“THE DOG ATE MY COURTWORK”: REASONS, EXCUSES AND EXPLANATIONS IN APPLICATIONS FOR RELIEF FROM SANCTIONS
One thing that the the Denton decision did, without doubt*, was to put an end to the “mandatory” requirement for a “good reason” to explain a breach when applying for relief from sanctions. However it is always incumbent upon an applicant to provide an explanation for the delay, even if the reason for the breach is not a good one. This is a brief look at two recent cases on this issue. The case law indicates that whilst an explanation is always required to explain default the absence of a “good reason” is not a bar to the court granting relief from sanctions.
BRITISH AIRWAYS: ABSENCE OF A GOOD REASON NOT A BAR TO RELIEF FROM SANCTIONS BEING GIVEN
The position was made clear by Mr Justice Morgan in British Airways PLC -v- Airways Pension Scheme Trustee Limited. The judge was considering objection to late amendments. One argument the defendant made was that BA did not provide a good explanation.
-
“I do not accept Mr Rowley’s submission that I am disabled from granting permission to make these particular draft amendments because BA did not provide a good explanation for the delay. I do not consider that the relevant legal principles make the provision of a good explanation an absolute pre-condition to the court’s exercise of its discretion to grant permission to amend. The presence or absence of a good explanation will normally be a factor which is to be taken into account and the absence of a good explanation for a late application will often be a very weighty factor against the grant of permission. However, the absence of a good explanation for a late application does not amount to a complete barrier to the grant of permission to amend in a case where the court is persuaded that it is otherwise fair and just to permit the amendment.
-
In Quah Su-Ling, the judge referred to Mitchell v News Group Newspapers and that citation was the obvious source of the statement she made at [38](g). However, it is also relevant to refer to the decision of the Court of Appeal in Chartwell Estate Agents Ltd v Fergies Properties SA [2014] 3 Costs LR 588, which was approved in
Denton v T H White Ltd [2014] 1 WLR 3926. It is clear from Chartwell that, even where the default is non-trivial and there is no good reason for the default, the court retains a real discretion to relieve from a sanction. This also appears from the more recent decision on the subject of relief from sanctions, British Gas Trading Ltd v Oak Cash & Carry Ltd (Practice Note) [2016] 1 WLR 4530 at [30].”
HOWEVER THE COURT WILL STILL REQUIRE AN EXPLANATION
A court, however, may be unwilling, or unable, to exercise its discretion if there is no explanation at all for the breach. In Redbourn Group Ltd -v- Fairgate Development Limited [2017] EWHC 1223 (TCC) Mr Justice Coulson stated that an explanation is usually needed
“ It is always incumbent upon a solicitor seeking relief from sanctions to explain why something is late or why a proffered date could not in fact be met. On that topic, an analogy can be drawn with the recent trend in cases concerned with late amendments, such as Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm), where Carr J made plain that, on the recent authorities, the absence of a proper explanation for delay will often, without more, lead to the application to amend being refused.”
THERE IS AN APPARENT TENSION HERE – THAT IS EASILY RESOLVED
A party applying for relief from sanctions must explain the reason for the breach and any delay.
- The only option is honesty. The court must be told the real reason that the obligation was overlooked. An explanation is required.
- The fact that the reason is not a “good” one is far from decisive. It is only one factor.
- If there is no “good” reason it is often prudent to concede this.
- The safest course of action is, if at all possible, to remedy any default as soon as possible. Certainly well before the date of any application for relief from sanctions.
*”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:..”