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Samara sixteen months on: applications for relief from sanction and to set aside default judgment
Up until March last year, the case law applying the new relief from sanctions regime in the context of applications to set aside default judgment was not always consistent or predictable. Samara v MBI & Partners UK Ltd brought welcome clarity to the question of whether CPR 3.9 applies to applications under CPR 13.3. Silber J was not hesitant in concluding that it does.
Even this, however, has not been applied consistently. There have been at least seven reported cases since Samara in which the question of the interplay between relief from sanctions and setting aside default judgment has arisen. The judgments are not all consistent.
Brett v Colchester University Hospital NHS Trust was decided less than a month after Samara. Master O’Hare referred to Samara in his judgment (paragraph 11) but clearly took the view that it was wrongly decided:
“I think [Silber J] made that decision without spotting the difference in wording which applies in default judgment rules to the wording which applies to CPR rule 3.9, relief against sanctions.”
A further month later, Burton J went back the other way in Mid-East Sales Limited v United Engineering and Trading Company (PVT) Ltd. Though the default judgment in that case was set aside, Burton J took the view that the “new approach” did apply to applications to set aside default judgment. He said:
“I am accordingly considering CPR rule 3.9 but (again pace Lord Dyson in Matthews) also rule 13.3… I am satisfied, as was Silber J in Samara, that the new approach described by Lord Dyson’s Implementation Lecture and exemplified in Mitchell is intended to be of universal effect, i.e. across the board in relation to the CPR…”
Despite this further statement of principle, I have found at least one other case in which (this time without reference to Samara or Mid-East Sales) the judge took the view that the difference in wording between CPR 3.9 and 13.3 meant that essentially separate considerations were to be addressed: Erol v Global Fashion Links per HHJ Hacon, in particular at paragraph 6. The judge appears to have proceeded on an incorrect basis, in ignorance of two relevant authorities.
It is now tolerably clear that the Samara approach to applications to set aside default judgment is the correct one. There is further confirmation in Newland Shipping and Forwarding Limited v Toba Trading.
Life after Denton
Samara was decided after judgment was handed down in Mitchell v News Group Newspapers Limited but before judgment in Denton v TH White Limited (and other appeals). Both cases are well known to civil litigators, but it is useful to recite the guidance given by Lord Dyson MR and Vos LJ to the post-Mitchell approach to relief from sanction (paragraph 24 in Denton):
“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)…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 [the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules, practice directions and orders]’.”
How do the rules on setting aside default judgment slip in to the threefold Denton test?
My view is that the correct approach must be that set out in the judgment of HHJ Jeremy Richardson QC in Hockley v North Lincolnshire and Goole NHS Foundation Trust. Referring to Denton, the judge said:
“it will be immediately appreciated the judgment covers relief from sanctions and not an application to set aside a default judgment…However the three stage approach has considerable relevance to an application to set aside a default judgment when considering the Good Reason Ground in CPR Part 13.3(1)(b). There has to be a good reason and that must embrace scrutiny of the seriousness of the default and why it occurred. Plainly, the court would wish to consider all the circumstances of the case.”
This is a neat and rational approach to assimilating the new approach to relief from sanction with the specificity of CPR 13.3.
Hockley was not cited to Popplewell J in Avanesov v Shymkentpivo. In that case, a different approach was taken to assimilating the Samara approach with Denton. Popplewell J said, at paragraph 59:
“Rule 13.3(2) requires ‘regard to be had to whether the application is made promptly’. I see little difference in the approach to this consideration from that required by the first two stages of the Mitchell/Denton approach, being an assessment of the seriousness and significance of the default and the reasons for it.”
With respect, the question to be asked on an application for relief from sanction (or to set aside default judgment) is as to the seriousness of and reasons for the breach (eg, the failure to serve witness statements on time, the failure to acknowledge service on time, etc) and not the seriousness of and reasons for any delay in applying to have the sanction set aside. While all the circumstances will be relevant (as the third stage in Denton confirms), promptness of the application to set aside is an explicitly relevant factor only in the context of applications to set aside default judgment.
I predict that the analysis that the courts will adopt is the one spelled out in Hockley.