DENTON PRINCIPLES CONSIDERED IN APPLICATION TO APPEAL OUT OF TIME : PERMISSION GRANTED

In Kumar v Secretary of State for Business, Energy and Industrial Strategy & Anor [2021] EWHC 2965 (Ch) ICC Judge Barber considered the Denton principles in an application for permission to appeal out of time.  The appellant’s application was granted.

THE CASE

The sole director and shareholder of a company that had gone into liquidation discovered that the Official Receiver had obtained a deferral of the company’s liquidation.  The Official Receiver confirmed that the reason for the deferral no longer existed and that an application in relation to the deferral would not be resisted.  This could only be done by way of appeal.

WAS PERMISSION TO APPEAL REQUIRED

The judge first considered whether permission to appeal was required in these circumstances. It was held that no permission was needed.

Is Permission to Appeal required?

1. 1. It is the Appellant’s primary position that he does not require permission to appeal.

1. 1. CPR rule 52.3(1) provides that:

‘An appellant or respondent requires permission to appeal

(a) where the appeal is from a decision of a judge in the County Court or the High Court, or to the Court of Appeal from a decision of a judge in the family court, except where the appeal is against –

(i) a committal order;

(ii) a refusal to grant habeus corpus; or

(iii) a secure accommodation order made under section 25 of the Children Act 1989 or section 119 of the Social Services and Well-being (Wales) Act 2014; or

(b) as provided by Practice Directions 52A to 52E.

(Other enactments may provide that permission is required for particular appeals )’.

1. 1. The Appellant maintains that he is not appealing from a judicial decision and that no provision is made in the Practice Direction, IR 2016 or the 1986 Act requiring permission. In such circumstances, he contends that CPR 52.3 does not apply.

1. 1. I am reminded that this was the approach adopted by the Court of Appeal in Banga (T/A Banga Travel) v Secretary of State for Transport [2008] EWCA Civ 188, [4]-[7], in relation to an appeal from the Transport Tribunal. In Banga, the Court held that permission was not required.

1. 1. At paragraphs [4] to [7] of Banga, Keene LJ (Ward LJ concurring) reasoned as follows:

‘[4] There appears to have been some uncertainty, at least at some point, as to whether permission to appeal is required for an appeal to this court from the Transport Tribunal. Paragraph 14(3) of Schedule 4 provides that:

“An appeal shall not be brought except in conformity with … rules of court”

But the relevant rule in the Civil Procedure Rules is Rule 52.3(1), which only requires permission to appeal where the appeal is from a decision of a judge in a county court or the High Court and makes no reference to statutory appeals from a tribunal. That same provision states that:

“Other enactments may provide that permission is required for particular appeals”,

but the fact is that no enactments does so provide in the case of appeals from the Transport Tribunal.

[5] The arguments concerning statutory appeals were thoroughly considered by this Court in the case of Colley v the Council for Licensed Conveyancers [2001] EWCA Civ 1137 where it was concluded that there was no general requirement for permission to appeal deriving from the CPR or the Practice Direction under Part 52, so far as statutory appeals from tribunals were concerned.

[6] That is certainly the approach this court has already taken on at least one occasion in the past where the appeal was from the Transport Tribunal. In Alison Jones t/a Shamrock Coaches v Dept of Transport Welsh Traffic Office [2005] EWCA Civ 58, Smith LJ, with whom the other two members of the court agreed, referred to the relevant provisions of the Transport Act 1985 and simply stated this:

“1 …. By reason of those provisions the appeal is a statutory appeal for which permission to appeal to this Court is not required.”

[7] That appears to me to be correct in law….’

1. 1. In my judgment, the position is no different in the present case. This appeal is not from a decision of a judge and so does not fall within CPR 52.3(1)(a). None of the Practice Directions referred to in CPR 52.3(1)(b) require permission to appeal in this case. As confirmed by the Court of Appeal in Colley, there is no general requirement for permission to appeal deriving from the CPR or the Practice Directions under Part 52, so far as statutory appeals are concerned. No provision is made in the 1986 Act or IR 2016 requiring permission.

1. 1. Accordingly, permission to appeal is not required. The Appellant does, however, require an extension of time for filing his appeal.

