Whittaker & Anor v Soper & Anor

Relief from a procedural sanction requires the court to consider all the circumstances identified in CPR 3.9 and to assess whether the sanction is proportionate. A defendant should not ordinarily be debarred from defending on the day of trial unless the claimant cannot receive a fair trial, or would suffer prejudice which the court cannot cure using its case-management powers. The court must distinguish deliberate or personally culpable default from defects caused by legal representatives. Previous procedural failures and serious breaches remain relevant, but they do not automatically justify striking out a defence where the trial can proceed and the claimant’s position can be protected.

The claimants sought substantial sums arising from shareholders’ and profit-distribution agreements. The defendants’ conduct had caused earlier trial dates to be lost. Morland J made an order requiring security to be provided by specified deadlines, with failure to comply resulting in the defendants being debarred from defending.

The defendants executed charges but there were disputes about their form and they were not registered. They also breached an injunction preventing further dealings with the properties. On the first day of trial, Mr Mawrey QC held that the defence had been automatically struck out, refused relief under CPR 3.9, and independently struck out the defence for breach of the injunction. The defendants sought permission to appeal and a stay-related order. The central issue was whether the defence should have been permitted to proceed to trial.

Rix LJ gave the principal judgment, with Aldous LJ agreeing. Permission to appeal was granted and the appeal was allowed.

1. The deputy judge had erred in treating the charges as mere drafts. They had been executed before the deadline. Even assuming that their form did not technically comply with Morland J’s order, that defect was attributable to the defendants’ solicitors, not personally to Mr Soper, and not to Mr Smith.

2. Under Civil Procedure Rules 1998, rule 3.9, the court must consider each listed circumstance when deciding whether to grant relief from a sanction. Relevant matters included promptness, intention, explanation, responsibility for the default, compliance with other orders, the effect on the trial date, prejudice, and the interests of the administration of justice. The defendants’ previous conduct was serious, but the attempted provision of security, the absence of demonstrated prejudice, and the fact that the trial could proceed strongly favoured relief.

3. The breach of the injunction against further dealings with the properties was admitted and potentially serious. However, there was no evidence that the additional charge had prejudiced the claimants, and the court could protect their security by other means. That breach therefore did not fundamentally alter the proportionality analysis.

4. The seriousness of debarring a defendant on the day fixed for trial required particular care. A strike-out should not be imposed in those circumstances unless the claimant could not have a fair trial, or would suffer prejudice which could not be corrected through the court’s other powers. The deputy judge had failed adequately to consider the CPR 3.9 factors and proportionality.

5. The Court of Appeal was therefore required to exercise its own discretion. The defendants were not to be barred from defending. The claimants were to be protected by appropriate security and given an expedited new trial date.

• Court of Appeal (Civil Division): Permission to appeal granted and appeal allowed from the judgment of Mr Mawrey QC, sitting as a deputy High Court judge, dated 9 July 2001. The Court of Appeal set aside the decision debarring the defendants from defending.