Lauriane de Campos Braciforte v Jennifer Williams

This is an appeal against the judgment of District Judge Baldwin delivered in a fast track claim heard by Microsoft Teams on 3^rd June 2024. It proceeds with permission granted by His Honour Judge Gregory on 5^th September 2024, and concerns the award of damages in relation to credit hire charges which the respondent recovered in the sum of £15,175.80.

The issue which lies at the heart of the appeal is whether the court should have taken a more robust approach to compliance with the standard directions order which deals with the disclosure of supporting documentation in relation to impecuniosity, both in terms of potential debar for a Claimant where there has been a shortcoming in that disclosure, and in the discharge of the burden of proof required in a substantial credit hire claim. It is the first of several appeals likely to proceed before this court where similar challenges are made, and I hope to provide some guidance which may be helpful in the future.

Oral argument was heard on Monday, 9^th December 2024, and I reserved judgment to enable a careful consideration of the authorities and the transcripts of the evidence and original submissions.

For ease of identification I shall refer to the appellant as the Defendant, and the respondent as the Claimant.

For all intents and purposes this was a relatively straightforward damages only RTA fast track claim arising out of an incident on 16^th August 2022 in Clandon Road, London when the Defendant drove her vehicle into collision with the stationary and parked Fiat 500 belonging to the Claimant. Although the Claimant had no connection with Liverpool, her solicitors were Bond Turner based in the city and proceedings were brought in the County Court here without any application to transfer to the court local to the accident. This particular firm bring a substantial number of RTA claims in Liverpool utilising multiagency services in relation to car hire, recovery and repair and providing comprehensive one-stop accident management in relation to accidents all over the country, particularly in the southeast. The claim comprised the pre-accident value of the damaged Fiat (just under £2500) recovery and storage charges of almost £900, and by far the most significant item, credit hire charges of £17,618.40. This represented the hire of a replacement vehicle, an Audi A3 over a period of 51 days.

The Claimant was put to proof of all three heads of loss in the defence that was filed, although she had been paid out for the pre-accident value by the Defendant’s insurers, with funds received on 23^rd September by her solicitors. She had used that money to partially fund the purchase of a new vehicle, a second-hand BMW X3, acquired on 5^th October, and the credit hire finished on this date.

In cases of this nature the issues which are likely to arise in any trial do not normally crystallise until the Defendant has filed its counter schedule of loss, and after there has been compliance with the standard directions which include specific direction orders in relation to credit hire and impecuniosity. This means that the Defendant has been afforded an opportunity to consider the material that has been disclosed in relation to a Claimant’s financial circumstances and in particular to formulate a response to the issue of impecuniosity, including, if appropriate, providing evidence in relation to alternative basic hire rates (BHR) which might be awarded if impecuniosity is not established.

It is helpful to identify those directions which have been the focus of discussions in this appeal. They are dealt with online in an SDO format and usually pre-populated, although there is scope for bespoke additional directions to be provided if need be. That did not happen in this case. The matter came before DJ Jenkinson on 6^th October 2023, and in addition to the usual orders in relation to standard disclosure, witness evidence exchange, and schedules/counter schedules (the latter of which was to be provided by 29^th December 2023) as well as listing the matter for trial, paragraphs 21 -23 were under the heading of “credit hire”. It is worth setting this out in full:

“21.

If impecuniosity is alleged by the Claimant and not admitted by the Defendant, the Claimant's disclosure as ordered earlier in this Order must include:

a)

Evidence of all income from all sources for a period of 3 months prior to the commencement of hire until the earlier of:

i)

3 months after cessation of hire

ii)

the repair or replacement of the Claimant's vehicle

b)

Copies of all bank, credit card, and saving account statements for a period of 3 months prior to the commencement of hire until the earlier of:

i)

3 months after cessation of hire

ii)

the repair or replacement of the Claimant's vehicle

c)

Evidence of any loan, overdraft or other credit facilities available to the Claimant.

22.

A failure to comply with the paragraph above will result in the Claimant being debarred from asserting impecuniosity at the final hearing.

23.

The Claimant must upload to the Digital Portal a witness statement addressing

a)

the need to hire a replacement vehicle; and

b)

impecuniosity

24.

This statement must be uploaded to the Digital Portal by 4pm on 03 November 2023. A failure to comply with the paragraph above will result in the Claimant being debarred from asserting need or relying on impecuniosity as the case may be at the final hearing, save with permission of the Trial Judge. (Footnote: ¹)”

The Claimant provided her statement on 1^st November 2023. As had been expected, she relied upon need and impecuniosity. This did not go into significant detail and in the experience of this court was in fairly standardised form in relation to incomings and outgoings. At paragraph 18 she said this:

“regarding my level of finances, I could not afford to replace my vehicle until I received the pre-accident value of my vehicle. I confirm I have no surplus income and all my income is taken up with outgoings together with the cost of supporting myself….”

