Dale Vince & Anor v HM Revenue & Customs

Relief from sanctions should be refused where a serious and unjustified delay in seeking to introduce important evidence would inevitably require a fixed trial to be vacated and cause substantial prejudice and cost. The court must apply the three-stage approach in Denton v White, considering the seriousness and significance of the breach, whether there is a good reason, and all the circumstances. Particular weight must be given to efficient and proportionate litigation and compliance with rules and orders. Relevant evidence going to a central issue is a powerful factor in favour of relief, but it may be outweighed by disruption, delay, prejudice and the interests of justice.

HM Revenue & Customs applied for permission under CPR rule 32.10 to rely on a late witness statement from Mr Martin Alder and call him at the trial. The statement concerned whether he had agreed that trademarks used by the relevant companies were owned by the first claimant. HMRC had previously stated that it would call no witnesses, and the deadline for witness statements had expired. The application was made shortly before the fixed trial window. The claimants opposed it on the basis that relief from sanctions was required and that admitting the evidence would require further investigation, evidence and preparation, causing the trial to be vacated.

1. The application for permission to rely on Mr Alder’s late witness statement was treated as, or was equivalent to, an application for relief from sanctions under CPR 3.9. The principles in Denton v White [2014] EWCA Civ 906 applied.
2. The breach was serious and significant. The deadline for witness statements had expired, the trial was imminent, and admitting the evidence would inevitably require the fixed trial to be vacated. The claimants would reasonably need to investigate further witnesses and documents and potentially serve additional evidence.
3. There was no good reason for the breach. The issue to which Mr Alder’s evidence related had been clearly raised on the pleadings by March 2016. HMRC’s internal communication difficulties and its delay in contacting Mr Alder did not provide sufficient justification.
4. Considering all the circumstances, the factors identified in CPR r.3.9(a) and (b)—efficient litigation at proportionate cost and enforcement of compliance with rules, practice directions and orders—militated against relief. Vacating the trial would cause disruption, wasted resources, delay and significant prejudice to the claimants and the court.
5. The fact that Mr Alder’s evidence was relevant to a central issue was a powerful factor in favour of granting relief. Nevertheless, it was outweighed by the lengthy and inexcusable delay, the inevitable vacation of the trial, further procedural consequences and the prejudice to the administration of justice. The application was refused. The subsidiary application for evidence by video link did not arise.

Not stated in the judgment.