Dhanji & Anor v Najar & Ors

Relief from sanctions requires a structured assessment of the breach, its explanation and all the circumstances. Missing a deadline by eighteen days, coupled with failures to seek an extension, serve the defence or address an existing default-judgment application, was serious and significant. Solicitors’ incompetence was not a good explanation. Nevertheless, relief remained appropriate because the conduct, though professionally unacceptable, was not beyond the possibility of relief, and its consequences could be addressed particularly through costs. Future non-compliance would be viewed less generously.

The claimants sought default judgment against the first defendant and an order debarring the first and second defendants from defending claims under sections 423 and 43 of the Insolvency Act 1986. The defendants applied for relief from sanction and an extension of time to file and serve their defence and counterclaim.

The defence was filed eighteen days late, was not served on the claimants, and the defendants did not promptly apply for an extension or relief. The central issue was whether relief from sanctions should nevertheless be granted.

1. Relief from sanctions. The court adopted the structured approach identified in the Mitchell and Denton cases. It considered whether the breach was serious or significant, the explanation for it, and all the circumstances of the case.
2. The breach was serious and significant. It was not comparable to missing a deadline by one or two days. The defendants’ solicitors had recognised the time problem but sought an extension only after the deadline, failed to serve the defence, and waited approximately two and a half months before issuing their own application.
3. There was no good, adequate or satisfactory explanation. The conduct was either deliberate or, more probably, the product of solicitor incompetence. The latter did not provide a satisfactory explanation.
4. Under rule 3.9 of the Civil Procedure Rules 1998, the court had to consider all the circumstances, including efficient and proportionate litigation and compliance with rules, practice directions and orders. The defendants’ conduct had caused inefficiency and disproportionate cost, but this was not the worst possible case. The conduct was professionally unacceptable, yet its consequences could be addressed by costs and a stricter approach to any future default.
5. The claimants’ application was dismissed. Relief was granted by extending time to 21 November 2016 for filing the defence and counterclaim and to 4 pm on the day of judgment for service. Permission applied only to the document originally filed at court, not to any amended version.