She went on to confirm that her income amounted to £1000 per month as a housekeeper.

Despite the relatively brief explanation, however, the Claimant provided fairly full disclosure amounting to over 150 pages of financial records. These comprised (a) four months of statements from the Nationwide Building Society current account which appeared to be in regular use (30^th May 2022 to 7^th October 2022); (b) statements from the same period for her Wise online account; (c) statements from a Capital One credit card account which was only occasionally used; (d) Uber, Just Eat and Deliveroo account statements which had previously been used by the Claimant for the receipt of earnings when she was a delivery rider/driver, but which were now said to be used by her husband and (e) tax returns for the tax years ending 2021 and 2022. There were other items of disclosure but not relating to financial circumstances.

The Claimant served an updated schedule of loss to comply with the order; this simply replicated the claim that had been made in the original particulars of claim. The Defendant also served an “updated counter schedule” which ran to 28 paragraphs and several pages, although there were only three items of loss addressed. Essentially (and understandably) this amounted to a challenge of the credit hire claim. Need, rate, the period of hire and impecuniosity were not accepted. These fulsome documents are now seen regularly in credit hire claims and comprise the thrust of the Defendant’s argument, identifying the issues which are likely to be raised. Reference was made to some case law and reliance was placed upon the witness evidence already served by the Defendant in relation to BHR which it is said should form the basis of any hire claim in place of the credit hire if the Claimant cannot establish impecuniosity. Further and significantly, the extent of the Claimant’s disclosure was criticised on the premise that the statements provided did not demonstrate proof of how the replacement vehicle was funded; in simple terms they did not show money leaving the account to pay for that vehicle. Paragraph 16 is key:

“The Defendant will submit the Claimant is therefore debarred from raising impecuniosity.”

One particular argument which emerged on the counter schedule arose from the fact that the Claimant appeared to be receiving additional income (other than her £1000 per month wage as a cleaner) from the Uber, Just Eat and Deliveroo account statements. It was further said that there were unexplained substantial sums appearing in the Wise account which did not match the Nationwide account.

Accordingly, the battle lines were being drawn for a potential argument about whether or not the Claimant would be entitled to raise impecuniosity and thus be entitled to the credit hire rates.

The receipt of the counter schedule prompted an exchange of correspondence between the solicitors for the parties. First, there was a response dated 17^th January 2024 from Bond Turner on behalf of the Claimant addressing several of the Defendant’s arguments in relation to potential sources of income. However the writer also dealt with the item at 12 (i) in the counter schedule which referenced large payments (£5500, £2700 and £762.86) out of an account attributed to “Lauriane Braciforte” (i.e. the Claimant) which could not otherwise be identified. An explanation was provided in these terms:

“The Claimant holds an account in Brazil, though she does not have access to this account and access from outside of the country of Brazil itself is not permitted. In order to regain access to a Brazilian account, one must go into the bank branch itself, though the Claimant is currently residing in the U.K and is unable to do so. The Claimant lost access to her account in Brazil in July 2022.”

The mention of the Brazil account was provocative, to say the least, and it elicited a response from Horwich Farrelly for the Defendant on 7^th March 2024:

“Paragraph 21(b) of the Order states that the Claimant must disclose copies of all bank, credit card, and savings account statements.

Paragraph 22 states that a failure to comply with this will result in the Claimant being debarred from asserting impecuniosity at the final hearing.

As your client has confirmed that she had another account in her name (her Brazilian bank account), she has failed to comply with the Order and is therefore debarred from asserting impecuniosity.

It is completely unreasonable for a Claimant to be seen to be transferring money into an account in her name, only to advise that the Defendant is not allowed to see the same. There is no evidence from the bank supporting the Claimant’s position regarding not being able to access the account, and in any event, it raises concerns that the Claimant would transfer payments to an account that she did not have any access to.

Please ensure this letter is included in the Trial Bundle.”

Following this letter, there were no additional documents disclosed by the Claimant’s solicitors, and the matter proceeded to a fast-track trial before DJ Baldwin on 22^nd March 2024.

The only oral evidence before the court was that of the Claimant, Ms Braciforte. She was cross examined at some length by counsel then appearing for the Defendant, Mr Stephens. There was limited questioning in relation to the smaller heads of loss, namely the recovery and storage charges and the pre-accident value, with most of the cross-examination focused on the issue of impecuniosity, and the disclosed financial records. She was asked about several large payments which appeared as debits and credits in the Wise account including those mentioned in the correspondence referred to above. She confirmed that the Brazilian account was no longer accessible to her having been closed down in July 2022, as her solicitors had indicated. She denied that she had any other accounts that had not been disclosed. In relation to the courier payments which were regularly deposited in her account and identifiable from the Uber/Deliveroo documentation, the Claimant asserted that they were her husband’s earnings, even though it had been her courier account and building society account which identified these. The Claimant explained that her husband was not “very good with money”.

