Vernon v Spoudeas & Anor [2010] EWCA Civ 666

Case No B2 / 2009 / 1765[2010] EWCA Civ 666IN THE COURT OF APPEAL ( CIVIL DIVISION )ON APPEAL FROM CLERKENWELL AND SHOREDITCH County Court(HIS HONOUR JUDGE BIRTLES)Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Thursday 6th May 2010
Before
LORD JUSTICE WARDLORD JUSTICE RICHARDSLORD JUSTICE JACKSON
Between
VernonAppellantSpoudeas and AnotherRespondent
( DAR Transcript ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7831 8838Official Shorthand Writers to the Court )
Mr James Sandham and Mr David Carter (instructed by the Pro Bono Bar Unit) appeared for Appellant.Mr Adam Smith (instructed by Halliwells LLP ) appeared for Respondent.
Judgment
[1]This is a case which fills me with gloom and despondency. It began life in mid 2005 with claims being made by the appellant, Mr Keith Vernon, an architect, against Dr Helen Spoudeas and Dr Mark Rosenthal, respondents in the appeal: the first, for the repayment of the balance of his fees in the sum of some £5,370 and the second, for £19,737 for the balance of the price for the supply and installation of kitchen cabinetry specially made by a firm called Custom Wood to fit exactly in the renovated kitchen of the respondents.[2]The respondents defended the claim, alleging in effect that Mr Vernon should have charged them the price he was paying Custom Wood for the kitchen without adding any uplift. They counterclaimed for damages for defective workmanship or design. Custom Wood had claimed from the appellant £12,146 for goods sold and delivered.[3]One would have thought that this was quintessentially the case which cried out for compromise through mediation, rather than confrontation through litigation. It was always inevitable that the cost would exceed the sums truly in dispute and so it has proved. We are told the respondents' costs are in the region of £75,000 so far. The appellant has acted in person, latterly with the help from counsel on a pro bono basis, and I thank Mr David Carter and Mr James Sandham for their help to the court in that regard. We would not have managed as well, I say this with all respect to Mr Vernon, had he presented his case to us in person. I am equally indebted to Mr Adam Smith for the cogent presentation of the respondent's case.[4]The appeal before us is brought with permission granted by Longmore LJ. It is against the order of HHJ Birtles made on 23 July 2009 dismissing the appellant's appeals against two orders, first of District Judge Manners of 23 January 2009 which in effect upheld the striking out of the appellant's claims because of his failure to comply with an unless order as I shall explain, and, secondly, District Judge Sterlini of 4 February 2009, in effect ordering the appellant to pay the cost of the action.[5]The procedural history is complicated, indeed confused. Doing the best I can this is that background.[6]An order seems to have been made by District Judge Stary on 5 December 2007. It is not in our bundle but I rather gather that among other orders she made she gave some directions sensibly for mediation, and a further case management conference was fixed for 17 June 2008. At or about that time the parties were in or about to become involved in mediation and so it was proposed again, as I understand it, that the case management conference be adjourned. For one reason or another, perhaps through his misunderstanding of the procedures, Mr Vernon did not agree to the adjournment and the matter came before District Judge Manners on 17 June and on that occasion District Judge Manners directed a further case management conference, adjourned the case until 16 September to allow for mediation but ordered the appellant to pay a contribution to the defendant's costs of £500 on or before 1 July 2008. Mr Vernon was not best pleased. He applied on 5 July for an order either to dismiss, set aside or make as costs in the cause the order of District Judge Manners drawn and dated 17 July, although heard on 17 June. His complaint was that the order for costs is not fair and reasonable in all the circumstances or in the spirit of District Judge Stary’s order of 5 December 2007.[7]That application came before Deputy District Judge Abrahams, and the order made on that occasion was that the defendant's application of 5 July, that is to say Mr Vernon's application, be dismissed. Time was extended for the payment of costs to 4pm on 11 November 2008, and paragraph 3 of that order provided that :
"Unless the claimant makes the payment by 4 pm on 11th November 2008 the claim be struck out in respect of the defendant and Part 20 claimant in the second proceedings"
[8]At paragraph 4 he ordered the appellant to pay the respondent's costs of various applications, summarily assessed, and in error the order says in the sum of £9,272.70 when it is agreed that the correct amount was a sum of £972.70, which was ordered to be paid by 4pm on 14 December.[9]We are told by Mr Smith that it was made perfectly plain to Mr Vernon at that hearing just how draconian the order was and that if he did not pay by 4pm on the 11th his claim would be struck out.[10]Mr Vernon takes up the story:
"At the hearing, I being aware of my low income, as I am semi-retired receiving Pension Credit, I did say it would take me 4 weeks to obtain the money to pay the required sum of £500.00 in costs to the Defendant, so requested 4 weeks ‘extension of time’ in which to make that payment. Deputy District Judge Abrahams, with the consent of the Defendant/ Part 20 Claimant, Dr Mark Rosenthal, who was present in the Court with his Counsel, agreed to that extension of time in order that I could raise that sum of money or by that date. On Monday November 10th, 2008, I had managed to raise enough money to put into my account with which to make the payment of £500.00. I therefore wrote out a cheque for the £500.00 and with covering letter posted it in our post box attached to our village Post Office Stores to the Defendants’ Solicitors Halliwells LLP. 7. In my opinion, I had made the payment in due time allowed by the Court. However, I did get an e-mail from Halliwells on November 12th saying that they had not received the payment. I was in and out of my office that day, but I immediately responded by writing that I had made the payment on Monday November 10th, 2008. I sent that by both e-mail and by post. … 9. Halliwells confirmed on November 13th, 2008 that they had received and banked the cheque. I confirmed that to the Court with copies of the correspondence, confirming further that my bank had cleared the cheque."
