Patterson v Spencer

Relief from sanctions requires the three-stage approach stated in Denton ([2014] EWCA Civ 906): assess the seriousness and significance of the breach in isolation; identify why it occurred; and evaluate all the circumstances, including efficient and proportionate litigation and compliance with orders. Those factors are important, but not paramount. A serious breach, or absence of a good reason, does not automatically defeat relief. Evidence in an application notice verified by a statement of truth is evidence. Where an unless order was not received before the deadline, the applicant acted promptly after learning of it, and the appeal was at an early stage without material prejudice, relief was justified.

Beverley Spencer was one of four children to whom George Spencer had transferred a property. In bankruptcy proceedings, the trustee obtained orders debarring her from defending the claim and providing for possession and sale of the property. She appealed to the High Court. After an order requiring her to file a transcript of the judgment under appeal, an unless order was made. The transcript was not filed by the deadline and the appeal was automatically struck out. The High Court deputy judge dismissed her application for relief from sanctions under rule 3.9(1) of the Civil Procedure Rules 1998: [2014] EWHC 1878 (Ch). The central issue was whether that refusal was wrong.

1. Disposition. Henderson LJ gave the substantive judgment and McFarlane LJ agreed. The appeal was allowed, relief from sanctions was granted, and the appellant’s High Court appeal was reinstated.
2. Applicable approach. The deputy judge had relied on the guidance in Mitchell v News Group Newspapers Ltd ([2013] EWCA Civ 1537; [2014] 1 WLR 795). The later decision in Denton v T H White Ltd ([2014] EWCA Civ 906; [2014] 1 WLR 3926) modified that guidance. Under rule 3.9(1), the court must first assess the seriousness and significance of the particular breach in isolation, then consider why the default occurred, and finally evaluate all the circumstances. The statutory factors are important and attract particular weight, but they are not paramount. Earlier defaults belong principally to the third stage.
3. Application. Failure to file the judgment transcript was serious or significant because the permission application could not be determined without it. However, the appellant’s evidence in Part C of her application notice was verified by a statement of truth and had evidential status. In the absence of contrary evidence or cross-examination, the deputy judge should not have rejected it as incredible. If accepted, non-receipt of the unless order until after the deadline provided a good reason for default. The appellant then acted with reasonable expedition.
4. The appeal was still at an early stage, and the delay caused no material prejudice to the trustee. The appellant had not committed repeated breaches of court orders. Her serious ill health and the limited nature of the earlier breach were relevant. The perception of delaying conduct could not substitute for the required structured assessment. The underlying grounds of appeal were not so obviously hopeless that the appeal should be prevented from reaching the ordinary permission stage.
5. Marcan Shipping (London) Ltd v Kefalas ([2007] EWCA Civ 463; [2007] 1 WLR 1864) confirmed that the sanction under an unless order took effect automatically, leaving relief from sanctions as the route to reinstatement. The proceedings should thereafter be advanced with minimum delay, and expedition could be considered if permission to appeal were granted.

• Court of Appeal (Civil Division): Allowed the appeal, granted relief from sanctions, and reinstated the appellant’s High Court appeal.
• High Court of Justice, Chancery Division: The deputy judge, Mr Henry Carr QC, dismissed the application for relief from sanctions under rule 3.9(1) of the Civil Procedure Rules 1998, leaving the appeal struck out: [2014] EWHC 1878 (Ch).
• County Court bankruptcy proceedings: District Judge Clarke made orders debarring the appellant from defending the trustee’s application and granting possession and sale relief in respect of the property.