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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Midland Premier Properties Ltd & Anor v Doal & Ors [2025] EWHC 1639 (Ch) (30 June 2025) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2025/1639.html Cite as: [2025] EWHC 1639 (Ch) |
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BUSINESS AND PROPERTY COURTS IN BIRMINGHAM
BUSINESS LIST (ChD)
Priory Courts 33 Bull Street Birmingham |
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B e f o r e :
____________________
IN THE MATTER OF | ||
(1) MIDLAND PREMIER PROPERTIES LIMITED | ||
(2) SANMAN PROPERTY MANAGEMENT LIMITED | Claimants | |
-v- | ||
(1) RAKESH SINGH DOAL | ||
(2) 2020 LIVING LIMITED | ||
(3) SAMUEL GINDA | ||
(4) TAYLOR GRANGE 2 LIMITED | ||
(5) TAYLOR GRANGE DM LIMITED | ||
(6) TGDM ONE LIMITED | Defendants |
____________________
MR S ATKINS KC and Ms E Livesey appeared on behalf of the 2nd – 6th Defendants
Hearing 8 May 2025
____________________
Crown Copyright ©
His Honour Judge Rawlings:
INTRODUCTION
(a) under CPR 3.1(7) that the unless order dated 31 July 2024 ("Unless Order") and Debarring Order dated 13 September 2024 ("Debarring Order") be varied so that they only debar them from taking part in the liability trial and not any hearing thereafter; or
(b) that they be granted partial relief from the sanctions set out in paragraph 2 of the Unless Order and paragraph 16 of the Debarring Order that their defences are struck out and they are debarred from defending the claim (both as to liability and quantum) ("the Sanction") so that they are only debarred from taking part in the liability trial and not any hearing thereafter; or
(c) that the Debarring Order is varied under CPR 3.1(7) with the consequence that a re-trial of the Liability Trial that took place between 15 and 16 October 2024 is directed.
BACKGROUND
(a) a declaration that paragraph 16 of the Debarring Order, when properly construed, applied only to the Liability Trial so that the Defendants were not debarred from defending the claim and from participating in any future hearing after the Liability Trial concluded; alternatively
(b) that the Debarring Order should be varied so as to clearly state that the Defendants were not debarred from defending the claim after the Liability Trial and from participating in future hearings; alternatively
(c) that the Defendants be granted relief from the Sanction, on the basis of a material change in circumstances, since the previous application for such relief.
REPRESENTATION
(a) the Defendants were represented by Mr Atkins KC and Ms Livesey; and
(b) the Claimant was represented by Mr Lewis.
THE EVIDENCE
(a) Hill Dickinson only came on record as acting for the Defendants on 8 January 2025, it would not have been sensible for the Defendants to change solicitors before this time, because appeals were being prepared against the Debarring Order and against the result of the Liability Trial up to that point;
(b) the CMC, for the Quantum Issue had not been listed when Hill Dickinson came onto the record;
(c) the Claimant pressed for the CMC to be listed on 23 or 24 January and Hill Dickinson asked that it be listed 4 weeks after 13 January, so that they would have time to prepare for the hearing and make what became the January Application;
(d) when the CMC was listed for 23 January, Hill Dickinson asked the Claimant to agree to an adjournment, but they refused;
(e) as a consequence of (a) – (d) and the time available on 23 January being insufficient to deal with all of the applications that were listed to be heard on that date, the Defendants' counsel decided to restrict the grounds on which the January Application sought to establish that the Debarring Order did not prevent the Defendants from contesting the Quantum Issue, by not applying under CPR 3.1(7) to vary the Unless Order/Debarring Order; and
(f) it was in that context that Hill Dickinson wrote to the court, on 31 January 2025 making further submissions after the conclusion of the hearing on 23 January.
(a) the Liability Trial took place on 15 and 16 October 2024 and therefore there was a three month gap between the end of the Liability Trial and the date fixed for the CMC, allowing the Defendants ample time to change legal advisers. Whilst Mr Little refers to work done in connection with appeals against the orders of 13 and 23 September 2024, that work was completed by 30 October 2024. In those circumstances, January 2025 was not the soonest that the Defendants could have sensibly changed legal representatives, as Mr Little suggests;
(b) dates of availability for the CMC had been given to the court, including dates in January 2025 and so it was entirely possible that the hearing of the CMC would be listed in January, at some point after 13 January 2025 and the Defendants' solicitors should have been prepared for that to happen;
(c) on 15 January 2025, Hill Dickinson wrote to his firm to ask whether they agreed that the Debarring Order did not prevent the Defendants from defending proceedings from then on. His firm responded to say that it was clear from the terms of the Debarring Order that the Defendants were debarred from defending the whole proceedings;
(d) written submissions were filed by the Defendants' solicitors on 6 March 2025. Those submissions assert that the court did not consider previously whether the Defendants should be debarred from defending after the Liability Trial, because the issue was overlooked by the parties and the court, in genuine error when the Unless Order and Debarring Order were made and that it is clear that the Claimant had also overlooked the issue. The orders are plain on their face and it is difficult to see how the Defendants could have overlooked their effect and he notes that, in applying for permission to appeal against my judgment of 13 September 2024 (which resulted in the Debarring Order and order refusing the Defendants' application for relief from the Sanction) the Defendants said that I should have considered granting relief on a partial basis, so that the Defendants were not debarred from defending the Quantum Issue; and
(e) the Defendants have still not complied with the Unless Order and continue to produce documents which ought to have been captured by the searches and disclosed in advance of the Liability Trial. In a letter of 5 March 2025, the Defendants' solicitors requested that the Claimant agrees to certain payments being made to third parties out of the funds frozen by a freezing order. In support of that request the solicitors sent copies of documents relating to the 6th Defendant's liability to those third parties which ought to have been disclosed prior to Liability Trial. In particular the agreement between the 6th Defendant and Skybridge Property Ltd which was disclosed on 5 March 2025 ought to have been disclosed before the Liability Trial. The Defendants' previous solicitors, who were specifically asked to disclose any written agreement with Skybridge, stated that no such written agreement existed.
