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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> FXF v English Karate Federation Ltd & Anor [2023] EWCA Civ 891 (26 July 2023) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2023/891.html Cite as: [2024] WLR 1097, [2023] EWCA Civ 891, [2024] 1 WLR 1097 |
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Appeal No: CA-2022-002220 |
ON APPEAL FROM THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Master Thornett
Strand, London, WC2A 2LL |
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B e f o r e :
LADY JUSTICE NICOLA DAVIES
and
LORD JUSTICE BIRSS
____________________
![]() | Claimant/ Appellant |
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- and - |
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(1) ENGLISH ![]() ![]() |
1st Defendant |
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(2) DAVID JONATHAN DONOVAN (sued in his representative capacity on behalf of THE ISHINRYU ![]() ![]() |
2nd Defendant/Respondent |
____________________
FXF)
Katie Ayres (instructed by Keoghs LLP) for the respondent/2nd defendant (the IKA)
Hearing date: 13 July 2023
____________________
Crown Copyright ©
Sir Geoffrey Vos, Master of the Rolls:
Introduction
However, I turn to the express primary requirements of 13.3(1). Mr Tahzib [counsel for the claimant] refers appropriately to Denton and its criteria. But the familiar criteria of Denton are qualified because of necessary incorporation into the context and the express criteria under CPR 13.3: in particular, the criterion of "real prospect of successfully defending the claim".
The essential chronological background
The applicable provisions of the CPR
(1) In any other case, the court may set aside or vary a judgment entered under Part 12 if
(a) the defendant has a real prospect of successfully defending the claim; or
(b) it appears to the court that there is some other reason why
(i) the judgment should be set aside or varied; or
(ii) the defendant should be allowed to defend the claim
(2) In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly.
(1) Where a party has failed to comply with a rule, practice direction or court order, any sanction for failure to comply imposed by the rule, practice direction or court order has effect unless the party in default applies for and obtains relief from the sanction.
(Rule 3.9 sets out the circumstances which the court will consider on an application to grant relief from a sanction)
(1) 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.
(2) An application for relief must be supported by evidence.
(1) The general rule is that the period for filing a defence is (a) 14 days after service of the particulars of claim; or (b) if the defendant files an acknowledgment of service under Part 10, 28 days after service of the particulars of claim.
(2) The general rule is subject to rules 3.4(7), 6.12(3), 6.35, 11 and 24.4(2).
The Master's decision
On the Denton point, it is not controversial to say Denton permeates every action relating to a breach of rules. But there is a slight qualification: CPR 13.3 has its own self-contained rules. But that doesn't mitigate Denton. The reason for default is central and relevant. But I also have to have regard to merit and the reasonable prospect of defence.
The authorities in chronological order
Hussain v. Birmingham City Council [2005] EWCA Civ 1570 (Hussain)
Second, there is, by analogy, the guidance given in CPR 3.9(1) (relief from sanctions) and in CPR 39.3(5) (setting aside judgment where a party has failed to attend at trial).
Matthews (2011)
The court may set aside a judgment entered under Part 12 if - (a) the defendant has a realistic prospect of success in the claim; and (b) the defendant acted as soon as reasonably practicable when he found out that judgment had been entered against him.
(1) Where the court makes an order or gives directions the court must whenever practicable also specify the consequences of failure to comply.
(2) Where a party has failed to comply with any of these Rules, a direction or any court order, any sanction for non-compliance imposed by the rule or the court order has effect unless the party in default applies for and obtains relief from the sanction, and rule 26.8 shall not apply.
(1) An application for relief from any sanction imposed for a failure to comply with any rule, court order or direction must be made promptly.
(3) The court may grant relief only if it is satisfied that (a) the failure to comply was not intentional; (b) there is a good explanation for the breach; and (c) the party in default has generally complied with all other relevant rules, practice directions, orders and directions.
(4) In considering whether to grant relief, the court must have regard to (a) the interests of the administration of justice; (b) whether the failure to comply was due to the party or his attorney; (c) whether the failure to comply has been or can be remedied within a reasonable time; and (d) whether the trial date or any likely trial date can still be met if relief is granted.
(a) a party needs or wishes to take procedural steps, (b) a mandatory time limit is prescribed by the rules for the taking of this step, (c) the time limit has expired without the party making an application for an extension of time for the taking of the step, then (d) unless a rule expressly otherwise states, the party is disabled from taking the relevant step, (e) being placed under that disability is an adverse consequence for that party which flows from that failure to observe the rule which prescribes the time limit, and (f) the adverse consequence is a sanction within the meaning of rule 26.7.
