COURT OF APPEAL UPHOLDS REFUSAL OF EXTENSION OF TIME IN FOREIGN JUDGMENTS CASE: JUDGMENT TODAY

A post in 2015 looked at the decision in In Christofi -v- National Bank of Greece (Cyprus) Ltd [2015] EWHC 986 (QB) Mrs Justice Andrews DBE held that there were very limited grounds for extending time in an appeal against the registration of a foreign judgment and declined to extend time relying, broadly, on the Denton principles.

That decision not to extend time has been upheld  today by the Court of  Appeal in Christofi v National Bank of Greece (Cyprus) Ltd [2018] EWCA Civ 413.  The application of the Denton principles was considered and approved.

THE CASE

The bank registered a judgment following a compromise agreement in the Cypriot court.  The applicant was one of two defendants in that action.  Payments were never paid under the agreement and judgment was registered for €7,868,044.88. The applicant sought to appeal the registration of the settlement order. The prescribed time for appealing was two months from date of service on the applicant. The time for appealing expired on the 11th September 2014, however the appeal was not made until the 30th September 2014, 22 days out of time. The judge, at first instance, refused to grant an extension of time. The applicant appealed.

THE COURT OF APPEAL DECISION ON THE EXERCISE OF DISCRETION

1. 1. (1) The judgment: Here, it is convenient to begin with brief reference to the judgment. Andrews J dealt with Issue II at [77] – [86]. She had regard to the domestic case law on relief against sanctions, in particular Denton v TH White Ltd [2014] EWCA Civ 906; [2014] 1 WLR 3926. She was, however, not persuaded:

“77. …that the guidance given in cases concerning non-compliance with a court order or procedural direction or with the rules of court pertaining to domestic litigation including appeals, is wholly apposite in this context though of course it is of some relevance. The underlying policy considerations in a case such as this…..go well beyond those affecting decisions on matters of pure case management.”

1. 1. The Judge concluded (at [78]) that the failure to meet the time limit was serious; the delay of about three weeks had to be seen in the context of a two months’ time limit. The delay may have had some impact on the progress of the litigation, in that (at [80]) the appeal may have been listed earlier and, in any event, there would have been no need to deal with the preliminary issues. At all events, the delay was serious (at [81]), whether or not it was significant with regard to hearing dates. The Judge was next satisfied (at [82]) that there was no good reason for the delay.

   2. Finally, therefore, the Judge turned to consider whether notwithstanding the seriousness of the delay and the absence of any excuse for it, the justice of the case required an extension of time (at [83] and following). The Judge was not persuaded that the decision of this Court in R (Hysaj) v Home Secretary [2014] EWCA Civ 1633; [2015] 1 WLR 2472 advanced the Appellant’s case and she in any event distinguished it. The Judge’s overall conclusion was encapsulated (at [85]), as follows:

” …..There was no background [in Hysaj] of a complex and supposedly self-contained international Treaty or directly effective EU Regulation with the policy of simple, expeditious recognition and enforcement of judgments of other contracting states at its heart, a deliberately tight timetable set for appeals on very restricted grounds, and a regime that was designed to strike a fair balance between the rights of the judgment creditor and protection of the legitimate interests of the defendant. Viewed in that context, there is no obvious justification for condoning a three week delay by someone who knows of the existence of the enforcement order in ample time to appeal. Indeed, given that the balance between the competing interests is already fairly struck by the terms of the ….Regulation itself, in my judgment any interference by the court with that balance in circumstances such as this would be unwarranted and unprincipled. It is not good enough to say ‘there was no harm done’ because, even if that were true (which it is not) it loses sight of the bigger picture.”

Accordingly, even if the Judge had a discretion to extend time for appealing, she declined to exercise it in favour of the Appellant (at [86]).