[11]On 12 December the respondents made an application for their costs of the action, correctly taking the view that as payment had not been made as required by the unless order, the action stood struck out. That application was supported by a witness statement from a Mr Lappin, the solicitor acting for the respondents, and what Mr Lappin said in his witness statement of 12 November was no more than this:
"4. Mr Vernon has failed to pay the sum of £500 (or any sum) to the doctors (or Halliwells LLP) by the date specified in the Order or at all nor has Mr Vernon requested an extension of time to comply with the Order prior to the deadline specified in the Order or at all"
[12]He made a further point that for the avoidance of doubt it is not necessary for the defendants to seek a further order from the court to record that Mr Vernon's claim be struck out and he referred to the case of Marcan Shipping (London) Limited v George Kefalas [2007] EWCA Civ 463.[13]We are told from the Bar by Mr Carter that his client, Mr Vernon, was somewhat confused having expected to receive an order striking him out. In any event we are told, though there is no evidence before us of this, that he sought advice from the Citizens Advice Bureau and eventually appreciated that, as the authority of Marcan Shipping made plain, he could apply even retrospectively for relief from sanctions and so he brought his application dated 12 December. It asks the court to make these orders:
"I am applying for relief under CPR Rule 8 for an extension of time to comply with the order of Deputy District Judge Abrahams of October 20th 2008:- paragraph 3:- 'Unless the claimant makes payment by 4pm on 11 November 2008 the claim be struck out in respect of the defendant/Part 20 claim in the 2nd proceedings' or, in the alternative, an order from the court that in their judgment I have complied with that order. I also wish to apply for an extension of time till after the hearing of the defendants’ Part 20 claimant's application to be heard on February 4th, 2009 to comply with paragraph 4 of Deputy Judge Abrahams' order of October 20th, 2008 [that I remind myself is the order for costs of £972]"
[14]In that form he ticked the box which he said he wanted the matter to be dealt with without a hearing. He supported it by the witness statement, part of which I have read. Much of that witness statement recites the judgment of this court in the Marcan Shipping case making it plain that it is possible retrospectively to apply for relief from forfeiture, notwithstanding the fact that the claim had already been struck out and he said in paragraph 11:
"I understand, therefore, that if it is correct that I am in default of the ‘unless order’ then I must apply for relief under CPR Rule 8(1), please accept this my Witness statement and the attached application as an application for relief from the Order of Deputy District Judge Abrahams of October 20 paragraph 3:-[ which he recites ]. I do believe that payment being received by the Defendant/Part 20 Claimant and that any delay was not my fault, nor was deliberate, the Court has powers to extend time for compliance with this rule…even when time has already expired… The court has power to make this order on its own initiative (rule 3)."
[15]That application was duly heard by District

Judge Manners and the puzzling order made is to this effect:

"Upon reading letter dated 5 January 2009 of the claimant, and without a hearing It is ordered that 1) Applications dated 12th December 2008 and 15th January 2009 struck out. If Mr Vernon wishes to apply out of time to appeal the order of Deputy District Judge Abrahams, he must do so by way of appeal notice. 2) The applications dated 17th October 2008, 12th December 2008 and 15th December 2008 will be considered at the hearing on 4th February 2009. 3) Claimant may make no further applications (but he may issue an appeal notice) prior to the hearing on 4th February 2009."
[16]Let me try and explain that puzzling order. The letter of 5 January appears to be, though it may be in dispute, either a letter to the court referring to a statutory demand that had been made or, as appears on page 243 of our bundle, a letter saying that he had enclosed: “…a fee redemption application form for each of the applications I made, however, if I did not send enough then so be it? I printed off another copy, plus a copy of my latest Guaranteed Pension Credit… If you have any further queries call me as I do not want the District Judge to say I am out of time with this application." So that is all that we know about the letter of 5 January.

