Graham Group Ltd v Fox

Where a litigant in person misses a hearing because of an apparently genuine illness, the court should exercise caution before deciding the matter in their absence. An application should not be treated as hopeless where newly disclosed documents may undermine the judgment under challenge. The proper course may be to adjourn the application on notice, require sworn evidence addressing the merits and delay, and arrange the appeal immediately if permission is granted.

Graham Group Ltd obtained summary judgment against Raymond James Fox as guarantor of debts owed by Fox Builders Ltd. A bankruptcy order followed. Mr Fox sought to challenge the judgment and bankruptcy proceedings, but Mr Justice Neuberger dealt with the matter in his absence after accepting that his illness was genuine and concluding that the proposed grounds had no merit.

Mr Fox later sought permission to appeal out of time. Documents were produced which appeared to indicate that the guarantee relied on might have been dated 1994 rather than 1996, that an earlier guarantee may have been limited to £3,000, and that Mr Fox had attempted to terminate it. The claimant’s solicitors had received the documents before the High Court hearing, but the judge had not seen them. The central issues were whether the application was hopeless and whether the matter should have proceeded in Mr Fox’s absence.

Application adjourned. Lord Justice Carnwath was not satisfied that the application for permission to appeal out of time was hopeless. He was also not satisfied that the newly raised issues had been fully explored.

1. The documents raised a substantial question about which guarantees were in force when the goods were supplied. They also created a possible challenge to the factual basis of the original summary judgment and the bankruptcy order. The Court of Appeal did not determine the allegations of forgery, fraud or alteration.
2. It was unfortunate that the fax sent to the claimant’s solicitors before the High Court hearing had not been shown to Mr Justice Neuberger. Had the judge seen it, there was a possibility that he would have adjourned the matter to obtain an explanation. This prevented summary dismissal of the application.
3. A question of general importance arose concerning the propriety of proceeding against a litigant in person who had an apparently genuine excuse for absence. The judgment identified rule 39.3 of the Civil Procedure Rules 1998 as a possible route for applying to set aside judgment given in a party’s absence. The Court of Appeal did not finally decide whether that route, rather than an appeal, was appropriate.
4. Mr Fox was directed to file an affidavit addressing the challenge to the judgment, the delay in obtaining and acting on the documents, the delay in applying to the Court of Appeal, and the illness preventing his attendance. The respondents were given three weeks to respond by affidavit.

The application for permission to appeal was adjourned to be heard on notice to the respondents, with the appeal to follow immediately if permission was granted. The transcript was to be provided to Mr Fox at public expense.

• Court of Appeal (Civil Division): The application for permission to appeal out of time was adjourned on notice. Directions were given for affidavits, with the appeal to follow immediately if permission was granted.
• High Court, Chancery Division: Mr Justice Neuberger decided the application in Mr Fox’s absence, having concluded that the proposed challenge had no prospect of success.
• Reading County Court: Summary judgment had earlier been entered against Mr Fox, and a bankruptcy order was subsequently made. Attempts to annul the bankruptcy order were dismissed.