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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Thevarajah v Riordan & Ors [2014] EWCA Civ 14 (16 January 2014) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2014/14.html Cite as: [2014] 1 Costs LR 163, [2014] EWCA Civ 14, [2014] CP Rep 19 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr Andrew Sutcliffe QC
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE AIKENS
and
LORD JUSTICE DAVIS
____________________
Thavatheva Thevarajah |
Appellant/ Claimant |
|
- and - |
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(1) John Riordan (2) Eugene Burke (3) Prestige Property Devloper UK Limited (4) Barrington Burke |
Respondents/Defendants |
____________________
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Simon Davenport QC and Daniel Lewis (instructed by Moon Beever) for the Respondents
____________________
Crown Copyright ©
Lord Justice Richards : This is the judgment of the court.
The relevant facts
"Without prejudice to the effect of, and the obligations imposed by, the First and Second Orders generally, unless each of the First, Second and Fourth Respondents do provide the information particularised immediately below by 4pm on 1st July 2013 then the First, Second and Fourth Respondents shall be debarred from defending the Applicants' claim and any Defence that they might have filed shall be struck out.
1.1 Details of any charges or similar such encumbrances of any real property (as defined in paragraph 8(2)(a) of the Second Order), including particulars of the specific interest that is so charged, together with the provision of bank or similar such statements covering the period 1st October 2010 until the date of this order in respect of any and all accounts of any borrowing secured against such real property.
1.2 Details of all of the said Respondents' bank accounts, whether or not they are in their own name and whether they are solely or jointly owned and whether the said Respondents and each of them are interested in them legally, beneficially or otherwise ….
1.3 Sub-paragraphs 1.1 and 1.2 above apply also to those assets, liabilities, and bank or other accounts and statements in respect of
1.3.1. Prestige Properties Limited;
…
1.4 Full particulars as to how the said Respondents are funding the present litigation …."
The unless order also recorded an undertaking by the respondents to the court to cause letters substantially in the form of letters produced to the court to be sent to the Bank of Cyprus and five other banks.
"When I add all this in the mix and test it against the prescription which CPR 3.9, in its newest form, conveys, namely that the court must be very cautious before granting what, in effect, is a dispensation from an order previously made, and when I take into account the factual context more generally, which includes the fact that the unless order was made after five previous applications, and where I also take into account the somewhat remarkable instances where the defendants have not provided the evidence that one would have expected, to explain themselves, I feel constrained to refuse any relief from the sanctions."
The judgment of Mr Andrew Sutcliffe QC
"… First, that they have now complied with the disclosure requirements of the order of Mr Justice Henderson dated 21st June. The breach of the unless order was remediable and has now been remedied. Second, that compliance has been delayed is in part due to the wide-ranging nature of the disclosure sought and the limitations on the availability of funding for legal costs …. Third, they submit that they have not acted with intent to frustrate the operation of the freezing injunction; on the contrary, they consented to the disclosure sought by the Claimant at the hearing on 17th May and then took steps to comply although it is accepted that there has not been complete compliance until provision of the affidavit dated 1st October. They say that the history of the case demonstrates a considerable effort to comply although they accept that these efforts were judged to have fallen short. Fourth, while accepting that the Defendants, as the parties, are principally responsible for compliance with court orders their submission is that the historic failings in disclosure were at least in part due to their former solicitors. Finally, they submit that the effect of the refusal of relief is to leave the court to try the claim in circumstances where (1) there is a substantial dispute of fact not capable of fair resolution by reference to the documents alone; (2) the Claimant has not provided disclosure or witness statements in compliance with the Directions order of 17th May; and (3) the Defendants may still participate in any trial subject to the court's inherent jurisdiction to determine how proceedings are managed but their involvement would be limited as to the issues which it is open to them to pursue …."
"28. … First, the matters contained in the old checklist in CPR 3.9 remain of relevance to an application for relief from sanction. Second, the change in CPR 3.9 did not mean that relief should be refused where that would be a disproportionate response and would give the opposing party an unjustified windfall. Third, that the court should not apply the new rules unthinkingly and should make allowance for human error. Fourth, that the amended Rules should not be permitted to encourage parties to exploit minor errors for tactical gain. These decisions show in my judgment that the court in each case while accepting that the purpose of the amended Rule is to counter a culture of deliberate delay still had principal regard to the requirement to do justice between the parties."
"29. The Defendants do not seek here to challenge the orders that have gone before. However, they submit – and I accept – that it is appropriate in the circumstances of this case in considering the application for relief and the extent of the previous compliance with those orders for the court to have regard to the following matters. First the burden imposed on the Defendants in complying with these orders and particularly the fact that the disclosure required of the Defendants went beyond that ordinarily required as ancillary to a freezing injunction. Second, the fact that that the orders required cooperation from third parties not within the Defendants' control. Third, the fact that the Defendants relied on their solicitors to advise them in relation to whether or not they had complied with the court's orders."
"55. Tarn Insurance Services was a case where the Applicant seeking relief remained in breach of the unless order at the time of the application for relief and was unable to show good reason for his continued non-compliance. In contrast, as I find, the Defendants have now complied with their disclosure obligations and I also find that this compliance itself amounts to a material change of circumstances between the time that the matter came before Mr Justice Henderson and Mr Justice Hildyard and the time of this further application for relief. On the basis of the Woodhouse decision, I find that in the circumstances of this case, where the disclosure obligations placed upon the Defendants were significant and wide-ranging and there is no evidence that the Defendants have wilfully failed to comply with the court's orders (on the contrary, on each occasion the evidence is that they have attempted to comply and acted on their solicitor's advice), the Defendants are entitled to make a second application under Rule 3.9 for relief from sanction."