I printed off another copy, plus a copy of my latest Guaranteed Pension Credit…

[17]As for the applications of 12 December, I recited the application that is in our bundle, but by a late addition a further document which is disputed by the respondent is placed before us and that is another document bearing the date 12 December. It has some stamp of the court on it but this time the relief sought is:
"1) I am applying for relief under CPR Rules 3.8 and 3.9 for an extension of time to comply with the Order of District Judge Abrahams on October 20:- … or in the alternative an order from the Court that in their Judgment, I complied with that said order. 2) I further wish to apply for an extension of time… after the hearing on 4 February to comply with paragraph 4 of the order of Deputy District Judge Abrahams dated October 20th…"
[18]This time he asked for the application to be heard at a hearing. We also have a copy of the last page of the witness statement he made in December but with this revision on it:
"Dated this December 12th 2008 and as revised due to a typing error on January 16th 2009 (under paragraph 11 line 2 CPR Rule 8(1)) deleted and substituted with CPR Rule 3.8 for ‘relief from sanctions’ under Rule 3.9."
[19]The application of 15 January is a document that the respondents are in some state of uncertainty about, and it may be that it is a document put in late and which may be disputed, which is at page 245 of our bundle which asks for this order :
"1. I wish to appeal against the Order of Deputy District Judge Abrahams as he apparently was not the correct level of judge to hear my Application dated July 5 2005 [which must mean 2008] to have the Order for costs of District Judge Manners set aside…. 2. I further wish to apply for an immediate stay of all compliance and enforcement of the Order of Deputy District Judge Abrahams dated October 20th… and relief under CPR Rules 3.8 and 3.9 so that I may [be] granted an extension of time to comply with that order…"
[20]I now turn to the confusion in paragraph 2 of the order of 23 January. The application of 17 October was apparently one made by the respondents to stay Custom Wood's claim against them. The application typed as 12 December has caused great confusion. Was it the applications or one or other of those dated 12 December which I have already recited? That seems unlikely since the action had been struck out, and so the explanation proffered by Mr Smith, probably rightly, is that it was a typographical error for the application of 12 November which was the respondent's application for the appellant to pay the costs of the action which had been struck out. The application of 15 December 2008 apparently relates to the claimant's application to strike out Custom Wood's claim against him.[21]Those applications came before District Judge Sterlini on 4 February 2009. By consent he dealt with the Custom Wood application of 17 October and then made this[22]As I have said perhaps more than once, many of the orders are very confusing but when paragraph (c) that I have just recited quotes the application starting "I am applying for relief against under CPR 3.8 and 3.9" that does not appear to be the first application of 12 December but it may be the “second query amended application of 12 December". In the end all of this may not much matter.[23]So those are the orders that were dealt with by HHJ Birtles. He dismissed the appellant's appeal, taking the view, if I can be very brief about this, that it was quite clear to him that District Judge Manners intended not to strike out the applications but to dismiss both of them. He took the view that:
"On the face of it, she was entitled to take the view that this application for relief from sanctions had no merit and should be dismissed. Whilst the use of the phrase ‘struck out’ is unfortunate, in my judgment it matters not. What District Judge Manners did was to dismiss the application – and, indeed, the other application dated 15th January 2009. I am satisfied she did so on the merits."
[24]He took the view that District Judge Sterlini was entitled to take the view that paragraph 1 of the order of 23 January struck out the application for relief from sanctions. It followed it was logically impossible that he should hear the same application again when another had struck it out.[25]So There we are. What are we to do with this appeal? There are no reasons given by the District Judge Manners for making her order of 23 January 2009. She chose to deal with it as a so-called “box matter” and to deal with it without a hearing. It is always a matter for the District Judge to decide whether or not to direct a hearing whether or not the parties had asked for it or been prepared to proceed without a hearing. That is a case management decision, but I do remind myself of the judgment of this court in Collier v Williams [2006] 1 WLR 1945; [2006] EWCA Civ 20 where, giving the judgment of the court Dyson LJ, as he then was, said in paragraph 38: "Before turning to the third argument, we would like to emphasise one further point. On receipt of a without notice application with a request for the matter to be disposed of on paper, the court should consider whether it is appropriate to dispose of the matter without a hearing. In our view, there is a danger in dealing with important applications on paper.”[26]I respectfully agree. This after all was an application for relief from sanctions to relieve the applicant of the strike-out of his claim. The claim was worth some £25,000 or thereabouts, not an insubstantial amount on any showing. On the evidence before District

Judge Manners at that time, the case for relief from sanctions was:

"I posted the cheque on the 10th by first class post. I was entitled to expect it would be delivered to meet the deadline the following day. I did not realise until I saw the evidence of Mr Lappin that it had not arrived on that day and indeed I only later discovered it arrived on the 13th."
