The eagerly awaited Court of Appeal judgement in Denton & others v TH White Ltd & others was handed down on Friday. Dyson LJ provides a careful methodology on the approach to applications for relief from sanctions under CPR 3.9, with the aim to set to rights the fall-out from the landmark decision of Mitchell v News Group Newspapers Ltd (our note here).
There is now a 3 stage process for such applications. The first question to be asked is whether the breach of the rule, practice direction or court order leading to the sanction was ‘serious or significant.’ This replaces the ‘trivial’ criterion at para.40 of Mitchell, the Court having accepted that a breach may be regarded as trivial from one angle but not from another. Importantly, seriousness must be judged from the point of view not only of the litigation in question but litigation in general (para.26), reminding us (as Mitchell did) of the impact of a breach on other court users.
If a breach is serious or significant, the next question to be asked is whether there was a good reason for it. If there was no good reason, the Court is not bound to refuse the application and must consider all the circumstances of the case, with a focus on the need to conduct litigation efficiently and proportionately and to enforce compliance with rules and court orders. The CoA under stages 2 and 3 is careful not to prescribe what may or may not count as a good reason or what circumstances of a case might be relevant. However, prompt applications for relief and breaches of other orders are mentioned as factors to be weighed in the balance.
Since Mitchell was decided, the new rule 3.8(4) allows parties to agree up to a 28 day extension for compliance with court orders and this provides the CoA in Denton with the opportunity to give guidance and warnings to litigators. Opportunism will now be more readily penalised in costs (para. 43) where it is obvious that an offending party’s application for relief would be successful and this application has been unreasonably opposed, or a request for an extension of time has been unreasonably refused.
So, in Denton, the CoA held that the judge’s decision was plainly wrong. Witness statements had been served approximately 6 months after the deadline with the result that the trial was vacated and a fresh set of case management directions were set. The application for relief failed at all three stages. In Decadent Vapours, the late payment of a listing and hearing fee, albeit serious and lacking a good reason, should have led to relief from sanction being granted as the breach was at the bottom end of seriousness and the litigation could still have proceeded proportionately.In Utilise, a costs budget was filed 45 minutes late, which was neither serious, nor did it disrupt this or other litigation. The fact that an earlier order had been breached did not turn this breach into anything more serious. Relief from sanction was therefore granted and all three appeals were allowed.
Comment
So does Denton clear up all doubts and misunderstandings that followed from Mitchell? Although the CoA describes a three stage process, it is a balancing rather than a sequential exercise because, as the Court says at paragraph 35, “The more serious or significant the breach the less likely it is that relief will be granted unless there is a good reason for it.”
Jackson LJ dissents from the majority on the weight to be given to the specific factors under CPR 3.9(1). The majority consider (at para.32) that these factors should be given ‘particular’ weight, whereas Jackson LJ considers (para.85) that these factors be given no greater weight than other considerations.
Whether this difference in opinion will have a bearing in individual cases remains to be seen (it made no difference to these appeals). Mitchell remains good law, sanctions will still be deemed to have been correctly imposed and there is no longer any room for judges to be inclined to decide cases on their merits at the expense of due consideration of this new guidance.
I also get a hint in Jackson’s judgment para 98, that altho Mitchell was not wrong Jackson would have decided Mitchell at first hand differently
98.Finally, for the avoidance of doubt, although I was not a member of the court which decided Mitchell, I am not criticising the actual decision in that case. The master made a very tough order in Mitchell, as demonstrated by Professor Sime in his article Sanctions after Mitchell (2014) 33 CJQ 133. Nevertheless that order was not outside the permissible range of her case management discretion, as the Master of the Rolls and Vos LJ explain in paragraph 9 of their judgment.