Patterson v Spencer [2017] EWCA Civ 140

Case No A2/2014/2433

[2017] EWCA Civ 140

IN THE COURT OF APPEAL (CIVIL DIVISION)

[2014] EWHC 1878 (Ch)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Mr Henry Carr QC

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 17/03/2017

Before

LORD JUSTICE McFARLANE

LORD JUSTICE HENDERSON

Between

SIMON PATTERSON (THE TRUSTEE IN BANKRUPTCY OF GEORGE SPENCER)Respondent

(1) GEORGE SPENCERDefendants

Between

LINDA SPENCER

BERYL DELORES LENNON

WINSTON BANCRAWF SPENCER

GARY ANTHONY SPENCER

BEVERLEY MONICA SPENCER Appellant

(Defendant)

Mr Nicholas Macleod-James (instructed directly) for Appellant

Mr Hugo Groves (instructed by Wellers Law Group LLP) for Respondent

Hearing Hearing date: 16 February 2017

Judgment

Introduction and background

[1]The sole issue on this appeal, which is brought with permission granted by Briggs LJ at an oral hearing on 9 December 2014, is whether the judge (Mr Henry Carr QC, sitting as a Deputy Judge of the High Court) was wrong to dismiss on 17 June 2014 an application for relief from sanctions brought by the sixth defendant (and appellant), Beverley Spencer, the effect of which was to debar her from prosecuting her appeal to the High Court in proceedings brought by the trustee in bankruptcy (“the Trustee”) of her father, George Spencer, in which the Trustee had obtained an order for possession and sale of a property at 28 Spring Bank Road, Chesterfield, Derbyshire (“the Property”).

[2]In the underlying bankruptcy proceedings, the Trustee had applied for a declaration that the transfer by George Spencer of the Property to four of his children (including the appellant) on 13 June 2007 constituted a transaction defrauding his creditors contrary to section 423 of the Insolvency Act 1986 and/or a transaction at an undervalue in contravention of section 339 of that Act. The other three of his children to whom the Property had been transferred were the third, fourth and fifth defendants (Beryl Lennon, Winston Spencer and Gary Spencer). It is convenient to refer to them as the defendants, although technically they were respondents to an application in the bankruptcy brought by the Trustee, so as to avoid confusion with the subsequent appeal proceedings in which Beverley Spencer was the appellant and the Trustee was the respondent. I will hereafter refer to Beverley Spencer as “the Appellant”.

[3]The first and second defendants to the bankruptcy proceedings were George Spencer (to whom I will refer as “the Bankrupt”) and his wife, Linda Spencer, who has sadly since died.

[4]The Trustee’s application had a rather complex history from its inception in the Central London County Court (as it then still was) on 2 February 2012 until its final determination in favour of the Trustee by the judgment and order of District Judge Clarke dated 29 October 2013. By her order of that date (“the October 2013 Order”), District Judge Clarke:(a) ordered that the Bankrupt, Winston Spencer and the Appellant be debarred from defending the Trustee’s application;

(b) granted the declaration sought by the Trustee;

(d) made orders for the sale of the Property, with vacant possession to be delivered by 28 January 2014.

[5]Earlier procedural steps in the progress of the Trustee’s application had included the following:(a) an order made by District Judge Hart on 12 February 2013 debarring the third and fifth defendants (Beryl Lennon and Gary Spencer) from defending the proceedings, following their breach of an order made by District Judge Hart on 23 January 2013;

(b) an order also made on 12 February 2013, setting down the application for trial with a two-day time estimate as against the three remaining defendants (i.e. the Bankrupt, Winston Spencer and the Appellant). On that occasion District Judge Hart specifically ordered that the Bankrupt might attend the trial by video link as there was a suggestion that he was too infirm to travel from Chesterfield to London;

(c) an order made by District Judge Clarke on 14 May 2013, requiring the Bankrupt to obtain a full medical report by 28 June 2013 on his mental capacity to give evidence and/or take part in the proceedings, following the submission by solicitors acting for the now-barred third defendant and by the Appellant of evidence obtained in Jamaica and Chesterfield which appeared to cast some doubts on his capacity;

