RELIEF FROM SANCTIONS REFUSED FOLLOWING LATE SERVICE OF WITNESS STATEMENTS: RECOURSE TO HUMAN RIGHTS ARGUMENTS WERE TO NO AVAIL

In Bank of Scotland Plc v Hoskins [2023] EWHC 306 (Ch) HHJ Paul Matthews (sitting as a High Court Judge) refused an application for relief from sanctions following late service of witness evidence.   The Defendant’s attempt to invoke Human Rights Act arguments in support was to no avail.

“… if the use of procedural rules to debar parties from making or defending claims (the most serious sanction possible in purely procedural, as opposed to penal, terms) did not contravene the right to a fair trial in article 6, it was hard to see why the refusal to relieve from sanction, properly applied, should do so”

THE CASE

The claimant had granted a mortgage to the defendant to a property said to have a value between £3.5 million and £5 million. The defendant stopped making payments under the mortgage in September 2018.  There was an initial agreement for a mortgage holiday.  The arrears stood at £689,726.68 and the amount required to pay in full was £3.4 million.  The defendant’s counterclaim was struck out at an earlier hearing. The court had made directions for a disposal hearing to take place.  Part of those directions were for witness evidence to be filed 14 days before the hearing. In fact the defendant filed a witness statement the last working day before the hearing.

THE DEFENDANT’S APPLICATION FOR RELIEF FROM SANCTIONS

The defendant made an application for relief from sanctions.  In addition to the usual “Denton” issues the defendant raised arguments in relation to article 8 and article 1 of the European Convention on Human Rights.

1. 1. As I have said, at the hearing I had to deal with the defendant’s application under CPR rule 3.9 for relief from sanction for evidence served late. This rule relevantly reads as follows:

“(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, 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.”

1. 1. And, after hearing counsel, I refused the application. These are my reasons. As I have also said, my order of 17 November 2021 required the defendant to file any evidence to be relied on at the disposal hearing at least 14 days before the date for which that hearing was directed to be listed. In September 2022, it was listed for 5 December 2022. (So far as that evidence related to the application to amend the defence, it was not in breach of any order. I was not therefore concerned with that. My concern was with that part of the evidence relating to the disposal hearing itself.)

1. 1. The defendant served his evidence only on 2 December 2022. Any exclusion of evidence for failure to comply with a court direction to file and serve by a particular date would be a procedural sanction, bringing CPR rules 3.8 and 3.9 and the case law surrounding those provisions into play. In particular I had to consider the so-called Denton criteria: see Denton v TH White Ltd [2014] 1 WLR 3926, CA. There are three stages to these. First of all, how serious and significant is the failure? Secondly, is there a good explanation for the failure? Thirdly, looking at the matter and the circumstances overall, is it in the interests of justice to allow the disputed evidence to be admitted?

1. 1. The first stage: In my judgment, this was a serious failure, as the defendant accepted at the hearing. This was a claim which had been on foot since May 2019, and in which the defendant’s counterclaim was struck out in November 2021. At the same time, I directed the disposal hearing. The defendant had 2½ years between issue and strike out to decide what his defence was and what evidence he would need. After the strike out, he knew that there would be a disposal hearing within a relatively short time, although in fact the date fixed turned out to be just over a year later. The defendant could have prepared his evidence then. Next, the defendant had 2½ months’ notice of the date of the hearing. But he still left it to the business day before to put in evidence to defend the possession claim. I am afraid that this is all of a piece with the history of this litigation. The defendant was simply stringing out the proceedings for as long as possible, so as to be able to continue to live with his family in this very expensive Grade 1 listed country manor house without paying anything now for the privilege.

1. 1. The second stage: Secondly, there was no good explanation for this failure. In his second witness statement, the defendant referred to the order of 17 November 2021, and then said simply:

“5. It has not been possible to comply with that order as the issues that have needed to be addressed to respond in full have been substantial and have taken time to collate”.

