Solanki v (Intercity Technology Ltd & Anor (Rev 1)

An appellate court reviewing a refusal to adjourn must determine whether the decision was fair in the circumstances, rather than merely whether it fell within a broad discretionary range. Where credible medical evidence shows that a party needed for a fair trial cannot attend, and refusal would effectively deprive that party of a defence, an adjournment may be required to avoid a denial of justice.

Under CPR rule 39.3(5), a judgment entered after non-attendance should be set aside where the applicant acted promptly, had a good reason for absence, and has a reasonable prospect of success. In contempt proceedings, recoverable costs must be reasonably incurred and proportionate; they are not penal.

The respondents sued their former employee for breach of contract, database-rights breaches, delivery up of confidential information and injunctive relief. The appellant denied wrongdoing and disputed that any alleged breach caused the claimed loss.

Shortly before a five-day trial, the appellant sought an adjournment because of severe depression. He relied on his general practitioner’s report and sought permission to rely on further client witness statements. The judge refused an adjournment, struck out the defence when the appellant did not attend, and entered judgment for damages of £290,009. He later refused to set aside that judgment under CPR rule 39.3(5) and summarily assessed contempt-related costs at £83,583.73.

The appeals concerned fairness of the refusal to adjourn, the requirements for setting aside an absence judgment, and the proportionality of costs in committal proceedings.

1. All appeals were allowed. The judgment of 27 February 2015 was set aside and a new trial was directed.
2. The correct appellate question on an adjournment application was whether refusal was fair in the circumstances, as explained in Terluk v Berezovsky [2010] EWCA Civ 1345. The judge’s personal impression of the appellant was no substitute for the unchallenged medical evidence. That evidence recorded severe depression, suicidal thoughts, lack of concentration and serious sleep deprivation. There was no evidential basis for treating the illness as contrived.
3. The refusal caused especially serious prejudice. It led to the striking out of the defence and denied the appellant the opportunity to give evidence, challenge the respondents’ evidence, and rely on potentially important client evidence bearing on breach, causation and quantum. The inconvenience and costs of a short adjournment did not outweigh the appellant’s right to a fair trial under European Convention on Human Rights, Article 6. This was therefore a rare case in which refusal of an adjournment amounted to a denial of justice.
4. Even if an adjournment had properly been refused, the requirements of CPR rule 39.3(5) were met. The appellant acted promptly; his medical condition gave a good reason for non-attendance; and his existing and proposed client statements gave him a reasonable prospect of successfully disputing loss, causation and possibly liability. The judge failed to apply the guidance in Bank of Scotland plc v Pereira [2011] 1 WLR 2391 and Mohun-Smith v TBO Investments Ltd [2016] EWCA Civ 403.
5. The summary assessment of £83,583.73 in contempt costs was also set aside. Costs of contempt proceedings must be reasonable and proportionate, not penal. Although the appellant remained liable for reasonable standard-basis costs of the limited admitted contempts, the judge had not adequately considered whether the respondents’ expenditure was reasonably incurred or proportionate. The issue was remitted for detailed assessment after the retrial.

• Court of Appeal (Civil Division): Allowed all appeals in [2018] EWCA Civ 101. Set aside the substantive judgment and the summary assessments of contempt costs, ordered a new trial, and remitted costs for detailed assessment.
• High Court, Queen’s Bench Division, Mercantile Court, Birmingham District Registry: HHJ Simon Brown QC refused an adjournment, struck out the appellant’s defence after his non-attendance, and entered judgment on 27 February 2015. He refused to set aside that judgment under CPR rule 39.3(5), and later summarily assessed the respondents’ contempt costs.