TBO Investments Ltd v Mohun-Smith and Another
| Jurisdiction | England & Wales |
| Judge | Master of the Rolls,Lady Justice Macur,Lord Justice Lindblom |
| Judgment Date | 26 April 2016 |
| Neutral Citation | [2016] EWCA Civ 403 |
| Docket Number | Case No: A2/2014/2784 |
| Court | Court of Appeal (Civil Division) |
| Date | 26 April 2016 |
[2016] EWCA Civ 403
The Master of the Rolls
Lady Justice Macur
and
Lord Justice Lindblom
Case No: A2/2014/2784
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
HIS HONOUR JUDGE SEYMOUR QC
HQ13X02120
Royal Courts of Justice
Strand, London, WC2A 2LL
Daniel Burgess (instructed by Shakespeare Martineau LLP) for the Appellant
Michael Lazarus (instructed by Pinsent Masons LLP) for the Respondent
Hearing date: 11/04/2016
The claimants commenced this claim on 28 March 2013 seeking damages of approximately £2 million against the defendant for professional negligence. The defendant defended the claim and retained Shakespeares Legal LLP as its solicitors. The trial was listed for 7 days floating in a 5 day window commencing on 23 June 2014. As the trial approached, the defendant was unable to put Shakepeares in funds to pay for counsel to represent it at the hearing. Shakepeares ceased to act and came off the record on 12 June 2014.
Mr Scott Robinson, a director of the defendant thereafter took over the conduct of the litigation on its behalf. On 23 June, he submitted an "Opening statement" for the purposes of the trial. On Friday 27 June, the court informed the parties that the trial would start on Monday 30 June.
On 30 June, the defendant did not appear before the trial judge, HH Judge Seymour QC. A letter had been sent to the court by Shakespeares which said:
"'We were on record at the Court as acting on behalf of the Defendant until notice of change was filed on 12 June 2014 confirming that the Defendant, acting through its representative, Scott Robinson, would now [be] representing itself in these proceedings.
We are informed that the trial in the above matter is commencing today (30 June 2014) at 2:00pm before His Honour Judge Seymour QC.
We have today received the attached letter from David McLaughlin of the Defendant and have been asked to provide a copy of the same to the Court for consideration.
In light of the circumstances set out within that letter, the Defendant has asked that the Court consider an adjournment to the trial.
As the trial is listed to commence today, please could you ensure that the enclosed letter and statement of fitness to work is placed before His Honour Judge Seymour QC for consideration as soon as possible."
The attached letter from Mr McLaughlin was also dated 30 June. It was addressed to Shakepeares and said:
"The Trial Window is now into its second week and on Friday (27 th June), Mr Robinson was obliged to attend his GP practice for a Medical assessment, due to the arising stress and pressure of the pending proceedings.
Following that appointment, Mr Robinson has been instructed to rest for at least a week and to report back to the Surgery on Friday of this week for a review of the condition. His GP issued a Statement for Fitness to Work certificate and this is enclosed.
For the avoidance of doubt, the company has no other representation. Mr Robinson is the only feasible witness able to stand on behalf of TBO Investments Ltd, therefore we respectfully seek an adjournment of the case, until he is able to deal with the proceedings."
The statement of fitness for work or "sick note" issued by Mr Robinson's GP recorded that:
"I assessed your case on 27/06/2014 and, because of the following condition: family stress, I advise you that: you are not fit for work."
As the judge said, the indication on the document was that Mr Robinson would not be fit for work for the period 27 June to 4 July.
On 30 June, the judge dismissed the application for an adjournment, struck out the defence under CPR 39.3, entered judgment for the claimants and assessed the damages at £2,135,67He also awarded costs to the claimants on the standard basis up to 21 June and on the indemnity basis thereafter; and a further sum of £75K for beating the claimants' Part 36 offer.
On 3 July, the claimants' solicitors sent a draft order recording the judgment. It is not clear on the evidence when Mr Robinson first saw the draft order. In the judgment given by HH Judge Seymour QC which is the subject of the present appeal, the judge concluded that Mr Robinson must have become aware of his decision of 30 June on a date between 3 and 8 July.