1. 1. I have already referred to the letter from his solicitors to the claimant’s solicitors of 11 November 2022, which sought an adjournment of the disposal hearing. This said that the solicitors did not believe that a one-hour hearing would be sufficient to deal with the submissions that the defendant intended to make. Apart from a reference to claims intended to be made by Mrs Hoskins against the property and her husband (which obviously did not fall to be made by the defendant, and of which at that stage the claimant had no idea), those matters referred to the defendant’s elderly mother and three young children, resident at the property, as well as to ongoing interest from third parties and purchasing the property. So far, there was nothing of any substance that could not have been put in a short witness statement and filed and served well before the 14 days before the hearing.

1. 1. I then referred to the short paragraph in the solicitors’ letter, complaining of a refusal by the claimant to allow the defendant to sell part of the property some years earlier. Despite relating to matters which were alleged to have happened years ago, the defendant had waited until less than a month before the listed disposal hearing to raise them in correspondence for the first time.

1. 1. The defendant put forward this explanation for the delay:

“7. … The threat of losing my house and my young family, and elderly mother (who has had serious health issues in recent weeks and who is in hospital at the date of this statement), being without a property is a very serious issue which justifies me taking time over the response and collating the evidence I need to support my position. Those details are set out below and in the attached exhibit”.

So far as concerned the defendant’s mother, his evidence was that she had been taken ill on 22 November 2022. But the deadline for the evidence to be filed and served was 21 November 2022, and so had already passed. As to the remainder of the evidence which the defendant then put forward, it was evidence which he had had since the events concerned in 2019 and following. And he lived through it and must have known all about it at the time. None of this was a good explanation for the delay in filing his evidence in opposition to the possession claim.

1. 1. The third stage: The final stage of the process was to consider whether, overall and taking everything into account, it was in the interests of justice to allow the late evidence to be admitted. I bore in mind the matters mentioned in CPR rule 3.9, namely the need for efficiently conducted litigation at proportionate cost, and enforcement of rules, practice directions and orders. The defendant was and had been throughout represented by experienced solicitors and counsel (now leading counsel). He had had more than sufficient notice of the disposal hearing, being aware in November 2021 that it would be listed, and receiving the actual listing in September 2022 for December 2022. Yet he waited until the business day before the hearing before serving his evidence. No good reason had been given for this. Given the attempts made by the defendant in correspondence to obtain an adjournment of the disposal hearing, it was hard to escape the conclusion that it was tactical, so as to make it impossible for the claimant to deal with, and so force an adjournment, as indeed was achieved.

1. 1. The defendant said that the order of District Judge Markland of 5 December 2022 had superseded my previous order regarding the service of evidence for the disposal hearing. I did not so read the order of 5 December 2022. It directed the filing and service of evidence in relation to the two applications, but said nothing about evidence in relation to the disposal of the possession claim.

1. 1. The defendant further said that, whatever the position might have been at the time of the hearing of 5 December 2022, the claimant would not now be prejudiced by the admission of the late evidence. I disagreed. This latest episode showed exactly how the claimant was being prejudiced by the defendant’s dragging out the proceedings, so that an order for possession (if otherwise appropriate) would never actually be made.

1. 1. Human rights: Finally, the defendant invoked article 8 (the right to respect for the home) and article 1 of protocol 1 (the entitlement to the peaceful enjoyment of possessions) of the European Convention on Human Rights. These read as follows:

“Article 8

1. Everyone has the right to respect for his private and family life, his home and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.

[ … ]

Protocol 1, Article 1

Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

1. 1. But he cited no authority in support of the submission that these articles impeded the refusal of relief from sanction. I was and am not aware of any such authority. On the other hand, there are cases dealing with the right to a fair trial under article 6, which in my view are of some assistance.

1. 1. In Azeez v Momson [2009] EWCA Civ 202, the appellant had failed to comply with an unless order, and consequently was debarred from defending the claim to a beneficial interest in properties which he owned. The question arose whether article 6 of the Convention (right to a fair trial) had been infringed. Rimer LJ (with whom Wall and Aikens LJJ agreed) said:

“36. The second ground of appeal raised the question as to whether Briggs J was required by Article 6 of the Convention (or otherwise) to consider whether the debarring order was proportionate. Mr Flower accepted that if (contrary to his primary submission) Briggs J was right to conclude that, without the ordered disclosure, a fair trial for Ms Momson was not possible, his decision could not be challenged on the basis that it was not compliant with Article 6. He conceded that the refusal of a court to grant relief against a debarring sanction will not contravene Article 6 provided that such refusal is proportionate and is for a legitimate purpose.”