(d) further orders made by District Judge Clarke at a pre-trial review without attendance by the parties on 23 July 2013 (“the July 2013 Order”), whereby time for filing the medical report on the Bankrupt’s capacity was extended in accordance with a fresh timetable which required compliance by “[the Bankrupt] and/or [Winston Spencer] and/or [the Appellant]”, beginning with the filing and service by 5 August 2013 of evidence of the referral of the Bankrupt to a medical team capable of producing the necessary report on his capacity, and ending with the filing and service of the complete report by no later than 28 October 2013. Both Winston Spencer and the Appellant were expressly ordered to ensure that this timetable was met, and (if it was not) to notify the court promptly by way of an explanatory witness statement setting out the failure, the reasons for it, and the proposed next steps to ensure that the timetable could be met with as little delay as possible;

(e) a letter written to the court by the Trustee’s solicitors on 8 August 2013 complaining that the first stage in the above timetable had not been met, to which the District Judge replied on 12 August that if the Trustee sought a variation of the July 2013 Order, or a peremptory order, an application should be made on notice for that purpose;

(f) an application made by the Trustee on 3 September 2013, returnable on 29 October 2013, seeking an order that the July 2013 Order be set aside or varied, and that a hearing date be fixed. This application was supported by a witness statement of the Trustee’s solicitor, Mr Nigel Owen, confirming that there had been no compliance with any of the requirements of the July 2013 Order; and

(g) a further application made by the Trustee on 26 September 2013, also returnable on 29 October 2013, seeking orders that the Bankrupt, Winston Spencer and the Appellant be debarred from defending the action on account of their failure to take any of the steps required by the July 2013 Order.

[6]Although the trial bundle prepared by the Appellant does not contain any certificates of service of the Trustee’s applications made on 3 and 26 September 2013, we were told by counsel now appearing for the Trustee, Mr Hugo Groves, on instructions, that each application was duly served on the Appellant and certificates of such service were lodged with the court in advance of the hearing on 29 October 2013.

[7]Shortly before the hearing, probably on the evening of 28 October 2013, the court received a letter from the Appellant which began:

“Please be advised that I am unable to attend the hearing as I have recently had a serious operation and have been advised not [to] be in public places for at least a year. I will be hospitalised from Sunday 27 October 2013 due to complications and cannot say when I will be well enough to be discharged. In the circumstances, I ask that the hearing be adjourned until I am well enough to deal with the court proceedings and attend hearings. As you are already aware, I have been in ill health for some time and have not been able to deal with matters relating to my father in these proceedings. I attach letter from my Doctor.”

[8]With regard to the July 2013 Order, the Appellant went on to say:

“With regard to the Order of 23 July 2013, unfortunately paragraphs 2 and 3 seek to impose obligations or duties or seek to ensure something occurs over which I have no control. In particular, I have no control over the Medical procedures or timetable or the actions of my father, the first defendant, so to that extent it seeks to impose obligations that simply cannot be met. With regard to the rest of the order, the essence is to provide the court with the necessary information if there was a need to change the timetable and the obligation should be seen in that light. As said above I have been very ill for several months.”

[9]It is not in dispute that the Appellant had indeed been very seriously ill, resulting in kidney failure and regular dialysis treatment. In September 2013 she had undergone a kidney transplant operation, but unfortunately this led to serious complications and she had to return to hospital, as she informed the court, two days before the hearing on 29 October 2013.

The judgment of District Judge Clarke

[10]The only person to appear at the hearing on 29 October 2013 was Mr Owen on behalf of the Trustee. None of the three active defendants was present or represented. We have been supplied with a transcript of the proceedings, from which it appears that Mr Owen began by reminding the District Judge of some of the background and then briefly opened the Trustee’s two applications. The District Judge then referred to a witness statement dated 26 September 2013 which had been received from Winston Spencer, and to a letter which the Appellant had sent to the court in advance of the pre-trial review on 23 July 2013, as well as her recent letter requesting an adjournment. The District Judge then delivered a judgment refusing the adjournment sought.

[11]The District Judge began her judgment by setting out much of the background which I have summarised above. She then referred to, and quoted from, the letter from the Appellant, saying “I know that she has kidney problems and is on dialysis”.

