PI Brief Update

PI Practitioner, October 2015

26/10/15. Each issue a particular topic is highlighted, citing some of the useful cases and other materials in that area. You can also receive these for free by registering for our PI Brief Update newsletter. Just select "Free Newsletter" from the menu at the top of this page and fill in your email address.

Applications for relief from sanctions, one year on from Denton

In Michael Wilson & Partners Ltd v Thomas Sinclair & Others [2015] EWCA Civ 774, the Court of Appeal considered the application of the decision in Denton v TH White Ltd to orders made on the basis of the guidance in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537.

The Court of Appeal's judgment is a useful demonstration of the role of the third stage of Denton in considering whether to grant relief from sanction. The Court, while maintaining the view that Denton constituted a 'restatement' of the guidance in Mitchell, held that the 'restatement' was a sufficient change in circumstances to justify a court in revoking an order where a judge had refused to reconsider striking out an appeal, prior to the decision in Denton.

The Applicant company claimed that the Second Respondent had been engaged in making payments to a director of the Applicant company for his own benefit. The Applicant had issued proceedings against the Second Respondent and pursued the director through arbitration, which resulted in the arbitrator largely finding against the Applicant. The Applicant's claim was struck out as an abuse of process, and following appeal it was ordered that the appeal would be stayed unless the Applicant made a payment into court by a specified date. The Applicant failed to do so and made an application to lift the stay. The judge considered the application to one for relief from sanctions under C.P.R. 3.9, and concluded that the claim should be struck out. In December 2013, prior to the decision in Denton, the judge found that the company's breach was not trivial and was without a good reason, and so, following the guidance in Mitchell, he refused to reconsider the strike-out.

The Court found that the judge's approach, based understandably on the language of Mitchell, was to treat the factors mentioned in r.3.9(1) of the CPR of the need to conduct litigation efficiently and at proportionate cost and the need to enforce compliance with rules, practice directions and orders as paramount considerations rather than having regard to all the circumstances of the case as required by Denton. While applying the first two stages of Denton did not lead to any material difference, the third stage of considering all the circumstances of the case meant that the judge's approach had been too narrow. Relief from sanction was therefore granted.

Elizabeth Gallagher & Ellen Robertson
Temple Garden Chambers

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