Nelson v Circle Thirty Three Housing Trust Ltd [2014] EWCA Civ 106

[2014] EWCA Civ 106Case No B3/2013/1085
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON CIVIL JUSTICE CENTRE
(HIS HONOUR JUDGE COLLENDER QC)
Venue Royal Courts of JusticeDate Monday, 27 January 2014
Strand
London WC2A 2LL
B e f o r e:
LORD JUSTICE RIMER
LORD JUSTICE MCFARLANE
SIR ROBIN JACOB
Between
MARGARET NELSONAppellantAMANDA MURRAYAppellantLEE MURRAYAppellantv
Between
CIRCLE THIRTY THREE HOUSING TRUST LTDRespondent
DAR Transcript ofWordWave International LimitedA Merrill Communications Company165 Fleet Street London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7404 1424(Official Shorthand Writers to the Court)
Mr D Ball (instructed by Phil & Co) appeared for Appellant sMr A Tabari (instructed by Wragge & Co LLP) appeared for Respondent
J U D G M E N T
[1]SIR ROBIN JACOB (giving the first judgment at the invitation of Rimer LJ): This is an appeal from a judgment and order of His Honour Judge Collender QC of 5 April 2013. It is by permission of Kitchin LJ, granted on 30 July 2013.[2]The claimant is a registered provider of social housing. By a tenancy agreement of 26 November 1991, it let a three bedroom property, 11 Forston Street, N1, to the first defendant, Mrs Margaret Nelson. Prior to commencement of the proceedings, it served on Mrs Nelson a notice to quit based on two grounds, namely that in breach of the tenancy agreement she had failed to live at Forston Street as her principal home, and that she had made unauthorised alterations which will reduce the value of the property.[3]The second defendant is Mrs Nelson's daughter. The third defendant is the daughter's husband. The fourth defendant is their son, Mrs Nelson's grandson. The third defendant is separated from the second defendant. His defence has been struck out and he does not appeal. He no longer lives in the property.[4]By the claim issued on 23 August 2012, the claimant alleged that by reason of the breaches to which I have referred, the first defendant's tenancy had come to an end and that it was entitled to possession. It said she was abusing her position as a social tenant by not living there.[5]The defences on behalf of the first and second defendant and the fourth defendant were served on 1 October. They allege inter alia that Forston Street was and has been occupied by the first defendant as her principal home since the beginning of the tenancy. That was therefore a live issue between the parties. Plainly relevant to that issue were documents showing whether or not the first defendant was or was not living at Forston Street.[6]District Judge Manners made an order on 10 December dealing with such documents. She ordered that:
"By 4 pm on 28 January 2013, the first defendant shall provide specific disclosure of: 3.1 a letter from her GP confirming her addresses from 2008 to date; 3.2 her driving licence; 3.3 vehicle insurance policies from 2011 to date [and certain vehicles were identified]; 3.4 gas, electricity, water and telephone bills from 2011 to date; 3.5 all mobile telephone bills from 2011 to date; 3.6 documentation from the department of work and pensions showing her address for the period 2008 to date; 3.7 all bank and building society statements for 2011 to date; and [most significantly for present purposes] all credit card statements for 2011 to date."
[7]Compliance with that order proceeded in dribs and drabs. We were taken through the correspondence. It was arranged in an astonishingly incomprehensible order, which fortunately I do not think it is necessary to go through. It is sufficient to observe that it gives or could give the impression that the documents were being produced with reluctance.[8]By 28 January, the deadline for disclosure had expired with not all the documents having been disclosed. The claimants indicated that they would seek an unless order, and this they duly did. Such an order was made by His Honour Judge Saggerson on 19 March 2013. It read as follows:
"Unless the first defendant provides to the claimant by 4 pm on 27 March copies of all credit card statements from 1 January 2011 to date in relation to the credit card account opened on 20 November 2008, the first defendant's defence stands struck out without further of the court and the claimant has permission to request the court in writing to list this action in the undefended possession list."
Prior to the hearing before Judge Collender, credit card statements for 2011 and that for March 2013 were disclosed, but the remainder were not. So Mrs Nelson was in default of the order.[9]Judge Collender held the hearing by telephone between himself and the solicitors for the parties. We have a note of the hearing prepared by the claimants’ solicitor. It is not an agreed note, for it has not been agreed by the solicitor who then (he no longer does) acted for the defendants. Nor has it been seen by Judge Collender. But is the best we can go on. What it records is that the solicitor acting for the first defendant did not do justice to her case, or indeed the facts. On the contrary, he presented to the judge a completely muddled picture. The first page of the note says as follows:
"HHJ Collender asked Mr Allie why the first defendant had not complied with the unless order dated 19 March 2013. [The solicitor] stated that his client was unable to comply as they were waiting for copies of other bank statements from Barclays which they had some difficulty in obtaining."
I interpolate that although it says "bank statements", everybody is agreed that this really means credit card statements.[10]Later on in the same hearing, it is recorded that:
"Miss Molloy [the solicitor for the claimants] submitted that if the first defendant was unable to comply with the unless order she should have made an application for relief from sanction but had not done so."
Then the note says:
"[The solicitor for Mrs Nelson] interjected throughout stating that Mrs Nelson did not have an account with Barclaycard. He said that the account had been closed but that she owed a balance which she was paying off at a rate of £10 per month. Therefore she was unable to obtain monthly statements."
The note goes on saying that

the judge questioned the solicitor concerned by stating:

