Dhanji v Al-Najar & Others EWHC 193 _ 18 January 2017

This case was a commercial dispute relating to breach of trust but it came before the High Court on two interim applications. Firstly, an application by the Claimant for Judgment in default of a defence, and secondly an application by the defendants for relief from sanctions and/or an extension of time to file their defence.

Proceedings were issued on 4 October 2016 following protracted pre action correspondence. The date of service was 7 October 2016 and the last date for filing and serving a defence was 3 November 2016.

On 1 November 2016 the defendant’s solicitors realised they would need an extension of time but they did not request one until 15 November 2016 by which time the claimant’s solicitors had already issued their application for Judgment. The request for an extension was therefore refused, but not until 22 November 2016.

In the meantime the Defendant’s solicitors filed a Defence and counterclaim, received by the Court on 21 November 2016, but they did not serve it on the claimant’s solicitors or notify them that they had filed it.

The defendants solicitors took no action until they lodged the present application on 16 January 2017.

The claimant said in their application that following the Mitchell and Denton cases, the Court should not grant relief because the breach was not trivial, but serious and significant, and the Court agreed.

The Court then looked at the reason for the breach and concluded that the defendant’s solicitors had been incompetent, ignored the rules (particularly relating to service of the defence on the claimant’s solicitors – which they said they didn’t realise they needed to do) and there was no adequate explanation.

The third stage of the test was to consider the whole circumstances of the case. Although the court accepted that the defendant’s solicitors had behaved inefficiently and with little regard for the rules, going so far as to say they were incompetent and unprofessional, the court did not consider that the breach ought to be relieved because it could be dealt with in other ways, such as costs sanctions. The Court therefore extended time for service of the Defence.

This is another example of the lower courts leniently applying the Mitchell and Denton rules, in rather an extreme set of circumstances.