[12]The District Judge then said that, so far as she was aware, the only person in the proceedings who had raised capacity issues about the Bankrupt was, in fact, the Appellant, who had produced the medical evidence placed before the court in May 2013 (albeit obtained by the previously debarred third defendant who was in Jamaica with her father at the time). The District Judge pointed out that the Bankrupt himself had not raised any issues about his own capacity, nor had Winston Spencer touched on that subject in his witness statement, even though he lived close to his father in Chesterfield whereas the Appellant lived in London. The District Judge continued:

“17. Where does that leave this court? A great deal of court time has been spent trying to deal with issues raised about the [Bankrupt’s] health. The hearing listed in January 2013 was adjourned because [the Appellant] told the court the [Bankrupt] was too unwell to travel to London. Shortly thereafter the [Bankrupt] went to Jamaica for a long holiday, despite being, apparently, unable to travel from Chesterfield to London. The hearing listed in May 2013 was adjourned because [Beryl Lennon] (already debarred from defending) and [the Appellant] raised issues of the [Bankrupt’s] capacity. [Winston Spencer] has made it clear he has no intention of involving himself in capacity discussions although he may be best placed to understand what his father’s capacity is. He has made it clear he has no intention of defending the Trustee’s application by that witness statement now before me. 18. I believe I have given [the Appellant] quite a few indulgences, in terms of allowing her time to provide proper information about her father’s capacity or, at the very least, to provide information that her father has been referred for somebody to look at his capacity and report to the court, and no such information has been provided. It was first requested in May 2013 to be provided by July. It was then ordered in July for that information to be provided at various dates going though August and September. Nothing has been provided.”

[13]After some further discussion of the Bankrupt’s health, and the unsatisfactory nature of the evidence about it before the court, the District Judge acknowledged (in paragraph 21 of her judgment) that the Appellant “undoubtedly does have health issues”, and had recently undergone a major operation, but said she was “not prepared to provide a further open-ended adjournment as she requests”. She said that the letter from the Appellant’s doctor did not bear out the Appellant’s own statement that she had been “advised not to be in public places for at least a year”, and she therefore needed to consider whether the request for an adjournment was a delaying tactic. She concluded that there was no reason why consideration of the Trustee’s underlying application should be held up any further.

[14]Having refused an adjournment, the District Judge then heard further argument for the Trustee and decided that each of the three remaining defendants should be debarred from defending the action. In relation to the Appellant, the District Judge gave the following reasons:

“24. … I am satisfied that [the Appellant] should be debarred from defending this action. Everything I have seen from her suggests to me that, although I accept she is not in good health at the moment, either I am not being told the whole story about things, or she is trying to dig her heels in and delay the Underlying Application reaching a conclusion. 25. I have given her every opportunity to try and move this forward and to deal with issues about the [Bankrupt’s] capacity. She has not taken them. She has not kept the court informed of what she has done, and everything seems to fall back to the excuse of her health. I believe that she is not well, but there is more that she could have done and that she has not done. The court has granted her numerous indulgences. These have resulted in adjourned hearings, wasted court time, delay and increased cost to the Trustee. The [Appellant] has now responded by saying she can’t appear in public for a year. This cannot be right. I am satisfied that in the face of repeated breached orders that debarring the [Appellant] from defending, although draconian, is the proportionate and the right thing to do.”

[15]All opposition to the Trustee’s application having thus been eliminated, the District Judge then granted the Trustee the relief which he sought.

The appeal proceedings

[16]On 27 November 2013, the Appellant issued an application to set aside the October 2013 Order on various grounds, including her illness, the alleged impossibility for her of complying with the relevant parts of the July 2013 Order, and the fact that she had allegedly been unaware of the Trustee’s application to debar her. The application was supported by a detailed witness statement dated 19 November 2013. On 28 November, however, the application was dismissed, without a hearing, by District Judge Hart, apparently on the basis that the Appellant’s grounds and evidence in support disclosed no material capable of supporting an application under section 375 of the Insolvency Act 1986. In the brief reasons which she gave for her order, she said that the Appellant should instead consider taking advice as to an appeal to the High Court, for which permission to appeal would need to be sought from the High Court as well as an extension of time.

