Michael Wilson & Partners, Ltd v Michael John Short

An order may be varied or revoked under Civil Procedure Rules 1998, rule 3.1(7), only within a principled exercise of the discretion. Finality, the avoidance of a second bite and the preservation of appeal rights ordinarily restrict the jurisdiction. The usual grounds are a material change of circumstances, a material misstatement of the facts underlying the order, or a manifest judicial mistake. The jurisdiction is rare.

An automatic stay under rule 15.11 may be lifted by applying the three-stage Denton inquiry: seriousness and significance, reasons for the breach, and all the circumstances. The court may weigh the merits, prejudice and parties’ conduct. A stay was lifted where the claim was arguable, the defendant alleged no prejudice, and the delay was materially explained despite the claimant’s failure to progress the proceedings.

The claimant sought a declaration that the defendant was personally liable for judgment debts obtained against a company associated with him. The claim had been automatically stayed under rule 15.11 after no defence was filed within the applicable period and no substantive progress was made.

The claimant applied to set aside an earlier order dismissing an application to strike out the security-for-costs application, and separately sought to lift the automatic stay. The set-aside application relied initially on the Barrell jurisdiction and later, without amending the application notice, on rule 3.1(7). The central issues were whether the earlier order could be reopened and whether the stay should be lifted.

1. The set-aside application was dismissed and certified as totally without merit. Wilson v Emmott established that the court had no jurisdiction under the Barrell jurisdiction to reopen a final order once sealed or perfected, even where the reopening application was made before sealing. The claimant therefore could not rely on that jurisdiction.

2. The claimant was not entitled to rely on rule 3.1(7), because the application notice did not invoke that provision and no amendment had been sought. In any event, the application failed on the merits.

3. Under rule 3.1(7), the discretion is broad but subject to principled limits. The usual circumstances include a material change of circumstances, an innocent or deliberate misstatement of facts underlying the original decision, or a manifest mistake in the formulation of the order. Known or reasonably knowable matters, especially matters deliberately omitted, will rarely justify revisiting an order.

4. The alleged false submissions did not justify reopening the order. An application for an extension of time does not prevent time from expiring. The issue had already been fully argued at the earlier hearing. The reference to a civil restraint order was passing, did not form part of the reasoning, and the allegation that the information had been obtained improperly was speculative and unsupported.

5. The stay-lifting application was granted. The court applied the flexible three-stage Denton test, as explained in Bank of America Europe v Citta Metropolitana di Milano. The delay was serious and significant, but around six months was attributable to Mr Wilson’s illness and other misfortunes. Other litigation did not itself provide a good reason, and the claimant’s mistaken understanding of the stay was not a good reason. Nevertheless, the claim was arguable, the defendant alleged no prejudice, and the defendant had consented to extensions and taken no steps to progress the security application. Those factors outweighed the delay and justified lifting the stay.

First-instance decision. No prior appellate decision is stated in the judgment.