[27]So he was two days late in paying a costs order of £500 and one might have thought that if the matter was to proceed without a hearing it would be because that excited sufficient sympathy in the mind of the court to proceed. That might be unfair on the respondents but to strike it out without a hearing is in my judgment a bold step to take and not one which I would ordinarily recommend. It was struck out without giving any reason. The order striking it out of 23 January was furthermore defective because under the rules if one proceeds without a hearing and dismisses an application the order should recite the right of the litigant to reply to vary or discharge it and the order is deficient in that respect.[28]It was an altogether confusing state of affairs which District Judge Sterlini was forced to grapple with and in understandable exasperation he rose in the middle of that hearing, saying, and I have real sympathy:
"All right, I will tell you what I am going to do. I am going to rise for five minutes and I am going to go and speak to Judge Manners. All right? I will be back. You can stay here if you wish, you can leave your stuff here if you wish. I have no responsibility for it. For all I know, it may walk in the next two minutes. Otherwise, just wait outside. I am going to talk to her. This is just ridiculous."
[29]There was a short break and he came back and he said:
"Right, okay, I have spoken with Judge Manners. She is quite certain in her own mind that the application for relief, this one which is dated the 12th of – oh, where has he gone? Mr Smith .... I think he has just gone to the bathroom, sir. He did not think it was -- well ... The District Judge: I will tell him this, she has already dealt with this application and she has already struck it out. Okay? Because she takes the view that, rather than applying for relief, the appropriate thing to do is to appeal Judge Abrahams’ order in the first place, and that is what she had envisaged with the two separate orders dealing with that specifically."
[30]That confirms the impression one has when reading the order that was made, namely that the District Judge Manners took the view that the right course of action was to appeal District Judge Abrahams' order and that there is nothing to suggest that she did, as the judge thought, grapple with the application for relief from sanction. In any event, as I have said, there was no reason given for it and, with respect to HHJ Birtles, he was not in a position to say she had considered the matter on the merits, still less that she had correctly considered the matter on the merits and for that reason this appeal should be allowed.[31]I take on board a point well made by Mr Smith that, in a case where the order is made without a hearing and where there is a right to apply to vary or set it aside, and especially where no reasons are given for having made that order, the better course is to apply under Part 3 to the judge who made the order to vary it or set it aside rather than exercise the concurrent right which exists under Part 52 to appeal, but whilst that might have been the better course, a right of appeal is given by the rules and Mr Vernon was entitled to exercise it.[32]Having allowed the appeal, the issue, which I confess to find extremely difficult for this court, is what to do now? In the ordinary way, since we do not know whether District Judge Manners dealt with the application for relief from sanctions on the merits and if so how, and we do know that HHJ Birtles did not, we should exercise our discretion and apply CPR 3.9 and consider whether in all the circumstances relief should be granted. I remind myself of the specific checklist of factors which are material to their consideration. a) is the interest of administration of justice. I have no doubt this court can deal with it and among the factors there and I am not intending to be exhaustive is the fact that orders of the court are made to be complied with. This was a moderate claim, it had taken ages to get to the position that it was in when the matter came before the court for these purposes and, having been warned of the condign effect of a failure to pay that is a material factor. Paragraph (b) requires the application for relief to have been made promptly. The strike-out took effect by operation of law on 11 November. The application was not made until 12 November. The circumstances of its making are once more shrouded in uncertainty. Because Mr Vernon is entitled to fee exemptions he did not submit an application fee but he says, and we have scant evidence about it, that he sent the appropriate forms claiming remission. This took its time so that, according to the respondents, they did not receive the application until 21 January, but on any showing there is a month's delay and at the moment we have no evidence to explain that delay although we have had some explanation from the Bar to account for it.[33]Paragraph (c) requires us to consider whether the failure to comply was intentional. Mr Carter says that this is the crucial matter in his favour because if, as is the appellant's case, he posted the letter on the 10th by first class mail, he could reasonably expected it to have been received on the 11th and in time, so that there would have been no breach of the order. That is a very important fact, I agree, but it is a fact that is now heavily in dispute. The respondents through their solicitor Mr Lappin have filed supplementary evidence in a written statement of 3 February and that now recites these material facts. "6. Mr Vernon contends he complied with the Unless Order which required him to make payment of £500 by 4 pm on 11 November 2008. He did not. 7. The Defendants contend that it was the service of their application dated 12 November 2008 which prompted Mr Vernon to send payment in respect of the costs order. Payment was received by this firm on 13 November 2008. 