There was one particular transaction which appeared to indicate that £5500 had been received as a deposit through the Earthport facility (international banking process) and was identified as being in the Claimant’s name, with a similar transaction (£2700) on the same day seemingly sent to the Claimant. She was asked whether or not this was an example of the Brazilian bank account being utilised. The exchange was as follows:

“Q……..Then I look a little further down and I can see sent money to Lauriane Braciforte and that is £2,700 goes out. But that is out of £5,500 that had come in just before. Of course we do make it clear. I am sure you realise we are looking at this from the bottom to the top. So £5,500 have come in through the Earth Port facility. Now, the Earth Port thing is something you use for international banking transactions, is it not?

A. I don't remember that.

Q. £5,500 is a big sum of money. There is nothing like it in the accounts before or after, really? So where did that come from?

A. Well my husband used to play bat(?). So that probably came from the bat. That amount of money.

Q. It says received from Lauriane Braciforte. That is you, is it not?

A. I don't recall that payment.

Q. It is from you, is it not?

A. Yes, well by the time when it is two years from now, I don't recall the money.

Q. It is not quite three years but even so, is that from the account in Brazil?

A. Probably not.

Q. But you have no recollection of where £5,500 comes?

A. No.

Q. May well be when you think about it. But is there some bill that had to be paid and perhaps you are putting in, I do not know, something in the kitchen, a kitchen extension or?

A. No, I don't remember. I don't recall.

Q. You cannot help us at all about where that sum has come from?

A. No.”

Therefore the Claimant’s response was that she had no knowledge of the source, although it may have been her husband’s winnings. This was not explored any further by counsel, although a little later on, when it is put directly to her that the various credits to her account suggested that a conventional car hire was affordable reference is made once again to the £5500:

“Q. I suggest to you that if you had thought about it, you were in a position to have got yourself a hire car to tide you through the time until you got your compensation from the insurance company. Because on the face of matters, you had £5,500 in from your own account somewhere else earlier in the year. You had on the face of matters, an income coming in, not only from your housekeeping, but it appears from delivery work as well, despite what you say. So what stopped you hiring your own car?

A.

The Deliveroo wasn't my money, it was my husband's account. I mean, it is my account, but was his money. He was the one working, not me.”

During the course of submissions at the end of the evidence Mr Stephens returned to the question of the alleged failure to disclose. Insofar as his instructing solicitors in correspondence had taken a principled stance, indicating that the debar provision in the order of District Judge Jenkinson would be relevant, and the Claimant would not be allowed to rely upon impecuniosity, it was potentially open to counsel to pursue the procedural point if it was evident that there had been a non-compliance with the order, particularly in the absence of any application for relief from sanction by the Claimant. The exchange is relevant, and I set it out in full:

It can be seen all, therefore, that there was no procedural objection relied upon to pursue an absolute debar, and no preliminary issue taken, although the failure to provide all of the financial information was urged upon the judge as a reason for a conclusion that the Claimant had not demonstrated impecuniosity. In other words that she had not discharged the evidential burden. I shall return to the relevance of a procedural objection later in this judgment.

The learned District Judge provided an ex tempore judgement. It runs to some 27 paragraphs over eight pages, and addresses all of the issues, including the credit hire claim and impecuniosity. The judge dealt with the reasonableness of the storage and recovery charges, issue of need, and the length of the hire period, before turning to the question of impecuniosity at paragraph 11, in which he described the evidence as being “not of the most straightforward fashion”. He goes on to say:

“11…….It is right to say that in the bank statements, which we have from the Nationwide and from a bank called Wise, that deposits into such accounts can clearly be shown to have emerged from other sources, i.e. other than the two bank accounts which she has disclosed.”

This is clearly referring to the payments of £5500 and £2700. Accordingly the judge has acknowledged a potential difficulty for the Claimant and he then turns to address what he understands to be the Defendant’s position on this as represented by counsel in the next paragraph:

The learned judge’s belief that the Defendant was seeking that the Claimant should be debarred from arguing impecuniosity (i.e. the procedural objection) is not apparent from the transcript, and it seems to me is a misunderstanding of the position which was being adopted by Mr Stephens. It is for this reason that I set out the relevant exchange between the judge and Mr Stephens at paragraph 20 above. However, the judge went on to consider the procedural aspect on a hypothetical basis in the next few paragraphs, having regarded Mr Stephens’ submissions as “unattractive”. In relation to what he interpreted as an application to debar he continued in the balance of paragraph 13:

“……It arrived very late in the day towards the end of his submissions. If it was going to be placed before the court with any degree of force, I would have expected it, frankly, not only at the forefront of the Defendant's case today but also to have been flagged up in advance of today to afford the Claimant a fair opportunity to apply for relief from sanction.

