British Gas Trading Ltd v Oak Cash & Carry Ltd

Relief from sanction requires the court to apply the structured approach in Denton v TH White Ltd: assess the seriousness and significance of the breach, identify why it occurred, and consider all the circumstances, including efficient and proportionate litigation and compliance with court orders. Repeated failure to comply with an ordinary directions order and an unless order may be serious and significant. Personal difficulties of the solicitor responsible do not necessarily provide a good reason where adequate delegation and supervision were available. A court should not set aside a default judgment without an application to do so supported by evidence.

The claimant brought proceedings for an unpaid electricity debt. The defendant failed to file a listing questionnaire by the ordered date and then failed to comply correctly with an unless order. Default judgment was entered.

The Oxford County Court granted relief from sanction, reinstated the defence and set aside the default judgment, although no application to set aside the default judgment had been made. The claimant appealed, alleging misapplication of CPR 3.9 and procedural error in setting aside the default judgment without an application or supporting evidence.

1. The appeal succeeded. The order of 15 April 2014 was set aside and judgment was entered for the claimant.

2. The court applied the three-stage approach stated in Denton v TH White Ltd [2014] EWCA Civ 906, which restated and gave greater definition to the approach in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537. The court must first assess the seriousness and significance of the failure, then consider why it occurred, and finally evaluate all the circumstances so as to deal justly with the application, including efficient and proportionate litigation and enforcement of compliance with rules and orders.

3. The defendant’s breach was serious and significant. It failed to comply with the original order for more than three months and then failed to comply with the unless order by filing the wrong questionnaire. The breach caused the loss of a two-day trial date and wasted valuable court resources.

4. The solicitor’s personal difficulties attracted sympathy but did not amount to a good reason. A substantial firm should have arranged effective delegation to a suitably experienced person and ensured proper supervision. The court also noted that the claimant had not exploited a trivial default: the unless order had provided a further opportunity to comply.

5. Considering all the circumstances, there was no sufficient basis for relief from sanction under CPR 3.9. The consequences for the defendant, including the substantial judgment and possible satellite litigation, did not outweigh the need to enforce compliance.

6. Separately, the court held that, absent an application to set aside the default judgment, the County Court should not have treated such an application as having been made. There was also no supporting evidence. The second ground of appeal was therefore made out.

• High Court (Queen's Bench Division): Appeal from the Oxford County Court allowed. The order granting relief from sanction and setting aside default judgment was set aside, and judgment was entered for the claimant.