Factual and Procedural Background
This opinion concerns an application by the claimants and appellants, Mr and Mrs Devoy-Williams, for permission to appeal against an order made by Her Honour Judge Baucher in the Central London County Court on 24 January 2018. The order granted the defendant's application to set aside a prior strike-out order dated 21 November 2016 and dismissed the appellants' application for relief from sanctions.
The underlying claim was a negligence claim brought by the appellants against the defendant, a firm of solicitors referred to as "HCA". This claim was connected to an earlier claim by HCA against the appellants for outstanding fees. The procedural history involved an Unless Order made on 14 September 2016 requiring the appellants to provide certain documents by 21 October 2016, failing which their claim would be struck out and judgment entered in favour of the defendant.
The appellants failed to comply fully with the Unless Order, leading to a strike-out order on 11 November 2016. That strike-out was set aside on 21 November 2016, but the defendant applied to set aside that order on 1 December 2016. The defendant's insurers had made a Part 36 offer to settle the claim on 10 October 2016, which the appellants attempted to accept on 1 November 2016, after the deadline for compliance with the Unless Order and after the claim was struck out.
The application to set aside the 21 November order was adjourned in June 2017 following the filing of a witness statement, and directions were given for an application for relief from sanctions and evidence.
Legal Issues Presented
- Whether the appellants complied with the terms of the Unless Order dated 14 September 2016, specifically paragraph 3.3 requiring disclosure of certain documents.
- Whether the breaches of the Unless Order were material.
- Whether relief from sanctions should be granted under the three-stage test in Denton v T H White Limited [2014] EWCA Civ.906.
- Whether procedural irregularities or unfairness occurred during the hearing, particularly regarding allegations of intentional non-compliance and the ability to cross-examine witnesses.
- The applicability and effect of the Part 36 offer and its purported acceptance in the context of the strike-out order.
Arguments of the Parties
Appellants' Arguments
- The judge erred by restricting the scope of cross-examination of a key witness and refusing permission to cross-examine another, limiting the appellants' ability to challenge critical evidence.
- The appellants were denied inspection of the disputed document bundle, impairing their ability to respond effectively.
- The allegation that Mrs Devoy-Williams deliberately removed a vital document was raised late and unfairly, denying proper opportunity to prepare a rebuttal.
- The judge wrongly applied the Joyce v West Bus Coach Services Limited principle to prevent acceptance of the Part 36 offer, as the appellants contend they complied with the order.
- The finding of deliberate removal of the schedule to the Tomlin Order was unsupported by evidence and plainly wrong.
- Even if there was a breach, it was not material.
- The refusal of relief from sanctions was incorrect, especially given the purported settlement by Part 36 offer and that sanctions were disproportionate.
- The Unless Order was insufficiently precise regarding required documents, and the appellants had made reasonable efforts to comply.
- The judge wrongly characterized the litigation as dilatory and treated the appellants as litigants in person despite their professional background.
Respondent's Arguments
- The judge's factual findings were well supported by evidence, including witness statements and oral testimony, and the judge was entitled to prefer certain evidence.
- The procedural conduct was proper; there was no restriction on cross-examination beyond the court’s discretion, and the appellants' counsel did not pursue certain cross-examinations despite opportunity.
- The allegation of intentional non-compliance was raised sufficiently in advance through witness statements and submissions.
- The judge correctly applied the Joyce principle to prevent acceptance of the Part 36 offer after the claim was struck out.
- The breaches of the Unless Order were material and serious, justifying refusal of relief from sanctions under the Denton test.
- The purported acceptance of the Part 36 offer did not excuse the late application for relief from sanctions, as the appellants were on notice of the strike-out position early on.
