Badejo v Cranston

At the third stage of the Denton v T H White Limited approach, the court must assess whether granting or refusing relief from sanctions is just in all the circumstances. Proportionality lies at the heart of that assessment. The court must consider the seriousness and explanation for the breach, the effect on the parties and court resources, previous defaults, the consequences of refusal, and any realistic alternative remedy. Loss of a trial date is important where the breach caused it, but should not carry decisive weight where the date was lost because the court failed to list an application promptly. Relief may therefore be granted for a moderately serious and unexplained breach where refusal would be disproportionate.

The claimant appealed against HHJ Roberts’s refusal to grant relief from an automatic strike-out caused by failure to pay a trial fee under rule 3.7A(1) of the Civil Procedure Rules. The application was issued shortly after the solicitor discovered the default, but the County Court did not list it before the fixed trial date, which was then vacated. The central issues were whether the judge had misapplied the third stage of the approach in Denton v T H White Limited and whether relief should be granted afresh.

1. The appeal was allowed and relief against sanctions was granted, subject to terms to be determined.
2. The lower court had erred in treating proportionality as irrelevant because the sanction was automatic. At the third stage of the Denton v T H White Limited approach, the question is whether relief is just in all the circumstances. That necessarily includes proportionality between the breach, its consequences, and the effect of granting or refusing relief.
3. The failure to pay the trial fee was a moderately serious, inadvertent and unexplained breach. It was not among the most serious breaches, but countervailing considerations were required before relief could properly be granted.
4. The relevant considerations included the short period between discovery of the default and the application, the additional costs and inconvenience to the respondent, demands on court resources, previous defaults by the claimant, the serious consequences of refusal, and possible alternative claims against the respondent or the solicitors.
5. The loss of the trial date had been given excessive weight. The application had been made nearly three weeks before trial, and the date was lost because the court did not list the application urgently. That administrative delay should not be held against the claimant. The breach created the opportunity for the date to be lost but was not, on these facts, its cause.
6. Refusal would cause substantial financial prejudice, including loss of the claim, existing costs, and the likely expense of further proceedings. Requiring the claimant to pursue a new claim or professional-negligence proceedings would be disproportionate to the breach and harm attributable to it. The discretion was therefore exercised afresh in favour of relief.
7. The decision did not establish that prompt applications will invariably succeed. Where the breach causes the loss of a trial date, or where there are serious previous defaults, that may be a significant factor against relief.

• High Court (Chancery Division): appeal from HHJ Roberts’s decision in the County Court at Central London refusing relief against sanctions; appeal allowed and relief granted.