Singh & Ors v The Charity Commission & Ors

Relief from sanctions may be granted after serious and unjustified non-compliance with an unless order where, considering all the circumstances, reinstatement causes limited disruption and the underlying claim may otherwise be good. The court must consider delay from the date of the original order, not merely from the later unless order. Particular weight must be given to efficient litigation, proportionate cost, and the enforcement of court orders. Subsequent payment is relevant but does not, by itself, justify relief. The merits are generally irrelevant unless one party’s case is so weak that summary judgment could properly be sought.

The proceedings concerned a dispute about the appointment of a management committee for a charitable Sikh temple. The claimants’ original claim had been dismissed, and the defendants brought a counterclaim. The claimants were ordered to pay £75,000 on account of costs and, by an unless order, were debarred from defending the counterclaim if payment was not made by the specified date. They failed to comply, and their defence was struck out. They later paid the sums due and applied for relief from sanctions and reinstatement of their defence. The central issue was whether relief should be granted in the circumstances.

1. Relief granted. The claimants were granted relief from sanctions and the proceedings were to be reconstituted, subject to an order that they bear the costs thrown away by the intervening costs and case management conference.
2. The court applied the approach established in Mitchell v Denton and considered in Oak Cash and Carry Ltd v British Gas Trading [2016] EWCA Civ 153. The breach and resulting delay were serious. No good reason for the delay had been shown. The court was required, however, to consider all the circumstances.
3. The relevant delay ran from the original costs order, made on 10 March 2017, rather than only from the subsequent unless order. The claimants’ later payment was relevant but attracted limited weight because the sum remained due notwithstanding the striking-out and had been paid only after the sanction took effect.
4. Particular regard was given to the need for litigation to be conducted efficiently and at proportionate cost, and to the importance of enforcing court orders. Against that, reinstatement would cause minimal disruption because the trial and pre-trial review dates remained available, and only minor adjustments to existing directions were required. The defaults, although serious, were not sufficient to justify continued debarring where the claim might otherwise be good.
5. Following Al Saud [2014] UKSC 64, the merits were irrelevant on this application because neither side contended that the other’s case was so weak as to justify summary judgment. The wider community interest and concerns about whether all persons affected by the eventual orders were properly before the court were taken into account, but did not alter the result.