"There must be bank statements if the account is live and Mrs Nelson is off the balance by instalments."
[11]The solicitor for the claimant is then recorded as confirming that other monthly statements had been disclosed (those are the statements for 2011 as we know now) and therefore it should follow that the missing statements could easily have been obtained.[12]So the Judge was given a completely muddled picture of where Mrs Nelson stood. First of all it was said there was difficulty in getting them; then it was said there weren't any. That did not make sense to the Judge. It is hardly surprising that he formed the view that this was an appropriate case for the unless order to take effect. He held that there had been failure to comply with it, and as far as he was concerned that was that.[13]He proceeded to make a possession order. A separate branch of this appeal is about whether he should have done that without making further inquiries, because the Housing Act 1988 provides by section 7(4) as follows:
"If the court is satisfied that any of the grounds in part 2 of schedule 2 to this Act is established, then subject to subsections 5(a) and 6 below, the court may make an order for possession if it considers it reasonable to do so."
The complaint is that the record of the hearing does not show the judge went on to consider whether it was reasonable to make a possession order as the Act required.[14]The question of quite what the court is to do when it is only to make an order if it is reasonable to do so when the defence has struck out may be rather a difficult question. Can the Court consider reasonableness without considering some of the very matter which has been struck out? For my part, I would rather not go into that today, because there are other reasons for allowing this appeal. That is because it is now apparent that the judge was given was given a plainly false impression of the facts.[15]Kitchin LJ admitted further evidence from Mrs Nelson explaining what she had actually done to try and get the credit card statements in question. She had asked the bank as soon as the possession order was made, either on the same day or the day after, for copies of the statements. The bank was at fault in not providing them, as it acknowledged in a letter of 10 April. It is not necessary to read the whole of this letter, for the key part is the bank recording what efforts were made by Mrs Nelson to get the documents. The letter says:
"As discussed, I have confirmed below the dates and times we have been contacted regarding obtaining copy statements according to our records: 20 March 2013, 16.01; 2 April 2013, 15.35 and 16.16; 4 April 2013, 16.32 and 16.43; 5 April 2013, 12.30 [that was the date of the hearing before the judge at 3 o'clock that afternoon]."
So she had contacted the bank no less than five times before that hearing to get the documents. What is more, there may have been other times, because the bank goes on to say:
"Please be advised that the above calls are the only ones showing according to our system. However, not all calls are recorded. I believe this is something which you have previously been advised of by our complaints helpdesk."
[16]Would that have made a difference in front of the judge? Plainly so. All the muddle about whether or not there was an account would not have happened. The Judge would have known that Mrs Nelson had tried hard to get the documents and that the failure to produce them was not her fault but the bank’s. It is quite clear that the letter and that information is material information. The judge would have been faced with a situation where there was substantial compliance with all the other items of disclosure, and substantial compliance with the credit card disclosure, and he would have had an explanation of what had happened to the missing credit card disclosure. Quite what he would have done is not for us to speculate.[17]We have two choices as to what to do. One would be to remit the matter so that the question could be reconsidered, together with an application under rule 3.9. The other is that we deal with it ourselves. This is plainly a case in which we should take the latter course. The former would be disproportionate.[18]The fresh evidence means is that we are in a position to exercise the discretion afresh. We are not for one moment suggesting the judge went wrong. We are simply exercising the discretion of this court on all the material now known. The question is whether there should be relief under rule 3.9. That the court can of its own motion consider whether there should be such relief is made clear by the judgment of Moore-Bick LJ in Marcan Shipping vKefalas [2007] 1 WLR 1864. He said this:
"[35]. The second consequence, which follows from the first, is that the party in default must apply for relief from the sanction under rule 3.8 if he wishes to escape its consequences. Although the court can act of its own merit, it is under no duty to do so, and the party in default cannot complain if he failed to take appropriate steps to protect his own interests."
[19]We asked Mr Ball whether he was asking for relief from sanctions and he said yes. Indeed, I notice that in effect Judge Collender was going the same way, because he was asked why there was default.[20]Given the knowledge that we now have as to why there was default, I think this is a proper case for granting relief from sanctions, which means that the defence is restored. I say that because of the very special circumstances here: first of all, very, very substantial compliance with the disclosure order; and secondly the evidence which we now have that although it was late, the first defendant did make proper efforts to get the necessary documents and that it was not her fault that she did not get them, but the bank's. Further, she now has them and they have been served on the other side some time ago..[21]I would therefore allow the appeal. I do not say anything about the question of reasonableness. As I say, I think there may be difficult questions there.

LORD JUSTICE MCFARLANE: I agree.

LORD JUSTICE RIMER: I also agree.

Cited in 2 later judgments