UTB LLC v Sheffield United Ltd

Relief from the deemed admission of a document’s authenticity should be refused where the challenge is raised seriously late, lacks a satisfactory explanation and concerns an issue that is collateral to the pleaded dispute. The court must apply the three-stage approach in Denton v T.H. White Ltd: assess the seriousness and significance of the default, identify why it occurred, and consider all the circumstances, including the overriding objective. The likely disruption, cost and unfairness to the opposing party are material. A court need decide only the issues necessary to resolve the dispute, rather than every factual matter mentioned in the proceedings.

During an expedited trial concerning the ownership and transfer of shares in Blades Leisure Limited, Sheffield United Limited sought permission to challenge the authenticity of two share sale agreements disclosed by UTB LLC and to adduce handwriting evidence. Under CPR rule 32.19, authenticity had been deemed admitted because no notice disputing the documents had been served by the deadline. Sheffield United therefore required relief against sanctions under CPR rule 3.9.

The court concluded that the agreements were irrelevant to the issues requiring decision, including the effect of the counter-notice and the alleged conspiracy. The question was whether relief should nevertheless be granted to permit the late challenge.

1. Relief refused. Sheffield United was refused relief against sanctions under CPR rule 3.9, and could not challenge the authenticity of the disclosed agreements or call expert handwriting evidence.
2. The applicable approach was that stated in Denton v T.H. White Ltd [2014] EWCA Civ 906; [2014] 1 WLR 3296. The court considered the seriousness and significance of the breach, the explanation for it, and all the circumstances, including the overriding objective.
3. The breach was serious. Authenticity had been challenged only after the trial had begun, despite the documents having been disclosed months earlier. The explanation that the discrepancy became apparent only during late trial preparation was unsatisfactory.
4. The disputed agreements were collateral. UTB accepted that service of the counter-notice transferred the beneficial interest in Sheffield United’s shares to UTB. Any sub-sale or nomination of transferees was irrelevant to that issue. The validity of the agreements was also immaterial to the conspiracy claim, which depended on the alleged agreement to pursue a scheme, not on the validity of any sub-sale.
5. Granting relief would cause substantial disruption, expense and delay. It could require further disclosure, witness evidence, expert evidence and amendment of the pleaded case. It would be unfair to UTB to require that investigation during a complex and expedited trial when the issue could not affect the pleaded claims. The court was required to determine the issues necessary to resolve the dispute, not every factual matter raised in the proceedings.