889 Trading Limited v Clydesdale Bank Plc & Ors

A later order recording the consequences of compliance or non-compliance with an earlier peremptory order does not, without clear language, vary, rescind or suspend the earlier order. Where a claim has been automatically struck out for failure to comply, the proper route is an application for relief from sanctions under CPR 3.9. The application must address the Denton criteria: the seriousness and significance of the breach, the reason for it, and all the circumstances of the case. Deliberate non-compliance, prolonged delay, repeated defaults, parallel proceedings and unsatisfied costs orders may decisively weigh against relief. Allegations of fraud in the substantive claim do not explain non-compliance with a case-management order and do not engage principles concerning judgments obtained by fraud.

The claimant sought relief from sanctions under CPR 3.9 in proceedings concerning alleged misrepresentation, breach of duty of care and unjust enrichment arising from banking transactions. The claim had been automatically struck out after the claimant failed to file a directions questionnaire by the deadline in an order dated 20 September 2018.

A further order dated 18 October 2018 stated that, if the claimant complied with the earlier order, the file would be considered and, if appropriate, a costs and case-management conference would be listed; otherwise, the claim was struck out. The claimant argued that this later order revived the claim or extended time indefinitely. That argument had been rejected by HHJ Cawson QC, and permission to appeal had been refused. The central issue was whether relief from sanctions should nevertheless be granted.

1. The application was dismissed and recorded as totally without merit. The claim remained struck out. The order dated 18 October 2018 did not revisit or revise the order dated 20 September 2018. It explained the consequences of compliance or non-compliance with that earlier order, which operated according to its terms.

2. The court agreed with HHJ Cawson QC’s reasoning. The claimant’s contention that the claim had not been struck out was no longer open to it, following two determinations by HHJ Cawson QC and the refusal of permission to appeal by the Court of Appeal. The observations of Nugee LJ concerning the possible effect of the later order had been strictly obiter and had been made without the benefit of the later judgment or the relevant CPR provisions.

3. Relief had to be considered under CPR 3.9 and the three-stage approach in Denton v White. The court had to assess the seriousness and significance of the breach, why the default occurred, and all the circumstances of the case. Particular weight had to be given to efficient and proportionate litigation and enforcing compliance with rules, practice directions and court orders, alongside the other elements of the overriding objective.

4. The breach was serious and significant. The claimant had failed to file a directions questionnaire on three occasions, deliberately chose to pursue other routes, delayed for more than three years before applying for relief, pursued parallel and abusive litigation, had four unsatisfied costs orders exceeding £135,750, and continued to dispute the strike-out. The alleged non-receipt of the later order could not explain the failure to comply with the earlier order, which had been served and known to the claimant.

5. The alleged fraud did not alter the result. This was not a case in which a judgment had been obtained by fraud. The claim had been struck out because of deliberate non-compliance with a peremptory order. The claimant’s allegations therefore supplied no basis for applying the principles discussed in Takhar v Gracefield, nor any adequate reason for the default.

The judgment describes earlier related decisions:

• High Court: HHJ Cawson QC determined on two occasions that the claim had been struck out on 17 October 2018 and that the order of 18 October 2018 had not revived it.
• Court of Appeal: Nugee LJ refused permission to appeal. Arnold LJ later refused permission to appeal from HHJ Cawson QC’s further decision, stating that HHJ Cawson QC was plainly correct.