14.

I am satisfied on the Claimant's evidence that she currently and at any material time during the disclosure process had no ability to access the account in Brazil, on the basis that she had gone into debt with the bank, as she told me, and having then managed to clear that debt, was faced with the bank peremptorily closing the account and thereby she lost her access to it online. Therefore, although there is arguably a technical breach of the order, I agree with Mr Eastwood that ultimately it boils down to a failure to mention the Brazilian account in the section of the disclosure list, which is in relation to documents which she no longer had control of.

15.

To the extent that any formal application for relief from sanction ought to have been made, if the Claimant had been aware that this point was to be raised, prior to very late on in today's proceedings, I have little doubt that relief would have been granted applying the overriding objective rule 3.9 and the Denton test. Therefore I refuse to regard her as being debarred from raising impecuniosity today.

Thus the learned District Judge was saying that if the matter had been dealt with on a procedural basis, with an application for relief from sanction, he would have granted it.

In paragraph 16 reference is made again to the accounts and the various payments that have been identified, and the learned judge appears to accept that her current account was used by her husband for his income, and that she would from time to time look after his money. It is also accepted that another individual, Leandra Lopez, a Deliveroo driver, occasionally used the account. His assessment of the issue of impecuniosity appears in the next two paragraphs:

“17.

……..what is most material here is the level of the accounts at the time when this accident occurred, and also the persuasive argument from Mr Eastwood that in evaluating impecuniosity, it is not just a matter of saying, to juggle these figures here and adjust your lifestyle a little bit there, then you could have afforded to pay a daily rate in terms of hire, or even a weekly rate in terms of a replacement hire. But it is a much more holistic view that needs to be taken in terms not only of an ability to pay for hire upfront, but also with a view to replacing the vehicle out of one's own funds, because one is either impecunious in the round or not impecunious in the round, in my judgment.”

18.

……………..The level of money in her accounts at the material times here, in my judgment, when combined with her evidence as to her income and her occupation, which I accept, and her outgoings which gradually reduce that basic income over a month, together with her son who is a growing lad, lead me to conclude that the proper inference to be drawn in this case is that the Claimant was impecunious at all material times.

The judge’s conclusion, paragraph 19, is that the BHR evidence is no longer applicable and that the Claimant is entitled to recover the credit hire rates. However, he goes on to deal with issues such as the applicability of VAT, and the reasonableness of the period, identifying some delay which should not be visited at the Defendant’s door. This served to reduce the overall award in respect of the credit hire claim to £15,175.80. There is no appeal in relation to those aspects.

There are five separate grounds relied upon, and the permission granted by HHJ Gregory was not restricted. Essentially, they can be summarised as follows:

This is what I have referred to above, (and in the course of the oral argument of counsel), as the procedural challenge. It is closely linked to the second ground.

The third ground represented a substantive challenge to the judge’s finding of impecuniosity on the evidence and the documents.

Grounds four and five again touch upon the procedural aspect in respect of the way in which the judge dealt with the non-disclosure point.

The court has received very full written submissions from both counsel for which it is grateful, supplemented by the skilful oral argument in court. I do not intend to set out every aspect of those submissions, but will deal with the headline points.

Mr Bailey did not appear as counsel at the hearing before DJ Baldwin. His starting point in respect of the prescribed approach to issues of impecuniosity was paragraph 6.3 and 6.4 of Practice Direction 16 which set out the requirements in a Claimant’s pleaded case where the claim included the hire of a replacement motor vehicle. These were (6.3):

“(1)

the need for the replacement vehicle at the relevant time;

(2)

the period of hire claimed (providing the start and end of the period);

(3)

the rate of hire claimed;

(4)

the reasonableness of the period and rate of hire; and

(5)

if the claim relates to credit hire, whether the Claimant could afford to pay in advance to hire a replacement car, and, if not, why not (“impecuniosity”).

He submitted that the obligation was further defined in paragraph 6.4:

“In paragraph 6.3—

(1)

“relevant time” means at the start of the hire and throughout the period of hire;

(2)

the obligation to state the matters in paragraph (3) includes an obligation to state relevant facts.”