1. 1. In Hayden v Charlton [2010] EWHC 3144 (QB), Sharp J struck out the claimants’ claims for libel for “deliberate and wholesale non compliance with the rules and orders of the court”. She considered article 6 of the ECHR in these terms:

“78. In considering whether it would be appropriate to strike these actions out, I have borne in mind that doing so will deprive the Claimants of access to the court, a matter which it might be argued by the Claimants, has implications for their rights pursuant to article 6(1) of the ECHR ‘to a fair and public hearing within a reasonable time and by an independent and impartial tribunal established by law.’ However as Hale LJ (as she then was) said in Khilili v Bennett and ors EWCA [2000] EMLR 996 at [50] when considering whether a decision to strike out a claim for delay deprived a party of his article 6(1) rights:

‘National laws are entitled to regulate their domestic procedures, and this includes prescribing timetables and steps which have to be taken within a limited period. If a claimant has not complied with those rules, then normally he will not be able to complain under Article 6’.”

1. 1. Plainly, the rights sought to be brought into play in the present case were different rights, under article 8 and article 1 of protocol 1 respectively. But, if the use of procedural rules to debar parties from making or defending claims (the most serious sanction possible in purely procedural, as opposed to penal, terms) did not contravene the right to a fair trial in article 6, it was hard to see why the refusal to relieve from sanction, properly applied, should do so. And, if that were so, given the exceptions for laws necessary to protect the rights and freedoms of others and to allow the government to control property in the general interest, it was just as hard to see why those rules should fall foul of article 8 or article 1 of protocol 1 either.

1. 1. Nevertheless, looking first at the article 8 right, it was clear that it was not absolute. It is a right to respect for the home, and not to the home. More importantly for our purpose, it is a right which is concerned with privacy rather than with property or contractual rights in relation to the family home. As Lord Hope said in Harrow London Borough Council v Qazi [2004] 1 AC 983,

“50. The right to respect referred to in this paragraph extends to the person’s home. But the essence of this right lies in the concept of respect for the home as one among various things that affect a person’s right to privacy. The context in which the reference to the person’s ‘home’ must be understood is indicated by the references in the same paragraph to his private and family life and to his correspondence. The emphasis is on the person’s home as a place where he is entitled to be free from arbitrary interference by the public authorities. Article 8(1) does not concern itself with the person’s right to the peaceful enjoyment of his home as a possession or as a property right. Rights of that kind are protected by article 1 of the First Protocol” (emphasis supplied).

(See also at [8] (Lord Bingham, with whom Lord Steyn agreed), [89] (Lord Millett), and [121]-[122] (Lord Scott).) This (unanimous) view was not overruled in Manchester City Council v Pinnock [2011] 2 AC 104, which dealt with public sector social housing: see at [50].

1. 1. Article 1 of protocol 1 concerns the deprivation of possessions (which is an autonomous term of art). I do not see the rules of relief from sanction for failure to keep to court timetables as involving any deprivation of possessions. If you do not defend a claim brought against you to claim an asset in your hands, of course you may lose it. So I see these rules much more as going to the notion of a fair trial, ie under article 6, already discussed above. Nor, in any event, is the right absolute. Paragraph 2 of article 1 of protocol 1 provides that it is subject to “the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest”. The rules of litigation relating to relief from sanction are in my judgment rules which are considered necessary in the general interest, and which in their ultimate effect may control the use of property. (In passing, I add only that I do not doubt that, in line with the applicable jurisprudence, the claimant’s security interest under the mortgage was also a possession protected under the article.)

1. 1. For these reasons, I considered that the defendant’s appeal to human rights here was misplaced.

1. Conclusion: Overall, I was clear that it was not in the interests of justice to allow this evidence to be admitted. This kind of behaviour has no place in our system. Therefore, the evidence in the witness statements of 2 December 2022 and 1 February 2023 relating to the disposal of the possession claim (rather than the applications for relief against sanctions and the permission to amend) was and is strictly inadmissible. However, in case I should prove to have been wrong in my decision, I will look at the further evidence de bene esse, so that it may not be necessary in that case to remit the matter to this court.