter that is to be taken into account in imposing the sanction in the first place. If there were any legitimate complaint about the seriousness of the sanction, the proper course would have been to appeal against Henderson J's order. That was not done. Moreover, in any event, the order of Henderson J was the second unless order made against the defendants, the first having been made by consent in August 2001. Third, this court has stressed on more than one occasion that compliance with court orders is a fundamental part of the interests of the administration of justice. This point was made with characteristic thoroughness by Arden LJ in Stolzenberg v CIBC Mellon Trust Co Limited [2004] EWCA Civ 827 in paragraphs 163 to 168.
25. There was a complaint that Fred Perry had not complied with its own disclosure obligations, but in the first place that was a contested allegation and secondly, even if it were true, there is no suggestion that that was causative of the defendant's own failure to comply with the unless order.
26. It is then said that the judge was not entitled to reach the conclusion that he did under paragraph (h), namely the effect of failure to comply. The point is made that the judge was not entitled to conclude that the effect on Fred Perry had a serious adverse effect. In effect, what Mr Engelmann submits is that, since the trial was to be a split trial dealing with matters of liability only, the failure to disclose the documents required by Henderson J's order would only have a limited impact on the liability trial and that, in practice, sufficient disclosure had been given. That flies in the face of the evidence adduced on the part of Fred Perry they had been coming across invoices dealing with liability which the defendants had failed to disclose and which even now the evidence of Mr Genis does not deal with. Moreover Miss Edwards-Stuart submitted in her written skeleton, and I agree, that this is a collateral attack on the unless order itself. No doubt disclosure could have been limited in the way that Mr Engelman submits, but the fact is that it was not. In addition this is not a point which was taken before the judge and was not supported by any evidence before him.
27. Mr Engelmann then complains that the judge did not explicitly consider whether a fair trial was still possible. That, in my judgment, entirely misunderstands the nature of this application. The unless order made by Henderson J was made because, without the required disclosure, he must have considered that a fair trial was not possible. That was the whole raison d'etre of the unless order. Moreover Mr Genis's affidavit gave no indication that the order would ever be complied with, let alone a timetable for compliance. In the course of the oral hearing, according to the transcript, Mr Genis accepted, in answer to questions from the judge, that he had not complied with the order and had not taken the steps that he had been required to take. Thus, in my judgment, Mr Engelman's reliance on Taylor v Anderson [2002] EWCA Civ 1680 is misplaced. The court was there considering whether a claim should be struck out, but in this case the defence had already been struck out as a result of the operation of the unless order. Consideration of the question whether there can be a fair trial as result of non-compliance of an order bears on the question what sanction should the court impose in the first place. This submission, too, is a collateral attack on the unless order.
28. Mr Engelmann submits that the judge did not grapple with the merits of the defence. To recap a little, Fred Perry's case was that this was a case of the sale of counterfeit goods with perhaps some element of parallel importing. The defendant's case was that the goods were genuine and had been put on the market in the EEA with Fred Perry's consent. The best that can be said is that there are disputes of fact, but if a defence has no real prospect of success then the defence is liable to be struck out anyway, whether or not there has been a breach of an order. It is only where there is an arguable defence that the sanction will have an appreciable effect. Although it is right to say that the judge can consider the merits of the case in an appropriate case, the fact that he did not does not in my judgment vitiate his approach to the question of relief against sanctions.
29. The last complaint on the details of the paragraphs is a complaint about the judge's approach to paragraph (i). It is suggested that the judge was wrong to say that the defendants had been seriously in breach of court orders in the past and had deliberately refused to comply with the order of Henderson J. However, in the light of the procedural chronology I have set out it is in my judgment indisputable that there had been wholesale breaches of court orders by the defendants from the very inception of the proceedings. Moreover unless orders, of which there had been many, are not made in cases where breaches of earlier orders are not serious. It is true that Mann J had said that the defendants had refused to comply with the order of Henderson J, but that has to be read in the light of his more detailed consideration of paragraph (c) in which he said that he failure to comply was intentional, not in the sense of being a flagrant and deliberate flouting of the court order but in the sense that failure to comply was the inevitable result of a deliberate course of action. It was in that sense that the defendants refused to comply with the unless order. This slip of the tongue, if such it was, comes nowhere near being an error of principle.
30. In his affidavit placed before the judge Mr Genis did deal with the stress that the litigation had been causing him, but he never suggested to the judge that the financial consequences for him would be disastrous. That was only revealed on the application for permission to appeal and it may well be that the Master of the Rolls paid attention to what was said in deciding to grant permission.
31. In the written material, although not pursued orally, one of the complaints about the judge was that he did not investigate fully Mr Genis's position on each of the paragraphs in Rule 3.9 and that if he had probed further he would have found out more. But that misunderstands the judge's function. He is not there to make a case for a party. He is there to adjudicate on the submissions and evidence placed before him. In fact the judge went much further than he needed to in making sure that Mr Genis said everything that he wanted to say.
32. Lastly, it is said that the judge should have considered whether an alternative sanction should have been imposed. The only alternative that was offered was a costs order, but Mr Genis's own evidence was that the reason for failure to comply with the unless order was lack of money, so a costs order would have been academic in those circumstances and would not have amounted to an effective sanction at all.
33. In addition, the defendants had failed to comply with the earlier costs order made by Henderson J. In the course of the hearing the judge did explore with Mr Genis whether the defendants had or would have access to funds to enable them to meet any costs order and he was clearly satisfied the answer was "No". In my judgment there is nothing in any of these complaints. Not only was the judge's decision well within his discretion, it was in my judgment plainly right. I would dismiss the appeal on this part of the judge's order.
34. Having refused the defendant's application for relief against sanctions, the judge went on to consider Fred Perry's application for judgment. That application fell to be decided under CPR 12.11(1), which provides:

