Churchill v Merthyr Tydfil [2023] EWCA Civ 1416Churchill v Merthyr Tydfil

Churchill v Merthyr Tydfil [2023] EWCA Civ 1416Churchill v Merthyr Tydfil

Date Posted: December 11, 2023

Xanthopoulos v Rakshina [2022 Court of Appeal, 29 November 2023, Lady Carr LCJ, Sir Geoffrey Vos MR and Birss LJ] EWFC 30

EWFC 30

The claimant bought a property adjacent to land owned by the council. In 2020, he wrote to the council concerning his intention to bring a civil claim against the council, related to damage that he claimed had been caused by Japanese knotweed originating on council property. The council responded to the initial letter of claim stating that the claimant should have made use of its corporate complaints procedure and that if the case went to court, it would seek a stay to enable that complaints procedure to be used. Despite this, the claimant issued proceedings in nuisance against the council in July 2021. In February 2022, the council issued its stay application. However, this was dismissed by a deputy district judge in May 2022, on the basis that, although the claimant had behaved unreasonably by failing to engage with the council’s complaints procedure, which was conduct contrary to the spirit and the letter of the relevant pre-action protocol, the court was bound to follow the following statement in Halsey v General NHS Trust [2004] EWCA Civ 576:

to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court“.

The council appealed to the Court of Appeal. The key questions on appeal were: whether a court could lawfully order the parties to court proceedings to engage in a non-court-based dispute resolution process, and, if so, in what circumstances it should do so. A question also arose as to whether, and in what way, the nature of the non-court-based dispute resolution process should be taken into account by the court, bearing in mind that the kind of non-court-based dispute resolution in issue in this case was an internal complaints procedure operated by a local authority, to which the claimant was not contractually bound. . The Bar Council submitted that the following factors were relevant if a court was considering whether to require parties to engage in a non-court based dispute resolution process: (i) the form of alternative dispute resolution being considered, (ii) whether the parties were legally advised or represented, (iii) whether alternative dispute resolution was likely to be effective or appropriate without such advice or representation, (iv) whether it was made clear to the parties that, if they did not settle, they were free to pursue their claim or defence, (v) the urgency of the case and the reasonableness of the delay caused by alternative dispute resolution, (vi) whether that delay would vitiate the claim or give rise to or exacerbate any limitation issue, (vii) the costs of alternative dispute resolution, both in absolute terms, and relative to the parties’ resources and the value of the claim, (viii) whether there was any realistic prospect of the claim being resolved through alternative dispute resolution, (ix) whether there was a significant imbalance in the parties’ levels of resource, bargaining power, or sophistication, (x) the reasons given by a party for not wishing to mediate: for example, if there had already been a recent unsuccessful attempt at alternative dispute resolution, and (xi) the reasonableness and proportionality of the sanction, in the event that a party declined alternative dispute resolution in the face of an order of the court.

The Court of Appeal allowed the council’s appeal in part.

The statement “to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court” was not part of the essential reasoning in Halsey v General NHS Trust [2004] EWCA Civ 576 and therefore had not bound the judge to dismiss the council’s application for the stay of these proceedings. Moreover, this court would not go so far. Experience had shown that it was extremely beneficial for the parties to disputes to be able to settle their differences cheaply and quickly. Even with initially unwilling parties, mediation could often be successful. Mediation, early neutral evaluation and other means of non-court-based dispute resolution were, in general terms, cheaper and quicker than court-based solutions. Whether the court should order or facilitate any particular method of non-court-based dispute resolution in a particular case was a matter of the court’s discretion, to which many factors would be relevant.

The court could lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process, provided that the order made did not impair the very essence of the claimant’s right to proceed to a judicial hearing, and was proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost. The court could stay proceedings for negotiation between the parties, mediation, early neutral evaluation or any other process that had a prospect of allowing the parties to resolve their dispute.

The court declined to lay down fixed principles as to what would be relevant to determining questions concerning a stay of proceedings or an order that the parties were to engage in a non-court-based dispute resolution process. It would be undesirable to provide a checklist or a score sheet for judges to operate. They would be well qualified to decide whether a particular process was or was not likely or appropriate for the purpose of achieving the important objective of bringing about a fair, speedy and cost-effective solution to the dispute and the proceedings, in accordance with the overriding objective. The merits and demerits of the process suggested would need to be considered by the court in each case. As well as the nature of the process contemplated, many of the factors mentioned by the Bar Council in their submissions would be relevant, as would other circumstances.

However, the court declined to make any order for a stay of these proceedings at this stage. In the circumstances, whilst it was obvious that the judge would have stayed the claim back in May 2022, had he been able to see this judgment, things had moved on since then. The claimant had now refused to allow the council to treat the knotweed in his garden, standing on his right to seek compensation and costs from the court. There were other relevant issues. Whilst the stay had been sought after the issue of legal proceedings, the council’s internal complaints procedure was plainly intended to operate before proceedings had been issued and seemed, predominantly at least, to envisage a complaint about the council’s services to council tax payers, as opposed to private law claims against the council as a neighbour. Also, whilst the council submitted that its internal complaints procedure was crucial, because the total value of all knotweed claims brought by adjoining owners against the council was very high indeed, it might not be the most appropriate process for an entrenched dispute of this kind. Nothing would be gained if a 1-month stay were granted and this court could not properly grant a mandatory injunction against the claimant requiring him to allow the council to treat his knotweed. It was better to allow the appeal to the extent already stated and to allow the merits and demerits of this particular internal complaints procedure to be resolved on another occasion.

The court’s provisional view was that: (i) there should be no order as to costs of this appeal as between the parties to the proceedings, and (ii) the parties ought to consider whether they could agree to a temporary stay for mediation or some other form of non-court-based adjudication.

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