THE ARGUMENTS FOR EACH SIDE IN SUMMARY
(a) in the March Judgment, I recognised that it is both unfair to the Defendants and unsatisfactory for the court (in determining the Quantum Issue at the Quantum Trial) for the Defendants to be debarred from defending the Quantum Issue. He also says that my judgment proceeds on the basis that I would have granted the Defendants partial relief from the Sanction, to enable them to defend the Quantum Issue, if I had felt that was something that I had a discretion to do;
(b) whilst the Claimant says that it is abusive for the Defendants to seek relief or partial relief from the Sanction, for reasons that he expanded upon, particularly in oral argument, it is not, he says, an abuse;
(c) the unfair and unsatisfactory nature of the Sanction as it is set out in the Unless Order, can be cured by one or more of five routes:
(i) because the parties and the court overlooked the issue of whether it was fair and proportionate for the Sanction to apply to the Quantum Issue, the court is not reconsidering that issue but considering it for the first time;
(ii) there was a manifest mistake, made in the Unless Order and the Debarring Order, in that no thought was given to the justice and proportionality of the Sanction extending to the Quantum Issue;
(iii) the facts and arguments on which the decisions to make the Unless Order and the Debarring Order were made were innocently misstated, in that neither party put before the court what the true extent of the Unless Order and Debarring Order, as drafted were;
(iv) the Claimant wrongly misrepresented to the court, when seeking the Debarring Order, that it was ready for the Liability Trial, but it was not as it was not in a position to put its case as to the correct counter-factual scenario to be adopted in valuing the Claimant's loss for the Hotel Site ("the Counterfactual Issue"), which the directions order of DJ Phillips of 22 February 2023 directed to be dealt with at the Liability Trial. Mr Atkins says that, as a result of the Claimant misrepresenting the true position, I could go as far as granting relief against the whole of the Sanction and order a retrial of the Liability Issue and if not that, then I should grant partial relief from the Sanction so that the Defendants can defend from now on; and
(v) CPR 3.1(7) and 3.9 should be read consistently with Section 3 of the Human Rights Act 1998 ("HRA") in order to prevent an unlawful restriction of the Defendants' rights under Article 6 of the European Convention on Human Rights ("ECHR").
(a) the Application is an abuse of the process of the court, because the Defendants should have taken the points which they now seek to take in the Application on at least two previous occasions and in the absence of a significant change of circumstances/new facts, it is abusive for the Defendants to seek to take those points now;
(b) the application under CPR 3.1(7) requires, in accordance with the Court of Appeal authority in Tibbles v SIG Plc [2012] EWCA Civ 518 there to have been a material change of circumstances since the Unless Order or the Debarring Order were made or that the material facts on which those orders were made were misstated, to justify the court now varying either of those orders and there has been no such material change/the facts were not misstated;
(c) a second application under CPR 3.9, for relief from sanctions requires the applicant to show a material change of circumstances or that the facts upon which the original application for relief was refused have been misstated. Neither of those circumstances apply here; and
(d) an order striking out a claim and debarring a defendant from defending a claim does not breach the defendant's Article 6 rights if those powers are exercised fairly and they were exercised fairly in this case.
IS THE APPLICATION AN ABUSE?
THE RELEVANT LEGAL PRINCIPLES
"The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice."
"The Henderson and Hunter principles apply to interlocutory hearings as much as to final hearings. Many interlocutory hearings acutely engage the court's duty to ensure efficient case management and the public interest in the best use of court resources. Therefore the application of the principles will often mean that if a point is open to a party on an interlocutory application and is not pursued, then the applicant cannot take the point at a subsequent interlocutory hearing in relation to the same or similar relief, absent a significant and material change of circumstances or his becoming aware of facts which he did not know and could not reasonably have discovered at the time of the first hearing. This is not a departure from the principle in Johnson v Gore Wood & Co [2002] 2 AC 1 that it is not sufficient to establish that a point could have been taken on an earlier occasion, but a recognition that where it should have been taken then, a significant change of circumstances or new facts will be required if raising it on a subsequent application is not to be abusive. The dictum in Woodhouse v Consignia plc [2002] 1 WLR 2558 that the principle should be applied less strictly in interlocutory cases is best understood as a recognition that because interlocutory decisions may involve less use of court time and expense to the parties, and a lower risk of prejudice from irreconcilable judgments, than final hearings, it may sometimes be harder for a respondent in an interlocutory hearing to persuade the court that the raising of the point in a subsequent application is abusive as offending the public interest in finality in litigation and efficient use of court resources, and fairness to the respondent in protecting it from vexation and harassment. The court will also have its own interest in interlocutory orders made to ensure efficient preparations for an orderly trial irrespective of the past conduct of one of the parties, which may justify revisiting a procedural issue one party ought to have raised on an earlier occasion. There is, however, no general principle that the applicant in interlocutory hearings is entitled to greater indulgence; nor is there a different test to be applied to interlocutory hearings. In every case the principles are those identified in paras 30–40 above, the application of which will reflect that within a single set of proceedings, a party should generally bring forward in argument all points reasonably available to him at the first opportunity, and that to allow him to take them serially in subsequent applications would generally permit abuse in the form of unfair harassment of the other party and obstruction of the efficacy of the judicial process by undermining the necessary finality of unappealed interlocutory decisions."
(a) because interlocutory decisions may involve less use of court time and expense to the parties and a lower risk of prejudice from irreconcilable judgments than final hearings, it may sometimes be harder for a respondent to persuade the court that the raising of a point in a subsequent application is abusive; and
(b) the public interest in finality of litigation is not absolute and is to be balanced against public and private interests such as the efficient use of the court's resources and the overriding objective.
(a) in Johnson v Gore Wood, Lord Bingham said that: "It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. Those words were considered by the Court of Appeal in Koza and the Court of Appeal said that "….the application of the principles will often mean that if a point is open to a party on an interlocutory application and is not pursued, then the applicant cannot take the point at a subsequent interlocutory hearing in relation to the same or similar relief, absent a significant and material change of circumstances or his becoming aware of facts which he did not know and could not reasonably have discovered at the time of the first hearing. This is not a departure from the principle in Johnson v Gore Wood & Co [2002] 2 AC 1 that it is not sufficient to establish that a point could have been taken on an earlier occasion, but a recognition that where it should have been taken then, a significant change of circumstances or new facts will be required if raising it on a subsequent application is not to be abusive"; and
(b) whilst the Defendants suggest that a more forgiving test is applied in the context of interlocutory hearings for procedural orders, the Court of Appeal made clear in Koza that there is no such lower test. In any event this was not, as the Defendants suggest, a procedural issue to ensure efficient preparation of the case for trial, but a contested application for relief from the Sanction which the Defendants are attempting to relitigate.
