Thevarajah v Riordan & Ors

Relief from a debarring sanction may be granted on a second application where there has been a material change of circumstances, including subsequent compliance with the order. Under CPR 3.9, the court must consider all the circumstances, including proportionality, reliance on legal advisers, third-party cooperation, delay, prejudice and trial readiness. A party debarred from defending remains entitled to require the claimant to prove the claim and, subject to the court’s control of its process, to cross-examine and make submissions. The power under CPR 3.1(7) is distinct from an appeal, but material change may justify variation or revocation.

The defendants applied during a speedy trial window for relief from sanctions imposed after repeated failures to comply with wide-ranging disclosure orders ancillary to a freezing injunction. Their Defence and Counterclaim had been struck out and they had been debarred from defending following an earlier refusal of relief. They contended that they had since complied, that their former solicitors had advised them that compliance had been achieved, and that the claimant had also failed to comply with directions.

The claimant argued that the second application was an abuse of process and that compliance remained incomplete or too late. The central issues were whether a second application was permissible, whether there had been material compliance and changed circumstances, and what participation remained available to defendants if the sanction stood.

1. Application granted. The defendants had complied, albeit belatedly, with the unless order. The alleged omission concerning an account controlled by a third party was not a breach; alternatively, it was de minimis in the context of the disclosure as a whole. Compliance with a freezing-order disclosure obligation requiring information to be provided to the best of the respondent’s ability is assessed objectively by reference to the respondent’s position and difficulties. The question is whether the respondent did what someone in that position could reasonably have done in the time available. This applied the guidance in Oystertech plc v Davidson [2004] EWHC 627.
2. The amended CPR 3.9 requires consideration of all the circumstances, including efficient and proportionate litigation and enforcement of compliance. The former checklist remains relevant. The rule should not be applied mechanically or so as to produce disproportionate tactical advantages.
3. A second application for relief is permissible. Under Woodhouse v Consignia plc [2002] 1 WLR 2558, the availability of material at the earlier hearing is relevant but not automatically decisive. Subsequent compliance constituted a material change of circumstances. The claimant’s own failure to comply with disclosure and witness-evidence directions also meant that the case was not ready for trial.
4. Tarn Insurance Services Ltd v Kirby [2009] EWCA Civ 19 and [2009] CP Reports 22 was distinguished because it concerned continuing non-compliance without material change. Here, the defendants had complied and had acted on advice that compliance was complete.
5. A party debarred from defending remains entitled, subject to the court’s control of its process, to require the claimant to prove the claim, cross-examine and make submissions. The court applied Culla Park Ltd v Richards [2007] EWHC 1687. The contrary submission based on the three decisions in Momson v Azeez was rejected because those judgments did not analyse the effect of a debarring order where the claimant still had to prove the case.
6. The proposed variations to the freezing injunction were also addressed. Permission to spend a reasonable sum on legal representation was agreed. The court was prepared to rule on reduction of the frozen amount if agreement had not been reached.