[17]On 20 December 2013, the Appellant filed an appeal in the High Court from the July and October 2013 Orders and District Judge Hart’s order of 28 November 2013. Her appellant’s notice included applications for an extension of time and a stay. Her grounds of appeal, clearly drafted with professional assistance, ran to 48 paragraphs.

[18]No doubt because of the application for a stay, the papers were referred at an early stage to a judge of the Chancery Division. On 9 January 2014, Arnold J made an order granting a stay pending determination of the Appellant’s applications for an extension of time and permission to appeal. He also made an order in standard form, requiring her, within 28 days of service of the order, to file a full appeal bundle containing the documents specified in PD 52B paragraphs 6.4(1) and (2), including in particular “a transcript of the judgment dated 29 October 2013”.

[19]Arnold J’s order was sealed on 16 January 2014, and then served by post on the Appellant in the usual way. Within the 28 day period specified, she filed on 14 February 2014 an appeal bundle which included a transcript of the hearing before District Judge Clarke on 29 October 2013, but not a transcript of the judgment, which in accordance with the usual practice would have been separately transcribed and sent to the judge for her approval.

[20]Because of the failure to include a transcript of the judgment in the bundle, the papers were referred back to Arnold J who on 4 March 2014 made an order in “unless” form (“the Unless Order”), saying that unless the Appellant by no later than 21 March 2014 filed a transcript of the judgment of District Judge Clarke dated 29 October 2013, her appeal should be struck out as from midday on the second working day after that date. The Unless Order then informed the Appellant that if, through no fault of her own, she was unable to comply by 21 March 2014, and she wished to apply for a further extension, she must do so (making a formal application on form N244) before that date, and her application would be listed before a judge for her to explain why she had not complied with the order. Finally, the Unless Order recorded that it had been made without notice and of the court’s own motion, so any party might apply within seven days of service to set aside or vary all or any part of it.

[21]The Appellant failed to file the necessary transcript by 21 March 2014, with the consequence that the sanction specified in the Unless Order then took effect automatically, and her appeal was struck out as from midday on 25 March 2014: see Marcan Shipping (London) Ltd v Kefalas

[2007] EWCA Civ 463

[2007] 1 WLR 1864

, at [28] to [30] and [34], per Moore Bick LJ.

[22]In these circumstances, the only way in which the Appellant could hope to reinstate her appeal was by making an application for relief from sanctions pursuant to CPR rule 3.8. This she duly did, by an application dated 12 May 2014, having belatedly filed the transcript of the judgment on 6 May 2014. In her application notice, she asked for her appeal to be reinstated because the Unless Order “was not received by me in sufficient time to comply with its provisions”. In Part C, she set out the evidence she wished to rely on in support of her application. In relevant part, her evidence was as follows:

“I could not comply with the order or make a formal application for a further extension before March 21st, as I had not in fact received, nor seen the order. This was as a result of the fact that the letter containing the court order had been posted to a neighbour’s property and was only delivered to me on the 19th April 2014. This is [a] very common factor where I reside, as I frequently receive mail addressed for my neighbours or people who do not reside on the same road. However, as soon [as I] received the court correspondence, I hastened to send the Judgment, with a letter of explanation and apology, requesting that the court if possible communicate with me via email as well as post, just in case future letters go astray. … I filed the appeal bundle on 14 February 2014, but was still waiting for the Judgment transcript to be translated, and forward to me.”

This evidence was verified by a statement of truth, signed by the Appellant herself.

[23]In due course, this application came on for hearing before the deputy judge on 4 June 2014. The Appellant was represented, as before us, by Mr Nicholas Macleod-James of counsel. The Trustee was represented by his solicitor, Mr Owen.

The judgment of the Deputy Judge

[24]After a concise introduction explaining how the application came to be made, and setting out the provisions of CPR rule 3.9, the judge referred extensively to what he rightly termed the “landmark judgment” of this court in the Mitchell case (Mitchell v News Group Newspapers Ltd

[2013] EWCA Civ 1537

[2014] 1 WLR 795

). At [10], he directed himself as follows:

“The Court of Appeal set out guidance as to how the new approach should be applied in practice at paragraphs 40 to 46 and made clear that the new, more robust approach will mean that from now on relief from sanctions should be granted more sparingly than previously. However if the nature of the non-compliance could properly be regarded as trivial the court would usually grant relief provided that an application was made promptly. Furthermore there could be a good reason for the default, likely to arise from circumstances outside the control of the party in default.”

[25]It should be noted that this court had not yet handed down its further guidance in the Denton case (Denton v T H White Ltd

[2014] EWCA Civ 906

[2014] 1 WLR 3926

), judgment in which was given a month later on 4 July 2014 following a hearing in mid-June.

[26]In the next section of his judgment, running from [12] to [22], the judge described the facts of the case in more detail, largely by reference to District Judge Clarke’s judgment of 29 October 2013. He quoted extensive extracts from paragraphs 17, 18, 24 and 25 of her judgment.

[27]Turning to the application before him, the judge began by rejecting a submission of Mr Macleod-James that the wording of the Unless Order required actual receipt by the Appellant in order for it to be validly served on her. As he rightly said, there was no support for this submission in the wording of the CPR, and the Unless Order had merely required “service upon …” the Appellant. He then said, at the end of [23]:

“Furthermore, for the reasons given below, I have been unable to conclude that the Appellant did not receive the Order in the normal course of postage, well before the date for compliance had passed.”

[28]The judge then recorded Mr Macleod-James’ next submission, which was that the Appellant mistakenly thought that the transcript of the hearing on 29 October 2013, which she had filed with the appeal bundle, was the required transcript of the judgment. Having filed the transcript of the entire hearing, she had no motivation not to include the transcript of the judgment. The judge continued:

“The Appellant claimed that the [Unless Order] was not received by her until 19 April 2014, which was well after the date for compliance. Although there was no witness statement to this effect, the Appellant claimed the letter had been accidentally delivered to her neighbour and had not been seen by the Appellant until 19 April 2014. This was supported by a letter from the Appellant, and a letter (purportedly) from Mr S Norris, the neighbour. The Appellant also produced copies of two envelopes addressed to Mr Norris which she claimed had been wrongly delivered to her address. Although he did not put it in quite these terms, the essence of Mr Macleod-James’ submission was that this was a trivial breach, which was outside the control of the Appellant.”

The judge’s reference to the absence of a witness statement by the Appellant was perhaps unfortunate, given that her evidence in Part C of her application notice was verified by a statement of truth signed by her, and had the same evidential status as a separate witness statement. It is, however, right to say that the supporting letters and envelopes which the Appellant produced, and which we have not seen, were not formally in evidence.

[29]Mr Macleod-James’ third submission was that the justice of the case required reinstatement of the Appellant’s appeal. On behalf of the Trustee, Mr Owen then responded (without any evidence to support the assertion) that his firm had sent 33 letters to the Appellant, only one of which was said not to have been received. He also pointed out that it had apparently taken many weeks for the neighbour to show the Appellant the letter, for which there was no explanation. He doubted whether this was a true or complete account. He also drew attention to the long history of the proceedings, and the repeated indulgences already granted to the Appellant as summarised in District Judge Clarke’s judgment.

[30]In the final section of his judgment, headed “Assessment”,

the judge stated his conclusions:

“27. It is clear from the Mitchell decision that I must regard the specific considerations referred to in CPR 3.9 as of paramount importance and I must give them great weight. This particular default cannot be viewed in isolation. It is part of a course of conduct by the Appellant described in detail by DJ Clarke whereby the court has granted her numerous indulgences which has resulted in adjourned hearings, wasted court time, delay and increased cost to the Trustee. This is just one more instance of default by the Appellant, the effect of which has been to prevent the litigation from being conducted efficiently and at proportionate cost. The Appellant has demonstrated a persistent failure to comply with the rules and orders of the Court. I have no doubt that delay has been regarded by the Appellant as an end in itself. This cannot be allowed to continue. 28. Necessarily I have regard to the justice of the case. However in all the circumstances I do not consider that it is unjust to deny the Appellant relief from sanctions. The Jackson reform was designed to end a “culture of delay and non-compliance”

