Brazil v Brazil

When deciding whether a party had a “good reason” for failing to attend trial under rule 39.3(5), the court must identify the genuine reason from all the relevant evidence and assess its sufficiency in the round. An exhaustive definition or rigid list of criteria is inappropriate.

The applicant must satisfy each threshold condition before the discretion to set aside arises. The importance of the proceedings does not form part of that threshold assessment. Illiteracy, acting in person and failure to receive formal notice may together constitute a good reason, even where documents were properly served and the applicant’s own conduct contributed to the failure.

The claimant obtained an order in the defendant’s absence rectifying the Land Register so that the claimant would replace the defendant as registered proprietor of the property in which the defendant and his family lived. Hart J subsequently set aside that order under rule 39.3(5). He found that the defendant had a good reason for failing to attend trial.

The claimant appealed against both the setting-aside order and the direction that the application costs should be costs in the case. The substantive issue was whether the defendant’s illiteracy, his position as a litigant in person and his failure to receive the formal order notifying him of the trial date could constitute a good reason for non-attendance.

1. The substantive appeal was dismissed unanimously. Lord Justice Mummery, with whom Lady Justice Hale agreed, held that “good reason” in rule 39.3(5)(b) is an ordinary expression providing a sufficiently clear standard. The court should examine all relevant evidence, identify the true reason for non-attendance and assess its sufficiency in the round. A genuine reason is necessary but is not necessarily sufficient. An unduly analytical approach would conflict with the overriding objective of dealing with cases justly.

2. The defendant did not attend because he did not know that the trial was taking place. His illiteracy could properly be considered together with the facts that he was acting in person and had not received the formal order notifying him of the hearing. The contractual context considered in Barclay’s Bank v Schwarz (1995) TLR 452 was materially different. The present issue concerned knowledge of a hearing at which the defendant was entitled to be present.

3. The claimant’s procedural compliance did not determine whether the defendant had a good reason. Rule 39.3(5) required attention to the particular defendant’s position. The combined effect of his circumstances was sufficient to cross the threshold and permit the court to exercise its discretion to set aside the order.

4. Lord Justice Carnwath agreed, with hesitation. All three conditions in rule 39.3(5) are cumulative. The importance of the case to the absent party is irrelevant at the threshold stage, though it may become relevant when the discretion is exercised. An illiterate litigant who knows of proceedings should obtain help with formal documents. Nevertheless, Hart J permissibly regarded the absence of formal notice as uncured by delivery of the trial bundle.

5. The costs appeal was allowed. Although the defendant succeeded in setting aside the order, his irresponsible approach had made the application necessary. The claimant was blameless and had reasonably resisted it. The defendant was therefore ordered to pay the costs of the application.

1. Court of Appeal (Civil Division): In [2002] EWCA Civ 1135, dismissed the appeal against the setting-aside order but allowed the appeal concerning costs. The defendant was ordered to pay the costs of his application.

2. High Court, Chancery Division: Hart J set aside the Deputy Master’s rectification order under rule 39.3(5) and directed that the costs should be costs in the case.

3. High Court, Chancery Division: Deputy Master Lloyd determined the proceedings in the defendant’s absence and ordered rectification of the Land Register in the claimant’s favour.