Brenton Carl Smith v John Lloyd

On an appeal against refusal of relief from sanctions, the appellate court must respect the first-instance judge’s evaluative discretion. A different assessment of the seriousness of the breach, the adequacy of the explanation, or the weight given to individual circumstances does not establish an error of law. An order requiring payment within a specified period to avoid sanctions may involve a serious and significant breach where non-compliance affects the proceedings and continues beyond the deadline. An incorrect reliance on minor defaults will not necessarily invalidate the decision where other serious breaches independently justify refusing relief.

The appellant appealed against an order of HHJ Rawlings dated 18 May 2021 refusing relief from sanctions. The sanction was the striking out of the remaining part of his defence after he failed to pay £10,000 into court by the deadline imposed by an order of HHJ Truman.

The order had been made on 9 April 2021 but was sealed only on 6 May 2021. The first-instance judge accepted that there was a reasonable explanation for most of the period before the sealed order was received, but found no sufficient explanation for the subsequent delay. The appeal challenged the assessment under the three stages of the Denton test and alleged that the judge had relied on two matters which were not in fact breaches.

1. Appeal dismissed. The appellate court found no error of law in the refusal of relief from sanctions.
2. The appeal concerned an exercise of discretion. The appellate court will intervene only where the judge went wrong in law, for example by taking account of an irrelevant matter or failing to consider a relevant one. It is insufficient that another judge might have attached different weight to the circumstances.
3. At the first stage of the Denton test, the failure to pay £10,000 within 28 days was serious and significant. The payment was required to prevent the defence from being struck out, and its non-payment had a clear effect on the proceedings. The decision in Khandanpour v Chambers [2019] EWCA Civ 570 was distinguishable because it concerned a payment on account of costs which had no impact on the conduct of the proceedings and was less than one day late.
4. At the second stage, the judge was entitled to find a reasonable explanation for the period before receipt of the sealed order, but no reasonable explanation for the delay after 2.30 pm on 7 May 2021. The appellant’s evidence concerning the reason for non-payment was contradicted by contemporaneous material.
5. At the third stage, the judge was entitled to take account of serious and continuing defaults, including breach of an injunction requiring notices and the order to be sent to tenants and the council, late service of evidence for the summary judgment application, and the late adjournment application concerning a litigation friend.
6. Although the judge had wrongly treated the acknowledgement of service and defence as late, that was at most a minor consideration. The other breaches were materially more serious and sufficient in themselves to justify the conclusion. The erroneous reliance on those matters therefore did not vitiate the exercise of discretion.

• High Court (Chancery Division): Appeal from the order of HHJ Rawlings dated 18 May 2021. Appeal dismissed.
• County Court at Birmingham: Relief from sanctions refused after the remaining part of the defence was struck out for failure to pay £10,000 into court by the required deadline.