9 December 2014Print This Post

Mitchell bites back as High Court overturns grant of relief from sanctions

Wife’s difficult pregnancy was not a good excuse for default

The High Court has fired a warning that the Denton ruling does not give parties a free run at relief from sanctions applications after overturning an “overly generous interpretation of the judgment in Mitchell”.

The initial ruling granting relief by HHJ Charles Harris QC at Oxford County Court came after Mitchell but before Denton.

But on appeal Mrs Justice McGowan ruled: “Denton restated and gave greater definition to the views of the court expressed in Mitchell. There were adjustments to facilitate greater understanding and perhaps a greater explanation but Denton does not alter the statement of principle as set out in Mitchell.”

British Gas Trading Ltd v Oak Cash & Carry Ltd [2014] EWHC 4058 (QB) related to a claim for an unpaid debt for the provision of electricity. Proceedings were initiated in February 2013, and in November 2013 the defendant was given three months to file the listing questionnaire. It failed to do this, and then failed to comply with an unless order. Default judgment for £211,388 was entered until HHJ Harris granted relief and reinstated the defendant’s defence.

McGowan J applied the three-stage Denton test and said that, firstly, it could not be said that the failures were neither serious or significant.

In relation to the second stage, it was recognised that the defendant’s solicitor had suffered personal problems, with his wife undergoing a difficult pregnancy.

“That being said, this was a significantly sized firm, over 40 qualified solicitors practised within the firm. There must be provision for those who have the responsibility of conducting litigation who know that they may not be available because of an ongoing medical problem to delegate the work to others who have sufficient experience and skill to ensure that tasks are properly completed,” the judge said, ruling that there was no good excuse for the failure.

Moving to the third stage, she said: “In considering all the circumstances of this case, I take into account the effect of the failure to comply. It is accepted that a questionnaire of this sort might not be the most important document provided by either side in the conduct of litigation.

“That being said, the persistent failure to provide such a questionnaire meant that in this particular case the trial date of two days was lost. That must be a matter of grave concern when one looks as the court did in Mitchell to the overall effect of such a breach, to the impact that it would have not only on the conduct of this piece of litigation but all those other cases awaiting dates for hearings and the waste of valuable court time, which is already massively under strain.

“I also bear in mind the effect on the defendant of their not being granted relief from sanction in this case. The finding against them is one in a substantial sum. It is unfortunate, to say the least, that the consequence of a refusal to grant relief from sanction in a case such as this, will in certain circumstances mean satellite litigation. It may well mean that the defendant now has to bring an action against its own solicitors…

“In my view the learned judge fell into error in applying an overly generous interpretation of the judgment in Mitchell… Looking at the circumstances of the case as a whole, there is no reason why relief from sanction should be granted.”

By Neil Rose

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