ANATOMY OF A POST-DENTON RELIEF FROM SANCTIONS APPLICATION 2: THE REASON MAY NOT BE GOOD ENOUGH BUT THIS DOES NOT PREVENT RELIEF BEING GRANTED
The first stage of an application for relief from sanctions has been considered in an earlier post. If the breach is neither serious or significant then the court need not spend too much time on the second and third stages. However if the court considers other matters then the “second stage” is the reason for the breach. The key point here (and no apologies are made for repeating this) is that the absence of a good reason is not fatal to an application for relief from sanctions.
THE REASONS: THE JUDGMENT IN DENTON
This aspect of the case is dealt with in two short paragraphs in the Denton judgment.
“The second stage
29. The second stage cannot be derived from the express wording of rule 3.9(1), but it is
nonetheless important particularly where the breach is serious or significant. The
court should consider why the failure or default occurred: this is what the court said in
Mitchell at para 41.
30. It would be inappropriate to produce an encyclopaedia of good and bad reasons for a
failure to comply with rules, practice directions or court orders. Para 41 of Mitchell
gives some examples, but they are no more than examples.”
THE CRUCIAL POINT IS THAT THE REASON FOR THE BREACH IS A FACTOR AND NOT DETERMINATIVE
Some judges had been holding that the absence of a good reason meant that an application for relief from sanctions would automatically fail.
“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 Mitchell: see para 37.”
AN EXAMPLE OF NO GOOD REASON BY RELIEF GRANTED: THE FINDING IN DECADENT VAPOURS
The decision of the Court of Appeal decision in Decadent Vapours makes this clear. A court fee had not arrived at court in time.
1. In that case there was no good reason for the solicitor’s failure. The solicitor knew in advance of being in breach that posting the cheque would inevitably give rise to a brach of the court order.
2. This did not, however, prevent the Court of Appeal from granting relief. Looking at all the relevant factors:
“On a consideration of all the circumstances of the case, the only reasonable conclusion in this case was to grant relief.” (paragraph 65).
ANOTHER EXAMPLE: THE JUDGMENT IN UTILISE
Similarly in the third of the Court of Appeal decision of Utilise the costs budget was filed 45 minutes late. In that case the Court of Appeal found that the breach was not serious or significant and that it was not necessary to spend too much time on the second or third stages of the case.
However they were clear that “There was however, no good reason demonstrated for the delay in filing a costs budget.”
Not only did the Court of Appeal grant relief from sanctions they were clear “We consider that the Defendants in Utilise ought to have consented to the grant of relief from sanctions.”
SAY THIS LOUD AND SAY IT OFTEN: THE ABSENCE OF A GOOD REASON DOES NOT PREVENT A COURT GRANTING RELIEF FROM SANCTIONS
The court looking at the reason does not represent a “hurdle” for the applicant to clear. Rather it is part of the general overall consideration that takes place.