The practice direction, he submitted, had the same effect as an unless order. Reliance was placed upon the decision of the Court of Appeal in Diriye v Bojaj [2020] EWCA Civ 1400, and in particular the judgment of Coulson LJ, who was highly critical of credit hire claimants who advanced “rubbishy” cases from the pleadings through to the evidence adduced at trial where there was little more than a one line assertion of impecuniosity. What the Claimant should have done in this case, is to state all the relevant facts which included the particularisation of her outgoings, but also to identify every one of her bank accounts and the funds that were available to her, including the Brazilian bank account.

Mr Bailey accepted that his challenge to the decision of the learned judge was based upon a procedural aspect, as well as a contention that in his substantive decision the judge’s conclusion was contrary to the weight of the evidence. In respect of the procedural aspect, (principally ground one) the question of compliance with the directions order (and the practice direction) was a binary one, and the absence of any information about the Brazilian account, quite apart from the fact that nothing had been disclosed, meant that the debarring provision had to apply. In simple terms the Claimant had not provided what she was required to provide. The reference by her solicitors in the correspondence (referred to above) was inadequate to address this shortcoming, and the assertion that access was unavailable was manifestly untrue. Mr Bailey submitted that the duty of disclosure extended to documents which had formerly been in her control. The absence of this material, and indeed any reference to it in the disclosure list gave the learned judge no alternative other than to conclude that the Claimant was debarred from asserting impecuniosity, in the absence of an application for relief from sanction for which there were no good grounds. In short, the Claimant had not been able to demonstrate the provenance of three substantial payments, and the court was left with the position where the Claimant’s documents established these sums coming in and out of her account probably from an account overseas which was not included in her evidence. There were several missing pieces to the puzzle.

It was submitted that the absence of the Brazilian bank account details, and indeed the relevant tax return for the period which might have identified other sources of income, meant not only that the Claimant should not have been allowed to argue impecuniosity, but also about the judge was unable to make an assessment of impecuniosity without such full financial disclosure. Reliance was placed upon the decisions of Knowles J in Haider v DSM Demolition Ltd [2019] EWHC 2712 in which he held that an assessment of the issue of impecuniosity could only be taken where a Claimant gave full financial disclosure.

Insofar as the learned judge identified the lack of any Part 18 request for further information by Defendant, this effectively reversed the burden, placing an onus on the Defendant to clarify a case of impecuniosity. He made reference to a recent decision in the High Court by Cotter J (Steven Probyn v Sahr Noordin [2023] EWHC 3314 (KB)), which was concerned with an appeal from the first instance decision of a recorder in a credit hire case where impecuniosity was relied upon. The appeal judge held that was not open to the recorder to allow a case to proceed where there had been a failure to comply with the disclosure of evidence relating to impecuniosity, simply on the basis that the Claimant’s case would emerge during the course of his cross-examination. This, said Mr Bailey, was reflective of the approach taken by District Judge Baldwin in the present case.

In relation to ground five of the appeal notice, Mr Bailey submitted that insufficient evidence of the steps taken by the Claimant’s solicitors in respect of the obtaining of the Brazilian bank account details precluded the learned judge from finding that relief was appropriate in respect of a hypothetical relief from sanction application.

In the circumstances, the court was wrong to award a credit hire rate, and should have identified the basic hire rate from the evidence of Mr Haynes (Europcar) which would have reduced the total sum in respect of the hiring charges to less than £2500.

Mr Eastwood of counsel, who did appear before the court at first instance, provided an updated skeleton argument which responded to the more recent skeleton from the Defendant and the amended appeal bundle, but maintained some preliminary observations in respect of a failure on the part of the Defendant on this appeal to consider the submissions and oral evidence, focusing substantially on the conclusions of the district judge. In particular he draws the attention of this court to the fact that an application for relief from sanction was made by him in the face of the court when the issue of a failure to comply was first raised. However the Claimant had never accepted that there had been non-compliance with either the order or the practice direction.

His overarching submission was that the principal grounds of appeal involved a challenge to findings of fact which on the basis of established jurisprudence should be rarely interfered with by an appellate court in the absence of any compelling reason, or where they were plainly wrong. Here the judge had heard evidence, and had had an opportunity to assess the Claimant and all the material which was relied upon. Similarly, a broad discretion existed in relation to those parts of the decision which were procedural/case management aspects, particularly where the first instance court had to consider whether there had been a technical failure of compliance where an automatic sanction was in place which may have deprived, unfairly, a genuinely impecunious claimant from advancing a credit hire claim.

In relation to the challenge to the court’s acceptance that the Brazilian bank account was inaccessible in terms of the obligation of disclosure, Mr Eastwood reminded this court that rather than the judge’s conclusion being based upon the solicitors’ assertion, he made it clear in his judgment that he was relying upon the Claimant’s evidence. Further, the various transactions relied upon by the Defendant were not the subject of any cross-examination by the Defendant’s counsel at the time. The appeal challenge simply did not cross the threshold of being “plainly wrong” or one which no reasonable judge could have arrived at.