8. Paragraph 6 of Mr Vernon's witness statement dated 12 December 2008 suggests that he posted the letter and cheque (‘the Letter') to Halliwells on Monday 10th November 2008 using the post box attached to the Post Office Stores in his village [I interpolate this is a village in West Sussex]. The envelope in which the Letter arrived has a first class stamp attached ('the Envelope') (a copy of which is annexed hereto). 9. On 23 January 2009 we contacted the Post Office Stores of West Chiltington, Church Street, Pulborough…to be informed that mail is collected from the attached post box twice a day. The first collection is at approximately midday and the second at approximately 4.30pm. The proprietor was not aware of any problems with the collection of post during the week beginning 10 November 2008. 10. The Royal Mail website states that 'first class mail aims to deliver your letter or packet the next working day, including Saturday'… ie a letter posted and collected on 10 November 2008 (as suggested by Mr Vernon) would be collected and delivered by 11 November 2008 (and not 13 November 2008) as did happen. 11. The Envelope has an ink stamp on it which states a date, time, place and an eight digit number. On 23 January 2009, the Royal Mail customer service line confirmed that the details set out in the Envelope indicated it was processed in the Royal Mail Manchester [I interpolate which is where Halliwells practice] sorting office on 13 November 2008 at 4.08 am, some 3 days after Mr Vernon purports to have posted the letter."[34]The exhibited envelope does indeed show just that. What is perhaps strange is that there is no postmark at the Sussex end of the delivery chain. The stamp is reflective of the time it arrived in Manchester at the end of the delivery chain, so there is a real and serious dispute about this aspect and I will return to it in a moment.[35]I resume with looking at the CPR 3.9 factors. (d) is whether there is a good explanation for the failure. There is precious little before us, but again we are told from the Bar that Mr Vernon will have a good explanation. We are told that because, as we know he was hard-up, he asked for the extension of time because he had to get enough money together during that four-week period and he wishes to demonstrate, by producing these bank statements, that money did become available to him which enabled him to make the payment, even though it was, as has to be accepted at the very last minute. (e) requires the court to consider the extent to which the party in default has complied with other rules, practice directions, court orders and relevant pre-action protocol. Mr Smith submits that it is the failure to pay not only the £792 ordered by District Judge Abrahams on 14 October which is relevant but also the failure to pay the costs ordered by District Judge Sterlini. I would not for my part accept that argument. The matter has to be judged in the light of the state of affairs as they were in November and the only order of which he was then in default was the order for £972, which should, in fairness to him, be noted was an order for which he was seeking by his application on 12 December to be set aside. (f) requires the court to consider whether the failure was caused by the party or his legal representative. At the time he was in person and no lawyers can be blamed, for once. (g) requires the court to consider whether the trial date or the likely time of a trial date can still be met if relief is granted. For my part I am not entirely sure about that but I do not understand that at that stage any trial date had already been fixed, so Mr Vernon may satisfy that. (h) is the effect which the failure to comply had on each party. The effect on Mr Vernon is the serious effect that his claim has been struck out. The effect on the respondents is no more than that they waited two days for the payment of their costs but they have got them (i) is the effect which the granting of relief would have on each party. It would enable the appellant to continue his claim but it would certainly psychologically affect the respondents, who have already incurred a fortune in costs, face the whole thing being resurrected when they had thought it was dead and buried and one can have some sympathy for them.[41]The question is, can this court decide that ruling from sanction without being able to determine the critical fact whether the failure to comply was intentional or not? I began this judgment with the lament that it was a gruesome, ghastly case. To send it back for that dispute to be resolved by the District Judge, necessitating no doubt a further witness statement to be served by Mr Vernon, exhibiting his bank statements and I don’t know what, making whatever else enquiries one can from the Post Office, subjecting no doubt Mr Vernon to rigorous cross-examination, all of that fills me with horror because of the expense that is going to be involved in dealing with a claim which one would have hoped, despite the already unsuccessful attempt to mediate, should have been compromised long ago given the imbalance between the costs involved and the amounts in dispute. But, and with a sense of reluctance I simply do not see how this court can do justice to the parties without making that crucial finding of fact. If one assumes in Mr Vernon's favour that the failure was not intentional and that he did what he thought he had to do to get payment there in time, the case takes on a very different complexion from the case that the respondents advance, not only that he must have posted the letter after the deadline, but putting it perfectly bluntly told a pack of lies to improve his position, and if that is established that is a very different state of affairs, which the court in all the circumstances has to take into account.[42]So I do not feel, for my part, that fairness can be met and justice delivered without that dispute being resolved and with a heavy heart I for my part would allow the appeal against the order of District Judge Manners but remit the matter to the county court to the District Judge to resolve the issue of whether or not that the failure to comply was intentional, whether or not there is a good explanation for the failure to comply with the order and whether or not the application has been made promptly.