(a) the Claimant bears the burden of proving that it is abusive for the Defendants to issue the Application insofar as it seeks, for the first time, an order varying the Unless Order/Debarring Order under CPR 3.1(7) and/or for the third time an application for relief from the Sanction under CPR 3.9;
(b) the test is whether, in making the Application, the Defendants are misusing or abusing the process of the court and this involves the balancing of public and private interests;
(c) interlocutory decisions may involve less use of court time and expense and a lower risk of prejudice from irreconcilable judgments than final hearings and so it may sometimes be harder for respondent to persuade the court that the raising of a point in a subsequent interlocutory hearing is abusive as offending the public interest in the finality of litigation, efficient use of court resources and fairness, protecting the respondent from vexation and harassment;
(d) the court will have its own interest in interlocutory orders to make sure that preparations for trial are orderly and efficient which may justify revisiting a procedural issue which a party ought to have raised on a previous occasion; but
(e) an applicant in an interlocutory hearing is entitled to no greater indulgence than an applicant in a final hearing and there is not a different test, they should generally bring forward all points reasonably available to them at the first opportunity, allowing them to take the points serially in subsequent applications would generally be abusive.
(i) Lord Bingham in Johnson v Gore Wood said that: "It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before…". Lord Bingham seems to be using the word "should" not in the sense of – does not have a good excuse for not having done so, but looking at all the circumstances of the case should the party have done so;
(ii) In Woodhouse v Consignia plc [2002] 1 WLR 2558 (the case which Popplewell LJ said did not create a tension with other authorities he referred to) the Court of Appeal said:
"The application of 8 November 2000 was undoubtedly a "second bite at the cherry". It was supported by evidence that was available at the time of the first application. There was no good reason for the failure to place that evidence before the court on the first occasion. We accept that the fact that the evidence relied on in support of the application that was made on 8 November could and should have been put before the court in support of the earlier application is material to the exercise of the discretion conferred by CPR r 3.9(1); and
(iii) the Court of Appeal in Consignia went on to overturn the decision, not to allow the claimant to make a second application to lift the stay finding that it would be a disproportionate penalty for the claimant to lose his right to damages, due to an error by his legal representative. The Court of Appeal treated the fact that the claimant in that case was applying for the same relief a second time and producing evidence on the second occasion that he ought to have produced on the first occasion, as important factors against granting the order but as not decisively establishing abuse. The fact that, if the stay were not lifted, the claimant would be denied the right to pursue his personal injury claim and this was a disproportionate penalty for the error of the claimant's legal representative outweighed those factors.
THE PARTIES' CASES ON ABUSE
(a) whilst the Defendants could have applied under CPR 3.1(7) in the January Application and pursued that application at the hearing on 23 January 2025, it cannot be said that the Defendants should have done so, because:
(i) the Defendants had insufficient time to prepare for the hearing on 23 January 2025;
(ii) at the time of the January Application, the Defendants had only just changed their solicitors;
(iii) there was a lack of court time available on 23 January to deal with all of the applications which had been listed to be heard on that date and in light of that lack of time the Defendants decided to reduce the number of applications made in the January Application to fit within the time available;
(iv) even if the Defendants had applied, as the Claimant suggests that the Defendants should have done, to adjourn the hearing of the January Application, because the time available on 23 January was insufficient to deal with it, this would not have led to an application under CPR 3.1(7) being dealt with any more efficiently than it was by the Defendants issuing the Application separately. There would have had to be 2 hearings in any event; and
(v) the Claimant obtained a costs order in its favour at the 23 January hearing which it may well not have obtained if the Defendants had pursued an application under CPR 3.1(7) at that hearing; and
(c) the court has its own interest in ensuring that the Quantum Issue is fairly and efficiently determined. In the March Judgment I accepted that it was unsatisfactory for the court and unfair for the Defendants that they should be debarred from defending the Quantum Issue. The overriding objective and Article 6 of the ECHR are engaged, says Mt Atkins, and I should ensure that there is a fair trial of the Quantum Issue, it cannot be an abuse of the court's process to invite it to ensure that that happens.
(a) the Claimant has been harassed by being required to respond to three applications seeking, in essence, the same relief;
(b) the Claimant has incurred irrecoverable costs in doing so;
(c) a significant amount of court time has been wasted; and
(d) the Unless Order was made on 31 July 2024, Mr Atkins has accepted that, by 11 September 2024, he had appreciated that the Sanction contained in the Unless Order may debar the Defendants from defending the Quantum Issue, but no application was made to vary the Unless Order, under CPR 3.1(7), until 25 March 2025.
IS THE APPLICATION AN ABUSE? – MY DECISION
(a) the Defendants knew, as long ago as 11 September 2024, that the Sanction for which the Unless Order provided, at least arguably did bar the Defendants from defending the Quantum Issue and, when the Debarring Order was made, on 13 September 2024, that the Defendants, at least arguably were then debarred from defending the Quantum Issue;
(b) the general rule is that a party should bring forward every point reasonably available to them that they knew or ought to have known of , on the first occasion;
(c) the Defendants say that they chose not to include, in the January Application, an application to vary the Unless Order/Debarring Order under CPR 3.1(7);
(d) In my judgment the Defendants do not have a good excuse for not including the application under CPR 3.1(7) in the January Application, notwithstanding what Mr Little says in his witness statement and Mr Atkins said in his submissions about why it was not included. I find this because:
(i) whilst Mr Atkins says that the Defendants' new solicitors had very little time to prepare the January Application, so that it would be heard at the CMC, very little additional time would have been involved in including a CPR 3.1(7) application in the January Application. I say this because Tibbles, the leading authority on the principles to be applied in considering a CPR 3.1(7) application (which I deal with at length below) makes it clear that in circumstances such as the present any application under CPR 3.1(7) should be made promptly and largely on the evidence that was before the court when the original order, which it is sought to vary, was made. That very little additional evidence would have been required to support the January Application, had an application under CPR 3.1(7) been included in it is borne out by the content of Mr Little's witness statement, made in support of the Application. Whilst that witness statement is 31 paragraphs long almost all of those paragraphs address the reasons why the CPR 3.1(7) application was not made earlier, in the January Application (evidence that would not have been required if it had been included in the January Application); and
(ii) Mr Atkins says that, because there was insufficient time available on 23 January 2025 to deal with all the applications that had been listed to be dealt with on that date, the Defendants decided not to include a CPR 3.1(7) application in the January Application. He goes on to say that, if a CPR 3.1(7) application had been included, then inevitably it would have had to be adjourned to a later date and two hearings would therefore have been necessary, even if the CPR 3.1(7) application had been included in the January Application. I do not accept that is a good excuse, it appears that the Defendants made a tactical choice because of the lack of time available on 23 January, to include in the January Application only those grounds which they thought held out the best prospect of their obtaining an order which would allow the Defendants to defend the Quantum Issue. Those grounds failed and now the Defendants seek to advance the other grounds that they knew of before issuing the January Application, but chose not to deploy. Given that the general rule is that a party should bring forward all points in support of the relief that they seek on the first occasion, I do not accept that a tactical choice not to advance some of those points (even if based on a perceived lack of time at the hearing) is a good reason not to do so. Mr Atkins acknowledged that the Defendants could have asked for an adjournment on 23 January if there was insufficient time to deal with all the January Application, had it included an application under CPR 3.1(7).
