A judge should have permitted a new ground of appeal to be raised alleging that there had been a procedural irregularity in entering a default judgment without requiring the claimants to prove their case. However, that ground of appeal lacked merit and the appeal was dismissed.
The appellant appealed against the refusal of his application for permission to raise a new ground of appeal.
The respondent companies had brought proceedings against the appellant alleging that he had withdrawn money from their accounts without proper authorisation. The appellant’s case was that he had only taken agreed sums and was entitled to commission on sales. He brought a counterclaim. Shortly before trial, the appellant applied unsuccessfully for an adjournment on the grounds of his mental health problems. The adjournment application was renewed at the beginning of the trial. The judge refused the application and refused permission to appeal, holding that an adjournment was not worthwhile because there was no evidence that the appellant’s mental health would improve. In the appellant’s absence the judge struck out the appellant’s defence and counterclaim and then went on to give judgment for the respondents with costs. The appellant applied unsuccessfully to have the judgment set aside. He then appealed against the refusal to adjourn and the refusal to set aside. He later applied to amend his notice of appeal to add as a ground that there had been a serious procedural irregularity because the judge had wrongly given judgment in default without requiring the respondents to prove their case. The judge dismissed the appeal against the refusal to adjourn, refused permission to appeal against the refusal to set aside and refused permission to add the new ground of appeal.
HELD: (1) The addition of a new ground of appeal under CPR r.52.8 was a late amendment which was subject to the principles set out in Swain Mason v Mills & Reeve [2011] EWCA Civ 14, [2011] 1 W.L.R. 2735 and Ketteman v Hansel Properties Ltd [1987] A.C. 189, Swain Mason and Ketteman followed. Because an extension of time was required it also engaged by analogy the modern principles relating to relief from sanctions, Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, [2014] 1 W.L.R. 795 considered and Denton v TH White Ltd [2014] EWCA Civ 906, [2014] 1 W.L.R. 3926 and R. (on the application of Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633, [2015] 1 W.L.R. 2472 followed. The judge had erred in considering only the question of the delay in raising the new ground and had not considered the other relevant factors. The Court of Appeal had to consider the issue afresh. The new ground clearly had a real prospect of success, since permission had been granted to appeal to the Court of Appeal. Utilising the Denton approach, it was appropriate to consider the seriousness of the delay in place of the seriousness of the breach of the rules. On that basis, there had been some delay, but part was explained by the need to instruct counsel. The respondents had not been prejudiced and had been able to respond to the new ground within days. Equally the new ground had had no effect on the hearing date or other litigation. Applying Swain Mason and Denton and considering CPR r.3.9(a) and r.3.9(b) the judge should have permitted the new ground to be raised.
(2) The judge had been fully entitled in the circumstances to strike out the appellant’s defence and counterclaim. The question was what should have happened next. The appellant’s case was that judgment had been given without the judge having properly considered the evidential basis for doing so. What a judge was required to do in such circumstances would vary from case to case. In the instant case the judge was familiar with the case, having conducted a case management conference, and had read the statements of case and looked through the trial bundle. She also had a Scott Schedule detailing the position in relation to each of the allegedly unauthorised payments. It was not suggested that she should have required the witnesses to be called to give oral evidence. In some cases it might be necessary to go further to clarify any inconsistencies, but the instant case was straightforward. The judge was clearly right to dispense with oral evidence, which would have been pointless in an undefended claim. The respondents nevertheless had to prove their claim and that was done by consideration of the statement of case, which was verified by a statement of truth, and the witness statements. The court would infer that the evidence proved the respondents’ case unless the contrary was clearly made out, Piglowska v Piglowski [1999] 1 W.L.R. 1360 considered. The judge had considered enough of the evidence to justify her conclusion; there was no evidence to the contrary. Furthermore, it was not for the respondents to show that the result would have been the same, but for the appellant to show that the appeal was more than academic and that the result would have been different. Otherwise the case would be returned to the judge only for her to reach the same conclusion. The appeal was allowed to the extent of permitting the new ground to be raised, but was otherwise dismissed.
Judgment accordingly
Law Lessons 4 Life 