Heard by the Court of Appeal on 16th June 2014

 (Lord Justice Dyson MR)

(Lord Justice Jackson)

(Lord Justice Vos)


 In the present case the appellant appeals a decision to refuse relief from sanctions the grounds for the appeal are that the judge erred in his application of Mitchell and this is not a similar case to Mitchell.

In the present case the judge’s decision was nor fair or just. The court lost sight of the administration of justice.

Assuming that the Mitchell guidance is sound and applying the “raw” Mitchell the judge should have concluded that the case should not be struck out.

The breach was most regrettable and was certainly not a model of how to conduct litigation.


But this was not a case of them putting themselves at risk that it would be late. It was certain that the payment would be at least one day late. The risk was that it could be even further later.


Yes they were going to be late. But this lateness of one day viewed on its one is a trivial lateness or as outlined in Summit Navigation it was not material.


But immaterial to what ?


It did not derail the litigation. Suppose the cheque had been one day late and had not been lost in the DX or court system by the time of the pre-trial review it would have been paid and there would not have been an issue. The reality is the case would have just continued.


Just picking up on the material and trivial distinction. You could have a non-trivial breach which may not be material. I would like help on what is meant by material. The question is what should the court do in relation to that type of case?


There is always a danger when lawyers come up with words which end up as tests. It is better to stick with the definition of trivial, as it is less likely to be unpacked.


Yes, and in your view this is a trivial breach, and I am inclined to agree.


Yes the rational approach for litigators now is to jump on the breach bandwagon.


I think the word material means something that matters and material is a better word than trivial.

Paying court fees late is not trivial, but the mishaps in this case did not really matter, so the difference may be important in you case.


Well as is the way with the legal profession can I have my cake and eat it ?

The problem with trivial can be construed narrowly.


Yes, one of the devils said to be unleased by Mitchell is an abundance of satellite litigation. But will that always be the case with whatever test. Even if you ask does the breach matter? This raises issues.  Justice between the parties and harm to litigation is still present in the test in the background. But can you consider the effect of the breach without considering the merits?


Yes but more in the sense of procedural merits instead of substantive merits of the case. I accept that one has to be fundamentally concerned with the procedure as the court is in no position to adjudicate on the case at that stage.


One may think that there may be a different answer when considering the nature of the breach in relation to the two limbs in CPR 3.9. For example a breach may never be trivial in relation to (b) but may have no material effect. It may be that the two words are not interchangeable.


At present Lord Justice Jackson and perhaps Lord Justice Voss may not say that the breach was trivial.

But I maintain that it is trivial, but that it may not be trivial taking into account the actual period of delay, which was more than just one day. But this additional period was out of the control of the parties and therefore there was a good reason for granting relief.

The courts must not reduce Mitchell to a crude two part test- the court may still be persuaded to grant relief


We did say that in Mitchell but that seems to have been lost in its application.


The guidance in Mitchell is guidance in apply the rule. The rule says look at the circumstances and consider the two considerations outlined.

It is good to look at the reason for the breach but it is still a three limb test which includes the need to deal with cases justly.


Yes and the judge has not done this. The judge did not look at the overall picture and ask what should I do to do justice.

The judge just enforced discipline. But the court must not set up an elaborate series of trip wires. Civil litigation is not quidditch or an antiquated game where you make one mistake and you are out. The court must concentrate on the main issue.

What seems to be happening is that we are going back to a previous time where litigation was concerned with the niceties of procedure rather than coming to justice and adjudicating on the merits.


But two elements in CPR 3.9 have been singled out. Of course the court must do justice but the way in which they do it has been spelt out in a particular way. Prior to the Woolf and Jackson reforms there were complaints that litigation was sloppy, it’s a question of balance.


But the pendulum has swung too far.

(Counsel then referred the court to Professor Zuckerman’s article “The CPR a coded message requiring articulation” and an article titled “stupid lawyer tricks”).

The problem now is stupid lawyer tricks are being promoted so the objective of Mitchell and new CPR is not being achieved. Although in the present case it was the judge’s decision and not the respondent who took the breach point.

The breach did not affect proceedings. The fact that the application now has taken up extra court time cannot render it as non trivial.

The delay beyond the one day was out of the appellant’s control.

It is not realistic to suggest that the appellant should have checked on the payment like the judge commented.

It is important to pay court fees and the appellant has complied with all other requirements, unlike the defendants. But it is the appellants who are now struck out and have a costs award against them.

Although it is true that the appellant could re-issue and may have an action against their solicitors, this is a copyright action and a money only remedy is not adequate.

In respect of fees there is also CPR 3.7 this provides that a party should be given notice that if it does not pay the court fee it will be struck out and relief is given conditional on payment.

In this case notice under CPR 3.7 was not engaged. Late payment of court fees is not an automatic death penalty but is a conditional dealth penalty.

The court clearly has power to grant relief and in the present case both parties were in default. The Defendant had a defective checklist with no draft directions.

