RELIEF FROM SANCTIONS GRANTED ON APPEAL WHERE A PARTY FAILED TO PAY THE COURT FEE

In  Silber v London Borough of Barnet (HOUSING – CIVIL PENALTY – case struck out by FTT for failure to pay the hearing fee – criteria for relief from sanctions) [2021] UKUT 206 (LC) the Upper Tribunal allowed an appeal against a decision where relief from sanctions was refused. The appellant’s solicitor had failed to pay a hearing fee and the matter was struck out.  The tribunal erred in failing to consider and apply the Denton criteria. It further erred in taking a view of the merits of the case as a whole.

THE CASE

The appellant was appealing against a financial penalty for being in control of a house in multiple occupation.  There were directions that a hearing fee of £200 be paid with 14 days or the appeal would be deemed to be withdrawn.  The appellant’s solicitor was abroad at the relevant time, with scant access to the internet, and had to quarantine when he returned.  The fee was not paid and the claimant made an application for an extension of time. This was refused.  The appellant appealed.  The appeal was successful.

THE DENTON PRINCIPLES APPLY

It was held that the tribunal erred in failing to consider and then apply the Denton principles.

8.             Mrs Silber’s application to the FTT was for relief from the sanction imposed upon her for failure to pay the hearing fee. In Haziri and Kela v London Borough of Havering [2019] UKUT 330 (LC) the Tribunal (the Deputy President) said this at paragraph 21:

“In Denton v T H White Limited [2014] EWCA Civ 906, the Court of Appeal laid down the approach to be followed by the courts in deciding whether to grant relief against sanctions for non-compliance. The majority of the court (Lord Dyson MR and Vos LJ) said at [24] that a judge should approach the question in three stages:

1. i)        identify and assess the seriousness of the failure to comply;

2. ii)        consider why the default occurred;

iii)       evaluate all the circumstances of the case to enable the court to deal justly with the application, including the need for litigation to be conducted efficiently and the need to enforce compliance with rules, practice directions and orders.

22. In BPP Holdings v Commissioners for Her Majesty’s Revenue and Customs [2017] UKSC 55 the Supreme Court explained that although the Civil Procedure Rules (which govern court procedure) do not apply to tribunals, such tribunals should follow a similar approach to procedural non-compliance and relief against sanctions.”

23. The decision to refuse relief from sanctions is a discretionary one, and the Tribunal will not interfere with such a decision unless a serious error can be shown.

THE TRIBUNAL’S FAILURE TO MENTION AND FOLLOW THE DENTON CRITERIA

The failure to mention and follow Denton was, it was held, a fundamental error.

22. The obvious cause for concern with the FTT’s decision is that the Denton criteria were neither mentioned nor followed. It may be that the judge had them in mind; she may have taken the view that the failure to pay the fee was a serious default, and she was clearly unimpressed with Mr Goldkorn’s explanation. She did consider the need to deal justly with the application, but she was heavily influenced by her view of the merits of Mrs Silber’s case, which is not relevant to the decision about relief from sanctions. She failed to take into account that Mrs Silber herself was not at fault, that the result of the striking out of her case would be the loss of her right to appeal the financial penalty, and that it was still weeks before the date at which her appeal was to have been heard so that the efficient conduct of litigation would not have been prejudiced by her reinstatement. And while the efficient use of the resources of the FTT was a relevant matter, it is difficult to understand the judge’s comment that Mrs Silber’s appeal was less important than other appeals from financial penalties and I fail to see how such an assessment could rationally or fairly be made.

23. In Block A9 The Upper Drive Limited v Copse Mill Properties [2019] UKUT 337 (LC) the FTT’s failure to consider the approach set out in Denton led it to take an unduly harsh approach and to refuse relief from sanctions where relief should have been given. In my judgment the same has happened here. The FTT’s failure to take into account the Denton criteria, and its consideration of irrelevant criteria namely the merits of the case and its supposed relative importance, led it to make a decision which fell outside the range of decisions available to it in the exercise of its discretion. Its decision is set aside.

The Tribunal’s decision on relief from sanctions

12. The Tribunal substitutes its own decision for that of the FTT.

13. In Denton the Court of Appeal said that the failure to pay a court fee is a serious default even if it does not affect the efficiency of litigation (paragraph 26). Turning to the second step, it is clear that Mr Goldkorn, perhaps in haste before his holiday, failed to notice that what was wanted was a hearing fee in addition to the application fee he had already paid. In my judgment that explains his failure to reply to the demand for a fee before he went away. I accept that he was unable either to manage emails from Brazil or to delegate housing litigation to his criminal lawyer colleagues; and as he was (albeit mistakenly) unaware that anything had gone wrong it is entirely understandable that he did not make any other arrangements for the matter to be dealt with in his absence.

14. In the light of that I move on to the third step in the Denton criteria, namely to evaluate all the circumstances of the case in order to deal justly with the application, including the need for litigation to be conducted efficiently and the need to enforce compliance with rules, practice directions and orders. It is significant that the reinstatement of Mrs Silber’s case would have had no effect, in February, upon the efficient conduct of litigation since the hearing was some weeks ahead. Compliance with the rules could have been ensured by a requirement for the payment of the fee at once. Most importantly, justice would have been served, because the striking out of Mrs Silber’s case was a draconian and disproportionate response to a default that arose from a minor error, namely Mr Goldkorn’s misunderstanding about which fee was referred to, and where Mrs Silber herself was not at fault.

15. Accordingly Mrs Silber’s case is reinstated in the FTT.