THE DIFFICULTY IN APPEALING A DENTON TYPE DECISION

The second issue in  judgment of HHJ Matthews (sitting as a High Court judge) in Wolf Rock (Cornwall) Ltd v Langhelle [2020] EWHC 2500 (Ch) was whether the appellant was able to appeal the District Judge’s refusal to grant relief from sanctions in serving witness evidence late.

THE FACTS

The respondent to the appeal(Langelle) had applied to be substituted as a petitioner in a winding up application against Wolf Rock.   The petition did not proceed on the initial hearing but the District Judge gave directions for the service of evidence.   Service of evidence for Wolf Rock was later extended to the 16th August 2020.   Wolf Rock served evidence on the 15th August and two further witness statements on the 21st November 2019.  The District Judge refused to allow Wolf Rock to rely on the witness statements served in November.  The District Judge heard the evidence and made a winding up order.

THE APPEAL ON THIS ISSUE

Wolf Rock’s appeal failed on the issue that relief from sanctions was not needed to rely on the witness statement served late.   The judge then considered its appeal against the judges decision not to grant relief from sanctions.

1. 1. The second issue then is whether the district judge applied the Denton/Mitchell principles correctly. The appellant argued that he did not. The grounds of appeal on this point (paragraph 5 of ground I) are divided into five subparagraphs, each of which begins with words to the effect that the judge failed to give any or any sufficient weight to various points. These are characteristic of a challenge to the weighing up process in the mind of the judge. At the hearing, the appellant submitted in particular that, in relation to the second of the criteria (the reason for the breach), the judge did not place sufficient weight on the conduct of the respondent, who, it was said, obstructed the appellant’s access to the accounting documents which were needed in order to deal with the respondent’s claims and the appellant’s cross-claims. Instead, the appellant said, the judge dwelt on credibility points. The second criticism made by the appellant relates to the third of the Denton/Mitchell principles, taking account of all the circumstances. The appellant says that the judge’s primary concern was the loss of the court time that would be represented by granting an adjournment, which would follow from the decision to admit the fresh evidence. The appellant says that prejudice to the appellant should have been considered more important.

   2. In response, the respondent referred me to the decision of the Court of Appeal in Metropolitan Police Commissioner v Abdulle [2015] EWCA Civ 1260. That was a case which concerned the decision of a first instance judge not to strike out a claim on the basis of a failure to comply with rules and court orders. The defendant appealed against this decision to the Court of Appeal.

   3. Lewison LJ (with whom Moore-Bick and Kitchen LJJ agreed) said this:

“24. Let me say at once that if I had been the first instance judge I would have accepted [the defendant]’s submissions. I would have given more weight to the lamentable history of delay in progressing this case, the apparent incompetence of the claimants’ solicitors, and the loss of the trial date. But that is not the question for an appeal court.

25. Mr Thomas’s submissions did not include a submission that the judge overlooked any relevant factor, or that he took into account irrelevant factors. Nor did he suggest that the judge misdirected himself in law. Rather, his submissions were directed to the weight that the judge attributed to the various factors that he did take into account in exercising his discretion. That is not a promising start to an attack on an exercise of discretion. What it amounts to is a submission that the judge’s decision was perverse.

26. In Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, [2014] 1 WLR 795 at [52] this court said:

‘We start by reiterating a point that has been made before, namely that this court will not lightly interfere with a case management decision. In Mannion v Ginty [2012] EWCA Civ 1667 at [18] Lewison LJ said: “it has been said more than once in this court, it is vital for the Court of Appeal to uphold robust fair case management decisions made by first instance judges”.’

27. The first instance judge’s decision in that case was to refuse relief against sanctions and her refusal was upheld by this court. But the same approach applies equally to decisions by first instance judges to grant relief against sanctions. In Chartwell Estate Agents Ltd v Fergies Properties SA [2014] EWCA Civ 506, [2014] 3 Costs LR 588 Davis LJ said at [63]:

‘… the enjoinder that the Court of Appeal will not lightly interfere with a case management decision and will support robust and fair case management decisions should not be taken as applying, when CPR 3.9 is in point, only to decisions where relief from sanction has been refused. It does not. It likewise applies to robust and fair case management decisions where relief from sanction has been granted.’

28. In my judgment the same approach applies to decisions by first instance judges to strike out, or to decline to strike out, claims under CPR 3.4(2)(c). In a case in which, as the judge himself said, the balance was a ‘fine’ one, an appeal court should respect the balance struck by the first instance judge. As I have said I would have found that the balance tipped the other way; but that is precisely because in cases where the balance is a fine one reasonable people can disagree. It is impossible to characterise the judge’s decision as perverse.”

1. In my judgment, the same is true in this case. At the hearing the appellant sought to argue that the judge did not take into account the highly complicated nature of the accounting information which had been obtained from the online database. I do not agree. The judge did look at the fresh evidence tendered, and cannot have failed to notice its nature. The appellant also criticised the fact that the judge did not mention rule 7.16. But rule 7.16 had been referred to during the argument, and the judge cannot have failed to have it in mind. In my judgment, on the material before me, the judge did not fail to consider matters that ought to have been considered, and neither did he consider anything which was irrelevant. The weight to be put on the matters that he did consider was one that was for him, and not for me. Standing back and looking at what he says, I cannot possibly characterise his decision on the application of the Denton/Mitchell principles as perverse. As Lewison LJ said in Abdulle, what I myself might have done in those circumstances is irrelevant. Accordingly, I hold that the judge’s application of the Denton/Mitchell principles cannot be challenged.