Budget filed one day late: a trivial and insignificant breach

The case of Wain v Gloucestershire County Council & Ors [2014] offers a glimmer of hope for those of us fearfully monitoring the budgeting landscape in the wake of the much-cited Mitchell decision. Somewhat unusually, the judge in this matter took a more sensible approach and granted relief from sanctions for a budget that was filed one day late. This is a stark contrast to the earlier decision in Burt v Linford Christie [2014] in which DJ Lumb ruled that the filing of a budget a day late was a serious enough breach – perhaps not helped by the fact that due to it being a weekend, the budget was not received until the Monday, having been due the previous Thursday.

Briefly, the facts of Wain are that the fourth Defendant filed their budget one day late: six days before the first CMC, instead of the requisite seven days. The Claimant applied to have the fourth Defendant suffer the consequences set out in CPR 3.14, namely that the fourth Defendant would effectively have filed a budget comprising only of the applicable court fees, seeking to rely on the Mitchell decision. The Claimant submitted that the fourth Defendant had provided no good reason for the late filing, and that the breach was not ‘trivial’.

The fourth Defendant had not made an application for relief from sanctions, and submitted that no one on behalf of the fourth Defendant had appreciated that they were in breach until they received notification from the Claimant that they intended to highlight the error to the Court. The fourth Defendant proceeded to make an oral application for relief.

His Honour Judge Grant, sitting as a High Court Judge, in determining that the breach was trivial referred to a paper delivered by Lord Justice Jackson at a recent conference on 21st March 2014 by the Civil Justice Council on the impact of the Jackson reforms. At paragraph 3.9 of that paper, Jackson LJ, referring to the decision in Mitchell, wrote:

Nevertheless parties should not be allowed to exploit trivial or insignificant breaches by their opponents, as Leggatt J stated in Summit Navigation Ltd & Other v General Romania Asigurare Reasigurare SA [2014] EWHC 398 (Comm).

HHJ Grant gave his reasons for finding the beach trivial as:

  • The one day delay being in the context of a seven day period, comparing it ti the three day period for the service of a standard application notice before its hearing;
  • The Claimant themselves admitting that they had not been prejudiced by the delay;
  • The fact that the costs hearing was able to go ahead on the day as planned notwithstanding the delay, and no disruption had been caused to the Court’s timetable; and
  • By reference to the Master of the Rolls’ judgment in Mitchell itself in the Court of Appeal: “…the Court will usually grant relief if there has been no more than an insignificant failure to comply with the order: for example…  where the party has narrowly missed the deadline imposed by the order, but has otherwise fully complied with its terms.”

HHJ Grant therefore decided the non-compliance or breach was “trivial and/or insignificant and/or inconsequential”, and commented that he had observed that experienced and competent practitioners were able to deal with the process of costs management at the first CMC/costs management hearing where one party or more had filed their costs budget late by a day or even more. However the Judge did stress that context was key, and that applications are likely to be decided on a case-by-case basis, with reference and consideration to the particular facts of each case, as well as the disruption caused to the Court.

The fourth Defendant was therefore permitted to rely on her costs budget as served, with the common sense approach taken by the Judge providing some relief to those fearful of the post-Mitchell legal landscape.