Hackney v Driscoll

The Court of Appeal dismissed the defendant's second appeal challenging refusal to set aside an order for possession made in his absence. The court held that where a party has knowledge of proceedings and has participated in them, CPR 39.3(5) applies: an application to set aside a judgment obtained in the party's absence can be granted only if the applicant acted promptly, had a good reason for non-attendance and had a reasonable prospect of success. The court distinguished the situation in White v Weston (no service of process at all) from cases where a party knew of the proceedings but did not receive notice of the specific hearing date.

The court concluded that once a defendant knows of and participates in proceedings the court has jurisdiction to make orders affecting him and is entitled to require proof of a reasonable prospect of success before ordering a re-hearing. The appeal was dismissed because the judges below were entitled to find that the defendant would not have a reasonable prospect of success even if permitted a re-hearing.

Background and facts:

• The defendant acquired a long lease under a right-to-buy and took a mortgage from the claimant council. Mortgage arrears led the council to bring possession proceedings. The claim form was served at the leased address though the defendant had moved and let the premises to a tenant.
• The defendant attended court for procedural hearings in July and August 1996. A trial was fixed for 27 November 1996 and notice of the trial was sent to the leased address. The defendant did not attend the hearing on 27 November and an order for immediate possession was made in his absence. The council evicted the tenants and sold the premises in July 1997, effectively discharging the mortgage debt.
• The defendant suffered from schizophrenia and spent time under hospital care. He only applied on 26 January 2001 to set aside the possession order. Both the district judge and a circuit judge refused the application under CPR 39.3(5). The defendant obtained permission to bring a second appeal to the Court of Appeal.

Nature of the application: The defendant sought an order setting aside the possession order and a re-hearing. He relied on the principle in White v Weston to argue that, because he had not been given notice of the trial date, he was entitled as of right to have the judgment set aside.

Issues framed:

• Whether the White v Weston rule (entitlement to set aside where there has been no service) applies to a case where a party knew of proceedings and had attended earlier hearings but received no notice of the specific hearing date.
• Whether CPR 39.3(5) should be applied and, if so, whether the applicant must show a reasonable prospect of success in addition to acting promptly and having a good reason for non-attendance.

Court's reasoning and conclusion:

• The court distinguished cases of complete non-service (where White v Weston may entitle a defendant to relief as of right) from cases where the defendant knew of and participated in proceedings but did not get notice of the hearing date. The judgment expressly left open the precise legal analysis where there has been no notice of the proceedings at all.
• The court applied CPR 3.10 and CPR 39.3(5). It endorsed the district judge's and circuit judge's approach that all three criteria in CPR 39.3(5) are relevant: promptness, a good reason for non-attendance and a reasonable prospect of success. The court considered it proper to require the applicant to show a reasonable prospect so as not to force the successful party to re-prove a case where the absent party had no realistic chance of success.
• On the facts the judges below were entitled to conclude that the defendant would not have succeeded at a re-trial. The Court of Appeal found no error in that conclusion and dismissed the appeal.

Procedural context: This was a second appeal brought with permission because the point raised was of practice importance. The court referred to earlier authorities and practice rules (including White v Weston, Willowgreen Ltd v Smithers and Al-Tobasishi v Aung) but limited its decision to the class of cases where the defendant had knowledge of the proceedings.

Appeal dismissed. The Court of Appeal held that where a defendant knows of proceedings and has participated in them, CPR 39.3(5) applies and all three criteria in that rule must be considered: the applicant must act promptly, have a good reason for not attending and demonstrate a reasonable prospect of success. The judges below were entitled to find there was no reasonable prospect of success and to refuse to set aside the possession order. The court declined to decide the distinct issue of complete non-service of proceedings.

This is a second appeal to the Court of Appeal with permission. The order under challenge was made by Judge Marr-Johnson in the Mayor's and City of London Court on 15 October 2002, who dismissed the defendant's appeal from the order of District Judge Wright made on 7 February 2001 refusing to set aside the possession order originally made on 27 November 1996. The present judgment is reported at [2003] EWCA Civ 1037.