[43]If relief from sanction is granted and the action is restored, it would follow that District Judge Sterlini's order must be set aside. If on the other hand the strike-out remains, then there is nothing wrong with the approach taken by District Judge Sterlini and that order should stand, so in a rather complicated way, and I would like counsel's help in drawing the order, I would allow the appeal against District Judge Manners' order and remit it to the county court for re-hearing. I would say that if relief from sanction is granted, then the order of District Judge Sterlini could be set aside. If on the other hand the relief from sanction is not granted then the appeal against that order should be dismissed.[44]I agree that the appeal should be allowed for the reasons given by Ward LJ and that the matter should be remitted to the county court for a hearing and determination of the appellant's application for relief from sanction arising out of non-compliance with the unless order. I have reached that conclusion after considerable hesitation and, like Ward LJ, with a very great degree of reluctance. The appellant is plainly entitled in my judgment to a properly reasoned decision on the application for relief from sanction. He did not get such a decision from District Judge Manners. To the extent that the District Judge's reasons for striking out the application can be discerned from the order of 23 January 2009 or from what she reportedly said later to District Judge Sterlini, the reasons are bad. The indication that the appellant should apply out of time to appeal against the previous order of Deputy District Judge Abrahams does not deal with the question of whether the appellant should be relieved from the sanction imposed for failure to comply with that order. In those circumstances, and in the absence of any other stated reasons, it cannot be inferred or assumed that the District Judge reached a considered judgment on the merits of the application by reference to the evidence before her and the criteria in CPR Rule 3.9.[45]Since District Judge Manners's order was made without a hearing, it was open to the appellant to apply to set aside the order and to have a hearing of that application. I agree that such a procedure should have been used. Nevertheless an appeal against the order did technically lie, and now that the matter has come on appeal via HHJ Birtles as far as this court it is plainly right to put aside procedural niceties and to concentrate on the substance of the matter, that is to say on the question of relief from sanction. If it were possible for this court to reach a decision on the substance in the exercise of its own discretion by reference to the criteria in Rule 3.9, it should plainly do so. A further stage in this long drawn-out case should be avoided if at all possible. But it seems to me that a key element in a decision on the application for relief from sanction is whether the failure to comply with the unless order was intentional, and factually related to that is the question whether there is a good explanation for the failure to comply. On the face of it, the respondents have a strong case, based on the inquiries made and documents exhibited by their solicitor, that the cheque was not posted until 12 November 2008, after the time for compliance with the unless order had expired. But it is the appellant's own evidence in his witness statement that he posted the cheque on 10 November, as soon as he was in funds, and that he expected it to arrive on 11 November in time to comply with the order. I do not think that this court could fairly decide that disputed issue of fact simply on the basis of the witness statements and the documentary material before us. There needs to be an opportunity for oral evidence by the appellant with cross-examination by the respondents, and also for the appellant to adduce any further evidence he wishes to rely on, so that a properly based finding can be made on the credibility of his assertion.[46]The only realistic way of achieving that is to remit the matter to the county court for a hearing. If a finding adverse to the appellant is made on the disputed issue of fact, it would, as it seems to me, be a strong factor against the grant of relief against sanction, although it would of course be for the judge hearing the matter to reach a decision after taking into account all relevant considerations. If on the other hand a finding is made in favour of the appellant on the disputed issue of fact, the decision becomes much more finely balanced and I can see that relief might well be granted, though again it would be for the judge hearing the matter to reach a decision after taking into account all relevant considerations. It is because this disputed issue of fact seems to me to be of potentially central importance in the determination of whether relief should be granted that I have reached the reluctant conclusion that it would be wrong for this court to decide the question of relief for itself and I therefore agree with the remittal proposed by Ward LJ.[47]I should make clear that in my view all the criteria in Rule 3.9 would be in play on a remittal and although any additional evidence is likely to be directed to the issue to which I have referred I would not seek in any way to limit the issues to be examined by the judge in the county court or the evidence that can be deployed in relation to them.[48]May I begin by echoing the thanks expressed by Ward LJ to all counsel for their considerable help today. I am particularly grateful to Mr David Carter and Mr James Sandham, who are acting pro bono for the appellant. So far as presentation is concerned I am equally grateful to all counsel for their assistance in this difficult case, the difficulty of which is illustrated by the reluctance expressed by my Lord and by the difference of opinion within the court as to the correct disposition.