- The defendant’s application for strike-out was procedurally proper and not opportunistic, given the history of non-compliance and delays.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Abalian v Innous [1936] 2 All ER 834 |
Requirement that Unless Orders be clear and precise to avoid ambiguity. |
Used to emphasize the importance of clarity in the Unless Order terms. |
| Denton v T H White Limited [2014] EWCA Civ.906 |
Three-stage test for relief from sanctions. |
Applied to assess whether relief from sanctions should be granted; breaches were serious and no good reason was found. |
| Mitchell MP v News Group Newspapers Limited [2013] EWCA Civ.1537 |
Principle that well-intentioned incompetence without good reason should not usually attract relief. |
Supported the judge’s conclusion that intentional breach precluded relief. |
| Joyce v West Bus Coach Services Limited [2012] EWHC 404 |
Part 36 offer cannot be accepted if the claim has been struck out. |
Applied to reject appellants’ attempt to accept Part 36 offer post-strike-out. |
| London Borough of Haringey v Ahmed and Another [2017] EWCA Civ.1861 |
Standard for appellate review of factual findings: only interfere if no evidence supports findings or decision is perverse. |
Guided the court’s deference to trial judge’s factual findings. |
| Assicurazioni Generali Spa v Arab Insurance Group [2002] EWCA Civ.1642 |
Appellate courts rarely overturn credibility findings unless judge was plainly wrong. |
Supported deferential approach to trial judge’s assessment of witness credibility. |
| The Commissioner of Police of The Metropolis v Abdulle and Others [2015] EWCA Civ.1260 |
Generous discretion afforded to judges in case management decisions including relief from sanctions. |
Supported the conclusion that Judge Baucher’s decision fell within proper discretion. |
| Marcan Shipping (London) v Kefalas and Another [2007] 1 WLR 1864 |
Sanctions under Unless Orders take effect automatically if there is a material breach without need for further order. |
Confirmed the effect of the Unless Order sanction and need for prompt relief application. |
| Jones v Montevideo Gas Company [1880] 5 QBD 556 |
Affidavit or statement of documents usually accepted as conclusive in discovery. |
Distinguished as not applicable to witness statements filed months after Unless Order. |
| West London Pipeline & Storage Limited v Total UK Limited and Others [2008] EWHC 1729 |
Discussed principles relating to affidavits of documents and discovery. |
Referenced to clarify limits of Montevideo principle regarding witness statements. |
| E Buyer and Citibank NA v HMRC [2017] EWCA Civ 1416 |
Allegation of knowledge of fraudulent tax evasion does not necessarily amount to dishonesty requiring specific pleading. |
Used to distinguish intentional non-compliance from allegations of fraud or dishonesty. |
| Three Rivers District Council and Others v Governor and Company of the Bank of England (No.3) [2003] 2 AC 1 |
Fraud or dishonesty must be distinctly alleged and proved; defendant entitled to know case to meet. |
Referenced in submissions regarding the timing and clarity of dishonesty allegations. |
Court's Reasoning and Analysis
The court granted permission to appeal primarily due to the appellants’ allegations of procedural irregularity and the seriousness of the allegations of intentional non-compliance. However, upon review of the record, the court found no material procedural irregularities. The judge’s discretion in managing evidence, including the scope of cross-examination and the handling of witness statements, was appropriate and not challenged at the time.
The court noted that the allegation of intentional removal of a material document—the schedule to the Tomlin Order—had been sufficiently raised in advance through witness statements and submissions, allowing the appellants adequate opportunity to respond. The judge was entitled to prefer the evidence of the defendant’s receptionist over that of Mrs Devoy-Williams, especially given the inconsistencies and the appellant’s failure to check the documents after photocopying. The court found the judge’s conclusion that the breach was intentional and material was supported by the evidence.
The court rejected the appellants’ argument that the Part 36 offer and its purported acceptance negated the materiality of the breach or justified relief from sanctions. It held that the sanction under the Unless Order took effect automatically upon breach, and relief must be sought promptly, which did not occur here. The judge’s application of the three-stage Denton test was proper, and the refusal of relief from sanctions was within the generous discretion afforded to case management decisions.
Regarding the precision of the Unless Order, the court found it sufficiently clear that paragraph 3.3(a) required disclosure of documents supporting specific quantified figures in the counterclaim, not merely documents relating to settlement discussions. The court also distinguished the Montevideo principle as inapplicable to witness statements filed long after the order.
Finally, the court was not persuaded that the appellants’ professional background or conduct entitled them to more lenient treatment. The history of delays and failures to comply justified the order and the refusal of relief.
Holding and Implications
The court granted permission to appeal but ultimately dismissed the appeal, affirming the decision of Her Honour Judge Baucher.
The appeal is DISMISSED.
The direct effect is that the Unless Order breach was material, the strike-out order was properly set aside, and relief from sanctions was correctly refused. No procedural irregularities warranting interference were found. The decision confirms the strict application of Unless Orders, the necessity of prompt applications for relief from sanctions, and the wide discretion of trial judges in case management matters. No new precedent was established beyond the application of established principles.