APPLICATION FOR RELIEF REFUSED BECAUSE THE UNDERLYING CLAIM WAS MISCONCEIVED: A RARE EXAMPLE OF THE MERITS OF THE ACTION BEING CONSIDERED

In  Price, R v (on the application of) v The Crown Court at Snaresbrook [2020] EWHC 496 (Admin) Mr Justice Freedman refused the claimant’s application for relief from sanctions because the underlying claim was “hopeless”. This is a rare example of the merits of the action being considered in an application for interlocutory relief.

 

“The case of Denton went on to say that the merits of the case will not generally be explored at the interim stage following failure to observe a peremptory order. However, there is an exception to this where the case can be shown as if on a summary judgment to be bound to succeed or to fail.”

THE CASE

The claimant brought proceedings in relation to orders made under the Proceeds of Crime Act 2002.  An incomplete copy of the claim form had been served.  A peremptory order was made d that the claimant serve a complete copy of the claim. The claimant failed to comply and the action stood struck out.  The claimant applied for relief from sanctions.

THE JUDGE’S CONSIDERATION OF THE APPLICATION FROM RELIEF FROM SANCTIONS

The judge considered the Denton principles and identified the one circumstance in which the merits of the underlying case can be relevant to the issue of relief from sanctions.

The applicable law regarding relief from sanctions
    1. In these circumstances, the usual order is to grant relief from sanctions. In Denton v TH White Limited[2014] EWCA Civ 906, there was set out the three-stage process of considering (1) whether the breach was serious or significant, (2) whether there was a good reason for a breach, and (3) all the circumstances of the case. In the usual case, if the breach was neither serious or significant, then it would not be necessary to go further. Likewise if there was a good reason for a breach. However, that is not invariably the case. The Court of Appeal in Denton said the following:
“35…the more serious or significant the breach the less likely it is that relief will be granted unless there is a good reason for it. Where there is a good reason for a serious or significant breach, relief is likely to be granted. Where the breach is not serious or significant, relief is also likely to be granted.

36. But it is always necessary to have regard to all the circumstances of the case. The factors that are relevant will vary from case to case.”

32. The case of Denton went on to say that the merits of the case will not generally be explored at the interim stage following failure to observe a peremptory order. However, there is an exception to this where the case can be shown as if on a summary judgment to be bound to succeed or to fail. The language used in this connection was in the case of HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al Saud (Appellant) v Apex Global Management Ltd and another [2014] UKSC 64 where Lord Neuberger said that the strength of a party’s case is generally irrelevant in case management issues. However, there was a possible exception where a case was strong enough to obtain summary judgment. However, he cautioned that in order to avoid unfairness, the point as to merits must be signalled very clearly in advance.
33. This was applied in the case of R (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633. This was a case which decided that the merits of the appeal in the context of an application to extend time for bringing the appeal were in most cases not relevant to the exercise of the discretion. However, the Court of Appeal referred to the above-mentioned judgment of Lord Neuberger, saying the following:
“46. If applications for extensions of time are allowed to develop into disputes about the merits of the substantive appeal, they will occupy a great deal of time and lead to the parties’ incurring substantial costs. In most cases the merits of the appeal will have little to do with whether it is appropriate to grant an extension of time. Only in those cases where the court can see without much investigation that the grounds of appeal are either very strong or very weak will the merits have a significant part to play when it comes to balancing the various factors that have to be considered at stage three of the process. In most cases the court should decline to embark on an investigation of the merits and firmly discourage argument directed to them. Here too a robust exercise of the jurisdiction in relation to costs is appropriate in order to discourage those who would otherwise seek to impress the court with the strength of their cases.

47. Support for that conclusion can be found in the recent decision of the Supreme Court in HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al Saud v Apex Global Management Ltd [2014] UKSC 64, in which the court had to consider the extent to which the merits of a claim or defence were relevant to granting relief from the sanction of striking out in default of compliance with an “unless” order. Lord Neuberger, with whom Lord Sumption, Lord Hughes and Lord Hodge agreed, held that, even in a case of striking out, the merits of the claim or defence were relevant only when they were so strong that there was no real answer to them, in other words, in cases where an application for summary judgment could be expected to succeed.”

Application of law to the instant facts
  1. In the instant case, the submissions are such that the application for permission in this case would be bound to fail. That is because even if it were established that the application to state a case could or should have been dealt with (to the extent that this was not the case), it would have made no difference. Even if a case could have been stated, it would have been bound to fail because the interest of the Claimant in the Property in France was in the light of the case of R v Moss considered to be part of the proceeds of an offence even if it were not traceable to the receipt of drugs money. Further and in any event, the proper course would have been to have sought to appeal to the Court of Appeal rather than to have a case stated. However, even if that route had been followed, the case would have been bound to fail because of the reasoning in R v Moss set out above.
  2. In those circumstances, there would be no point in giving relief from sanctions because it would progress a case which was bound to fail. There is no unfairness in this course being adopted. The CPS had stated very clearly its reliance on R v Moss in the grounds of opposition to reinstatement of the CPS dated 18 July 2019 (as well as the correct course being an appeal to the Court of Appeal). This was set out with great clarity at paragraph 27 that “the judgment in Moss also provides a definitive answer to the Claimant’s principal challenge to the certificate made in the instant case.” In conclusion, the final words of the skeleton are that “the underlying claim is misconceived in any event.

THE JUDGE’S CONSIDERATION OF THE UNDERLYING MERITS

  1. The judicial review proceedings are hopeless. There is no prospect of even permission being granted. They are misconceived because the case stated procedure is inappropriate. Any appeal would have to be brought to the Criminal Division of the Court of Appeal. It follows that the resort to judicial review is misconceived. In any event, substantively too, the complaint is also misconceived. The Judge in his ruling on 31 March 2017 stated fully reasons for reaching granting the certificate which are unassailable. Further, the Judge’s ruling is entirely consistent with the subsequent judgment of the Court of Appeal in R v Moss is entirely consistent. Thus, even if the correct appellate route had been followed, the challenge would have been bound to fail. In the circumstances of the principal basis of the underlying claim and any other points of challenge of the decision of the Judge are hopeless.
  2. It follows that even if the breach were not serious or significant, which, without deciding, I have assumed for the purpose of this application that it was not, there is no purpose in giving relief from sanctions. This would simply be to revive a claim which has no basis. That would be pointless. Accordingly, the application is dismissed.