[49]I agree with the judgments of my Lords that the question of Mr Vernon's application for relief from sanctions is outstanding. However, I disagree with my Lords' view that that question should be remitted to the county court. In my view Mr Vernon's application for relief from sanctions should be dealt with here and now by this court and should be dismissed.[50]I shall refer to the parties in this litigation as follows. As already gathered, I refer to the appellant as Mr Vernon. I refer to Doctors Spoudeas and Rosenthal, who are defendants in the second action, as "the doctors". I refer to Custom Wood Limited, trading as Timbercraft, as "Custom Wood".[51]My reasons for reaching a different conclusion from my Lords are as follows. The litigation between Custom Wood, Mr Vernon and the doctors has now been on foot for four years. It has achieved nothing for the benefit of any party save to generate disproportionate costs and stress. The present position is that Custom Wood's claim against Mr Vernon has been stayed for over a year and, from what we have been told from the Bar, there is no realistic prospect that it will be revived. Mr Vernon has been in repeated breach of orders made by the court and it is quite clear that he does not have the means to meet any substantial award of damages or costs that may be made against him.[52]The doctors for their part have made it clear to this court that they have no wish to pursue their counterclaim for damages against Mr Vernon, assuming that the litigation can be brought to an end. Furthermore most of Mr Vernon's claim against the doctors is referable to Custom Wood's claim in the first action, which is no longer pursued. In my view this litigation is and has for some time been futile.[53]I turn now to the breaches of orders by Mr Vernon. This part of the saga begins as my Lord has recounted in June 2008, when a mediation was being set up in order to resolve the tripartite dispute between the parties in a rational and sensible way. A case management conference had been fixed and was in the diary for 17 June 2008. Custom Wood and the doctors very sensibly agreed between themselves and proposed to Mr Vernon that the case management conference should be adjourned until after the mediation had taken place. Mr Vernon refused to agree. There then followed an entirely pointless hearing. That hearing took place in front of District Judge Manners on 17 June. The judge made an order that the case management conference be adjourned until 16 September, in order to allow for the mediation to take place. The District Judge unsurprisingly took the view that the hearing on 17 June was a waste of time and a waste of costs. There is no point in progressing litigation at substantial cost if there is a good chance of a mediated resolution. Therefore the District Judge ordered Mr Vernon to pay the sum of £500 costs to the doctors on or before 1 July.[54]Mr Vernon did not pay the costs as ordered. On 5 July (5 days after the due date for payment) Mr Vernon applied for the order of 17 June to be set aside. In the meantime, following that application, the mediation proceeded and, for reasons which we have not been told about, was unsuccessful. On 14 October Mr Vernon's application to set aside the costs order came before Deputy District Judge Abrahams. Unsurprisingly the Deputy District Judge dismissed the application to set aside the previous costs order. The previous costs order was made for very good reason. The Deputy District Judge ordered Mr Vernon to pay £972.70 costs in respect of that application although, as my Lord has recounted, there was a slip in drawing up the order by the court office at Clerkenwell. No-one has suggested that any party was misled by that typographical error in the order.[55]The Deputy District Judge was persuaded by Mr Vernon to extend the time for paying the £500 costs to 11 November 2008 and he added an “unless” provision: ""Unless the claimant makes the payment by 4 pm on 11th November 2008 the claim be struck out in respect of the defendant and Part 20 claimant in the second proceedings." In other words that was an “unless” order, the effect of which was that Mr Vernon's claim against the doctors would be struck out if the requisite payment was not made by 4pm on 11 November.[56]Mr Vernon did not comply with that order. No payment was received by the doctors' solicitors until 13 November 2008. That was two days late by reference to the current order and nearly five months after the original date set for payment. Furthermore Mr Vernon never complied with the order to pay costs of £972.70 in respect of the hearing on 14 October 2008. It is quite true, as my Lord has said, that Mr Vernon has made an application to set that order aside. However, that application has not been dealt with or allowed and for my part I cannot see any conceivable basis upon which it might be allowed.[57]In relation to the “unless” order, Mr Vernon asserts that he took reasonable steps to comply with the order because he posted a cheque on 10 November 2008. It is now common ground between the parties that, even if that is correct, Mr Vernon did not in fact achieve compliance with the order and therefore the action must be struck out unless there is relief from sanctions.[58]I am bound to say that I take a less charitable view of the evidence concerning the postage of the cheque than that taken by my Lords. On the evidence before this court I regard it as unlikely in the extreme to be correct that Mr Vernon posted a cheque for £500 before the second post was collected on 10 November 2008. The envelope containing that cheque was not delivered until 13 November. There is no postmark on the envelope to indicate that it was posted on 10 November. The only postmark on the envelope is a Manchester postmark of 13 November. Furthermore, even if I am wrong in the view which I take of those facts, Mr Vernon's conduct is still inexcusable. An "unless" order made by the court should be treated as a matter of the utmost gravity. It is absurd for any litigant to wait until one day before the expiry of an “unless” order and then to put the requisite cheque into the post.