Newland Shipping & Forwarding Ltd v Toba Trading FZC

Relief from sanctions under CPR 3.9 generally requires either trivial non-compliance or a good reason for the default. Other circumstances remain relevant, but carry less weight than the need for efficient, proportionate litigation and compliance with court orders. A party cannot use CPR 3.9 to challenge the underlying appropriateness of a sanction; that is ordinarily a matter for appeal. CPR 3.1(7) permits variation or revocation only within principled limits, normally including a material change of circumstances, a material misstatement of the facts, or a manifest mistake in formulating the order. A clear, central misstatement may justify correction of the judgment. Separate actions ordered to be heard together remain separate unless consolidated, so non-compliance in one action is not automatically a default in another.

Newland Shipping & Forwarding Ltd brought two commercial actions against Toba Trading FZC and, in one action, against Mr Hossein Rahbarian. Field J struck out Toba’s defences and counterclaims and entered judgment against Toba and Mr Rahbarian following defaults concerning disclosure and witness statements.

Toba and Mr Rahbarian applied for relief under CPR 3.9. They also sought to amend the application to rely on CPR 3.1(7), contending that the original order should be varied or revoked. The applications raised the proper distinction between relief from sanctions, variation or revocation of an order, and appeal. A further issue was whether a default in the action concerning one cargo affected the separate action concerning another cargo.

The court allowed the amendment to the application and granted relief under CPR 3.1(7) to correct the judgment sum in Action 1213. The amended particulars claimed US$3,904,060.16, but judgment had mistakenly been entered for US$4,534,120.48. That was a clear misstatement central to the order and justified variation. The wider complaints about the merits and proportionality of Field J’s decision concerned appeal, not CPR 3.1(7).

1. CPR 3.1(7). Following Tibbles v SIG plc and Mitchell v News Group Newspapers Ltd, the discretion is principled and is normally engaged by a material change of circumstances, a misstatement of the facts on which the order was based, or a manifest mistake in formulating it. The present availability of evidence, representation and submissions was not a material change because those matters could have been available at the original hearing.
2. CPR 3.9. The court applied the robust approach in Mitchell v News Group Newspapers Ltd. The principal questions were whether the default was trivial and whether there was a good reason. The defaults in Action 1213, particularly inadequate disclosure and the failure to serve witness statements before a short trial date, were serious. Loss of representation caused by a failure to pay solicitors’ fees was foreseeable and was not a good reason. No compelling circumstances justified relief.
3. Action 1214 remained a separate action. The order that both actions be heard together did not consolidate them. Toba had complied with the procedural orders in Action 1214, so there was no default in that action. Alternatively, any indirect effect of the defaults in Action 1213 was trivial. Relief was therefore granted in Action 1214.
4. The judgment against Mr Rahbarian was a judgment in default. CPR 13, rather than CPR 3.9, provided the appropriate procedure for challenging it, and no such application had been issued.

The remaining applications were refused. Any challenge to the substantive appropriateness of the sanction in Action 1213 had to be pursued by appeal.