Pharmagona Ltd v Taheri & Anor

Unrepresented litigants are ordinarily subject to the same standard of compliance with court rules and orders as represented parties. An unless order may be proportionate where disclosure is material, the timetable is tight, and compliance serves the overriding objective. Reconsideration or variation generally requires a material change of circumstances, a material factual misstatement, or genuine error. Relief from sanction requires assessment of the seriousness and significance of the default, the reason for it, and all the circumstances of the case. Deliberate non-compliance with an understood unless order, especially where accompanied by false evidence, will ordinarily justify refusing relief.

The claimant brought proceedings alleging that the defendants, former employees, had participated in fraudulent transactions and misappropriated funds. The claimant obtained disclosure orders and later an unless order requiring the defendants to provide an original signed letter of authority concerning specified bank accounts. Failure to comply would debar the defendants from defending and permit judgment for the sum claimed.

The defendants disputed non-compliance. The first defendant also sought a stay, reconsideration of the unless order, and relief from sanction. The court determined whether the order had been complied with, whether it should be varied or stayed, and whether relief from the sanction should be granted.

1. The defendants had failed to comply with the unless order. The court preferred the claimant’s evidence and found that no signed letter of authority had been delivered by the deadline. The defendants were therefore prima facie liable to be debarred from defending.

2. Although allowances may sometimes be made for unrepresented parties in case management and hearings, they are not ordinarily entitled to a lower standard of compliance with rules or orders. The court applied the guidance in Barton v Wright Hassall [2018] UKSC 12.

3. The unless order had been reasonable and proportionate. The underlying documents were material to the destination of the alleged proceeds, the order was tailored to obtain them, the trial timetable left little room for delay, and there was an important public interest in compliance with court orders.

4. The application to reconsider or vary the unless order was refused. Under CPR 3.1(7), the usual grounds identified in Tibbles v SIG plc [2012] 1 WLR 2591 were absent: there had been no material change of circumstances, misstatement of facts, or genuine error. CPR 40.8A did not apply because no qualifying material matter had occurred since the order.

5. Relief from sanction was refused under CPR 3.9. Applying the three-stage test in Denton v TH White [2014] 1 WLR 3296, the default was serious and significant, the first defendant had deliberately failed to comply despite understanding the order, and the need for efficient litigation, proportionate cost, and enforcement of court orders outweighed relief. The provision of false testimony supplied an additional compelling reason to refuse relief.

6. The claimant was entitled to judgment for £454,112.58. The first defendant’s applications for a stay of execution, reconsideration, and relief from sanction were dismissed.