(a) Mr Atkins says that even if the CPR 3.1(7) application had been included in the January Application, there would still have had to be two hearings, because, in those circumstances, the January Application would have had to be adjourned part heard. I accept that but, nonetheless, the Claimant was entitled to expect that the Defendants would bring forward all of the grounds on which they sought to persuade the court that the Defendants should be allowed to defend the Quantum Issue in one application; and
(b) in my judgment, the Claimant was also entitled to expect that the Defendants would make an application dealing with the Sanction, once it was triggered, swiftly and comprehensively, but they did not do so, in a number of ways:
(i) at the hearing on 2 September 2024 Mr Atkins, for the Defendants, applied for full relief from the Sanction or in the alternative for partial relief, on the basis that the Defendants would be debarred from defending some but not all of the claims. He did not suggest that I might grant partial relief from the Sanction on the basis that the Defendants would not be debarred from defending the Quantum Issue, although he ought to have realised that the Sanction did debar the Defendants from defending the Quantum Issue;
(ii) Mr Atkins accepts that he realised on 11 September, 2 days before I handed down my judgment in relation to the applications I heard on 2 September, that the wording of the Sanction at least may mean that the Defendants were debarred from defending the Quantum Issue, as well as the Liability Issue. Mr Atkins applied, on 13 September 2024, for permission to appeal against my refusal to grant the Defendants relief from the Sanction, amongst other grounds, on the ground that I ought to have considered granting partial relief to the Defendants, so that they were not debarred from defending the Quantum Issue;
(iii) notwithstanding that Mr Atkins had applied for permission to appeal on the ground that I ought to have considered granting partial relief, so that the Defendants would not be debarred from defending the Quantum Issue, no application was issued for partial relief from the Sanction, variation of the Unless Order/Debarring Order or other application aimed at ensuring that the Defendants would not be debarred from defending the Quantum Issue, until 15 January 2025, over 4 months later;
(iv) the Defendants offer, as an excuse, as to why an application was not made before the Liability Trial, that the Defendants were fully engaged in dealing with an application to amend the freezing order made against them and in dealing with disclosure and preparations for the Liability Trial. I do not accept that these are good excuses, in particular, as I have said elsewhere, an application under CPR 3.1(7) to vary the Unless Order/Debarring Order would have required little preparation, because hardly any evidence would be needed to support it. Whilst the Defendants did change solicitors in January 2025, this does not explain why an application was not made by the previous solicitors before then. Mr Atkins also says that having to deal with the Quantum Issue at all was contingent upon the Claimant succeeding at the Liability Trial, but I do not accept that that is a legitimate excuse for delaying making an application, the aim of which was to ensure that the Defendants were not debarred from defending the Quantum Issue, until after the result of the Liability Trial was known; and
(v) when eventually the January Application was issued, the Defendants made a choice not to include an application under CPR 3.1(7) in it. I have already concluded that they did not have a good excuse for not doing so.
Conclusion is the Application Abusive?
THE APPLICATION
(a) Mr Atkins concentrates on the five routes, by which he says the Application might be granted. Mr Atkins says that four of those five routes fall under the exceptions to the general rule set out Tibbles (the remaining route being Section 3 of HRA);
(b) Mr Lewis says that, whether the application is made under CPR 3.1(7) or CPR 3.9, the Defendants must show that there has been a material change of circumstances, since the Unless Order/Debarring Order were made or that the facts on which those orders were made were misstated to the court. Mr Lewis says that, as the Defendants cannot show either of those two things, the Application must fail; and
(c) the Defendants cannot show that there has been a material change of circumstances, because I found, in the March Judgment, that there had been no material change of circumstances since the Unless Order/Debarring Order had been made, in rejecting the January Application to vary the Debarring Order.
(a) I will set out the legal principles applying to an application to vary an order made under CPR 3.1(7). In doing so I will spend some time analysing the Court of Appeal decision in Tibbles, given that it is common
ground that Tibbles sets out the current guidance on the use of CPR 3.1(7) to set aside or vary an order under CPR 3.1(7);
(b) I will set out the legal principles applying to a second (or third) application for relief from the same sanction under CPR 3.9;
(c) I will consider Mr Atkins' point that CPR 3.1(7) and CPR 3.9 should be interpreted and applied consistently with Section 6 of the HRA (which Mr Atkins presents as one of his five routes by which he says I might grant the Application, but which I consider, if correct, to be a general principle applying to CPR 3.1(7)/CPR 3.9;
(d) I will then consider the four remaining routes that Mr Atkins says are available to the Defendants, as exceptions to the general rule that it is necessary for the Defendants to show a material change of circumstances since the Unless Order and Debarring Order were made or that material facts were misstated, to obtain an order varying them under CPR 3.1(7); and
(e) if I find that any of Mr Akins four routes are available, I will decide whether the legal principles set out in Tibbles are met in relation to that route or routes
PRINCIPLES APPLYING TO VARYING AN ORDER UNDER CPR 3.1(7)
(a) the first authority was Lloyds Investment (Scandinavia) Ltd v Ager-Hansen [2003] EWHC
1740 (Ch). In that case Patten J refused to vary a previous order made by a Deputy High Court Judge setting aside a default judgment on terms that the defendant paid a sum of money into court. Patton J said that, whilst it was not intended to be an exhaustive definition of the circumstances in which the power under CPR 3. 1 (7) could be exercised, the applicant had to show either a material change of circumstances or that the judge that made the original order was misled, in some way, innocently or otherwise, as to the correct factual position. It was not, he said, open to a party to the earlier application to seek to re-argue the application by relying on submissions and evidence which were available to him at the time of the earlier hearing but which, for whatever reason, he or his legal representatives chose not to deploy;
(b) In Calder v Williams [2006] 1 WLR 1945 Dyson LJ endorsed Patten J's approach, he said that the two circumstances outlined by Patten J were the only ones in which the power to revoke or vary an order already made should be exercised under CPR 3.1(7). However later in his judgment, Dyson LJ said that the jurisdiction to vary or revoke under CPR 3.1(7) should not "normally" be exercised unless the applicant is able to place material before the court whether in the form of evidence or argument which was not placed before the court on the earlier occasion;