. Such culture would only be promoted if relief from sanctions were given in the present case. 29. As to Mr Macleod-James’ specific submissions: In the absence of a witness statement from either the Appellant or her neighbour, I do not accept, on a balance of probabilities the account that the full facts have been provided to the Court. Whilst it is conceivable that this letter was wrongly delivered to the neighbour (although I am unable to conclude that this was the case), no proper explanation has been provided as to why it took so many weeks for it to be given to the Appellant. I do not accept that she did not see the [Unless Order] well before 23 March 2014. 30. As to an assessment of the strength of the Grounds of Appeal, I am far from satisfied that this is appropriate on an application for relief from sanctions. However, in case it is relevant, I have carefully considered the Grounds of Appeal. With great respect to Mr Macleod-James, I do not find them at all persuasive and, if the application had been before me, I would have refused permission to appeal. It would be a formidable task to obtain permission to appeal from what was an exercise of discretion by DJ Clarke, supported by details and compelling reasons. 31. In conclusion, I dismiss this application for relief from sanctions under CPR 3.9(1) and accordingly the appeal of the Appellant remains struck out pursuant to the order of Arnold J dated 4 March 2014.”

Relief from sanctions: the guiding principles

[31]CPR rule 3.9 provides: “Relief from sanctions(1) On an application for relief from any sanctions imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need – (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders.

(2) An application for relief must be supported by evidence.” (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders.

[32]As is well known, the leading case on the principles which should guide the court on an application for relief from sanctions under CPR rule 3.9(1) is now Denton. In that case, the court, headed by Lord Dyson MR, modified in some important respects the guidance which had previously been given in Mitchell. The approach which is now to be applied is set out at [24]:

“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). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred.

(a) and (b)]”

. We shall consider each of these stages in turn identifying how they should be applied in practice. We recognise that hard-pressed first instance judges need a clear exposition of how the provisions of rule 3.9(1) should be given effect. We hope that what follows will avoid the need in future to resort to the earlier authorities.”

[33]The court then discussed the first stage at [25] to [28], explaining that it is preferable to focus on the question whether a breach is serious or significant, rather than adopting the test of triviality referred to in Mitchell. The court pointed out at [27] that, at the first stage, “the court should concentrate on an assessment of the seriousness and significance of the very breach in respect of which relief from sanctions is sought”. An assessment of the defaulter’s previous conduct in the litigation, including previous breaches of court orders, should be left to the third stage.

[34]As to the second stage, the court said at [29] and [30] that the court should consider why the failure or default occurred, particularly where the breach is serious or significant. There is no “encyclopaedia of good and bad reasons” for a failure to comply, and the cases can do no more than provide examples.

[35]In its discussion of the third stage, at [31] to [38], the court was at pains to correct the misapprehension that an application for relief from sanctions will automatically fail if(i) there is a serious or significant breach, and

(ii) there is no good reason for the breach. In every case, the court must consider “all the circumstances of the case, so as to enable it to deal justly with the application”. Nor is it right to say that the factors (a) and (b) in rule 3.9(1) are to be accorded “paramount importance”, as Mitchell at [36] had widely been thought to imply. Those factors are, nevertheless, “of particular importance and should be given particular weight at the third stage”: see [32]. The court also gave this guidance:

“35. … The more serious or significant the breach the less likely it is that relief will be granted unless there is a good reason for it. Where there is a good reason for a serious or significant breach, relief is likely to be granted. Where the breach is not serious or significant, relief is also likely to be granted. 36. But it is always necessary to have regard to all the circumstances of the case. The factors that are relevant will vary from case to case. As has been pointed out in some of the authorities that have followed the Mitchell case …, the promptness of the application will be a relevant circumstance to be weighed in the balance along with all the circumstances. Likewise, other past or current breaches of the rules, practice directions and court orders by the parties may also be taken into account as a relevant circumstance.”

Discussion

[36]Lacking clairvoyance, the judge was understandably unable to forecast the revised guidance which this court would give in Denton, one month after the hearing before him. It may therefore be said that his reliance on Mitchell led him into potential error in at least three ways. First, he wrongly regarded the two factors specified in rule 3.9(1) as being “of paramount importance”, although it would be difficult to quarrel with his statement that he “must give them great weight” read in isolation. Secondly, he said that the Appellant’s failure to comply with the Unless Order should not be viewed in isolation, when according to Denton he should have started at stage one by doing precisely that, reserving consideration of the Appellant’s previous course of conduct for the third stage. Thirdly, and more generally, he did not adopt the structured three stage approach which Denton enjoins.

