UNLESS ORDERS AND RELIEF FROM SANCTIONS

profile_PI_Bronia_Hartley1 By Bronia Hartley

Oak Cash & Carry Ltd v British Gas Trading Ltd [2016] EWCA Civ 153

This case has been rumbling on since 2014 (see Nicola Phillipson’s blog post – ‘Failure to file LQ – Relief from sanctions refused’). By way of reminder, the respondent’s claim against the appellant was for an alleged debt of around £200,000. The appellant failed to file its pre-trial checklist.  The judge directed that the appellant’s defence be struck out if it failed to file the checklist by a specified date.  The appellant failed to comply with the unless order and the defence was struck out.  The respondent applied for and obtained judgement in default of defence.

The appellant applied for relief from the sanction contained in the unless order, by which time the trial date had been lost. The application was supported by a witness statement from the appellant’s former solicitor, who stated that he had entrusted the litigation to a trainee solicitor during a time when he was attending a lot of medical appointments with his wife, who was suffering from pregnancy complications.  Relief was granted.

The respondent successfully appealed the decision to grant relief.

The appellant company appealed against the decision that the judge had erred in granting its application for relief from sanctions.

The appeal was dismissed.

It was held that an unless order did not stand on its own. A party who had failed to comply with an unless order was normally in breach of an original order or rule as well as the unless order. In order to determine the seriousness and significance of a breach of an unless order it was necessary to also look at the underlying breach.  The very fact that a party had failed to comply with an unless order as opposed to an ordinary order was undoubtedly a pointer towards seriousness and significance. In this case the appellant had three months to comply with the original order and six days to comply with the unless order.  The breach could not be classified as anything other than serious and significant.  The next question was whether there was a good reason for the default.  The judge on the last occasion was right to find that the firm was large enough to provide appropriate cover for the solicitor during his absence and that as such there was no good reason for the default.  The promptness of the application for relief from sanctions was relevant to the circumstances to be considered at the third stage of the enquiry under 3.9 and Mitchell.  If the appellant had made an immediate application for relief at the same time as filing its checklist, or very soon after, the court would have been strongly inclined to grant relief. The appellant’s lack of promptness in applying for relief was a critical factor.  It was clear that the appellant’s default and delay thereafter had substantially disrupted the progress of the action.  The application for relief had to be refused.

N.B Also on the question of delay, see Gentry v Miller & Anor [2016] EWCA Civ 141 where a defendant who delayed in applying to set aside a default judgment was refused relief from sanctions despite evidence enabling it to allege that the claim was a fraudulent one.

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One comment

  1. C.Notarianni@rbht.nhs.uk · · Reply

    Very nice.

    Christine Notarianni
    Solicitor, BVC (Barrister NP), LLm, LLB
    Head of Legal
    Royal Brompton and Harefield NHS Foundation Trust
    01895 823 737 Legal Office Harefield extension 5377

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    [cid:image002.png@01D1ABA7.6803C260] [cid:image003.png@01D1ABA7.6803C260] [cid:image004.png@01D1ABA7.6803C260]

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