(c) In Edwards v Goulding [2007] EWCA Civ 416 a Master made an order, the effect of which, was to do the opposite of his intention, which was clear from his judgment, to leave the question of limitation to be canvassed later in the proceedings. The Master varied his previous order to be consistent with his intention. Buxton LJ said that the rule was very wide and appeared to give a broad discretionary power but it must not be used as a substitute for an appeal. There must be additional material before the court in the form of evidence or possibly argument, although he reserved the question of whether additional argument alone would be enough. The case before the court considering an application of CPR 3.1(7) must be essentially different from a simple error that could be righted on appeal. Use of the CPR 3.1(7) power was appropriate, in that case, on the basis that the Master intended to keep the limitation issue alive but his order had the opposite effect;
(d) In Roult v North West Strategic Health Authority [2010] 1 WLR 487 a settlement of a medical negligence claim was approved by the court. The claimant sought to revise the schedule to the approved order to provide for private rather than local authority care for the claimant. The judge decided that he had no power to reopen the order. Hughes LJ said that CPR 3.1(7) could not be used by a judge to, in effect hear an appeal from himself. For case management decisions the grounds for invoking the rule generally had to fall into two categories: (a) erroneous information provided when the order was granted; or (b) subsequent events destroying the basis on which the order was made. The exigencies of case management may well call for a variation in case management planning from time to time in light of developments. It did not follow that even where one of those two categories was present a party was entitled to return to a trial judge and ask him to reopen a decision. In particular it did not follow where the judge's order is a final one disposing of the case in whole or in part and especially so if the final order was a settlement agreed between the parties;
(e) In Simms v Carr [2008] EWHC
1030 (Ch) Morgan J found that a Master did not have power to revoke his previous order for security for costs on the basis of new information that he was not aware of the first time round. The new information was not material to the decision and could have been correctly stated the first time round;
" in my judgment this jurisprudence permits the following conclusions to be drawn:
(i) …. The rule is apparently broad and unfettered, but considerations of finality, the undesirability of allowing litigants to have two bites of the cherry and the need to avoid undermining the concept of appeal, push towards a principled curtailment of an otherwise apparently open discretion….
(ii) The cases all warn against an attempt at an exhaustive definition of the circumstances in which a principled exercise of the discretion may arise. Subject to that, however, jurisprudence has laid down further guidance as to the primary circumstances in which the discretion may, as a matter of principle, be appropriately exercised, namely normally only: (a) where there has been a material change of circumstances since the order was made, or (b) where the facts on which the original decision was made were (innocently or otherwise) misstated.
(iii) It would be dangerous to treat these primary circumstances, originating with Patten J in this court, as though it were a statute. That is not how jurisprudence operates, especially where there is a warning against the attempt at exhaustive definition.
(iv) Thus there is room for debate in any particular case as to whether and to what extent, in the context of principle (b) in (ii) above, this statement may include omission as well as positive misstatement, or concern argument as distinct from facts. In my judgment, this debate is likely ultimately to be a matter for the exercise of discretion in the circumstances of each case;
(v) Similarly, questions may arise as to whether the statement (or omission) is conscious or unconscious; and whether the facts (or arguments) were known or unknown, knowable or unknowable. These as it seems to me, are also factors going to discretion: but where the facts or arguments are known or ought to have been known as at the time of the original order it is unlikely that the order can be revisited and that must be still more strongly the case where the decision not to mention it is conscious and deliberate;
(vi) Edwards v Goulding [2007] EWCA Civ 446 is an example of the operation of the rule in a rather different circumstance, namely that of a manifest mistake on the part of the judge in the formulation of his order. It was plain in that case from the master's judgment itself that he was seeking a disposition which would preserve the limitation point for future debate, but he did not realise that the form which his order took would not permit the realisation of his adjudicated and manifest intention; and
(vii) The cases considered above suggest that the successful invocation of the rule is rare. Exceptional is a dangerous and sometimes misleading word: however such is the interest of justice in the finality of a court's orders that it ought normally to take something out of the ordinary to lead to variation or revocation of an order, especially in the absence of a change of circumstances in an interlocutory situation."
(a) Paragraph 41 – "Thus it may well be that there is room within CPR 3.1(7) for a prompt recourse back to a court to deal with a matter which ought to have been dealt with in an order but which in genuine error was overlooked (by the parties and the court) and which the purposes behind the overriding objective, above all the interests of justice and the efficient management of litigation, would favour giving proper consideration to on the materials already before the court. This would not be a second consideration of something which had already been considered once (as would typically arise in a change of circumstances situation) but would be giving consideration to something for the first time. On that basis, the power within the rule would not be invoked in order to give a party a second bite of the cherry, or to avoid the need for an appeal, but to deal with something which, once the question is raised, is more or less obvious, on the materials already before the court"; and
(b) Paragraph 42 – "I emphasise however the word "prompt" which I have used above. The court would be unlikely to be prepared to assist an applicant once much time had gone by. With the passing of time is likely to come prejudice for a respondent who is entitled to go forward in reliance on the order that the court has made….."
PRINCIPLES RELATING TO A SECOND APPLICATION FOR RELIEF FROM SANCTIONS UNDER CPR 3.9
(a) at paragraph 18: "However, even if that were not right, it appears to me that, as a matter of ordinary principle, when a court has made an interlocutory order, it is not normally open to a party subsequently to ask for relief which effectively requires the order to be varied or rescinded, save if there has been a material change of circumstances since the order was made……Accordingly, even if CPR 3.1(7) did not apply to the second relief application, it appears clear that the defendants would have faced the same hurdle before the deputy judge…"; and
(b) at paragraph 19: "There was no question of the facts having been misstated by Hildyard J or of a manifest mistake in formulating his order. Accordingly unless (perhaps) they could show that this was not a "normal" case, the defendants had to establish a material change of circumstances since the hearing before Hildyard J before the deputy judge could properly consider the second relief application on its merits…".