It is central to the claimant's argument that a defendant cannot file and serve a defence once the time for doing so has passed. ... If that were the case [the defendant had an unlimited right to file a defence at any time before judgment is entered], what purpose would be served by having rules which impose a time limit for the filing of a defence? Thus an application to file a defence out of time where the agreement of the claimant has not been obtained is not merely an application under rule 10.5. It is in reality an application for relief from the automatic sanction imposed by the rules. In short, it is submitted on behalf of the claimant that rule 26.6 and 26.7 are designed to ensure compliance with all the time limits provided by the rules of court, court orders and practice directions. rule 10.5. It is in reality an application for relief from the automatic sanction imposed by the rules.
Mitchell v. News Group Newspapers Ltd [2013] EWCA Civ 1537, [2014] 1 WLR 795 (Mitchell)
Samara v. MBI Partners UK Ltd [2014] EWHC 563 (QB), [2014] 3 Costs LR 457 (Samara)
Mid-East Sales Ltd v. United Engineering and Trading Co (PVT) Ltd [2014] EWHC 1457 (Comm), [2014] 2 All ER (Comm) 623 (Mid-East Sales)
85. I am accordingly considering CPR Rule 3.9 but also Rule 13.3 as in Hussain. I am satisfied, as was Silber J in Samara, that the new approach described by [Jackson LJ's] Implementation Lecture and exemplified in Mitchell is intended to be of universal effect, i.e. across the board in relation to the CPR, by reference at least to the amended Overriding Objective it was considered that the introduction of the CPR itself would and should have an accelerating effect.
88. It seems to me clear that, although applications under CPR 13.3 do fall to be considered by reference to the new approach, there needs to be, and here I differ from Silber J, a somewhat different approach from that in relation to a case, as in Mitchell, falling within CPR 3.8. A sanction set out by the Rule itself for breach may be said to be pre-estimated as the appropriate course, absent good reason. But a sanction imposed pursuant to CPR 3.9, or an application by reference to CPR 3.9 and 13.3, may allow different or wider considerations to be taken into account, or more than trivial delays to be addressed.
Denton (2014)
23. In understanding the correct approach to the grant of relief from sanctions, it is necessary to start with an examination of the text of rule 3.9(1) itself. The rule contains three elements First, it states when the rule is engaged by providing that it applies "[o]n an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order". This makes it clear that the court's first task is to identify the "failure to comply with any rule, practice direction or court order", which has triggered the operation of the rule in the first place. Secondly, it provides that, in such a case, "the court will consider all the circumstances of the case, so as to enable it to deal justly with the application". Thirdly, it provides that the exercise directed by the second element of the rule shall include a consideration of factors (a) and (b) [see [15] above].
Guidance
24. We consider that the guidance given at paras 40 and 41 of Mitchell remains substantially sound. However, in view of the way in which it has been interpreted, we propose to restate the approach that should be applied in a little more detail. A judge should address an application for relief from sanctions in three stages. The first stage is to identify and assess the seriousness and significance of the "failure to comply with any rule, practice direction or court order" which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate "all the circumstances of the case, so as to enable [the court] to deal justly with the application including [factors (a) and (b)]. We recognise that hard-pressed first instance judges need a clear exposition of how the provisions of rule 3.9(1) should be given effect. We hope that what follows will avoid the need in future to resort to the earlier authorities.
31. The important misunderstanding that has occurred is that, if (i) there is a non-trivial (now serious or significant) breach and (ii) there is no good reason for the breach, the application for relief from sanctions will automatically fail. That is not so and is not what the court said in the Mitchell case: see para 37. Rule 3.9(1) requires that, in every case, the court will consider "all the circumstances of the case, so as to enable it to deal justly with the application". We regard this as the third stage.
Hockley v. North Lincolnshire and Goole NHS Foundation Trust, 19 September 2014) (Hockley)
the three stage approach has considerable relevance to an application to set aside a default judgment when considering the Good Reason Ground in CPR Part 13.3(1)(b). There has to be a good reason and that must embrace scrutiny of the seriousness of the default and why it occurred. Plainly, the court would wish to consider all the circumstances of the case. The discipline of the three stage approach is entirely apposite to an application to set aside a default judgment when considering whether there are good reasons for doing so.
Regione Piemonte v. Dexia Crediop SpA [2014] EWCA Civ 1298 (Piemonte)
38. A question arose at the hearing of the appeal as to the extent to which the principles laid down in [Mitchell] applied to applications to set aside a default judgement.
39. In essence Piedmont submits that the Mitchell/Denton principles do not apply to an application to set aside a default judgment. The majority in Denton considered that the Mitchell decision was correct to attribute a particular importance to [factors (a) and (b) Part 3.9(1)] because the Civil Procedure Rule Committee had rejected a recommendation in the Review of Civil Litigation Costs Final Report that CPR 3.9.1 should be reworded so that 3.9.1 (b) read "the interests of justice in the particular case". But the Final Report did not propose any amendment to CPR 13.3 so that the reasoning of the majority in Denton does not apply to it. There is thus, it is submitted, no reason to conclude that the Mitchell/Denton principles apply to an application under CPR 13.3 or that promptness under CPR 13.3 should be regarded as anything more than a factor. I disagree.