It was submitted that if an automatic debar had applied, the approach taken by counsel at first instance did not rely upon this, so much as the absence of the Brazilian bank account details rendering a finding of impecuniosity untenable. (Footnote: ⁴) Insofar as there may have been a technical failure to comply with the disclosure obligation by including the existence of an inaccessible Brazilian bank account in the appropriate section in the disclosure list, the Claimant had not failed materially in respect of her disclosure obligations, and her compliance was not “illusory”. He relied upon the decision of Hamlen J in Lakatamia v Shipping Co. Ltd v Nobu Su [2014] EWHC 275 (Comm) and Smith J in Euro-Asian Oil SA v Abilo (UK) Ltd [2015] EWHC 1741 (Comm).

It was relevant, said Mr Eastwood, that the learned district judge found that the Claimant could not have access to the Brazilian bank account at the material time, which was not of July 2022 but the time of the disclosure obligation.

Counsel addressed the “hypothetical” relief from sanction application, assuming the sanction was engaged. It was submitted that on the application of the relevant criteria this was not a significant or serious breach; further, if it had been, good reasons had been established by virtue of the fact that the Claimant had no ability to provide access to the Brazilian bank account either digitally or in physical form. In any event, it would have been unduly harsh to have expected compliance with directions which could not be achieved, and a party should not be put in a position by directions in which he or she was bound to fail. This was relevant to “all the circumstances”. Mr Eastwood relied upon Marcan Shipping v Kefelas [2007] 1 WLR 1864 and the judgment of Moore Bick LJ. Also relevant, he submitted, was the Defendant’s approach, failing to pursue the question of the debar until the trial itself. It was to be noted that District Judge Baldwin found the Defendant’s approach to be unattractive and potentially unfair if inadequate notice had been given prior to the trial. This amounted to litigation by ambush.

In respect of the learned judge’s substantive finding of impecuniosity, Mr Eastwood reminded the court of the “reasonable sacrifices” approach which was advocated by the House of Lords in the well-known case of Lagden v O’Connor [2003] 3 WLR 1571 and confirmed more recently by Turner J in Irving v Morgan Sindell [2018] EWHC. It was clear, he submitted, that the learned judge undertook the appropriate evaluative exercise on the basis of the evidence available, noting in particular his conclusion that the Claimant had been invited to spend almost the entirety of her monthly income on replacing a vehicle at her own cost.

It is to be noted at the outset that although there are numerous prescriptive requirements in relation to claims for the recovery of credit hire charges, and a large body of case law has evolved dealing with those requirements, in particular the issue of impecuniosity and what is required to prove it, in fact the source within the procedural rules and practice directions is limited to the single PD contained within paragraph 6 of 16 PD.6 set out above. This only makes provision for what is required in the pleading, and in fact is not onerous. The reference to “must state” in the preamble to paragraph 6.3, of course carries with it an implied sanction because of its mandatory nature, but although the suggestion is made in the present case (paragraph 13 of Mr Bailey’s skeleton argument) that there was a failure to comply with the pleading requirement in the practice direction and in particular the “statement of relevant facts” in paragraph 6.4 (2) this was not pursued with any great enthusiasm by the Defendant. Essentially, this is not a pleading challenge but a disclosure challenge based upon the prescriptive order that was made by DJ Jenkinson.

In any event, insofar as Mr Bailey retained a criticism in terms of the pleading, I agree with Mr Eastwood that the proper construction of the present iteration of the Practice Direction paragraphs 6.3 and 6.4 is that the “obligation to state relevant facts” specified in 6.4 (2) refers back only to 6.3 (3) which deals with the rate of hire, out of the five mandatory pleading requirements, and not to the other four, being need, period, reasonableness and impecuniosity. Whether this is a drafting error or not is a matter for the rules committee, although it does seem to me that imposing a pleading requirement with relevant facts which included lists of outgoings, fund availability, bank statement references etc would make the particulars of claim somewhat more cumbersome than was intended. This does not detract from the importance of the observation of Coulson LJ in Diriye which appeared to criticise Claimants who not only advanced poorly pleaded claims with “bald statements” but continued this approach at all stages of the litigation, including disclosure of material in support, and the evidence in court in respect of impecuniosity in “rubbishy cases”.

What is clearly important, in credit hire cases, is compliance with the orders that are made by way of directions for trial, and in particular those directions which deal with disclosure, schedules of loss and witness statements. The present directions (here provided by DJ Jenkinson) are almost universally applied in cases where impecuniosity is alleged, and although they are pre-populated on a digital directions form there is scope for additional bespoke directions to be given. Nevertheless they are comprehensive, and in my experience are based upon many years of development in county courts up and down the country by district judges who have been providing standard directions over that period in credit hire claims. It is clear what material is needed, and a Claimant relying on impecuniosity should be left in no doubt as to his or her obligations in terms of disclosure and the provision of a witness statement.

