Sanray Export Services Ltd v Customs & Excise

A claim with no real prospect of success may be struck out without a trial or oral evidence. A claimant is not entitled to proceed to cross-examination merely in the hope that evidence will emerge to support the claim. On a late application for permission to appeal, the court considers both the explanation for delay and the prospects of success. Where proceedings amount in substance to a further appeal, the restrictions applicable to second appeals may be applied by analogy. Permission should be refused where there is no important point of principle or practice, no other compelling reason for a hearing, and no real prospect of success. Further evidence will not be ordered where it cannot be compelled or would not advance the case.

Sanray Export Services Ltd and R K Marya claimed more than £100,000 from HM Customs & Excise after a winding-up petition against Sanray was advertised despite an agreement to withhold advertisement while an admitted VAT debt was paid by instalments. The claimants alleged deliberate and collusive conduct.

The Kingston-upon-Thames County Court struck out the claim under CPR Part 24.2, allowing an opportunity to amend, but no amended statement of case was filed. An appeal was dismissed in the claimants’ absence, and an application to set aside that order was refused. The claimants then applied to the Court of Appeal for permission to appeal out of time and to adduce further evidence. The central issues were whether the delay should be excused, whether the proposed appeal had a real prospect of success or raised a compelling point, and whether further evidence should be admitted.

1. Permission to appeal out of time. The application was dismissed. The appellant’s notice was filed more than two months late. The explanation that Mr Marya had been in Canada did not account for the period after he was told that the application had to be made to the Court of Appeal. The court nevertheless considered the prospects of success before deciding whether the delay should be held against the claimants.
2. Strike-out and oral evidence. The first ground of appeal was impossible because Judge Hague had recorded that the district judge struck out the claim pursuant to CPR Part 24.2. The second ground was hopeless. The purpose of the strike-out jurisdiction is to remove cases with no prospect of success without taking up trial time. It therefore operates without oral evidence. A claimant is not entitled to a trial merely because cross-examination might reveal supporting material.
3. Issues of fact and law. The third ground did not disclose an arguable basis for appeal. The question was whether the alleged issues were sustainable and should proceed to trial. The district judge held that they were not, and that conclusion had been upheld on the subsequent applications. The proposed proceedings would in substance be a further appeal. The restrictions in CPR Part 52.13, requiring an important point of principle or practice or another compelling reason, should apply by analogy. No such point or reason was shown, and the appeal had no real prospect of success.
4. Further evidence. The application to adduce evidence was also dismissed. The court had no power to compel Mr Brodie to create or provide a statement that did not exist. The without-prejudice letter merely attributed the advertisement to administrative oversight and did not establish deliberate conduct. The claimants had not produced a transcript of the district judge’s judgment or their own notes, and the proposed material was unlikely to assist their case.

Order: Application dismissed.

• Kingston-upon-Thames County Court: The district judge struck out the claim under CPR Part 24.2 on 17 May 2000, giving leave to file an amended statement of case; none was filed.
• Kingston-upon-Thames County Court: Judge Hague dismissed the appeal in the claimants’ absence. Judge Morgan later refused to set aside that order and held that the strike-out points were correct.
• Court of Appeal (Civil Division): The application for permission to appeal out of time and the application to adduce further evidence were dismissed.