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Counterclaim struck out but allowed to stand as a Defence

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In the recent case of Cockell v Holton (No 2) [2015] EWHC 1117 (TCC), which was a claim arising out of works to a listed building following a fire, the Judge refused to grant the Defendant permission to pursue a significant Counterclaim, but allowed him to amend his Defence to include the allegations contained in that Counterclaim.

The contractor Claimant, Mr Cockell, issued proceedings in relation to allegedly underpaid building costs, in the sum of approximately £240,000. Mr Holton served a Counterclaim in response, which made some very general and poorly particularised allegations of bad workmanship and unsuitable materials, in the rather larger sum of £1.6 million. Mr Holton was then directed by the Court to file and serve a properly particularised Counterclaim by a certain date, which he failed to do, despite chasers from Mr Cockell’s solicitors. Mr Cockell applied for, and was granted, an “Unless Order”, pursuant to which Mr Holton’s Defence and Counterclaim would automatically be struck out if it was not filed and served by 20 March 2015.

Unfortunately for Mr Holton, his solicitors mistyped the Court’s email address when attempting to serve his Amended Defence and Counterclaim on 20 March 2015, the last date for compliance with the Unless Order. The claim was therefore automatically struck out – in itself a lesson in not leaving it to the last moment to file or serve important documents.

On 25 March 2015 Mr Holton applied for relief from sanctions, asking to be allowed to rely on the Amended Defence and Counterclaim. If the mistyped email address had been the only relevant incident, the application would most probably have succeeded. However it was not, but more fundamentally the Judge took the view that the Counterclaim still fell well short of the required level of particularisation – in other words it was still far too general.

The Judge characterised the detail of the alleged defects set out in the Counterclaim as, for example, “objectionable for lack of clarity”, “almost meaningless”, and “unclear”. He therefore concluded that Mr Holton’s failure to file the Amended Counterclaim was not trivial or technical, but “serious and significant”. With a trial listed for mid July, the Judge took the view that the Claimant, Mr Cockell, would be “irretrievably prejudiced” if he had to respond to the Counterclaim, and said that Mr Holton (and his insurers) had no-one to blame but themselves.

However the Judge went on to draw a distinction between Mr Holton’s Counterclaim and his Defence, and said that Mr Cockell’s claim for payment could not be fairly determined without an examination of the allegations of defective work. He therefore gave Mr Holton permission to amend his Defence to rely on certain of the allegations contained in the Counterclaim.

This case serves as a reminder of the importance of complying with Court Orders, but with a twist. The Judge’s conclusion was an interesting and practical solution, which appears to strike a sensible balance between strict compliance with the rules and the need to do justice as between the parties.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact. Information correct as at 15 May 2015