However, there is one notable feature of the credit hire standard direction which was used here. The disclosure obligation in paragraph 21 is followed by paragraph 22 which identifies the sanction for “failure to comply with the paragraph above”, namely, being debarred from asserting impecuniosity at the trial. Paragraph 23 deals with the requirement to upload the witness statement which addresses need and impecuniosity and thiscontains a similar sanction, but unlike paragraph 22, in paragraph 24 the debarring order in relation to the failure to upload the statement is subject to “the permission of the trial judge”. Whilst I have no doubt that this is intended to reflect CPR 32.10 dealing with witness statements, and where the sanction is that a party who does not serve such a statement cannot call the witness “unless the court gives permission”, it begs the question as to whether there should be a difference of approach between failure in relation to disclosure (automatic debarring) and failure in relation to the witness statement, whether this be in terms of content or the actual uploading to the portal, (reliance only with the permission of the judge). In both respects there are sanctions, although the order made by the court would appear to suggest that the consequences in respect of the former are somewhat more drastic. In my judgment, as will become apparent below, there should be no difference in approach and the judge retains the same discretion to deal with relief from sanction in relation to disclosure or witness evidence where there has been non-compliance in appropriate cases.

In the light of these observations, I turn to deal with the five separate grounds of challenge of the decision of District Judge Baldwin.

In respect of the first ground of challenge, which is essentially procedural, it is correct that there existed at the time of the occurrence of the credit hire charges (July/August 2022) an overseas bank account. There was no material referencing this included in the disclosure list which was provided over a year later. It is also correct that even if this was no longer accessible at the time the disclosure obligation arose, its previous existence should still have been identified in that part of the disclosure list which specified material which had been in the control of the Claimant but was no longer. Thus there was a breach of the order. It has been referred to as a technical breach. It is not a term which I favour when considering whether or not there has been compliance, because a breach is a breach, although the seriousness of the breach will always be considered at the first stage of the Denton test on any application for relief from sanction.

However, it seems to me that a distinction must be drawn between those cases where there has been a wholesale or obvious failure to comply with a direction, and those where, as here, there were several accounts, both debit and credit, in existence, and where a considerable amount of material had been disclosed. It is open to a judge in a credit hire case to undertake an evaluative assessment as to whether there has been compliance with the directions order, and much will depend upon the extent to which the “missing” material impacts on the judge’s ability to make the assessment as to whether a Claimant was impecunious. The purpose of these directions should not be overlooked; there remains an evidential burden on a Claimant who is seeking to rely upon impecuniosity and a Defendant is entitled to know how the case is put, so that his position can be protected with appropriate offers of settlement or lines of challenge. If a Claimant discloses only a bare current account when it is obvious that there are complex payments in and out from other sources, including settlement of credit card accounts which have not been identified, that would be an example of significant non-compliance, as of course would be the total failure to disclose. A Claimant who attends court with little or no material to support a claim of impecuniosity cannot expect to be allowed to pursue such a claim on the basis of being debarred, or to succeed evidentially if the court allows impecuniosity to be argued.

That is not the position, however, that was faced by District Judge Baldwin in the present case. There were two features of note. First, despite his judgment appearing to suggest to the contrary, as Mr Eastwood has argued there was no formal application on a procedural basis to debar the Claimant from arguing that she was impecunious at the outset of the trial, or even during exchanges with counsel. Further, although there had been rumblings and threats in correspondence that there had been inadequate disclosure of the Brazilian bank account, there had been no moves by the Defendant solicitors to seek a debarring order prior to the trial, effectively to strike out the claim for credit hire charges. Second, paragraph 14 of the judgment makes it clear that the learned judge did in fact undertake an evaluation of the alleged breach and came to the conclusion that it was no more than “technical”. This was within his reasonable case management discretion, and whilst the Defendant may have been unhappy with the outcome, unless it can be established that the judge exceeded the ambit of his discretion or in some way acted unlawfully, an appellate court should be extremely reluctant to interfere with such a case management decision.

In any event, I agree with the learned judge, and would have come to the same conclusion. It is clear that he accepted the evidence of the Claimant in respect of the accessibility to the account and concluded that at the time of the disclosure obligation she would not have been able to provide any material evidencing that account. His evaluation of the evidence, furthermore, cannot be ignored on this procedural challenge, and it is to be noted that he accepted the Claimant’s evidence which did not concede that any of the large payments had anything to do with the Brazilian account, and a contrary case was not put to the Claimant in cross examination.

