Denton & Ors v TH White Ltd & Ors

An application for relief from sanctions requires three stages. The court must assess the seriousness and significance of the breach, consider why it occurred, and evaluate all the circumstances so as to deal justly with the application.

A breach which is neither serious nor significant will usually attract relief. A serious or significant breach makes relief less likely without a good reason. At the third stage, the majority held that particular weight must be given to efficient and proportionate litigation and the enforcement of compliance, although neither consideration displaces the duty to consider every relevant circumstance.

Earlier or unrelated defaults ordinarily belong at the third stage. Parties should cooperate where relief is plainly appropriate and may face substantial costs consequences for opportunistic opposition.

Three appeals concerned applications for relief from sanctions under rule 3.9 of the Civil Procedure Rules 1998. In Denton, a judge permitted six late witness statements, causing a ten-day trial to be adjourned. In Decadent, relief was refused after a cheque for court fees was sent so that it would arrive one day late and was then lost. In Utilise, relief from the costs-budget sanction was refused following a 45-minute filing delay and a separate late notification to the court.

The Court of Appeal considered how the guidance in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537 should be clarified. The central issue was the correct structured approach to seriousness, reasons for default and all the circumstances, including the two considerations expressly identified in rule 3.9(1).

Held

1. All three appeals were allowed unanimously. In Denton, the order admitting the late statements was set aside and the action was to be listed for trial at the earliest practicable date. In Decadent and Utilise, relief from sanctions was granted.

2. An application under rule 3.9 of the Civil Procedure Rules 1998 involves three stages. First, the court identifies and assesses the seriousness and significance of the breach for which relief is sought. Secondly, it considers why the default occurred. Thirdly, it evaluates all the circumstances so as to deal justly with the application. A breach which is neither serious nor significant will usually attract relief. A serious or significant breach makes the second and third stages more important.

3. Per the Master of the Rolls and Vos LJ, constituting the majority on construction, the need for litigation to be conducted efficiently and at proportionate cost and the need to enforce compliance must receive particular weight at the third stage. They are not necessarily paramount and do not displace the express requirement to consider all the circumstances. Earlier or unrelated defaults should ordinarily be considered at the third stage rather than used to alter the character of the breach under examination.

4. The guidance in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537 remained substantially sound but required clarification. The focus should be on whether a breach is serious or significant, rather than semantic disputes about whether it is trivial. It is incorrect to treat a serious breach without a good reason as automatically fatal.

5. The late evidence in Denton was significant, had no good justification and required the trial to be vacated. Relief should therefore have been refused. The fee default in Decadent was serious only at the lowest end of the range, caused no material disruption and was promptly remedied; striking out the claim was disproportionate. The 45-minute delay in Utilise was neither serious nor significant, and the separate minor default did not make it so.

6. Jackson LJ agreed with the three-stage structure and every disposition, but dissented on the construction of the third stage. In his view, the two specified factors had to be considered expressly but possessed no predetermined priority over other circumstances; their weight depended upon the individual case.

7. Parties should cooperate where relief is plainly appropriate and agree reasonable extensions where permitted. Opportunistic opposition may justify substantial costs sanctions, including consequences under rules 44.11 and 3.18. Courts should set realistic directions and reserve unless orders for cases in which they are truly required.

1. Court of Appeal (Civil Division): In Denton & Ors v TH White Ltd & Ors [2014] EWCA Civ 906, all three appeals were allowed. The late-evidence order in Denton was set aside, while relief was granted in Decadent and Utilise.
2. Queen’s Bench Division, Bristol District Registry: HHJ Denyer QC granted relief permitting six late witness statements and adjourned the trial. That order was set aside.
3. Chancery Division, Cardiff District Registry: HHJ Jarman QC refused relief from the sanction striking out the Decadent claim. That order was set aside.
4. Chancery Division, Manchester District Registry: HHJ Hodge QC dismissed Utilise’s first appeal from the refusal of relief. His order and the District Judge’s order were set aside.
5. Manchester District Registry: District Judge Matharu refused relief from the costs-budget sanction after treating separate defaults cumulatively. That decision was set aside.