"Where the claimant makes an application for a default judgment, judgment shall be such judgment as it appears to the court that the claimant is entitled to on his statement of case."

35. The judge granted an injunction restraining infringement of trademarks and passing off and an order for the delivery up of infringing goods. Those parts of the order are not controversial on this appeal. He then made an order for an inquiry in standard terms. That part of the order reads as follows:

"There shall be an inquiry as to damages suffered by the Claimant, alternatively and at the claimant's option, an account of the profits accruing to the Defendants by reason of the Defendants' acts of trade mark infringement and passing off ('the Inquiry'). The Inquiry shall include resolution of the issue as to the extent to which (if at all) the Second Defendant is jointly liable with the first defendant for the First Defendant's act of trading trade mark infringement and passing off "

36. The complaint made in the written material, but not I think pursued orally is that the judge should have limited the scope of the inquiry to the period following Fred Perry's letter before action because of Fred Perry's delay in bringing the claim. The relevant chronology as pleaded in the Amended Particulars of Claim shows that Mr Genis sent a sample polo shirt bearing Fred Perry's mark to Fred Perry on 13 March 2008 and that Fred Perry confirmed that it was a counterfeit. On 27 March 2009 a representative of Fred Perry made a purchase of a polo shirt at Brands Plaza's premises. It too was a counterfeit. On 20 May Haringey Trading Standards raided Brands Plaza's premises and a number of counterfeit items were seized.
37. It is important to be clear about the two alternative remedies claimed. The first is an inquiry into damages. The causes of action are infringement of registered trademarks and passing off. In the case of infringement of registered trademarks the remedy is that provided by section 14 of the Trade Marks Act 1994, section 14(2) of which provides:

"In an action for infringement all such relief by way of damages, injunctions, accounts or otherwise is available to him as is available in respect of the infringement of any other property right."

An award of damages and by parity of reasoning an inquiry into damages it is a common law remedy. It is a matter of entitlement not a question of the exercise of a discretion. As was made clear in many cases, of which in the intellectual property field Fisher v Brooker [2009] UKHL 41; [2009] 1 WLR 1764 is a recent example, the law of property is concerned with rights in things. The distinction which exists between the exercise of rights and the obtaining of discretionary remedies is a fundamental importance in any legal system. Where a person has a right of property it is for him to exercise it as he pleases. He does not need the permission of the court nor is it subject to the exercise of the court's discretion. The benefits that flow from intellectual property are a product of that concept.

38. There are of course statutory limitation periods whose object is to prevent the bringing of stale claims both for trademark infringement and passing off. The relevant limitation period is six years from the accrual of the cause of action, and subject to that, the only circumstance in which a court would be justified in limiting the period covered by an inquiry into damages is where the defendant establishes some form of defence such as an estoppel. Where, as here, there is no defence because it has been struck out, that defence cannot be run. An account of profits, on the other hand, is an equitable remedy. There may be a measure of discretion involved, as indicated by Lord Westbury Lord Chancellor in Egglestone v Egglestone [1863] 1 GJ&S S 182. He said:

"For although it is well founded in reason, and also settled by decision, that if A has acquired property in a trademark which is afterwards adopted and used by B in ignorance of A's right, A is entitled to an injunction yet he is not entitled to any account of profits or compensation except in respect of any user by B after he became aware of a prior ownership."

