Jalay Enterprises Limited v Harrison Ramsdale & Ors

A tribunal considering the consequences of non-compliance with directions should generally use the Denton framework. It must assess the seriousness of the breach, the reason for it, and all circumstances bearing on the overriding objective of dealing fairly and justly.

Debarring a party from a final hearing is a draconian sanction, particularly where the claim alleges criminal conduct and may result in a substantial financial penalty. A tribunal must consider relevant explanations and lesser sanctions. An appellate tribunal may intervene where material matters were ignored and the debarring decision falls outside the permissible ambit of discretion.

The respondents, tenants of a shared flat, obtained a rent repayment order against Jalay Enterprises Limited after the First-tier Tribunal debarred it from participating in the hearing. The order concerned an alleged unlicensed HMO and totalled £16,866.

The appellant had missed directions for evidence but promptly sought an extension after finding the directions in a spam folder. The First-tier Tribunal did not determine that application before the final hearing. It later excluded the appellant's evidence and debarred it from giving evidence, cross-examining, or making submissions.

The appeal concerned whether the debarring order resulted from a serious procedural irregularity and denied the appellant a fair hearing.

1. Appeal allowed. The rent repayment order was set aside and the case was remitted to a differently constituted First-tier Tribunal.

2. The First-tier Tribunal should generally adopt the three-stage Denton guidance when responding to non-compliance with directions: assess the seriousness or significance of the breach, consider why it occurred, and then evaluate all relevant circumstances in accordance with the overriding objective. The guidance promotes consistent and fair decision-making, while the tribunal rules require a flexible and proportionate approach that seeks, so far as practicable, to enable full participation.

3. The appellate jurisdiction over a discretionary debarring order is restrained. Intervention is justified only where the decision cannot be justified because the tribunal applied incorrect principles, ignored relevant matters, or relied on irrelevant matters. The potentially determinative effect of a debarring order nevertheless limits permissible harshness.

4. The First-tier Tribunal failed to consider the appellant’s outstanding extension application and Mr Patel’s explanation for the initial default. Those matters were material to the appellant’s culpability and to the later delay in filing evidence. The tribunal instead stated that no plausible explanation had been offered. Its omission meant that the decision to debar the appellant could not stand.

5. Even if evidence were excluded, the tribunal had to consider a lesser sanction. It did not explain why the appellant’s solicitor should be prevented from cross-examining the respondents or making submissions. On remittal, the appellant’s statement of case and Mr Patel’s witness statement were directed to be admitted. Any remaining criticism of delay carried relatively little weight against enabling both parties to participate fully.

• Upper Tribunal (Lands Chamber): allowed the appeal in [2023] UKUT 247 (LC), set aside the rent repayment order, and remitted the matter to a differently constituted First-tier Tribunal.
• First-tier Tribunal (Property Chamber): on 16 January 2023 debarred the landlord from participation at the hearing and made a rent repayment order for £16,866.