1. 1. (2) The rival cases: For the Appellant, Mr Warents submitted that the Judge had applied the wrong test, taken into account irrelevant factors and failed to give any or appropriate weight to relevant factors in the exercise of her discretion. She would otherwise have exercised her discretion in favour of granting an extension of time. The appropriate test was to be found in Denton and Hysaj, save that extensions of time beyond two months could not be granted on account of distance. The Judge had erred in law by not applying the guidance contained in these authorities and, in her overall conclusion, had done no more than pay lip service to Denton. Developing his argument, Mr Warents made detailed reference to the chronology, which he submitted was not affected by the Appellant’s delay in lodging her appeal or was irrelevant in that “the Appellant should not be penalised because the preliminary issues raised matters that are legally complex”. The Judge ought to have found that the Appellant’s delay had no significant impact on the course of the litigation or on other court users”. Further, the Judge had failed to take into account, appropriately or at all, relevant factors including that the Respondent was not prejudiced by the delay, that permission was not required to appeal under CPR Part 74.8, so that the facts were very similar to those of Hysaj – which the Judge had been wrong to distinguish. Mr Warents submitted that, as the Judge’s exercise of her discretion was flawed, we should exercise it afresh – and grant the extension of time.

   2. For the Respondent, Mr Elvin submitted that the Judge’s determination of Issue II involved a case management decision, with which this Court should be slow to interfere. The Judge could not be said to have exercised her discretion – which was closely linked to her reasoning in respect of Issue I – in a flawed manner. In Mr Elvin’s submission:

” ….to the extent that the Court has power to grant relief from sanctions from a failure to comply with the two month time limit it should exercise that discretion in accordance with:

(1) the domestic law on relief from sanctions;

(2) consistently with the polices and principles underlying the Regulation.”

It was therefore incumbent on the Judge to apply the domestic law on relief from sanctions in a manner which gave effect to the polices and principles underlying the Regulation. That was what the Judge had done. It would be contrary to the policy of the Regulation for the discretion to extend time to be exercised in a case such as this “….where the putative appellant was actually served with the registration order in sufficient time to make an appeal but did not do [so] because of a serious mistake on the part of her legal representatives”. The decision in Hysaj did not require the Judge to reach any different conclusion. The criticisms of the Judge’s exercise of her discretion were not made out. In any event, if we exercised the discretion afresh, we should uphold the Judge’s decision.

1. 1. (3) Discussion: (A) The premise: The premise for considering Issue II is that the conclusion to which I have come on Issue I is wrong, so that there is a discretion vested in the national Court to extend time in accordance with national procedural law. That said, Issue II cannot be and is not divorced from the context in which it arises: namely, the Regulation, with its policy, principles and principal objective.

   2. (B) The test: Two aspects arise for consideration. First, the test to be applied by the Judge. Secondly, the test for this Court interfering with the decision of the Judge. I take them in turn.

   3. As to the test to be applied by the Judge, CPR Part 3.9 provides, inter alia, as follows:

” Relief from sanctions

(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –

(a) for litigation to be conducted efficiently and at proportionate cost;

and

(b) to enforce compliance with rules, practice directions and orders.”

1. 1. In this jurisdiction, Denton (supra) furnishes a three-stage test for considering an application for relief from sanctions under CPR Part 3.9(1):

“24. ….. A judge should address an application for relief from sanctions in three stages. The first stage is to identify and assess the seriousness and significance of the ‘failure to comply with any rule, practice direction or court order’ which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate ‘all the circumstances of the case, so as to enable [the court] to deal justly with the application including [factors (a) and (b)]’….”

1. As held in Hysaj (supra), an application for an extension of the time prescribed pursuant to Part 52.4(2) for filing a notice of appeal should be approached in the same way and with the same rigour as an application for relief from sanctions under Part 3.9.

2. In my view the test to be applied by the Judge was the domestic test for relief from sanctions (as laid down by Denton and Hysaj), with the third stage informed by the policy and principles of the Regulation. This is indistinguishable from Mr Elvin’s formulation, namely, that the discretion to grant relief from sanctions is to be exercised in accordance with the domestic law and consistently with the polices and principles underlying the Regulation. In this way, while the exercise of discretion under Issue II faithfully reflects the premise upon which it is addressed and is thus kept properly separate from the jurisdiction issue arising under Issue I, it is not divorced from the context in which it arises. This approach is preferable to that advocated by Mr Warents (see above) which, to my mind, does not adequately address the question of context, save for the length and basis of any extension which might be granted.

