British Gas Trading Limited (represented by Moon Beever) succeeded in its appeal against Oak Cash & Carry Limited having been granted relief from the sanction of its defence being struck strike following Oak’s failure to comply with an ‘unless’ order to file a Listing Questionnaire.
Oak failed to file comply with an order to file a Listing Questionnaire by 3 February 2014. By an ‘unless’ order the deadline was extended to 19 February 2014 with the sanction of strike out. A two-day trial had been listed commencing on 30 April 2104. On 18 February Oak’s solicitors filed a directions questionnaire, a different version of which had already been filed, rather than a listing questionnaire. On 20 February it was made aware of the error and filed its listing questionnaire two days beyond the deadline.
Since no application for relief from sanction had been filed and the defence had been struck out without further order at the time of breach, British Gas requested judgment in default, giving notice of the application to Oak. Oak’s solicitors wrote to the court apologising for the mistake and simply asking the court not to grant the sanction requested by the Claimant.
No application for relief was filed by Oak until 21 March, shortly after judgment being granted to British Gas in the sum of £211,388.61, a delay of some five weeks. Evidence filed in support of the application explained that the solicitor with conduct of the litigation for Oak had been absent from the office for personal reasons and had delegated the task of filing the Listing Questionnaire to a trainee solicitor. No application was made to set the judgment aside.
On 15 April 2014 His Honour Judge Harris QC sitting at Oxford County Court granted relief from sanction, reinstated the claim and set aside the default judgment. The listing of the final hearing, by then only two weeks hence, was vacated.
British Gas appealed on the grounds that the judge had misapplied CPR 3.9 and that that he made an error in setting aside the default judgment not withstanding there was no application to do so and no evidence in support.
The Appeal Judgment
Mrs Justice McGowan noted that the application had been heard by the lower court between the handing down of the judgment in Mitchell and the subsequent handing down of judgment in Denton. Having cited the CPR Overriding Objective and rule 3.9 McGowan J noted that Mitchell restated the position in a way that makes it clear that there is to be greater penalty or sanction for failure to comply with the rules governing the conduct of litigation, and that failure to comply with a court order will no longer simply be met with a sanction of costs relating to some wasted hearing or some extra piece of work required by the court or the other side. She held that while Denton restated and gave greater definition to Mitchell, it does not alter the Mitchell statement of principles. She went on to apply the three-stage approach of Denton (1) seriousness of breach, (2) whether there was good reason for breach, and (3) consideration of all of the circumstances of the case.
In respect of stage one she held that the breaches of both the original order and the ‘unless’ order was ‘serious and significant’.
In respect of stage two she noted that although sympathy had been expressed for the personal circumstances of Oak’s solicitor his firm had over 40 qualified solicitors and there must be provision for those who have the responsibility of conducting litigation who know that they may not be available because of an ongoing problem to delegate the work to others who have sufficient experience and skill to ensure that tasks are properly completed. In this instance, it appeared that such delegation did not occur until about the time of the ‘unless’ order and that the trainee solicitor to whom the task was delegated must not have had sufficient experience to complete it and must not have been adequately supervised. Notwithstanding the predicament faced by Oak’s solicitor it could not be a good reason for failure to comply with the orders.
Applying the third stage of Denton (consideration of all of the circumstances of the case) McGowan J took into effect the effect of the failure to comply. Although she accepted that a Listing Questionnaire might not be the most important document provided by either side in the conduct of litigation, she noted that Oak’s persistent failure to file the questionnaire caused the loss of the two day trial date and held that must be a matter of grave concern when one looks, as the court did, in Mitchell to the overall effect of such a breach, and to the impact that it would have not only on the conduct of this claim but other cases awaiting dates for hearings and the waste of valuable court time already massively under strain. She bore in mind the effect on Oak of it not being granted relief from sanction, that judgment had been granted against it in a substantial sum, and noted that the consequence of a refusal to grant relief from sanction in a case such as this may lead to Oak having to bring an action against their own solicitors.
Finally, McGowan J noted that British Gas had not sought to take advantage of an insignificant or trivial failing on the part of the Defendants.
In conclusion the court held that the lower court had misapplied the application of the CPR 3.9 rule for relief from sanction, and that in the absence of an application by Oak to set judgment aside the lower court should not simply have taken the view that the application ought to have been brought and therefore would be treated as though it had been brought, certainly without any evidence in support of such application.
Any application for relief from sanction must be made promptly, irrespective of the ostensibly trivial nature of a breach and any subsequent compliance. The requirement for promptness is amplified by the proximity of a hearing date. Where default judgment has been granted following strike out, an application to set aside default judgment supported by evidence should accompany any application for relief from sanction.
This is intended for general information only and should not be considered as giving advice in relation to any individual case nor be taken as applying to any particular case. No liability is accepted for any such use of the information contained.