40. In my judgment the matter stands thus. CPR 13.3 requires an applicant to show that he has real prospects of a successful defence or some other good reason to set the judgement aside. If he does, the court's discretion is to be exercised in the light of all the circumstances and the overriding objective. The Court must have regard to all the factors it considers relevant of which promptness is both a mandatory and an important consideration. Since the overriding objective of the Rules is to enable the court to deal with cases justly and at proportionate cost, and since under the new CPR 1.1(2)(f) the latter includes enforcing compliance with rules, practice directions and orders, the considerations set out in CPR 3.9 are to be taken into account: see [Hussein] at [30]; [Mid-East Sales] at [85]. So also is the approach to CPR 3.9 in Mitchell/Denton. The fact that the Court's judgment in Denton was reinforced by the fact that CPR 3.9 was not reworded in the manner proposed by Jackson LJ does not detract from the relevance of CPR 3.9, and what was said about it in Denton, to applications under CPR 13.
126. I do not regard Piedmont as having established that the judge's refusal to set aside the default judgment or his grant of summary judgment on the monetary claims were in error. Whilst in limited respects I have found that there was a realistic prospect of establishing non-compliance with Italian law that is not sufficient to justify setting aside the judgment. In my view the extent and character of the delay alone afforded, in this case, good grounds to refuse to set the judgment aside even if the defence had a real prospect of success.
Prince Abdulaziz (2014)
R (Hysaj) v. Secretary of State for the Home Department [2014] EWCA Civ 1633, [2015] 1 WLR 2472 (Hysaj)
it is equally appropriate to have regard to the check-list in CPR 3.9 when a court is considering an application for an extension of time for appealing in a case of any complexity. The reason for this is that the applicant has not complied with CPR 52.4(2), and if the court is unwilling to grant him relief from his failure to comply through the extension of time he is seeking, the consequence will be that the order of the lower court will stand and he cannot appeal it. Even though this may not be a sanction expressly "imposed" by the rule, the consequence will be exactly the same as if it had been, and it would be far better for courts to follow the check-list contained in CPR 3.9 on this occasion, too, than for judges to make their own check-lists for cases where sanctions are implied and not expressly imposed.
Whatever one may think of the doctrine of implied sanctions, therefore, particularly in the light of the views expressed by the Privy Council in Matthews, I think that the approach to be taken to applications of the kind now under consideration is now too well established to be overturned. It follows that in my view the principles to be derived from Mitchell and Denton do apply to these applications.
Blakemores LDP (In Administration) v. Scott [2015] EWCA Civ 999, [2016] CP Rep 1 (Blakemores)
Gentry (2016)
23. Both sides accepted that it was now established that the tests in [Denton] were to be applied to applications under CPR r 13.3: see paras 3940 of the judgment of Christopher Clarke LJ in [Piemonte]. It seems to me equally clear that the same tests are relevant to an application to set aside a judgment or order under CPR r 39.3.
24. The first questions that arise, however, in dealing with an application to set aside a judgment under CPR r 13.3 are the express requirements of that rule, namely whether the defendant has a real prospect of successfully defending the claim or whether there is some other reason why the judgment should be set aside, taking into account whether the person seeking to set aside the judgment made an application to do so promptly. Since the application is one for relief from sanctions, the tests in [Denton] then come into play. The first test as to whether there was a serious or significant breach applies, not to the delay after the judgment was entered, but to the default in serving an acknowledgement that gave rise to the sanction of a default judgment in the first place. The second and third tests then follow, but the question of promptness in making the application arises both in considering the requirements of CPR r 13.3(2) and in considering all the circumstances under the third stage in [Denton].
25. I do not think that any different analysis applies under CPR r 39.3.
Redbourn Group Ltd v. Fairgate Development Ltd [2017] EWHC 1223 (TCC) (Redbourn)
Cunico Resources NV v. Daskalakis [2018] EWHC 3382 (Comm), [2019] 1 WLR 2881 (Cunico)
Family Channel Ltd v. Fatima [2020] EWCA Civ 824, [2020] 1 WLR 5104 (Family Channel)
PXC v. AB College [2022] EWHC 3571 (KB) (PXC)
Discussion of the law
Factor (a) makes it clear that the court must consider the effect of the breach in every case. If the breach has prevented the court or the parties from conducting the litigation (or other litigation) efficiently and at proportionate cost, that will be a factor weighing in favour of refusing relief. Factor (b) emphasises the importance of complying with rules, practice directions and orders. This aspect received insufficient attention in the past. The court must always bear in mind the need for compliance with rules, practice directions and orders, because the old lax culture of non-compliance is no longer tolerated.
Discussion of the facts
Conclusions
Lady Justice Nicola Davies:
Lord Justice Birss: