Keen Phillips (A Firm) v Field

LORD JUSTICE JONATHAN PARKER: This is an appeal by Peter Field, the defendant in the action, against an order made by HHJ Reid QC in the Guildford County Court on 14 February 2006 granting Keen Phillips, an accountancy firm and the claimant in the action, permission to appeal against the refusal of a district judge to grant summary judgment on its claim and allowing the appeal. Keen Phillips is the respondent to the appeal but, in order to avoid confusion, I will continue to refer to it throughout as the claimant.

The appellant’s notice contains eight grounds of appeal but, by his order dated 2 May 2006, Gage LJ granted permission to appeal on ground one only, Brooke LJ having previously refused permission to appeal on the papers. Ground one reads:

“The learned judge did not have jurisdiction to grant permission to appeal, to hear the appeal or to allow the appeal.”

As the only issue on the appeal is one of jurisdiction, it is unnecessary to go into the details of the claim. It is enough to say that in the action, which was commenced on 18 February 2005, the claimant claims payment of sums due in respect of accountancy work allegedly carried by it for the appellant.

The claimant’s application for summary judgment was dismissed by District Judge Letts on 12 December 2005. The claimant appealed to the judge. By its notice of appeal, it sought an order granting permission to appeal and allowing the appeal. By an interlocutory order dated 22 December 2005, Judge Reid directed that the claimant, as the proposed appellant, lodge with the court an approved transcript of the district judge’s judgment by 31 January 2006 and that, in default, permission to appeal was refused. HHJ Ryland later extended the time limit imposed by Judge Reid’s order to 7 February 2006.

In the event, through no fault of the claimant or its legal advisers, and despite pressure on their part, the transcribers were unable to supply the court with a transcript of the district judge’s judgment until 8 February 2006. The transcript was thus lodged one day late. At the hearing before Judge Reid on 14 February 2006 both parties were represented by counsel; the claimant by Miss Brander, who also appears in this court, and the appellant by Mr Foreshaw. A further party, a part 20 defendant, also appeared by counsel before Judge Reid, but that party has since dropped out of the picture.

At the outset of the hearing, Miss Brander referred the judge to the grounds of appeal and asked for permission to appeal. However, the judge responded that the sensible course would be for Miss Brander to advance her substantive grounds, so that the application for permission and the substantive appeal could be dealt with together. Miss Brander accordingly presented her submissions on the substantive appeal. When she had done so, the judge indicated that he wished to hear only Mr Foreshaw in response to her submissions. The transcript continues as follows at page 9:

“MISS BRANDER: I know there is one issue that Mr Foreshaw seeks to raise in relation to --

“JUDGE REID: Shall we see if he does and then you can come back on it if need be.

“MISS BRANDER: So be it.

“MR FORESHAW: Your Honour, there is a preliminary point which I do seek to take and that is that, on the face of the papers, permission to appeal has already been refused, and that is as a result of an order made by you. Could I invite you to --

“JUDGE REID: I made a more or less standard form order that, unless we get the transcript or an agreed note within such and such a time, then permission is refused, which is really for good housekeeping purposes. What not infrequently then happens is that that time has to be extended, because of shortcomings either in the speed at which the shorthand writers can operate or - it is not this case, because this was a full-timer - the length of time it takes deputy district judges to actually get hold of and correct draft transcripts when they arise. What are the dates on this particular problem?

“MR FORESHAW: 90F is the order made by you on 7^th January. That is that the proposed appellant lodge with the court by 31^st January 2006 --

“JUDGE REID: An approved transcript.

“MR FORESHAW: That is right, your Honour. That was then varied on 1^st February. I think it is HHJ Ryland.

“JUDGE REID: HHJ Ryland, I know, has had a hand in this at some stage.

“MR FORESHAW: I think it is 90M, although it is fair to say the bundle numbers on my copy --

“JUDGE REID: I have got 90K as an order of HHJ Ryland. He appears to have made two orders on the same day.

“MR FORESHAW: That is right, your Honour.

“JUDGE REID: He extended time to 7^th February.

“MR FORESHAW: That is right, your Honour. He states that explicitly to be with regard to the first two paragraphs of your order, 90F. Reading those two orders together, if that order is not complied with, in default permission to appeal refused, and it is my submission that that order has not been complied with.

“JUDGE REID: When do you say it was lodged with the court?

“MR FORESHAW: I say it was lodged on 8^th February, your Honour. Indeed, if I can invite you to turn to pages 151 and 152, there is some correspondence from solicitors. In fact perhaps the most instructive thing to turn to is 143, which as I understand it is an attendance note from those instructing my learned friend. That is dated 8^th February, your Honour. So there is no dispute that the transcript was not lodged until 8^th February.

“JUDGE REID: On the face of it, it went astray from the transcribers. So why should I not in those circumstances extend time further?

“MR FORESHAW: Your Honour, the situation is that there has been no application from my learned friend for relief from sanctions, and therefore on the face of your order given on 7^th January --

“JUDGE REID: How does that fit in with the overriding objective? What are you worried about? That the court has been done out of £30 for an application fee?

“MR FORESHAW: No, your Honour, I would not suggest that that is the concern. The reality is that this is on the back of a number of orders not being complied with by the proposed appellant.

“JUDGE REID: I can see from the documentation how it came about that it was not complied with, and I deprecate the fact that nobody saw fit to ask for an extension of time, but has any detriment been suffered by anyone as a result?

“MR FORESHAW: No, your Honour.

“JUDGE REID: In which case I will extend time.”

Mr Foreshaw then turned to the substantive grounds of appeal and made his submissions on them. Following brief submissions in reply by Miss Brander, the judge delivered judgment allowing the appeal. By his order dated 14 February 2006, he granted permission to appeal, allowed the appeal and entered summary judgment for the claimant in the sum of £4,218.25, plus interest.

The appellant appeals to this court. As explained earlier, we are concerned only with the issue of jurisdiction raised by ground one of his grounds of appeal, which I have earlier quoted.

The appellant is represented before us by Mr Mallet. He submits that Judge Reid had no jurisdiction to extend the time for the filing of a transcript of the district judge’s judgment with the court, pursuant to his order dated 22 December 2005 as subsequently varied, and that in consequence the sanction imposed by that order duly took effect and permission to appeal was refused. He points out that the court’s general case management power to extend time contained in CPR Rule 3.1(2)(a) is exercisable “except where these Rules provide otherwise”: see the introductory words to Rule 3.1(2).

He submits that in a case where, as in the instant case, a sanction has been imposed for failure to comply with an order, CPR Rule 3.8 provides “otherwise”, in that it provides expressly that where a party has failed to comply with a court order, any sanction for such failure imposed by the order “has effect unless the party in default applies for and obtains relief from the sanction”. He accordingly submits that unless and until an application is made by the party in default for relief from the sanction, pursuant to Rule 3.9, the court has no jurisdiction to grant such relief. In the instant case, he submits, no such application was made to Judge Reid by Miss Brander, hence the sanction, that is to say the refusal of permission to appeal, remained in effect, notwithstanding the judge’s purported extension of time for compliance with his earlier order.

In support of this submission, Mr Mallet relies in his written skeleton argument on the decision of this court in Sayers v Clarke Walker [2002] EWCA Civ 645. The leading judgment in that case was given by Brooke LJ, with whom Kay LJ and Sir Christopher Staughton agreed. In his judgment, Brooke LJ stressed the need for the court, when considering an application for relief from sanctions under Rule 3.9, to follow the checklist of matters to be considered, as set out in Rule 3.9(1). In paragraph 20 of his judgment he said this:

“The philosophy underpinning CPR Pt 3 is that rules, court orders and practice directions are there to be obeyed. If a sanction is imposed in the event of non-compliance, the defaulting party has to seek relief from the sanction on an application made under CPR r 3.8, in [which] event the court will consider all the matters listed in CPR r 3.9, so far as relevant.”

Brooke LJ went on in paragraph 21 of his judgment to observe that it is equally appropriate to have regard to the checklist in Rule 3.9(2) where the court is considering an application for an extension of time for appealing, at least in a case of any complexity. He continued:

“The reason for this is that the applicant has not complied with CPR r 52.4(2) [which deals with time limits for appealing], and if the court is unwilling to grant him relief from his failure to comply through the extension of time he is seeking, the consequence will be that the order of the lower court will stand and he cannot appeal it. Even though this may not be a sanction expressly ‘imposed’ by the rule, the consequence will be exactly the same as if it had been, and it [will] be far better for the courts to follow the check-list contained in CPR r 3.9 on this occasion, too, than for judges to make their own check-lists for cases where sanctions are implied and not expressly imposed.”

To the same general effect as Brooke LJ’s judgment in Woodhouse v Consignia plc [2002] 2 All ER 737.

Mr Mallet submits that Rule 3.8 cuts down the court’s general case management power in Rule 3.1(2)(a), in the same way as Rule 7.6 (extension of time for serving a claim form) does so, and in this respect he relies on the decision of this court in Vinos v Marks & Spencer plc [2001] 3 All ER 784, particularly at 792 where Gibson LJ said:

“It is plain that the general power in r 3.1(2)(a) to extend time cannot override r 7.6.”

Mr Mallet submits that the instant case is on all fours with the decision in Vinos and that just as Rule 7.6 cuts down the general case management power to extend time in Rule 3.1(2)(a), so also do the provisions of Rule 3.8, relating to relief from sanctions. Mr Mallet acknowledges that Rule 3.3(1) gives the court power to act on its own initiative but he points out that that power is limited in a similar way to the power to extend time in Rule 3.1(2)(a), in that Rule 3.3(1) is introduced by the words “except where a rule or some other enactment provides otherwise”. He submits once again that Rule 3.8 is such a rule.

Mr Mallet further submits that the overriding objective is not an absolute objective but must take effect in accordance with the express provisions of the various specific Rules which follow. He submits that the only possible construction of the opening words of Rule 3.8 is that they cut down the general case management power to extend time in Rule 3.1(2)(a). He submits therefore that the court is powerless to take the initiative in a case such as the instant case unless and until the party who would be in default makes an application for relief from sanctions under Rule 3.8 and 3.9.

In the instant case, he submits, the judge should have asked Miss Brander whether she wished to make an application, and she should formally have applied for an extension of time, events which he submits did not occur in the instant case. Had that happened, then he accepts that jurisdiction would have been conferred on the judge to extend time as he did.

I am content to assume, for present purposes, that in granting an extension of time in the circumstances of the instant case Judge Reid was granting relief from the sanction imposed by his earlier order within the meaning of Rule 3.8. However, even on that assumption, I am wholly unable to accept Mr Mallet’s submission that the court’s general case management powers (a) to extend time (see Rule 3.1(2)(a)) and (b) to act on its own initiative (see Rule 3.3(1)), are cut down by Rule 3.8(1), with the consequence that the court is powerless (that is to say has no jurisdiction) to extend time in circumstances such as those of the instant case unless and until an application for relief under Rule 3.8 is made by the party in default. Indeed, I would regard such an interpretation of a CPR as perverse and as flying in the face of the overriding objective of dealing with cases justly.

In my judgment, Mr Mallet has put the cart before the horse. It is Rule 3.8(1) which takes effect, subject to the court’s general case management powers in Rule 3.1(2)(a) and Rule 3.3(1), rather than the other way around. I can think of no sensible reason why, in the circumstances such as those of the instant case, the court should be deprived of jurisdiction to exercise those powers by extending time or otherwise granting relief from a sanction, unless and until the party who would otherwise be in default applies for relief under Rule 3.8. The words “has effect” in Rule 3.8 mean, in my judgment, no more than that, absent any exercise by the court of its general case management powers in extending time or otherwise granting relief from the sanction, the sanction will remain in effect until relief from it is granted by the court on an application made under Rule 3.8 by the party in default. As for Mr Mallet’s reliance on the Vinos case, it is to be noted that the terms of Rule 7.6(3) are entirely different to those of Rule 3.8. Thus, the rule provides in paragraph 3 that “the court may make such an order only if …”. As this court decided in Vinos, the meaning of that rule is plain and its effect on its face is to override the court’s case management powers under 3.1(2)(a).

I would therefore dismiss the appeal on that ground.

In any event, even if I had accepted Mr Mallet’s interpretation of the relevant provisions of the CPR, I would have concluded, based upon the passage in the transcript which I quoted earlier, that there was an application before the judge for an extension of time for compliance with his earlier order, that is to say (on the assumption to which I referred earlier) for relief from the sanction imposed by that order.

It is clear from the transcript that Miss Brander was about to make an application when the judge intervened and invited submissions from Mr Foreshaw, on the express footing that Miss Brander could “come back on it if need be”. In the event, the judge quite rightly did not find it necessary to call upon Miss Brander to reply to Mr Foreshaw’s submissions, and accordingly he went ahead and extended time without hearing Miss Brander further on the point.

Given that the court has a general power to dispense with an application notice (see the Practice Direction supplementing Part 23 of the CPR, paragraph 3(4)) it seems to me that it would be an unacceptably artificial approach to the application of the CPR to conclude that, in the circumstances revealed by the transcript, there was no application for an extension of time before the court. The judge heard submissions from counsel in opposition to the grant of an extension of time and he duly considered and rejected those submissions. However, as I have said, my decision as to the interpretation of Rule 3.8 suffices to dispose of this appeal.

Accordingly I would dismiss this appeal.

LORD JUSTICE MOORE-BICK: I entirely agree. There is nothing that I wish to add.