CLAIMANT GIVEN RELIEF FROM SANCTIONS FOLLOWING BREACH OF PEREMPTORY ORDER (WITH NO FORMAL APPLICATION BEING MADE).

In Park v Hadi & Anor [2020] EWHC 2687 Mr Justice Freedman granted a defendant relief from sanctions in circumstances where there had been a breach of a peremptory order and no formal application had been made.

 

THE CASE

The claimant brings an action relating to the transfer of ownership of a public house. In June 2020 a peremptory order was made that the claimant must issue an application that the claimant must issue an application to amend his claim form and particulars of claim.

LATE SERVICE

  1. Subsequent to the order of Lavender J of 4 June 2020, Mr Park attempted to issue an application on 18 June 2020 to amend the claim form and the Particulars of Claim. He sent an email to the Court at 3.55pm with various documents including the N44 to amend the claim form, the amended particulars of claim, two witness statements, the EX 140 about his means and the Metro bank account statement. The Court contacted Mr Park/Mr Syed because the form did not open at the court end. After that was sorted, on 22 June 2020 at 4.33pm, the documents were then served by email on the Defendants’ solicitors. The Defendants say that this was not good service because they were not served on Thursday 18 June 2020, but after 4.30pm (at 4.33pm) on Monday 22 June 2020. They point out that this was deemed to have been served on 23 June 2020, that is 5 days’ late. Further, service by email was not an effective form of service. It was therefore submitted that accordingly the sanction contained in the order applied that the Particulars of Claim is dismissed and Mr Park is to pay the costs of the claim. This was said by solicitors’ letter on 17 July 2020 at para. 1-3. It did not refer to the failure, subsequently referred to, to serve bank statements of HFKL.
  2. There was no application for relief from sanctions. There has been no witness statement explaining what occurred. In the course of the oral submissions, it was explained by Mr Syed that he was working from his home and without the benefit of an office at his home. He was under-equipped as regards machinery. He struggled to get the bank statements and had to visit the bank. He was acting without remuneration. Mr Park was unable to pay for legal representation. Although the documents should have been served on 18 June 2020, it was submitted that there was no disadvantage to the Defendants caused by the lateness in that they had enough time to respond.

RELIEF FROM SANCTIONS GRANTED

The judge granted relief from sanctions, even though there was no formal application.
    1. The Defendants’ case is that the effect of the breach of the order of Lavender J (service not by 4.30pm on Thursday 18 June 2020 but at 4.33pm on Monday 22 June 2020) is that the claim was dismissed with costs. The Defendants say that in any event, service by email was not allowed as their solicitors have never stated that they would accept service by email. There is a recital in the order that Mr Park was informed that there would be no further toleration of any failure on the part of Mr Park to comply with the Court’s order and/or the Civil Procedure Rules, which must be fully complied with.
    2. It is further said that whereas the order of Lavender J required copies of statements of bank accounts to which Mr Park is a signatory at the date of the order (4 June 2020) and for the period of 17 April 2020 to 17 June 2020, these have not been provided as regards the accounts of the company HFKL. According to Mr Syed, this was overlooked in the attempt to comply with the order of Lavender J. According to Hadi (2) at para. 55, this omission prevents Mr Park from being able to say that he has provided his full financial position and from then contending that he is unable to pay outstanding orders as to costs.
    3. In oral submissions of Mr Roseman for the Defendants, it was submitted that there is the possibility that there was received £25,000 by way of a Covid grant. There was no evidence to support this assertion which seems unlikely, given that such grants depend on the business trading in March 2020 and occupying premises with high fixed property-related costs. There is no evidence that HFKL is still trading or that it is occupying a property. On the contrary, the evidence is that Mr Park is in receipt of job seekers’ allowance, which ought to mean that he is unemployed and seeking work. This seems inconsistent with his being involved in a trading business of HFKL.
    4. In most circumstances, an application for relief from sanctions would be required. In the particular circumstances of this case, I shall dispense with the need for a formal application because many matters for Mr Park and Mr Syed have been attend to, and there has been procured almost substantial compliance: see White Book Vol 1 para. 3.9.24. The Court must consider the three stage test in Denton, namely the seriousness or significance of the breach, the reason why the default occurred and all the circumstances of the case “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.”: see CPR 3.9(2).
    5. Applying the threefold test in Denton v TH White Ltd [2014] 1 WLR 3926, in my judgment, the delay of that which was provided from 18 June to 22 June after 4.30pm was neither serious nor significant. The relevant documents were prepared by 18 June 2020: the fault was about service. The time period was not long, and it did not affect the ability of the Defendants to prepare for the next hearing. Thus, there was no prejudice suffered from the default. If in fact the breach was serious or significant, whilst bearing in mind the difficult circumstances in which Mr Park and Mr Syed were operating, they do not provide a good reason for the default, but they provide significant mitigation. The Court has borne in mind that the absence of legal representation does not usually excuse failure to comply with rules and orders: see Wright v Hassall [2018] AC 12. In that case, Lord Sumption JSC at para. 18 said the following:

“In applications under CPR 3.9 for relief from sanctions, it is now well established that the fact that the applicant was unrepresented at the relevant time is not in itself a reason not to enforce rules of court against him: R (Hysaj) v Secretary of State for the Home Department [2015] 1 WLR 2472, para 44 (Moore-Bick LJ); Nata Lee Ltd v Abid [2015] 2 P & CR 3. At best, it may affect the issue “at the margin”, as Briggs LJ observed (para 53) in the latter case, which I take to mean that it may increase the weight to be given to some other, more directly relevant factor.”

  1. Considering all the circumstances of the case, looking at the matter as a whole, there was much to do to comply with the Order prior to 18 June 2020, and despite the handicap of not having a solicitor or barrister to act on his behalf, and with only the assistance of Mr Syed assisting without the benefit of an office, a lot was done. That included the preparation of an amended pleading, re-pleading much of the case. There was prepared a form about the financial circumstances of Mr Park and personal bank statements were obtained. Witness statements were prepared. In addition to this, there are peculiarities about the case that require examination to which I shall turn whilst looking at the application to amend. In all the circumstances, if the breach was serious or significant, it was not intentional or reckless or defiant, and it did not cause prejudice to the Defendants. Further, there was substantial mitigation for the default. Taking into account all the circumstances, the overall justice of the case that is that it should not fail because of the late service and the method of service of the documents