3. Turning to the test to be applied by this Court, it is the well-known test covering appeals from discretionary decisions by the Court below. We should not interfere simply because we might ourselves have exercised the discretion differently. We should only interfere if the Judge failed to consider relevant factors, or took into account irrelevant factors, or was plainly wrong.

4. (C) The exercise of the discretion: There can be no doubt that the Judge had regard to the first stage of the Denton test. For my part, I cannot fault her conclusion that the delay was serious, for the reasons she gave. That being so, I am not minded to take time over a more detailed consideration of whether or not the delay impacted on the date for the hearing of the appeal. Whatever the answer, it can only matter but little, if at all. It is, however, plain that the Appellant’s failure to comply with the time limit has generated the preliminary issues with which this Court is now concerned; but for these preliminary issues, it must be likely that the litigation would long since have come to an end. Though the Appellant cannot be “blamed” for the interest to which Issue I gives rise, there would have been no preliminary issues had the Appellant lodged her appeal within time. On any view – given the Judge’s conclusion as to the seriousness of the delay – stages two and three of the Denton test require careful consideration.

5. As to the second stage of the Denton test, no proper criticism can be made of the Judge’s conclusion that there was no good reason for the delay. Without belabouring the point, this was a case where there was ample time for the Appellant to lodge her appeal. That it was not lodged in time was attributable to the “serious mistake” made by her solicitors, as the Judge understandably characterised it (at [18] of the judgment).

6. Turning to stage three of the Denton test, as it seems to me, the Judge did have regard to “all the circumstances of the case”. She had already held that the delay was serious and that there was no good reason for it. Contrary, with respect, to Mr Warents’ submission, the Judge did take into account the Appellant’s contention that there had been no prejudice – “there was no harm done”, as expressed by the Judge (at [85]). She was, however, entitled to go on to conclude that any such considerations as to the absence of prejudice were outweighed by the “bigger picture” of the Regulation, including its deliberately tight timetable for appeals against the background of the balance already struck between the rights of the judgment creditor and the legitimate interests of the defendant. In the circumstances, the Judge’s conclusion that condoning the Appellant’s delay would be “unwarranted and unprincipled” cannot be said to fall outside the scope of her discretion.

7. I am not at all persuaded that the decision in Hysaj told in favour of, still less required the Judge to reach, a different conclusion. The point of principle in Hysaj was that already summarised: namely, an application for an extension of time for filing a notice of appeal should be approached in the same way and with the same rigour as an application for relief from sanctions under CPR r. 3.9. The decisions in Hysaj on the facts of the individual cases before this Court do not advance the argument. I am also not persuaded that the fact that CPR Part 74.8 does not require permission to appeal, somehow equates the position of the Appellant to that of the applicant in Hysaj, who had already obtained a judicial decision granting permission to appeal.

8. It follows that despite the Judge’s initial observation (at [77], set out above) as to the Denton test not being “wholly apposite”, she effectively worked through and applied that test, in context, against the background of the Regulation and its underlying policy and principles. The precise language in which the Judge expressed herself does not affect the essence of this conclusion. If there is any distinction between the approach adopted by the Judge and the test to be adopted as set out above, it is a distinction without any real difference. For my part, I cannot see any proper basis for impugning the Judge’s exercise of her discretion, so that no question of exercising the discretion afresh arises.

9. If, however, I am wrong about that, so that it is appropriate to exercise the discretion afresh, then I would have no hesitation in coming to the same conclusion as that reached by the Judge. In all the circumstances of this case, informed by the context and even assuming (without deciding, in the Appellant’s favour) “no harm done”, there is no warrant for granting a substantial extension of time, so cutting across the policy and principles of the Regulation.

10. (D) Overall conclusion: For the reasons given, I would uphold the decision of the Judge on Issue II and would dismiss the appeal.