[37]Also of concern is the fact that the judge twice referred to the absence of any witness statement from the Appellant, while nowhere recognising the undoubted evidential status of what she said in Part C of her application notice. When granting permission to appeal, Briggs LJ said it seemed to him at least arguable that the judge may have overlooked this evidence, and that his decision not to believe her explanation may therefore arguably have been unduly harsh. I respectfully agree. Furthermore, the judge’s statement that “no proper explanation” had been provided of why it took so many weeks for the letter from the court to be given to the Appellant is impossible to reconcile with her clear evidence that the letter was only delivered to her on 19 April 2014, having previously been delivered to a neighbour’s property. Without cross-examination, I find it difficult to see how the judge could properly have dismissed this evidence as incredible.

[38]Furthermore, although there was a gap of some two and a half weeks between 19 April 2014 and 6 May 2014, when the transcript of the judgment was eventually filed, it is clear that during this period the Appellant had communicated with the court, presumably seeking guidance in view of the fact that the date for compliance with the Unless Order had already expired before it came to her notice. This appears from a letter dated 2 May 2014 sent by the Chancery Appeals Office to the Appellant, which reads as follows:

“After referring your file to Mr Justice Arnold, he has noted that because you did not comply with his order dated 4 March 2014 this appeal has been struck out. If you wish to pursue your appeal you will need to file an application for relief from sanctions using the N244 form.”

The file would not have been referred to Arnold J in the absence of some communication from the Appellant, because the sanction for non-compliance took effect automatically and needed no further judicial intervention: see [21] above. It would seem, therefore, that the Appellant acted with reasonable expedition after (on her version of events) she first became aware of the Unless Order on 19 April 2014.

[39]In all the circumstances, it seems to me that the judge erred, albeit understandably, in his approach to the application, and we should consider it afresh with the benefit of the guidance in Denton.

[40]The first question is whether the breach, viewed in isolation, was serious or significant. Mr Macleod-James sought to persuade us that it was not. Viewed in context, it caused no more than a four week delay to an application for permission to appeal, and an extension of time for appealing, which was still at an early stage, the notice of appeal having been filed on 20 December 2013, and an appeal bundle (compliant apart from the missing judgment) having been filed by the Appellant, in time, on 14 February 2014.

[41]I would reject this argument. The failure to lodge a transcript of the judgment under appeal, within the period directed by the court, cannot be characterised as unserious or insignificant, because the application for permission to appeal could not be determined until the transcript was provided. Of all the documents needed for the appeal, it was probably the most important: hence the fact that it was singled out in the standard form direction given by Arnold J on 9 January 2014.

[42]The next question is why the default occurred. As to this, I respectfully think the judge was wrong to disbelieve the explanation given by the Appellant, and he was unduly influenced by the absence of a separate witness statement from her. It was entirely appropriate for her to give the evidence upon which she wished to rely in Part C of the application notice, and in the absence of any evidence in answer from the Trustee she did not need to elaborate the explanation which she had given, even if she would have been well advised to do so (for example, by procuring a supporting statement from her neighbour, and/or by exhibiting to a statement the documents which she apparently provided at the hearing).

[43]If the Appellant’s evidence was accepted at face value, she clearly had a good reason for failing to comply with the Unless Order before 21 March 2014, because she knew nothing about it. It is true that she remained in breach of Arnold J’s earlier order of 9 January, but as a litigant in person she may not have appreciated the importance of the distinction between the transcript of the proceedings, which she had supplied, and the judgment, which she had not. Furthermore, we do not know when the transcript of the judgment was sent to District Judge Clarke for approval, or when it was returned. The Appellant could no doubt have supplied this information had the deficiency in the bundle which she lodged been drawn to her attention; but there is no evidence that it was, and until she finally received the Unless Order, there was nothing to alert her to the problem.

