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A very helpful application of the Denton principles to unless orders. A trial had been fixed. Listing questionnaires were due. The defendant did not comply. An unless order was made.

Jackson L.J takes up the story:

“The unless order arrived at [the solcitors’] office on Thursday 13th February 2014. Any order in those terms should galvanise solicitors into action, especially in early 2014 when the Court of Appeal’s decision in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537; [2014] 1 WLR 795 was the subject of widespread discussion. BB unfortunately were not galvanised into action. They failed to comply with the unless order.
On 18th February 2014 a trainee solicitor at BB filed a directions questionnaire at the Oxford County Court. This document had no relevance to the action which was approaching trial.
On 19th February 2014 the unless order became operative. The defendant’s defence was automatically struck out. The defendant’s copy of the unless order was subsequently lost. No copy survives on BB’s file. ” [paras 15-17].

The background was that the family of the solicitor dealing with the case was facing health issues so that the solicitor was often out of the office.
Just over a month went by before the Defendant applied for relief from sanctions. It did not apply for relief from sanctions.
The Court in Denton had said at paragraph [27] that you should not look a previous non-compliance when considering whether the breach was serious or significant. But what about the non-compliance that led to the unless order being imposed in the first place.

Jackson L.J. said,

“36. In relation to this issue, the crucial passage in the authorities is paragraph 27 of Denton. In that paragraph the Master of the Rolls and Vos LJ (“the majority”) said:

“The assessment of the seriousness or significance of the breach should not, initially at least, involve a consideration of other unrelated failures that may have occurred in the past. At the first stage, the court should concentrate on an assessment of the seriousness and significance of the very breach in respect of which relief from sanctions is sought. We accept that the court may wish to take into account, as one of the relevant circumstances of the case, the defaulter’s previous conduct in the litigation (for example, if the breach is the latest in a series of failures to comply with orders concerning, say, the service of witness statements). We consider that this is better done at the third stage (see para 36 below) rather than as part of the assessment of seriousness or significance of the breach.”

37. In my view the reference in the first sentence of that paragraph to “unrelated failures” is a reference to earlier breaches of rules or orders which the applicant has committed during the course of the litigation… At stage 1 the court must ignore X’s historic breaches and assess the breach in respect of which X is seeking relief.
38. An “unless” order, however, does not stand on its own. The court usually only makes an unless order against a party which is already in breach. The unless order gives that party additional time for compliance with the original obligation and specifies an automatic sanction in default of compliance. It is not possible to look at an unless order in isolation. A party who fails to comply with an unless order is normally in breach of an original order or rule as well as the unless order.
39. In order to assess the seriousness and significance of a breach of an unless order, it is necessary also to look at the underlying breach. The court must look at what X failed to do in the first place, when assessing X’s failure to take advantage of the second chance which he was given.
40. In my view the phrase “the very breach” in paragraph 27 of Denton, when applied to an unless order, means this: the failure to carry out the obligation which was (a) imposed by the original order or rule and (b) extended by the unless order.
41. The very fact that X has failed to comply with an unless order (as opposed to an ‘ordinary’ order) is undoubtedly a pointer towards seriousness and significance. This is for two reasons. First, X is in breach of two successive obligations to do the same thing. Secondly, the court has underlined the importance of doing that thing by specifying an automatic sanction in default (in this case the Draconian sanction of strike out).
42. On the other hand, as Mr Weston rightly says, not every breach of an unless order is serious or significant. In [the case of] Utilise the claimant was just 45 minutes late in complying with an unless order. He filed his budget by 4.45 p.m., rather than 4 p.m. when it was due. The Court of Appeal held that a delay of only 45 minutes in compliance was “trivial”. The court also noted that, contrary to the district judge’s view, there was no underlying breach of the rules onto which the unless order was attached.
43. [The Defendant by its solicitors] had three months to comply with the 1st November order. They did not do so. They filed their PTC 18 days late by reference to that order. [The solicitors] received the unless order on 13th February (not 17th February as Judge Harris was led to believe). They had six days in which to comply with the unless order. They failed to do so. The document which they filed on 18th February was not a PTC. Furthermore its contents bore no sensible relationship to the current litigation. It proposed that all sorts of steps should be taken long after the fixed trial date.”

It followed that the breach was serious and significant.

Jackson LJ was equally unsympathetic when dealing with Denton Stage 3,

“54. The court stated in paragraph 36 of Denton that the promptness of the application is a relevant circumstance to be considered. The importance of applying promptly for relief is stressed in the earlier authorities…
55. Let me now turn to the present case. It the defendant had made an immediate application for relief at the same time as filing its PTC, or very soon after, I would have been strongly inclined to grant relief from the sanction of striking out. To debar a party from defending a £200,000 claim because it was somewhat late in filing a PTC is not in my view required by rule 3.9, even as interpreted by the majority in Denton.
56. As at 21st February the late filing of the listing questionnaire had not had any adverse impact on the smooth conduct of the action. The moderately late filing of a PTC is not like the late service of evidence or the late disclosure of documents. It does not disrupt the work schedule of any other party to the action. The PTC is needed for administrative reasons, except in those cases where the court dispenses with that procedural step. The late provision of the PTC in this case did not have any adverse effect on the administrative processes of the Oxford County Court.
57. If, therefore, the defendant had promptly applied for relief from the sanction, in my view this is a case where one of two things would have happened. The claimant may (and should) have consented to the application. Alternatively, the court would have acceded to the application when applying stage 3 of the Denton test.
58. Unfortunately the defendant did not make a prompt application for relief pursuant to rule 3.9.”

Jackson went on to set out the unfortunate history of the case again concluding,

“60. [The Defendant finally] issued an application for relief from the sanction pursuant to rule 3.9. By then, unfortunately, the trial date had been lost. If the court had granted relief at that late stage, it would have needed to fix a new trial date some time after the original trial window. The serious consequences of losing a trial date are discussed in Denton at paragraph 89.
61. In my view the defendant’s lack of promptness in applying for relief is the critical factor. When that delay is added to all the other factors, it can be seen that the defendant’s default has substantially disrupted the progress of the action. Bearing in mind factors (a) and (b) in rule 3.9 (which under Denton must be given particular weight) there is really only one answer to the question which arises at stage 3. The court must refuse the application for relief.”

Comment

The critical factors here were the delay in making the application for relief coupled with the loss of a trial date. The importance in the case lies in its application of the Denton rule to unless orders in a way that allows proximate default to be taken into account.

For subsequent cases see here and here.

Edited for ease of reading.

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