Daly & Anor v Ryan & Anor

An application to set aside judgment entered for non-compliance with an unless order must comply with the procedural requirements governing applications, including adequate grounds, supporting evidence and the applicable time limit. A defective or late application may engage the relief-from-sanctions jurisdiction. The court applies the Denton stages: seriousness and significance of the breach, the reason for it, and all the circumstances, with efficient and proportionate litigation and compliance with rules and orders given particular importance. A general power to extend time does not require an extension where delay is serious, unexplained and inconsistent with finality in litigation.

The claimants brought proceedings in deceit, conspiracy and breach of contract arising from alleged payments and costs connected with proposed business ventures. The defendants failed to comply with an unless order requiring further information and statements of truth. Judgment was consequently entered under CPR 3.5.

The defendants applied under CPR 3.6 to set aside that judgment, but the application notice gave inadequate grounds and was unsupported by evidence. The application was dismissed on the papers. The defendants then sought to set aside that dismissal order, relying on a subsequently filed witness statement and alleging that the original judgment had been obtained on a false basis. The central issues were whether the dismissal order should be set aside, whether relief from sanctions or an extension of time should be granted, and what costs order should follow.

1. The application to set aside the May order was dismissed. The rehearing was conducted on the basis that the court could determine whether the defendants should be permitted to pursue their underlying CPR 3.6 application. The court admitted the later witness statement in the exercise of its case-management discretion, applying the approach supported by Al-Zahra (PVT) Hospital v DDM [2019] EWCA Civ 1103.
2. The original application was defective. CPR 3.6 required an application within 14 days of service of the judgment. CPR 23.6 required the order sought and adequate grounds to be stated, while CPR 23.7 and Practice Direction 23A required supporting evidence to be served and filed. The defendants’ application did not adequately explain the case relied upon and contained no supporting evidence.
3. The failure to make an effective application within time and to file and serve evidence engaged CPR 3.9. The court accepted that a sanction may be implied even where the rule does not expressly state one, applying the reasoning in R (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633 and Mark v Universal Coatings & Services Ltd [2018] EWHC 3206 (QB).
4. Applying the three-stage test in Denton v TH White Limited [2014] EWCA Civ 906, the breaches were serious and significant. No good reason for the delay was shown. The circumstances, including substantial procedural delay, repeated non-compliance, the need for finality and the requirements in CPR 3.9.1(a) and (b), weighed against relief. The court therefore refused relief from sanctions.
5. The alternative application for retrospective extension of time under CPR 3.1(2) was also refused. Allowing the application to proceed would not further the overriding objective in CPR 1.1 and would perpetuate disproportionate delay. The defendants were ordered to pay the claimants’ costs on the standard basis. Costs summarily assessed at £12,000 plus VAT.

The judgment describes earlier procedural orders within the same proceedings. Judgment was entered against the defendants under CPR 3.5 after their non-compliance with an unless order. Their subsequent CPR 3.6 application was dismissed on the papers. The present court dismissed the defendants’ application to set aside that dismissal order and refused relief from sanctions or an extension of time.