"Of course I have full regard to these dicta but I am quite satisfied that in the circumstances of this case it is entirely appropriate to grant relief from sanction under CPR 3.9. The Claimant seeks to rely on the Defendants' delay of some 7 weeks between the order of Mr Justice Hildyard dated 9th August 2013 and the issue of the present application on 1st October 2013. However I do not regard this delay as significant, in particular in the context of the fact that this case only began in March this year, was the subject of a speedy trial in May, and is now before the court for trial in October. Although an adjournment of the trial is required to enable outstanding directions to be complied with and the case got ready for trial, that adjournment need not be for an excessively long period."
"61. Having given full consideration to both those Court of Appeal authorities, I am firmly of the view that the appropriate rule of court to consider on this application is CPR 3.9. To the extent that Mr Justice Hildyard's order of 9th August needs to be varied or revoked pursuant to CPR 3.1(7), I consider that the matters set out in this judgment fully justify such a variation or revocation and that in the circumstances it is appropriate to grant the Defendants' application."
The relevant procedural rules
"A power of the court under these Rules to make an order includes a power to vary or revoke the order."
Judicial guidance on the exercise of the power to vary or revoke an existing order is considered below.
"On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders."
The judgment of the Court of Appeal in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537 ("Mitchell") – which we observe, in fairness to the deputy judge, postdated his judgment in the present case – sets out the former version of the rule and the background to the change, and gives authoritative guidance on the application of the rule in its present form.
The second application for relief from sanction: discussion
"Although this is not intended to be an exhaustive definition of the circumstances in which the power under CPR 3.1(7) is exercisable, it seems to me that, for the High Court to revisit one of its earlier orders, the applicant must either show some material change of circumstances or that the judge who made the earlier order was misled in some way, whether innocently or otherwise, as to the correct factual position."
"(i) Despite occasional references to a possible distinction between jurisdiction and discretion in the operation of CPR 3.1(7), there is in all probability no line to be drawn between the two. The rule is apparently broad and unfettered, but considerations of finality, the undesirability of allowing litigants to have two bites at the cherry, and the need to avoid undermining the concept of appeal, all push towards a principled curtailment of an otherwise apparently open discretion. Whether that curtailment goes even further in the case of a final order does not arise in this appeal.
(ii) The cases all warn against an attempt at exhaustive definition of the circumstances in which a principled exercise of the discretion may arise. Subject to that, however, the jurisprudence has laid down firm 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 the statement of these primary circumstances, originating with Patten J and approved 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.
…
(vi) Edwards v Golding 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 ….
(vii) The cases considered above suggest that the successful invocation of the rule is rare. Exceptional is a dangerous and 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."
"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. Promptness in application is inherent in many of the rules of court: for instance in applying for an appeal, or in seeking relief against sanctions (see CPR 3.9(1)(b)) …."
"44. … An application for relief from a sanction presupposes that the sanction has in principle been properly imposed. If a party wishes to contend that it was not appropriate to make the order, that should be by way of appeal or, exceptionally, by asking the court which imposed the order to vary or revoke it under CPR 3.1(7). The circumstances in which the latter discretion can be exercised were considered by this court in [Tibbles]. The court held that considerations of finality, the undesirability of allowing litigants to have two bites at the cherry and the need to avoid undermining the concept of appeal all required a principled curtailment of an otherwise apparently open discretion. The discretion might be appropriately exercised normally only (i) where there had been a material change of circumstances since the order was made; (ii) where the facts on which the original decision was made had been misstated; or (iii) where there had been a manifest mistake on the part of the judge in formulating the order. Moreover, as the court emphasised, the application must be made promptly. This reasoning has equal validity in the context of an application under CPR 3.9.
45. On an application for relief from a sanction, therefore, the starting point should be that the sanction has been properly imposed and complies with the overriding objective. If the application for relief is combined with an application to vary or revoke under CPR 3.1(7), then that should be considered first and the Tibbles criteria applied. But if no application is made, it is not open to him to complain that the order should not have been made, whether on the grounds that it did not comply with the overriding objective or for any other reason …."
"55. 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). There is a public interest in discouraging a party who makes an unsuccessful interlocutory application from making a subsequent application for the same relief, based on material which was not, but could have been, deployed in support of the first application. In some contexts, this is partly because, as Chadwick LJ said in Securum Finance Ltd v Ashton [2001] Ch 291, there is a need for the court to allot its limited resources to other cases. But at least as important is the general need, in the interests of justice, to protect the respondents to successive applications in such circumstances from oppression. The rationale for the rule in Henderson v Henderson (1843)3 Hare 100 that, in the absence of special circumstances, parties should bring their whole case before the court so that all aspects of it may be decided (subject to appeal) once and for all is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever, and that a defendant should not be oppressed by successive suits where one would do ….
56. In our view, although the policy that underpins the rule in Henderson v Henderson has relevance as regards successive pre-trial applications for the same relief, it should be applied less strictly than in relation to a final decision of the court, at any rate where the earlier pre-trial application has been dismissed.
…
58. In the present case, it is clear that both the district judge and the judge considered that the fact that the application of 8 November 2000 was a second bite at the cherry was decisive. In our view, they were wrong to do so. They failed to take into account the evidence of Mr Collins, and to consider how cogent the case was for lifting the stay, having regard in particular to the provisions of CPR r.3.9(1). In short, they failed to exercise their discretion at all. In these circumstances, it is necessary for us to exercise our discretion afresh."
Other concerns about the deputy judge's approach
Conclusion