Fatima v Family Channel Ltd & Anor

An application under rule 39.3 of the Civil Procedure Rules to set aside judgment entered after non-attendance is a distinct procedural remedy. It is neither an appeal nor an application to vary an earlier refusal to adjourn. The court exercises a fresh discretion and may reach a different conclusion on the same evidence.

The applicant must satisfy the three mandatory conditions of promptness, good reason for non-attendance and reasonable prospects of success. The approach to good reason is more generous than the rigorous approach generally appropriate to a medically supported adjournment application. If all three conditions are satisfied, setting aside will ordinarily follow unless the relief-from-sanctions principles produce the unusual contrary result. An appellate court should interfere with that decision only for an error of principle or a decision outside the permissible range.

Family Channel Ltd claimed repayment of money allegedly withdrawn without authority by Ms Fatima while she worked as its administrative assistant. She denied the claim and brought Part 20 claims against the company and its director. When illness prevented her attendance, the Recorder refused an application to adjourn, proceeded in her absence, struck out her defence, dismissed the Part 20 claims and entered judgment against her.

A District Judge granted her application under rule 39.3 of the Civil Procedure Rules to set aside those orders. On the respondents’ appeal, HHJ Gosnell reversed that decision. He considered that, without new evidence or changed circumstances, judicial comity required the District Judge to follow the Recorder’s assessment.

The second appeal concerned whether a rule 39.3 application is an independent exercise permitting a different conclusion on the same facts, and whether the intermediate appellate court was entitled to interfere with the District Judge’s decision.

1. The appeal was allowed and the District Judge’s decision restored. An application under rule 39.3(3) of the Civil Procedure Rules is not an appeal or an application to vary the earlier refusal to adjourn. Rules 39.3(3)–(5) provide a distinct procedural remedy governed by their own principles, subject at the stage of ultimate discretion to rule 3.9 and the Denton principles. Pereira and Gentry applied: paras 45–47.

2. There is a material distinction between refusing an adjournment and refusing to set aside a judgment entered after non-attendance. The latter refusal may deprive the applicant of any adjudication on the merits. The rule 39.3 court should therefore adopt a less rigorous and more generous approach to whether there was a good reason for non-attendance than would ordinarily apply to medical evidence supporting an adjournment. TBO Investments and Emojevbe followed: paras 48–49.

3. The rule 39.3 judge exercises a fresh discretion, unfettered by the earlier decision on adjournment. Judicial comity, consistency and finality do not require the judge to follow the trial judge, even where the facts are identical. Nor must the applicant demonstrate changed circumstances. The analogy with renewed case-management applications was inapposite because the two applications serve different purposes and apply different tests: paras 51–54.

4. An appellate court reviews rather than rehearing a rule 39.3 decision. It should interfere only for an error of law or principle, or where the decision falls outside the wide permissible range. HHJ Gosnell therefore erred by treating the appeal as a binary question whether the District Judge was right or wrong: paras 50 and 55.

5. The District Judge committed no error of law. Promptness and reasonable prospects of success were conceded. He was entitled to find a good reason for non-attendance from the evidence that Ms Fatima had attended hospital in good faith and was medically affected. Her fuller witness statement could properly be accepted absent cross-examination or direct contrary evidence: para 56.

6. Although the District Judge did not expressly work through the Denton stages, that point was not raised below or on appeal. Where all three rule 39.3(5) conditions are satisfied, it will be very unusual for the Denton analysis to justify refusing to set aside: para 57.

1. Court of Appeal (Civil Division): By [2020] EWCA Civ 824, unanimously allowed the second appeal and restored the District Judge’s order setting aside the judgment entered in Ms Fatima’s absence.

2. County Court at Bradford, HHJ Gosnell: Allowed the respondents’ appeal on 4 October 2019 and set aside the District Judge’s order. He held that, without new material or changed circumstances, judicial comity required adherence to the Recorder’s decision.

3. County Court at Bradford, District Judge Hickinbottom: On 13 March 2019 granted the application under rule 39.3 of the Civil Procedure Rules, set aside the Recorder’s judgment and orders, reinstated the defence and Part 20 claims, and directed a new trial.

4. County Court at Bradford, Recorder Bebb QC: On 17 January 2019 refused to adjourn, proceeded in Ms Fatima’s absence, struck out her defence, dismissed her Part 20 claims and entered judgment for Family Channel Ltd.