Obsession Hair and Day Spa Ltd v Hi -Lite Electrical Ltd

Permission to appeal should be set aside under Civil Procedure Rules r 52.9 only for a compelling reason. The threshold is high. An applicant will ordinarily need to show that the judge granting permission was misled or overlooked plainly decisive authority or legislation.

A material failure of full and frank disclosure may amount to an abuse of process. It does not, however, require an automatic setting aside. The court must assess the gravity and culpability of the omission, the explanation for it, and the overriding objective. Where the full facts still justify an extension of time and reveal an arguable appeal, permission may remain in force.

The claimant hair salon alleged that a fire had been caused by the defendant electrical contractor’s supply and installation of a pump. The claim was advanced in contract and negligence. In December 2008, HHJ McKenna gave judgment for the claimant with damages to be assessed. In November 2010, when assessing damages at £847,171, he stated that the earlier judgment had been only in contract.

The claimant obtained an extension of time and permission to appeal both decisions. The defendant then applied under Civil Procedure Rules r 52.9 to set aside those orders. It contended that the claimant had misleadingly failed to disclose that, at an interim-payment hearing in January 2009, the judge had indicated that the liability judgment was in contract rather than tort.

The issue was whether the omission supplied a compelling reason to revoke the extension and permission to appeal.

Application dismissed. Ward LJ, with whom Sullivan LJ agreed, declined to set aside the extension of time and permission to appeal.

1. Under Civil Procedure Rules r 52.9, setting aside permission requires a compelling reason. The jurisdiction is exceptional. The authorities show that an application ordinarily requires very cogent grounds, such as the permission judge having been misled or having overlooked plainly decisive authority or legislation. It should not create satellite litigation between permission and the substantive appeal.

2. An applicant seeking relief without notice owes the court full and frank disclosure. A material omission may abuse the court’s process and may justify removing the advantage obtained. However, the consequence is not automatic. The court must consider the gravity, explanation and culpability of the omission, and decide what justice and the overriding objective require.

3. The non-disclosure of the January 2009 exchange was highly material. Ward LJ had therefore granted permission under a misapprehension. But the claimant’s legal advisers had not deliberately misled the court. They genuinely, and in the unusual circumstances reasonably, believed that the judge had not unequivocally decided the negligence claim until the approved quantum judgment. The 2008 judgment left negligence live and contained findings arguably capable of supporting it.

4. The January 2009 observation should have alerted the claimant to seek clarification, including by the procedure discussed in English v Emery Reimbold [2002] EWCA Civ 605. Its failure to do so was not fatal. The claimant retained a real prospect of arguing both that the findings amounted to negligence and that dismissal of negligence without adequate reasons was unfair. Armed with the full facts, the court would still extend time and maintain permission.

• Court of Appeal (Civil Division): In [2011] EWCA Civ 1148, dismissed the respondent’s application to set aside the claimant’s extension of time and permission to appeal.
• High Court, Queen’s Bench Division, Birmingham District Registry: HHJ McKenna gave judgment for the claimant for damages to be assessed on 11 December 2008. On 8 November 2010 he assessed damages at £847,171 and held that liability had been established only in contract.