RELIEF FROM SANCTIONS GRANTED: DID THE COURT OF APPEAL TURN A BLIND EYE TO MITCHELL? NELSON -v- CIRCLE CONSIDERED
It is unusual to see the Court of Appeal granting relief from sanctions without reference to CPR 3.9 or the decision in Mitchell. That is precisely what happened in Nelson –v- Circle Thirty Three Housing Trust Ltd  EWCA Civ 106.
The Claimant brought proceedings against the Defendant for possession of social housing alleging she was not living at the property and in breach of the tenancy agreement.
Clearly documents relating to bills and credit cards were important. They could show whether the Defendant was living at the property.
- On the 10th December 2012 it was ordered that the Defendant should provide specific disclosure of certain documents by 4pm on the 28th January 2014.
- The Defendants failed to disclose all the documents outlined in the order by the 28th January 2013.
- The Claimant subsequently applied for an Unless Order which required the Defendant to provide “copies of all credit card statements from 1st January 2011 to date in relation to the credit card account opened on 20th November 2008” by 4pm on the 27th March 2013. Failure to do so would result in the defendant’s defence being struck out.
- The defendant provided credit card statements for 2011 and for March 2013 but failed to disclose any others.
THE HEARING BEFORE JUDGE COLLENDER
During a telephone hearing a number of explanations were put forward by the defendant as to why the credit card statements had not been produced. At first they claimed that the defendant was unable to comply with the order as she was waiting for copies from the bank. It was then stated that the account had been closed and she was therefore unable to obtain monthly statements. The Judge proceeded to make a possession order.
The Court of Appeal commented that
“the Judge was given a completely muddled picture of where Mrs Nelson stood. First of all it was said there was difficulty in getting them; then it was said there weren’t any. That did not make sense to the Judge. It is hardly surprising that he formed the view that this was an appropriate case for the unless order to take effect. He held that there had been failure to comply with it, and as far as he was concerned that was that.”
THE ISSUES IN THE APPEAL
Prior to the appeal the Defendant obtained further evidence from Mrs. Nelson explaining what she had actually done to try and obtain the credit card statements. This included evidence that she had contacted the bank as soon as possible and had tried to obtain the documents on at least five separate occasions. The court firstly considered whether this would have made a difference:
“16. Would that have made a difference in front of the judge? Plainly so. All the muddle about whether or not there was an account would not have happened. The Judge would have known that Mrs Nelson had tried hard to get the documents and that the failure to produce them was not her fault but the bank’s. It is quite clear that the letter and that information is material information. The judge would have been faced with a situation where there was substantial compliance with all the other items of disclosure, and substantial compliance with the credit card disclosure, and he would have had an explanation of what had happened to the missing credit card disclosure. Quite what he would have done is not for us to speculate.”
THE COURT OF APPEAL’S CONCLUSION
In reaching their conclusion and allowing the appeal the Court of Appeal made the following comments:
17. We have two choices as to what to do. One would be to remit the matter so that the question could be reconsidered, together with an application under rule 3.9. The other is that we deal with it ourselves. This is plainly a case in which we should take the latter course. The former would be disproportionate.
18. The fresh evidence means is that we are in a position to exercise the discretion afresh. We are not for one moment suggesting the judge went wrong. We are simply exercising the discretion of this court on all the material now known. The question is whether there should be relief under rule 3.9. That the court can of its own motion consider whether there should be such relief is made clear by the judgment of Moore‑Bick LJ in Marcan Shipping v Kefalas  1 WLR 1864. He said this:
“. The second consequence, which follows from the first, is that the party in default must apply for relief from the sanction under rule 3.8 if he wishes to escape its consequences. Although the court can act of its own merit, it is under no duty to do so, and the party in default cannot complain if he failed to take appropriate steps to protect his own interests.”
19. We asked Mr Ball whether he was asking for relief from sanctions and he said yes. Indeed, I notice that in effect Judge Collender was going the same way, because he was asked why there was default.
20. Given the knowledge that we now have as to why there was default, I think this is a proper case for granting relief from sanctions, which means that the defence is restored. I say that because of the very special circumstances here: first of all, very, very substantial compliance with the disclosure order; and secondly the evidence which we now have that although it was late, the first defendant did make proper efforts to get the necessary documents and that it was not her fault that she did not get them, but the bank’s. Further, she now has them and they have been served on the other side some time ago..
21. I would therefore allow the appeal.”
POINTS TO NOTE
- This case is unusual in that the Court of Appeal granted relief from sanctions without considering (or even mentioning) Mitchell.
- Furthermore the reasons for granting relief we because of the “very special circumstances” of the case namely that there was substantial compliance with the order and the evidence that the defendant had made proper efforts to obtain the evidence and comply with the order.
- Additionally the court failed to mention or consider the criteria outlined in the CPR 3.9.
- It may be that the Mitchell criteria do not apply to housing/repossession cases [although this was not argued and it would be unwise to assume this]
- Finally, and importantly, note the observations that a court can consider and make an order for relief from sanctions without there being a formal application. However a party cannot complain if it fails to make an application for relief from sanctions and the court does not consider this.