SECTION 6 OF THE HUMAN RIGHTS ACT 1998 ("HRA")
(a) Section 3 of the HRA requires the court to interpret CPR 3.1(7) and CPR 3.9 in a manner which is compatible with the defendant's rights under the ECHR;
(b) Article 6 of the ECHR provides, where relevant that: "in the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair trial and public hearing within a reasonable time by an independent impartial tribunal established by law". Mr Atkins says that the court must always consider, therefore, whether a fair trial is possible and have regard to the defaulting party's ECHR Article 6 rights of access to the court, and whether (in this case) the remedy of strikeout of the Defendants' defences and debarring them from defending, will be proportionate and fair in all the circumstances of the case;
(c) I should interpret CPR 3.1(7) and CPR 3.9 consistently with Article 6, taking into account the conclusion in my judgment of 11 March 2025 that it will be unfair for the Defendants to be debarred from defending the Quantum Issue; and
(d) Mr Atkins accepted that there are established curtailments of the Article 6 rights, he referred me to the decision of Calver J in Active Media Services Inc v Burmester, Duncker & Joley GMBH and others [2021] EWHC
232 (
Comm).
In that case Calver J, at paragraph 307 said: " The court must always consider, therefore, whether a fair trial is possible and to this end have regard to the defaulting party's ECHR Article 6 rights of access to the court and whether the remedy of a strike out would be proportionate and fair in all the circumstances of the case…."
(a) Article 6 rights are subject to procedural orders and sanctions which the court may impose;
(b) in Patel v Mussa [2015] EWCA Civ 434, the Court of Appeal summarised the position as follows:
"It is convenient at this point to refer briefly to Article 6 of the Convention, on which the claimant placed some emphasis in his grounds of appeal and to which reference was made in the order granting permission to appeal. Although article 6.1 provides that "In the determination of his civil rights and obligations … everyone is entitled to a fair … hearing", it is well established that courts are entitled to give directions for the proper and efficient conduct of proceedings before them and to impose sanctions on parties who fail to comply with their orders. Such sanctions may, in an appropriate case, include striking out proceedings. Provided such powers are exercised fairly, they do not constitute a breach of Article 6 . The question in the present case, therefore, is simply whether, in dismissing the claimant's application for permission to appeal as a sanction for failing to comply with his earlier directions, the judge exercised his discretion improperly."; and
(c) the same questions apply here: did I exercise my discretion improperly in imposing and then applying the Unless Order? Mr Lewis submits that I did not but that, even if I did, that is a question for an appeal and does not justify another application to vary the Unless/Debarring Order or for relief from the Sanction.
THE FOUR ROUTES SAID TO BE AVAILABLE UNDER TIBBLES
ISSUE OVERLOOKED BY GENUINE ERROR
(a) the issue was not raised by the Defendants and would have been, had it occurred to them to do so. I confirmed (in refusing the Defendants' permission to appeal against the refusal of their first application for relief from the Sanction on the ground that the court ought to have considered granting partial relief, so that they were not debarred from defending the Quantum Issue) that this point was not raised in argument, on hearing of the application for relief from the Sanction;
(b) in the March Judgment I concluded that the Unless Order and Debarring Order are unfair to the Defendants in that they prevent the Defendants from taking part in the Quantum Issue. The Orders thus breach the overriding objective and Article 6 of the ECHR. The Court would not have made orders which had these consequences, unless it had overlooked them; and
(c) Mr Woolstenhulme has as good as confirmed that the Claimant also overlooked the issue of whether the Defendants ought to be debarred from defending the claim after the Liability Trial. Mr Woolstenhulme says:
"What the Claimants were considering at the time, and whether or not they overlooked the issue, is outside the knowledge of the Defendants and as such, it is inappropriate for them to submit [that the Claimant overlooked it]";
(d) this is not, therefore, Mr Atkins says, the Defendants having a second consideration of something which has already been considered once, but a consideration for the first time of this issue and it is obvious, on the materials already before the Court, that the Defendants ought not to be debarred from participating in the Quantum Trial; and
(e) the issue is being raised promptly before directions are ordered for the Quantum Issue.
(a) at the hearings of the applications for the Unless Order and the Debarring Order I was not addressed on the question of whether the Unless Order or the Debarring Order should be limited to the Liability Issue (the Liability Trial being due to commence
in October 2024) or extend to the Quantum Issue as well, for which no directions had yet been given. Mr Atkins says I was not addressed on the issue, the March Judgment makes it clear that I was not and Mr Lewis does not say otherwise;
(b) the point was overlooked inadvertently by the Defendants at both hearings and would have been raised by them had it occurred to them to do so (because, as Mr Atkins says, it was to the Defendants' advantage to raise the point and it would not have deliberately failed to do so); and
(c) I cannot say whether the Claimant was aware that I could have been asked to limit the effect of the Unless Order and the Debarring Order to the Liability Issue, and not the Quantum Issue as well. It was the Claimant that sought the Unless Order and Debarring Order in unlimited terms and it would perhaps have been strange if they had brought to my attention that I could make the Unless Order/Debarring Order in more limited terms than they were asking me to make it.
(a) it seems to me that the failure of the Defendants to argue, at the hearing of the Unless Order application or the Debarring Order application that, if the Defendants were to be debarred from defending at all, then such debarral should be limited to the Liability Issue and not extend to the Quantum Issue, falls within the conclusion of Rix LJ, that it was open to debate whether an omission to run an argument at the hearing at which the order (which it was sought to vary) was made was a basis on which the CPR 3.1(7) discretion may be exercised and fell to be considered as factors relevant to the exercise of that discretion (see paragraph 61 (iv) above); and
(b) there are similarities between the relevant circumstances in this case and those in Tibbles. In both cases, in support of an application under CPR 3.1(7), it is said that an issue was overlooked when the original order was made: (i) in Tibbles it was the existence and effect of CPR 44.11; and (ii) here it is the overlooking of an argument that the Unless Order and the Debarring Order could have been limited to the Liability Issue, rather than extending to the Quantum Issue as well. In Tibbles, Rix LJ said (see paragraph 62 (a) above) that, if an application in that case had been made the day after the District Judge made his order, then it may well have been granted but various factors and in particular delay militated against exercise of the discretion in favour of varying the order in that case.
MANIFEST MISTAKE
INNOCENT MISSTATEMENT
OTHER MISSTATEMENT BY THE CLAIMANT
(a) this serious allegation of wrong doing is not addressed in Mr Woolstenhulme's witness statement of 8 April 2025 at all. The strong inference is that Mr Woolstenhulme is silent because the Claimant knew, at the PTR, that it was not ready for the Liability Trial, but told the court that it was ready;
(b) the Claimant did not correct this position, until the end of the Liability Trial, six weeks later, when the Claimant requested an adjournment on the basis that the Counterfactual Issue could not be resolved without the benefit of expert evidence, which the Claimant had never sought permission to obtain;
(c) the misstatement is likely to have been material to the Court's decision to refuse the Defendants' application for relief from the Sanction (which was made at the PTR on 2 September 2024). If neither party was ready for the Liability Trial, the fair course would have been either to adjourn the Liability Trial so that the Defendants could complete their disclosure exercise and the Claimant could obtain expert evidence on the Counterfactual Issue, or to require both parties to continue to the Liability Trial but determine the Counterfactual Issue against the Claimant, rather than adjourning the issue to the Quantum Trial; and
(d) it is open to me to re-open the Debarring Order and order a retrial of the Liability Trial, but even if I do not do that, I should grant partial relief from the Sanction so that the Defendants are allowed to participate fully, from now on.
