Southern & District Finance Plc v Turner

Appeal rules require careful compliance, but they do not impose cast-iron rigidity. Under CPR 3.10, a court may remedy or waive an irregularity, including failure to seek an extension of time in an appeal notice or to file supporting evidence, where justice requires. The court should apply the CPR 3.9 checklist and the overriding objective, considering matters such as delay, prejudice, merits and the administration of justice. A conditional order may protect the other party while permitting a potentially meritorious issue to proceed. The proper appeal route depends on the true nature of the order. An order disposing of an appeal without deciding its merits may be challenged as a first appeal to the next higher court.

A borrower sought to challenge the enforceability of a secured loan agreement under the Consumer Credit Act 1974 and to reopen the credit bargain. District Judge Bryce refused to set aside an earlier possession order but permitted only a limited counterclaim. Judge Appleton later dismissed the defendant’s appeal because no extension of time had been sought and no supporting evidence had been filed. The Court of Appeal first determined the correct appellate route, then considered whether the procedural defaults could be remedied and whether the counterclaim should be enlarged to include the enforceability issue.

Appeal allowed. The court permitted the defendant to amend the notice of appeal to include an application for an extension of time and varied District Judge Bryce’s order by adding a further paragraph permitting a counterclaim on enforceability, subject to a condition preventing recovery of payments made before the order.

1. Appellate route. Judge Appleton had not refused permission to appeal or determined the merits. His order disposed of the appeal because the procedural requirements for an extension of time had not been addressed. Its true character therefore made it a first appeal to the next higher court, within the approach discussed in Foenander v Bond Lewis & Co [2001] EWCA Civ 759.
2. Procedural irregularity. The judge was clearly wrong to conclude that the absence of an extension application and supporting evidence was irremediable. CPR 3.10 empowered him to permit amendment of the notice and waive the evidential requirement if justice required it.
3. Relief and conditional orders. The court treated compliance with the rules as important, but held that the CPR regime did not require inflexible refusal. The CPR 3.9 considerations had to be assessed in light of the overriding objective. CPR 3.1(2)(a) enabled a conditional order to mitigate prejudice. The power’s flexibility was illustrated by Price v Price [2003] EWCA Civ 888, Beck v Ministry of Defence [2003] EWCA Civ 1043 and Jones v T Mobile (UK) Ltd [2003] EWCA Civ 1162.
4. Case management. The enforceability issue should be tried as a discrete preliminary issue because it might make a longer trial unnecessary. The Court of Appeal could exercise the discretion afresh where the lower court had failed to consider material matters that could have affected its decision.

The court was disposed to order that the defendant pay the costs of the appeals, added to the security, subject to consideration of wasted costs attributable to negligent conduct under the legal aid certificate.

1. Court of Appeal (Civil Division) — The court held that the appeal route lay to the next higher court as a first appeal, then allowed the appeal and varied the district judge’s order. The judgment is reported at [2003] EWCA Civ 1574.
2. Preston County Court, Judge Appleton — Permission to appeal had been granted at an oral hearing, but the substantive appeal was dismissed because the defendant had not sought an extension of time or filed supporting evidence.
3. Preston County Court, District Judge Bryce — The application to set aside the 1993 possession order was dismissed. Permission was granted for a limited counterclaim concerning an alleged extortionate credit bargain.