[59]Let me now turn to the factors set out in Rule 3.9 of Part 3 of the Civil Procedure Rules. The first factor is (a), "the interests of the administration of justice". There seems to be a perception amongst some members of the public and some members of the profession that orders made by the court can be breached with impunity. I do not share that view. If orders of the court are not obeyed, the consequences quite often are that additional costs are generated, litigation is delayed and other litigants in the queue are put back. Where the order in question is an "unless" order, this factor is one of high public importance. It is plainly to be expected that “unless” orders will be obeyed and, if “unless” orders are not obeyed, the specified consequences will follow unless there is good reason for a different course to be taken. When an “unless” order is made and not complied with, unsurprisingly the party with the benefit of that order will seek to cling on to the fruits of victory. If the party in default then tries to obtain relief from sanctions, there will usually be a long drawn out battle whilst that matter is contested and considered by the court. Thus non-compliance with an “unless” order has a high probability of having serious knock-on consequences. This case is a good illustration. The whole of this litigation has been derailed for a period of two years as a result of Mr Vernon's successive breaches of the orders of the court and, in particular, his non-compliance with the “unless” order.[60]I move on to factor (b), "whether the application for relief has been made promptly". As Ward LJ has observed, the application was not made promptly. No application appears in the bundle until one month after the date when the action was struck out and even the application which bears the date 12 December was not effectively issued. There is a controversy about when the documentation was in order so that there was an effective application for remission of fees made on behalf of Mr Vernon. It appears from the material before this court that the application for relief from sanctions was not effectively made until early January. Whether the date is early January or 12 December, I take the view that the application was not made promptly.[61]One then comes to factor (c), "whether the failure to comply was intentional". In my view the failure to comply plainly was intentional. In the light of counsel’s submissions, I do not accept for one moment that it was impossible for Mr Vernon to make payment in good time so that no question of breach of the “unless” order may arise.[62]One then comes to factor (d), "whether there is a good explanation for the failure". In my view there was no good explanation for the failure. In relation to factor (e), this was not the only order with which Mr Vernon failed to comply.[63]One then comes to factor (f), "whether the failure to comply was caused by the party or his legal representative". My answer to that is yes, the failure to comply was caused by Mr Vernon.[64]One then comes to factor (g), "whether the trial date or the likely trial date can still be met if relief is granted". Strictly speaking one may say that factor (g) is irrelevant because no trial date has been set. That proposition was urged most charmingly upon the court by Mr Carter and it may possibly have found favour with my Lords but not with me. The difficulty here is that this litigation has dragged on for four years and it has not yet been possible to fix a trial date. In my view the conduct of Mr Vernon has been a significant cause of that circumstance.[65]I then come to factor (h), "the effect which the failure to comply had on each party". I accept that at first blush the non-compliance by Mr Vernon had the effect that payment was received two days late, but that is not the end of the story. This was a breach of an “unless” order, which was bound to have and did have substantial knock-on consequences. The doctors now face the appalling prospect of being sucked back into this litigation so long after it commenced as a result of the series of events which have flowed since 17 June 2008, when the first relevant breach occurred.[66]One then comes to factor (i), "the effect which granting of relief would have on each party". The granting of relief would enable Mr Vernon to pursue his claim in litigation which, for the reasons that I have mentioned earlier, seems to be generating more costs, expense and stress than the benefit which any party is likely to derive from it. So far as the doctors are concerned, the effect of granting relief is to drag them back into futile litigation upon which they have already spent £75,000 with no realistic prospect of getting anything back from anybody.[67]In my view, this is a clear case for refusal to grant relief from sanctions. If relief were refused that would bring this whole action to an end and it would do so none too soon.[68]I view with horror the prospect of this litigation trundling on for more years into the future whilst evidence is collected from the Post Office, Mr Vernon gives further evidence and is cross-examined and who knows what will follow after that.[69]For the reasons stated above, I respectfully dissent from the conclusion reached by my Lords. In my view this action should remain dismissed. Thus I reach the same conclusion as Judge Birtles albeit for different reasons. I would dismiss this appeal.

order

"4. Upon the court noting: a) that Mr Vernon has asserted that he sent a cheque for £500.00 to the Solicitors for Dr Rosenthal and Dr Spoudeas on the 10th November 2008 in order to comply with the combined orders dated 17th June 2008 and 14th October 2008, but b) that this action on Mr Vernon's part did not effect the payment in cleared funds in time to comply with that order, and that c) having checked with her first District Judge Manners' order dated 23 January has already struck out Mr Vernon's application dated 12 December 2008 which starts with the words 'I am applying for relief against under CPR 3.8 and 3.9'. Mr Vernon's claim against Dr Rosenthal and Dr Spoudeas stands struck out pursuant to the order of Deputy District Judge Abrahams dated 14 October 2008" Order: Appeal allowed