(a) Mr Woolstenhulme's witness statement of 8 April 2025 replied to Mr Little's witness statement of 25 March 2025 served in support of the Application. Mr Little does not deal, in his witness statement, with the assertion that the Claimant misrepresented on 2 September 2024 that the Claimant was ready for the Liability Trial. I do not consider therefore that it is appropriate to infer that the Claimant accepts that it misrepresented, at the PTR that it was ready to proceed to the Liability because Mr Woolstenhulme did not deal with the point in his witness statement; and
(b) even if, as Mr Atkins contends, the Claimant knew that it would have difficulties in proving, at the Liability Trial, which counterfactual scenario should be used to value its loss for the Hotel Site, the Claimant is entitled to proceed to trial with the case it had and take its chances, rather than seek an adjournment of the Liability Trial, in an attempt to improve its case on this issue.
(a) the Defendants did not ask me, on 2 September 2024 to adjourn the Liability Trial, they argued that they would be able to complete all of the outstanding disclosure which they were required to provide, in time for the Liability Trial;
(b) I accept that, if I had adjourned the Liability Trial, because the Claimant said that it wanted to produce expert evidence on the Counterfactual Issue, then this may well have affected the outcome of the Defendants' application for relief from the Sanction, however I think it highly unlikely that I would have granted such an adjournment, even if the Claimant had asked for it. The Claimant would have had no excuse for not raising the issue long before the PTR, if they wanted, contrary to the directions order of DJ Phillips, to rely on expert evidence on the Counterfactual Issue, at the Liability Trial; and
(c) I decided, in the Liability Judgment that I handed down on 24 December 2024, that consideration of the Counterfactual Issue should be dealt with at the Quantum Trial, for the reasons set out in that judgment. I gave the Defendants permission to appeal that decision. If the appeal fails then my order, that the Counterfactual Issue should be dealt with at the Quantum Trial will stand, if it succeeds, then the Claimant may be denied the opportunity to recover damages in relation to the Hotel Site, notwithstanding that I determined at the Liability Trial that the Claimant was entitled to recover half of any profit for the Hotel Site. Either way I do not consider there is any link between my decision, at the end of the Liability Trial, to adjourn the determination of the correct counterfactual scenario for the Hotel Site and my refusal of the Defendants' application for relief from the Sanction, decided before the Liability Trial.
SHOULD I EXERCISE MY DISCRETION UNDER CPR 3.1(7) IN THIS CASE?
(a) in the March Judgment, I held that:
(i) as matters stand the Quantum Trial will be unfair to the Defendants because they are debarred from defending the Quantum Issue, as well as Liability Issue;
(ii) the Quantum Trial would be unsatisfactory to the court without the participation of the Defendants;
(iii) the failure of the Defendants to provide the disclosure that the Unless Order required the Defendants to provide, which resulted in the Debarring Order, would not prevent the Claimant from obtaining disclosure relevant to the Quantum Issue or disrupt their preparations for the Quantum Trial;
(iv) it was disproportionate or at least less appropriate for the Defendants to be debarred from defending the Quantum Issue as well as the Liability Trial; and
(v) I would have granted partial relief from the Sanction, to enable the Defendants to defend the Quantum Issue, had I been asked to do so, on 2 September 2024; and
(b) it follows that, if I have a discretion under CPR 3.1(7) to vary the Unless Order/Debarring Order, I should do so to grant the Defendants at least partial relief so that they can defend the Quantum Issue.
(a) "considerations of finality, the undesirability of allowing litigants to have two bites of the cherry and the need to avoid undermining the concept of appeal, push towards a principled curtailment of an otherwise apparently open discretion…."
(b) there is room for debate as to whether the discretion extends to omissions in the arguments that could have been put before the court on the first occasion, but were not;
(c) questions may arise as to whether the omission is conscious or unconscious; and whether the argument was known or unknown, knowable or unknowable. These are factors going to discretion: but where the facts or arguments are known or ought to have been known, at the time of the original order it is unlikely that the order can be revisited and that must be still more strongly the case where the decision not to mention them is conscious and deliberate;
(d) the successful invocation of the rule is rare, such is the interests of justice in the finality of a court's orders that it ought normally to take something out of the ordinary to lead to variation or revocation of an order, especially in the absence of a change of circumstances, in an interlocutory situation;
(e) it may well be that there is room within CPR 3.1(7) for a prompt recourse back to the court to deal with a matter which ought to have been dealt with in an order, but which in genuine error was overlooked (by the parties and the court) and which the purposes behind the overriding objective, above all the interests of justice and the efficient management of litigation, would favour giving proper consideration to on the materials already before the court. This would not be a second consideration of something which had already been considered once (as would typically arise in a change of circumstances situation) but would be giving consideration to something for the first time; and
(f) the court would be unlikely to be prepared to assist an applicant once much time had gone by. With the passing of time is likely to come prejudice for a respondent who is entitled to go forward in reliance on the order that the court has made…..".
(a) there was a delay of over 10 months in making the application which included determination of the claim, at trial, in the claimant's favour;
(b) there was inevitable prejudice to the defendant caused by the claimant's failure to apply for a variation earlier, the Claimant was entitled to proceed on the basis of the original order;
(c) the case fell outside of Patten J's two principal categories (change of circumstances and misstatement of the facts). At highest, the case was that the parties and the judge acted in ignorance of the relevant rule, but each party is responsible for looking after its own interests;
(d) the question was not what the right order would have been, if the relevant rule had been brought to the District Judge's attention, but what should be done at the time the application to vary was heard, bearing in mind any change of circumstances, new evidence, any delay, any explanation offered and especially any prejudice; and
(e) the application did not fall in the spirit of the primary circumstances in which CPR 3.1(7) can be invoked and even if it was a proper case, those circumstances did not support granting an application where there had been such a delay in making it.