Accordingly, in my judgment the learned judge was not wrong in refusing to debar the Claimant from arguing impecuniosity.

The second ground of challenge, which flows from the first and is essentially procedural, asserts that the judge was wrong to accept the explanation provided in correspondence by the Claimant’s solicitors that the account was inaccessible. There are also two points to note here. The first is that the exchange between the solicitors was clearly not the basis upon which the learned judge arrived at his conclusion about accessibility. He heard evidence from the Claimant which he accepted, and it is not suggested that he was wrong so to do. The second is that despite any belief of the Claimant’s solicitors as to the provenance of the large sums, the Claimant’s evidence did not indicate that they had anything to do with the Brazilian bank account. In my judgment the decision of the learned judge to accept the evidence of inaccessibility cannot be impugned, even if a different fact finding tribunal might have rejected such an explanation, and this ground of challenge fails.

In relation to the substantive challenge as to the conclusion on impecuniosity, (ground three) as I have indicated above there is a clear overlap with the procedural challenge, because the learned judge’s approach has obviously been qualified by his assessment of the Claimant’s compliance with her disclosure obligations, and the significance of the Brazilian bank account. The second limb of this challenge refers to the absence of any recent tax return (tax year ending 2023) which might have shed some light on the income sources for the Claimant over the relevant year, including the period when she was incurring the credit hire charges. This aspect was not pursued with any vigour at either first instance or on this appeal. The absence of a tax return is not mentioned by the learned judge in his judgement, although there is some cross examination by the Claimant in the trial transcript. However, it would only be in circumstances where unexplained income was identified that the tax return might have assumed some relevance. It is to be noted that the judge found (in paragraph 16 of his judgment) that the receipts from delivery work which were identified in the documents were not those relating to the Claimant, but to her husband, and another delivery driver. In these circumstances, the tax return had no relevance.

In any event, the key question is one which was addressed by the learned judge in paragraphs 17 and 18 of his judgment. It is not suggested that his approach was incorrect, and it seems to me that having accepted the veracity of the Claimant, a conclusion of impecuniosity was entirely within the reasonable range of conclusions open to him. Of course he could have taken a different view if he had not accepted the explanation provided by the Claimant in relation to the Brazilian bank account accessibility, or the substantial payments, but he was in the best position to make that assessment of the evidence having the Claimant before him in the virtual witness box. Therefore, in my judgment, this challenge also fails.

I can deal with the fourth and fifth grounds relatively briefly. It is correct that in the exchanges with counsel when the issue of compliance with the disclosure order and potential debarring arose, the learned Judge made reference to the availability of a part 18 request for further information. However, he does not repeat this suggestion within his judgment. It is clear to me that he is not informed in his approach by relying upon any burden which may have been on the Defendant to set out its stall and to object on the basis of non-compliance prior to the trial. This, I agree, would have been an error of approach. In paragraph 14 it is made clear that this conclusion is based upon an assessment of the breach being of little significance, and in particular his acceptance of the Claimant’s evidence that the account was not accessible.

In respect of the hypothetical relief from sanction application, this court was reminded by Mr Eastwood of counsel that in fact there had been an application in the face of the court by him when counsel for the Defendant was relying upon the non-compliance, even though this was not accepted. It is not uncommon for a court which identifies a potential breach in relation to previous directions, and faced with an application for relief even if not based upon a formal notice, to engage in a Denton exercise. Although District Judge Baldwin makes reference to this in paragraph 15, he does not in fact go through the three stage test, but simply indicates that if it had been considered, he had no doubt that relief would have been granted. This may have arisen from a misunderstanding of the Claimant’s position advanced by counsel, if he had overlooked the informal application for relief in the face of the court. In this respect it would have been preferable if the learned judge had considered the three separate elements. It is arguable that by referring to the breach as “technical” the matter would not have proceeded beyond the first stage.

Nevertheless, I am not satisfied that this amounts to a procedural failure on the part of the learned judge who was exercising a case management decision and dealing with the question of compliance with a previous order in a pragmatic manner. The learned judge’s reasoning for allowing the issue of impecuniosity to be pursued, and accepting the evidence of the Claimant is clearly set out. Accordingly there is no basis for the challenge that this conclusion was not open to him, and I reject grounds four and five in the appeal notice.

In the circumstances the Defendant’s appeal is dismissed. The decision of District Judge Baldwin stands, and the judgment sum is affirmed.

Before finishing this judgment, as I have indicated, some guidance may be helpful if the situation in the present case arises again. It seems to me that this is entirely consistent with the indications provided by the Court of Appeal in Diriye.

I now invite the parties to agree the terms of any consequential orders.