[44]It is relevant to note, in this connection, that the Unless Order was made by Arnold J of his own initiative, without any application having been made by the Trustee. The papers were presumably referred back to him by the court staff, when they noted that the bundle lodged by the Appellant did not include a transcript of the judgment. Thus the Appellant had no way of knowing that a further, more stringent, order was likely to be made against her, and it is perfectly credible that the first she knew of the Unless Order was on 19 April 2014, nearly one month after the deadline for compliance with it had expired.

[45]In all the circumstances, I would conclude that the Appellant had a good reason for her failure to comply with the Unless Order.

[46]As to the third Denton stage, it is appropriate to begin with the court’s statement at [35] that “[w]here there is a good reason for a serious or significant breach, relief is likely to be granted”. In the present case, that conclusion is reinforced by the fact that the appeal proceedings were still in their infancy, and no prejudice can have been caused to the Trustee apart from the relatively short delay in filing the transcript of the judgment. As to the alleged earlier defaults by the Appellant, of which District Judge Clarke had taken such a dim view, it is worthy of note that the only order with which the Appellant had failed to comply was the July 2013 Order, and even then she might have had a respectable argument that she was not in breach of the timetable steps in paragraph (2) of that order, given the rather curious way in which it was framed, and that her only breach had been of the requirement in paragraph (3) to ensure that the timetable was met, and to notify the court promptly if it was not. Given the very serious ill health from which she suffered at the time, and in particular from September 2013 onwards, this breach was in my view at the lower end of the scale of seriousness, quite apart from the question whether it was ever appropriate to order the Appellant to ensure compliance with a timetable relating to the capacity of her father.

[47]In any event, despite the impression given by the District Judge’s judgment, Mr Groves very properly accepted before us that the Appellant had not been guilty of repeated breaches of court orders. The exasperation which District Judge Clarke clearly felt seems rather to have been the product of what she perceived to be a series of delaying tactics for which the Appellant was one of the persons responsible. There may well have been some truth in this perception, but whether it justified the draconian step of barring the Appellant from defending the Trustee’s underlying application is another matter. I do not share the judge’s confidence that the Appellant’s grounds of appeal are “not … at all persuasive”, and I certainly do not consider that her appeal is so obviously hopeless on the merits that, for that reason alone, it should not be allowed to proceed to consideration of the application for permission to appeal by a Chancery judge in the usual way.

[48]All in all, I am satisfied that a consideration of all the circumstances of the case, and of the need to deal justly with the application for relief from sanctions, leads to the conclusion that relief should be granted. If McFarlane LJ agrees, that is therefore the order which I would make.

Concluding observations

[49]Before leaving this case, I should draw attention to the extraordinary delay of well over two years which occurred between the grant of permission to appeal by Briggs LJ on 9 December 2014, and the hearing before us on 16 February 2017. In his judgment,

[2014] EWCA Civ 1732

, Briggs LJ said at [10] that the appeal would have to be brought on “as quickly as possible”, because it concerned the case management of an appeal at first instance in circumstances where possession of the Property was sought by a trustee in bankruptcy. He warned the Appellant that her ill health would not be a satisfactory excuse for rescheduling any fixture for the hearing of the appeal. In the event, we were told that the appeal was originally scheduled to be heard in late 2015, but her health had by then deteriorated to such an extent that her life was in serious danger, and the appeal was relisted for 2016, although it could not then be heard until February 2017. Through her counsel, the Appellant expressed her gratitude to the court listing officers for the tolerance and understanding which they had displayed.

[50]I appreciate that this may be scant comfort to the Trustee, who obtained an order for possession and sale of the Property as long ago as 29 October 2013. On the other hand, it is of some relevance to note that the bankruptcy is a most unusual one. We were informed by Mr Groves that the only creditor in the bankruptcy is a granddaughter of the Bankrupt, who obtained a judgment against him for £120,000 as a result of bitter family litigation. It is not therefore a case where there are substantial external, non-family, creditors waiting to be paid. Nevertheless, given the unfortunate history which I have related, it is clearly desirable that the appeal proceedings should now be prosecuted with the minimum of delay, and if permission to appeal is granted, the court will no doubt wish to consider whether an order for expedition should be made.

[51]I agree.