Summary of Circumstances in Favour of Granting Relief
(a) had I been asked on 13 September 2024 (in the alternative to granting the Defendants full relief from the Sanction) to grant the Defendants partial relief from the Sanction, so that they were not debarred from defending the Quantum Issue, I would have granted them that partial relief, for the reasons set out in the March Judgment; and
(b) those reasons include that granting such partial relief would:
(i) ensure that the Sanction was more proportionate to the breaches of the Unless Order which triggered the Sanction;
(ii) have been a more appropriate sanction, given my finding that the breaches by the Defendants of the Unless Order, by failing to provide the disclosure that it required them to provide, whilst potentially impacting the Liability Trial, would not impact the Quantum Trial, or disrupt the Claimant's preparations for that trial;
(iii) avoid an unsatisfactory trial of the Quantum Issue, which would result from the Defendants being excluded from defending the Quantum Issue; and
(iv) be consistent with the overriding objective of dealing with the case justly, for the Defendants not to be debarred from defending the Quantum Issue.
Summary of Circumstances Against Granting Relief
(a) successful invocation of CPR 3.1(7) is rare and normally requires something out of the ordinary to justify the court using that discretion to vary an order (absent a material change of circumstances/a misstatement and that does not apply here);
(b) the Defendants have appealed my order of 13 September 2024, refusing them relief from the Sanction, they have been given permission to proceed with that appeal. It is arguable that using the jurisdiction under CPR 3.1(7) in those circumstances, in particular, undermines the concept of appeal, because the Defendants are pursuing an appeal against the Unless Order/Debarring Order whilst at the same time seeking an order varying those same orders under CPR 3.1(7);
(c) the onus was, in my judgment, on the Defendants' counsel, at the hearing on 2 September 2024, to make submissions as to what alternative relief the Defendants sought, if I did not grant relief from the Sanction in its entirety. Whilst Mr Atkins says that he did not realise, until 11 September 2024, that the Sanction arguably barred the Defendants from defending the Quantum Issue, in my judgment, he ought to have realised that when the Unless Order was made on 31 July 2024;
(d) the Defendants delayed in making the Application for well over 6 months between 11 September 2024, when Mr Atkins accepts that he became aware that the Sanction in the Unless Order might extend to Quantum Issue, and the Application being made on 25 March 2025. During the period of that delay:
(i) the Defendants applied to me for permission to appeal my order of 13 September 2024 on the same day, one of the grounds being that I ought to have considered granting partial relief from the Sanction, so that the Defendants were not debarred from defending the Quantum Issue;
(ii) the Liability Trial took place between 15 and 16 October 2024;
(iii) I handed down the Liability Judgment in respect of the Liability Trial on 24 December 2024 (having circulated the draft judgment on 29 November 2024) granting judgment on the Liability Issue to the Claimant against the Defendants;
(iv) the Defendants issued the January Applications, the aim of which was to obtain an order which enabled the Defendants to defend the Quantum Issue, but they elected not to seek a variation of the Unless Order/Debarring Order under CPR 3.1(7) in that application; and
(v) the Claimant has suffered prejudice as a result of the delay.
Detailed Analysis of Points in Favour of Granting Relief
(a) such a sanction would be a more appropriate sanction for the Defendants' breaches of the Unless Order, because: (i) I refused the Defendants' relief from the Sanction, at least in part on the basis that I was not satisfied, due to the imminence of the Liability Trial, that the Defendants defaults; in providing the disclosure to which the Unless Order applied could be made good in time for the Liability Trial; (ii) the disclosure orders to which the Sanction applied did not, at least substantially, relate to the Quantum Issue, but rather the Liability Issue; and (iii) insofar as the failures to provide disclosure may have related to the Quantum Issue, there would be ample time to ensure that such disclosure was provided, before the Quantum Trial;
(b) for the reasons set out by me at (a) above, granting partial relief from the Sanction, which enabled the Defendants to defend the Quantum Issue would be more proportionate to the breaches of the Unless Order which triggered the Sanction, than debarring the Defendants from defending the Liability Issue and the Quantum Issue;
(c) it was unsatisfactory for the court to have to decide the Quantum Issue without the Defendants being allowed to participate in the determination of that issue and in particular the Defendants being prevented from: (i) providing evidence to explain why documents which had been disclosed supported the Defendants' case as to quantum; (ii) relying on expert evidence to support their case on quantum; (iii) asking questions of the Claimant's expert; (iv) cross examining the Claimant's factual and expert witnesses at the Quantum Trial; and (iv) making submissions on the Quantum Issue, at the Quantum Trial.
Detailed Analysis of Points Against Granting Relief
(a) a declaration that paragraph 16 of the Debarring Order applied only to the Liability Issue;
(b) an order varying the Unless order and the Debarring Order pursuant to CPR 40.12 to make it clear that the Defendants were not debarred from defending the Quantum Issue; and
(c) relief from the Sanction, based on a change in circumstances since the previous application for relief from the Sanction was made on 2 September 2024.
Balancing the Factors For and Against Granting Relief
(a) the Defendants seek to vary the Unless Order/Debarring Order under CPR 3.1(7) at the same time as pursuing an appeal against the Debarring Order. This brings into sharper focus the need to avoid CPR 3.1(7) being used in a manner that undermines the concept of appeal. I should make it clear however that, even if I attributed no weight to this point, I would have still refused to exercise my discretion under CPR 3.1(7), for the other reasons set out in this paragraph;
(b) I have found that it was the responsibility of the Defendants' counsel to apply, on 2 September 2024, in the alternative to full relief from the Sanction, for partial relief, in the form in which it is now sought and that he ought to have realised at that point (not 9 days later) that the Sanction had the effect of debarring the Defendants from defending the Quantum Issue;
(c) I have found that the Defendants did not apply "promptly" (as Rix LJ made clear in Tibbles a party would need to if a party wants to rely on an omission by genuine error to put forward an argument at the original hearing). The delay was over 6 months since the Defendants knew, on 11 September 2024 that the Sanction had, or at least arguably had, the effect of debarring them from defending the Quantum Issue. I have also found that there was no good reason for that delay, in spite of what is said in Mr Little's witness statement. These are powerful reasons against exercising my discretion under CPR 3.1(7); and
(d) Mr Atkins says that no directions have been issued to determine the Quantum Issue and the Claimant has not therefore been prejudiced by having to comply with directions (or preparing to do so) which would need substantially to be complied with by the Claimant again (if I were to exercise my discretion under CPR 3.1(7)). Nonetheless, the Claimant has been proceeding, since 13 September 2024, on the basis that the Defendants are debarred from defending the Quantum Issue and have had to respond to the January Application and the Application and I consider that it has suffered a material amount of prejudice as a result of those matters, given the Defendants' delay.