There must be a change in circumstances between one application for relief and another
The claimants applied for an order requiring the defendants to answer their Part 20 requests for further information by 21 March 2014. The defendants failed to respond in breach of the court order and following this, an Unless Order was made for them to file and serve their responses by no later than 22 April 2014, failing which their defences would be struck out.
The defendants served a proposed response shortly before the deadline elapsed but the claimants argued that the response was insufficient and sought directions on the basis that the defence stood struck out as a result of the defendants failure to comply with the Unless Order.
The defendants made an application for relief from sanctions which was granted under the strict condition that the defendants would serve and file a full and complete response to the requests by 4 December 2014. The defendants served their response within the deadline but the claimants argued that the response was still inadequate, the judge’s conditions for relief had not been satisfied and the defence should be struck out.
The defendants applied for relief from sanctions for the second time. At the hearing, it was held that the defendants had failed to file a complete and full response and had not complied with the conditions set at the previous hearing. It was specifically held that the defences were to remain struck out as from 22 April 2014, which was the date when responses had been required in accordance with the Unless Order. The defendants application for relief from sanctions was refused on the grounds that there had been no material change of circumstances since the previous order.
The defendants appealed the decision submitting that there was nothing in CPR, r. 3.9(1), in respect of relief from sanctions, imposing any requirement that there should be a change in circumstances when making a further application for relief.
The Court of Appeal concluded that the order made as a result of the first application for relief from sanctions merely activated the original strike out sanction in the Unless Order. It was stated that this order had merely declared that the defences were to stand struck out unless complete responses were filed by the defendants by 4 December 2014 and only if this was done would the defences be reinstated.
It was held that the only relief which the defendants could seek was for failing to comply with the Unless Order. It was specifically held that defendants had only conditionally obtained relief following the hearing of the first application.
The Court of Appeal stated that the further application for relief from sanctions was a second application for relief where there had to be a material change of circumstances in order for it to be considered. It was concluded that there had been no material change of circumstances since the Unless Order and the hearing of the first application where the judge had imposed conditions in order for relief to then be granted.
As a result, the defendants appeal was dismissed and their defences remained struck out.
What this means for you
It is crucial to comply with Unless Orders because these are final orders that are normally made as a last resort. If a party does not comply with an Unless Order then they run the real risk of having their case struck out and will likely have difficulties with successfully making an application for relief from sanctions.
Here, the defendant was fortunate to have been granted relief from sanctions, following their first application, albeit on the condition that they filed and served a full and complete response to the claimants part 18 request by a specified date.
In some cases, a party may not be so fortunate because non-compliance with an Unless Order will likely to be considered a serious and significant breach under the first stage for consideration under Denton v TH White. Also, it will be difficult to show good reason for this type of breach under the second stage and under the third stage, all of the circumstances of the case may not lead to the court concluding that relief from sanctions should be granted.
This case also shows that there needs to be a material change of circumstances if a party is to make the same type of application again at a later date. In this case, it was seen that the defendants’ application for relief from sanctions was in respect of the same breach, being the breach of the Unless Order.
This case may have been decided differently had relief been granted following the hearing of the first application but not on the basis of any condition being satisfied. It could then be argued that any further breach would have been in respect of a different order so arguably there had been a materially different change of circumstances.