The Financial Conduct Authority v Da Vinci Invest Ltd & Ors

Failure to comply with an unless order causes the specified sanction to take effect automatically. An application for relief from that sanction is governed by the three-stage approach in Denton v TH White [2014] EWCA Civ 906: assess the seriousness and significance of the breach, identify the reason for it, and evaluate all the circumstances, giving particular weight to efficient, proportionate litigation and compliance with court orders. A substantial and continuing failure to provide essential evidence, without a good reason, will ordinarily weigh strongly against relief. Article 6 does not confer a general right to translation of all documents in civil proceedings. The court may also consider the realistic prospects of the underlying application.

The FCA had obtained judgment imposing a financial penalty on Mr Pornye for market abuse under section 129 of the Financial Services and Markets Act 2000. Mr Pornye later applied to set aside that judgment, alleging lack of service and unauthorised representation by Bivonas Law LLP.

He failed to comply with directions requiring evidence, supporting documents and original specimens of his signature. An unless order provided that his set-aside application would be dismissed automatically unless he complied. He did not comply and subsequently sought variation of the order, treated by the court as an application for relief from sanctions.

1. Automatic sanction. The failure to comply with the unless order meant that the sanction took effect automatically. Mr Pornye’s set-aside application was therefore dismissed on 10 May 2016.
2. Relief application. The application was considered under CPR 3.9 and the three-stage approach in Denton v TH White [2014] EWCA Civ 906. The breach was serious and significant. It concerned evidence and original documents essential to identifying the case and progressing the application to trial. It continued until the hearing and prevented efficient and proportionate conduct of the litigation.
3. The court found no good reason for the breach. Mr Pornye’s reliance on Article 6 of the European Convention on Human Rights did not assist him. The proceedings were civil, not criminal, and Article 6(3) was not engaged. In any event, Hermi v Italy (2008) 46 EHRR 46 established that even in criminal proceedings Article 6(3)(e) did not require translation of every document. The order required Mr Pornye to identify documents already relied upon and provide his own original signature specimens, which he could do without translation of the entire trial bundle.
4. Under the third stage, the court gave particular weight to efficient litigation and compliance with orders. Mr Pornye had participated in the earlier directions hearing, understood the requirements, received a Hungarian translation of the unless order, and had not appealed it. His explanations concerning translation, employment and the merits did not justify non-compliance.
5. The court also considered the prospects of the underlying application under CPR 39.3. The evidence showed that Mr Pornye had known of the proceedings and the imminent trial, yet deliberately failed to engage with them. His allegations of ignorance and unauthorised representation were found to be untrue. The set-aside application therefore had no realistic prospect of success, and it would not be unjust to refuse relief.
6. Order. The application dated 4 August 2016 was dismissed.