The sealed order was received by Mr Robinson on 18 July. On that date, the defendant applied to set aside the order pursuant to CPR 39.3(2) on the basis that Mr Robinson (being the only one of the two directors of the defendant capable of representing it) had been certified as unfit to attend trial on 30 June. This application was dismissed by the judge on 31 July 2014. In addition to the sick note that had been before the judge on 30 June, the defendant also provided the following further information in support of its application: (i) the explanation contained in Mr Robinson's third witness statement which included: "I spent the week waiting for the trial to take place and start and frankly the delay and the worry together with having to continue to deal with my day to day job created an unbearable situation which was having an effect on my business and personal life at home. The stress it was putting me under was unpalatable". He added at para 13: "I spoke to Dr Adams at Stamford Bridge Surgery over the telephone first thing on the morning of 27 June 2014 and made an appointment to see my GP that same day at 5.10 pm. The prognosis over the phone was that I should not be working for at least a week as my own personal wellbeing was beginning to suffer and it was confirmed in person at my appointment."; (ii) a letter from Dr Adams dated 25 July: "I am writing this letter in my capacity as general practitioner at My Health where Mr Robinson is registered….. I can confirm that Mr Robinson was not fit to attend court w/c 30 June 2014. I am unaware of any reason that would make him unfit to currently attend court."; and (iii) a further letter from Dr Adams dated 30 July:
"I can confirm that Mr Robinson was not fit to attend court w/c 30 June 2014.
I saw Mr Robinson in surgery on 27 June when he was under a great deal of stress due to a combination of business and family affairs. This stress resulted in an inability for Mr Robinson to attend any formal meetings, and obviously attending a court hearing as a key witness would be included in this.
I advised Mr Robinson to rest for a week and gave him a MED3, telling him not to work.
I am unaware of any reasons why Mr Robinson is not fit to attend court as a key witness at the present time. This is my independent view."
CPR 39.3 provides:
"(3) When a party does not attend and the court gives judgment or makes an order against him, the party who failed to attend may apply for the judgment or order to be set aside.
……
(5) Where an application is made under paragraph ( 2) or (3) by a party who failed to attend the trial, the court may grant the application only if the applicant:
(a) acted promptly when he found out that the court had exercised its power to strike out or to enter judgment or make an order against him;
(b) had a good reason for not attending the trial; and
(c) has a reasonable prospect of success at the trial."
It was common ground that the third of these conditions was satisfied. But it was in issue whether the first and second conditions were met. The judge held that the defendant (i) did not have a good reason for not attending the trial on 30 June and (ii) had not acted promptly once it had found out about his decision of that date. The defendant says that the judge was wrong on both points.
The general approach to applications under CPR 39.3
The general approach to be adopted in relation to applications under rule 39.3(3) is not in dispute. In Bank of Scotland Plc v Pereira [2011] 1 WLR 2391 Lord Neuberger MR said:
"24. First, the application to appeal Judge Ellis's refusal under CPR 39.3 to set aside the Order. An application to set aside judgment given in the applicant's absence is now subject to clear rules. As was made clear by Simon Brown LJ in Regency Rolls Ltd v Carnall [2000] EWCA Civ 379, the court no longer has a broad discretion whether to grant such an application: all three of the conditions listed in CPR 39.3(5) must be satisfied before it can be invoked to enable the court to set aside an order. So, if the application is not made promptly, or if the applicant had no good reason for being absent from the original hearing, or if the applicant would have no substantive case at a retrial, the application to set aside must be refused.
25. On the other hand, if each of those three hurdles is crossed, it seems to me that it would be a very exceptional case where the court did not set aside the order. It is a fundamental principle of any civilised legal system, enshrined in the common law and in article 6 of the Convention for the protection of human rights and fundamental freedoms that all parties in a case are entitled to the opportunity to have their case dealt with at a hearing at which they or their representatives are present and are heard. If the case is disposed of in the absence of a party, and the party (i) has not attended for good reasons, (ii) has an arguable case on the merits, and (iii) has applied to set aside promptly, it would require very unusual circumstances indeed before the court would not set aside the order.
26. The strictness of this trio of hurdles is plain, but the rigour of the rule is modified by three factors. First, what constitutes promptness and what constitutes a good reason for...
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