39. If by compensation Lord Westbury meant damages at common law I regret I cannot agree, nor am I at all sure that he is right about projects because of the proprietary element of a trademark, which is now confirmed statutorily for the first time by section 14 of the Trade Marks Act 1994.
40. But in any event, on the facts, it does not help the defendants to limit the account to a period beginning with the letter before action. On the pleaded case, Mr Genis has known since March 2008 that at least some of the goods in which he was trading were counterfeit. In addition, since the grant of the remedy of an account of profits is discretionary, the mere fact that the judge could have exercised his discretion differently does not begin to show that he should have; particularly as he was not asked to. Other points have been made about the scope of an inquiry which have not been pressed in oral submission. I can deal with them shortly.
41. It was suggested that the scope of the inquiry should be limited to the particular examples which have been given of infringement in the Particulars of Claim. However, it is clear from the pleading that the pleading indicates only those cases of infringement of which the claimants Fred Perry were aware pending disclosure and the provision of further information. There is no warrant, by reference to the pleaded case, for limiting the scope of the inquiry only to those infringements of which full particulars have been given and in any event it is quite contrary to the practice in intellectual property cases. I do not therefore consider that the judge was in error in making the order for an inquiry in the form that he did.
42. The judge then considered the application for an interim payment, which had been foreshadowed in the application notice. Mr Engelman submitted, by reference to the decision of this court in Young v Thomas [1892] 2 Ch 134, that the judge was in error in looking at material outside the pleading for the purpose of determining this application. But the application for an interim payment was a freestanding application made in circumstances where the claimant had already obtained judgment against the defendant for damages to be assessed or for a sum of money other than costs to be assessed, thereby opening the jurisdiction under CPR 25.7(1)(b). It is plain that an application for an interim payment under that rule is one which must be decided on evidence.
43. The problem, however, which arises in the present case is not that the judge failed properly to direct himself on the principles that he should apply. The problem is that the material upon which he was invited to come to a decision included a confidential schedule exhibited to Mr Ichinosy's witness statement. That confidential schedule had been offered to the defendant at a time when they were represented by solicitors on condition that undertakings as to confidentiality were provided. Those undertakings were not offered, with the consequence that the confidential schedule was not in fact served on Mr Genis or Brands Plaza. Nor, when the matter was before the judge, was an offer renewed to provide the confidential schedule to Mr Genis on the receipt there and then of suitable undertakings as to confidentiality. The result, therefore, was that the judge proceeded on the basis of material which one side had not seen. There seems to have been a measure of confusion in front of the judge and it seems to me that he was almost certainly under the impression that Mr Genis had seen the material. In the first place, understandably, Mr Stone's witness statement refers to the material as having been disclosed by Mr Ichinose. His witness statement was of course written in anticipation that the requested confidentiality undertakings would be given, but the phraseology of that witness statement, left uncorrected, would have given the judge the impression that the material had indeed been disclosed. Moreover there was some discussion about whether Mr Genis had seen the material. He told the judge that he had not and the judge was assured that the material had been served, but no particular attention was directed to the confidential schedule. The judge therefore proceeded on the false basis that Mr Genis had seen all the material that Fred Perry relied on.
44. It is, of course, a fundamental principle of our system that judges should not act upon evidence which only one side has seen. Whether or not it would have made a difference, and I am not saying that it would or it would not have done, that is such a fundamental principle of the common law that with regret I have come to the conclusion that the judge's order for interim payment cannot stand for that reason alone. It will, of course, be open to the claimant to reapply for interim payment and it will have to decide how to deal with the confidential schedule either by a renewed request for confidentiality undertakings or waiving confidentiality, or proceeding without reference to the confidential material or applying to the court for an injunction in anticipation of its disclosure to the other side, but in my judgment the order cannot stand on the basis upon which it was made.
45. The last part of the judge's order that is challenged is the order for costs. The judge ordered the defendants to pay Fred Perry's costs of the action and to make a payment on account without distinguishing between the two of them. In fact Mr Genis was adjoined in his capacity as sole trader only on 26 October 2011 and the argument is that the judge should have limited his liability for costs to the period beginning with that date. But in fact the costs order was not the one made by Mann J. It was the order made by Henderson J, which took effect automatically when the defences were struck out. Once the judge had refused to grant relief against sanctions, it was inevitable that that costs order would simply take effect, as indeed it did.
46. Accordingly I would allow the appeal in relation to the order for the interim payment but otherwise dismiss it.

Lord Justice Jackson :

47. I agree. I only wish to add a few words in relation to the defendant's application for relief from sanctions.
48. Non-compliance with the Civil Procedure Rules and orders of the court on the scale that has occurred in this case cannot possibly be tolerated. Any further grant of indulgence to the defendants in this case would be a denial of justice to the claimants and a denial of justice to other litigants whose cases await resolution by the court.
49. Mann J's applicant of Rule 3.9 to the facts of this case cannot be faulted. I should however draw attention to the forthcoming amendments to Rule 3.9. There is a concern that relief against sanctions is being granted too readily at the present time. Such a culture of delay and non-compliance is injurious to the civil justice system and to litigants generally. The Rule Committee has recently approved a proposal that the present rule 3.9(1) be deleted and the following be substituted:

"On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider the circumstances of the case, so as to enable it to deal justly with the application including the need –

(a) for litigation to be conducted efficiently and at proportionate cost; and

(b) to enforce compliance with rules, practice directions and court orders."

50. It is currently anticipated that this revised rule will come into force on 1 April 2013. After that date litigants who substantially disregard court orders or the requirements of the Civil Procedure Rules will receive significantly less indulgence than hitherto. As I say, that rule amendment lies in the future. In the present case, on the rules as they stand, relief from sanction must be refused.

Lord Justice Maurice Kay :

51. I agree with both judgments.

Order: Appeal allowed in part