THE EXTENSION OF TIME FOR FILING THE APPEAL

The appeal was considerably out of time. The judge held that the Denton principles applied.

Extension of Time for Filing Appeal

1. 1. Rule 12.62 of the Insolvency (England and Wales) Rules 2016 (‘IR 2016’) states that:

‘an appeal under the Act or these Rules against a decision of the Secretary of State or the OR must be brought within 28 days of delivery of notice of the decision’.

1. 1. This time limit expired on 30 November 2020, being 28 days after 2 November 2020.

1. 1. On the principles to be applied when considering an application for permission to appeal out of time, I was referred to the guidance of the Court of Appeal in R (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633. At [36], Moore-Bick LJ held that an application for an extension of time to appeal should be equated with an application for relief from sanctions and that the Mitchell/Denton principles should be applied. Moore-Bick LJ summarised these principles at [37]-[38], as follows:

’37. In paragraphs 40-41 of its judgment in Mitchell the court provided guidance on the approach to be adopted to applications for relief from sanctions. The most relevant parts of that guidance to be found in those and certain other paragraphs of the judgement can be summarised for present purposes as follows:

(i) if the failure to comply with the relevant rule, practice direction or court order can properly be regarded as trivial, the court will usually grant relief provided that an application is made promptly;

(ii) if the failure is not trivial, the burden is on the defaulting party to persuade the court to grant relief;

(iii) the court will want to consider why the default occurred. If there is a good reason for it, the court will be likely to decide that relief should be granted, but merely overlooking the deadline is unlikely to constitute a good reason;

(iv) it is necessary to consider all the circumstances of the case before reaching a decision, but particular weight is to be given to the factors specifically mentioned in rule 3.9.

38. In Denton the court affirmed the guidance given in paragraphs 40-41 of Mitchell, but explained the approach in more detail as follows:

’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 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)]’

It is this more detailed guidance to which judges should now be looking when considering applications under CPR 3.9 and applications for extensions of time for filing a notice of appeal made after the time for doing so has expired.’

1. 1. In my judgment, this is an appropriate case in which to grant relief from sanctions and allow the Appellant to bring the appeal out of time.

1. 1. Whilst I do not accept the Appellant’s argument that the breach ‘is not serious and significant when considered in the context of the length of the liquidation (nearly 3 years) and the length of the deferral period (nearly 5 years)’, in my judgment the Appellant has demonstrated good reasons why the appeal was not brought in time. In summary

(a) The Appellant only became aware of the Deferral in December 2020 and at that stage sought to engage with the Official Receiver to understand the situation. The delay in making contact with the Official Receiver was caused by the Official Receiver’s change of contact details.

(b) It only became apparent that a court application would be required when the Appellant received an email from the Official Receiver on 20 April 2021 stating that there was nothing that the Official Receiver could do (administratively) to shorten the deferral. Until that point, the Appellant had hoped to achieve an out-of-court resolution of the matter.

(c) There was further delay in bringing the appeal while the Appellant waited for the Official Receiver to confirm whether he would bring the appeal or, alternatively, what his position on the appeal would be. The Official Receiver did not respond on this issue until 5 August 2021.

1. 1. I am further satisfied that it is just in all the circumstances to grant relief from sanctions in this case. In reaching this conclusion I take into account the matters summarised in Paragraph 35 of this judgment. I also take into account the following matters:

(a) There is no prejudice to the Official Receiver in granting relief from sanctions in circumstances where he has confirmed that the reasons for the Deferral have fallen away and he does not oppose the appeal. There has been no suggestion of any prejudice to third parties.

(b) The bringing of the appeal is the only means by which the Appellant may challenge the Deferral.

(c) The Deferral is having, and unless successfully challenged will continue to have, a significant negative impact on the future business endeavours of the Appellant.

(d) The Appellant had no prior warning of the Deferral and was given no opportunity to make representations about the Deferral (or its length) before it was implemented.

(e) This is not a case where the Appellant has demonstrated a deliberate disregard for court rules or procedure. The Appellant did not become aware of the Deferral for at least a month after it had been made. Even at that stage, he was unaware that he would be required to make a court application to resolve the issue and did not know that he had a short period in which to appeal.

1. For all these reasons, I shall grant the extension sought.