Razaq v Zafar

An appeal against refusal of relief from sanctions is ordinarily a review, not a rehearing. The appellate court may intervene where the first-instance decision was wrong or unjust because of a serious procedural or other irregularity. Under the Denton v TH White Ltd approach, the seriousness and significance of the breach must be assessed independently from the seriousness of the sanction. The court must then consider the explanation and all the circumstances, giving particular weight to efficient litigation and compliance with court orders. A breach may be serious without being at the highest end of the scale. Where the breach has been remedied, has not disrupted the timetable or caused prejudice, and refusal would substantially impair a party’s ability to present a fact-sensitive claim, relief may be proportionate despite the absence of a good reason for default.

The claimant appealed against HHJ Sephton QC’s refusal on 10 December 2019 to grant relief from the automatic sanction under CPR 32.10. His witness statements and disclosure had been served late. The underlying claim concerned an alleged agreement for the sale of a private hire taxi business and repayment of £60,000. The central factual issue was whether the money had been returned.

The claimant argued that the judge had misassessed the breach, misunderstood the state of compliance, failed to consider the effect of the sanction and made material errors in applying CPR 3.9 and Denton v TH White Ltd. The defendant also applied to strike out the claim, but that application remained live only if the appeal failed.

1. Appeal allowed. The court reviewed, rather than reheard, the application. Appellate intervention was justified because the first-instance judge had materially misdirected himself and made material errors of fact.
2. At the first stage of Denton v TH White Ltd, seriousness and significance had to be assessed independently from the seriousness of the sanction under CPR 32.10. The automatic nature of the sanction did not make every late witness statement serious or significant. The breach here was significant because statements were served three-and-a-half weeks late and the intended sequence of exchange was reversed, but it was not at the upper end of seriousness.
3. The claimant’s solicitors had no good reason for default. That factor weighed against relief. However, the judge had wrongly treated the disclosure failure as unexplained and unremedied, wrongly stated that there had been many breaches, and wrongly concluded that granting relief would cause further delay. Disclosure and witness statements had been served before the hearing, the case was trial-ready, and there was no material prejudice or disruption to the timetable.
4. At the third stage, CPR 3.9 required consideration of all the circumstances, including efficient and proportionate litigation and enforcement of compliance. The court had to carry forward its assessment of seriousness and the explanation for default. The effect of the sanction was also relevant. Refusal would substantially impair, and potentially prevent, presentation of a claim turning on disputed dishonesty and witness evidence. That was not decisive, but materially supported relief.
5. Relief from sanctions was granted. Time for disclosure was extended to 29 October 2019 and time for witness statements to 30 October 2019. The claimant was permitted to give evidence and call Mohammed Nabeel, Khalid Parwiz and Choudry Imran Hussain. The strike-out application fell away. The claim was to be transferred back to the County Court, with directions or a further pre-trial review if required.

• High Court (Queen’s Bench Division): The claimant’s appeal from HHJ Sephton QC’s refusal of relief from sanctions was allowed. Relief was granted and the matter was remitted to the County Court for trial directions.