Chan Mok Park v Hassan Hadi & Anor.

A court may grant relief from sanctions where no formal application notice has been issued, either on an informal application at a hearing or, more rarely, on its own initiative. It should first consider the reason for the procedural omission, any impairment of the opposing party’s ability to respond, and whether sufficient evidence is available. If relief might justly be granted, the court must apply the three-stage approach in Denton.

Evidence need not invariably take the form of a witness statement. Relief without a formal application should nevertheless be granted sparingly and consistently with the overriding objective. When assessing a breach, the court may consider its duration, cause, prejudice, remediability and whether the purpose of the order was substantially achieved.

The claimant sought damages for breach of an alleged contract for the sale of a public-house business. Following earlier procedural defaults, Lavender J made an unless order requiring him to issue an amendment application and provide specified witness statements and financial records. Although he substantially attempted compliance, there were delays and deficiencies in filing, service, verification and disclosure.

Freedman J treated the claimant as having made an informal application for relief from sanctions. He granted relief, permitted amendment and refused to make payment of outstanding costs orders or security for costs a condition of continuing the claim: [2020] EWHC 2687 (QB). The defendants appealed. The central issues were whether relief could properly be granted without a formal application and supporting witness statement, and whether the claimant should have been debarred unless he paid the outstanding costs.

1. Appeal dismissed. A court has discretion to grant relief from sanctions where no formal application notice has been issued but an informal application is made at a hearing. It may also act of its own initiative where no application is made, although that course is likely to be rarer.

2. Before considering the merits of relief, the court should examine why there is no formal application, whether the absence of notice has impaired another party’s ability to oppose relief or adduce evidence, and whether sufficient evidence is available. The general rule in CPR rule 32.6 does not impose an inflexible requirement for evidence by witness statement. The discretion must be exercised consistently with the overriding objective and sparingly, particularly where the court proposes to act entirely of its own initiative. If relief might justly be granted, the court must apply the three-stage approach in Denton v TH White Ltd [2014] EWCA Civ 906.

3. The claimant had made an informal application at the hearing. The absence of a formal notice caused the defendants no real difficulty in opposing it. The judge had sufficient evidence and was entitled to avoid the needless cost and delay of an adjournment for a formal witness statement.

4. At the first Denton stage, the judge was entitled to find the defaults neither serious nor significant. The delay was short, partly resulted from a technical problem for which the claimant was not at fault, and caused no real prejudice. Defects in signature and verification were remediable. The omitted company statements resulted from oversight, while the financial form supplied sufficient information to achieve the purpose of the order.

5. There was no good reason for at least some defaults, but the explanation and mitigation were relevant at the third stage. The considerations in CPR rule 3.9(1)(a) and (b) were important but not exclusive. The judge could balance the relatively minor deficiencies against substantial compliance and conclude that striking out an apparently viable claim would be disproportionate and contrary to the overriding objective.

6. Whether to require payment of outstanding costs or security for costs was discretionary. The evidence of impecuniosity entitled the judge to refuse a condition which would, in practice, have terminated a claim that should proceed to trial.

1. Court of Appeal (Civil Division): The defendants’ appeal was dismissed: [2022] EWCA Civ 581.

2. High Court, Queen’s Bench Division: Freedman J granted relief from sanctions, dismissed the strike-out and summary judgment application, permitted amendment, and refused to condition continuation of the claim upon payment of outstanding costs or security: [2020] EWHC 2687 (QB).

3. High Court, Queen’s Bench Division: Lavender J had adjourned the defendants’ application and made an unless order requiring specified procedural steps by 18 June 2020.