(Counsel then referred the court to Chartwell Para  47-50,52 and 58).

It is unattractive to give a defendant a windfall when the defendant is in default as well (although this may not be determinative).


I do not agree that there should be different tests for relief in cases involving unless orders and cases that don’t.

But there could be use of different words for different breaches and areas of breach. However this would be difficult to establish and it is difficult to categorize a breach by reference to its effect and apply different tests.


Isn’t it that at the first stage it must be considered whether there needs to be a good reason for the breach?

Lord Justice Dyson said in Mitchell that if a breach is trivial then normally a reason would not need a reason. But if you start to define trivial using material it is only relevant to one part of CPR 3.9


Also the problems with resources with the courts cannot affect the courts approach to relief from sanctions.


The under resource argument cuts both ways. It means court hearings and timetables are more important.


In this case the judge was faced with no explanation for the delay. The judge found out that the fee was late from the court office. The only explanation given was that the appellant’s solicitor stated that court staff had said it was ok to pay the fee later than the court order.

The judge was merely declaring the state of affairs as it was – the sanction had been effected.

The respondent made no proper application for relief. Had there been a prompt application, before or shortly after the expiry of the unless order the judge would have been able to consider the application.


But how should the appellant have ascertained that the fee was not received


The solicitors could have phoned or checked their records to see if it had been paid out. Although this may create extra work, not every case involves an unless order where the solicitor knows the consequences of non-compliance.

Furthermore the solicitor in this case consciously decided not to comply. This consciousness adds to the gravity of the breach. Breach of unless orders should be considered more significant and there should be a hierarchy in orders.

As to the appellant’s argument that the respondent was also in breach, in the Fred Perry case it was outlined that one party’s failure are not causative of another party’s default.

In this case the respondent’s reaches did not cause the appellant’s breach.


What has been the effect on the litigation?


Yes the proceedings have come to an end because of the judge’s order if it stands, subject to the issue of whether the appellant can re-issue.

The judge also took into account the effect on other court users. The hearing on the 7th January was lost. Had their been a relief application consideration could have been given at that stage and this could have been mitigated. This has to be taken into account.

Rule 3.7 on payment of court fees is the only automatic strike out provision and shows the serious approach the rule committee considers should be taken to this issue.

The importance of fee payment has never been higher and parties must pay for services they seek.


This is seen as the second limb of Mitchell, but this should not be divorced from the promptness aspect.

There is simply no justification for the default in this case. The solicitors were aware that the cheque would not reach the court in time.

The solicitors considered proportionality. They could have sent someone to the office that day instead of posting the cheque. But they decided this was not proportionate and did not.

But paragraph 48 of Mitchell states “well intentioned competence should not attract relief.” Similarly in the Azura case, paragraph 18 it was stated a misunderstanding is also not a good reason.

There was no reason why the solicitors could not have applied promptly. They knew they were about to fail to comply but made no application.

The appellant tries to compartmentalize the time but


But what was the just position in this case?


The appellant could re-issue.


But assume your right and they can re-issue does that promote efficient litigation?


Clarity is the answer. The unless order sets out the position. Here it will not prevent a trial but will result in a costs order and the message goes out.


But if the emphasis is on re-issue there is a danger to going back to the strike out for want of prosecution regime.


Justice requires uniformity. The way to do that is to send out a message, as in Mitchell that solicitors must comply. In this case the message that will flow from giving relief is that a conscious decision to disobey an unless order will be excused.  One sure way to circumvent satellite litigation is for parties to comply or apply from relief from sanctions as soon as possible. Had this occurred in the present case we would not be in this position.

(Counsel referred the court to para 24 of the Fred Perry case and that compliance with court orders is fundamental to administration of justice and para 30 of Lakatima shipping)


Is there authority saying relief from sanctions applications should have regard to the underlying claim.


In Fred Perry (para 28) it mattered in relation to old regime and there is support in Michael v Middleton (1st Instance decision)


I cannot see anything there to support that. It could possibly be said in a hopeless case, but in this case there was no application to strike out, I cannot see how the substance of a case can affect a relief application.


3.9 gives an open list in an appropriate case and court can weight merits. This is relevant  (Chapel case).

This is relevant as at the time as the appellant was saying the respondent was is employee trading in direct competition. The respondent had no real defence and their defence was late in any event.


The answer then is to apply to strike it out


But then it is a battle to the death and who dies first the appellant or respondent as both were in breach.

Also even if the appellant can re-issue he still has to pay the costs of the first action. The appellant was also seeking an injunction, re-issuing means longer delay and a financial remedy is not necessarily adequate.

It does not make sense to say you’re struck out as you cocked up but can come back in.

Furthermore the parties would have to go through disclosure again and pay fees etc.

Although sols did consciously not comply it was only by one day and should have been a classic Mitchell case had the cheque not been lost.

It also cannot be law that need to seek relief, thus taking up court time, renders a breach non trivial. It does not alter the nature of the breach.