Pickard & Anor v Roberts & Anor

This is an appeal against the order of District Judge Hay made on 28th July 2015 (the Hay order) whereby she set aside the order of Deputy District Judge Paul dated 26th February 2015 (the Paul order). The Paul order was made at the culmination of proceedings brought in December 2012 by the Appellant trustees in bankruptcy and concerned property in the name of the bankrupt (the first Respondent) and his spouse, or former spouse (the second Respondent, Mrs Roberts). The first respondent did not attend the hearing of the appeal.

The Paul order was made after a hearing on 26 February 2015 at which Mrs Roberts did not attend. In her judgment setting aside the Paul order, DJ Hay said she was not satisfied that there was a good reason for Mrs Roberts not attending this hearing. However, she was persuaded that Mrs Roberts had a real prospect of success at the trial and she thought that, potentially, there would be a miscarriage of justice if the Paul order were not set aside. DJ Hay set aside the Paul order pursuant to CPR 3.9 rather than 39.3 because, in the words of the judge, “[Mrs Roberts] has not satisfied me that she had a good reason for not attending the trial”.

The issues before me on this appeal are whether or not the hearing before DDJ Paul on 26th February 2015 was a trial within CPR 39.3 and, if it was, did Mrs Roberts have a good reason for not attending and, if not, what are the consequences, and if it was not a trial what, if any, different considerations apply.

On 5th December 2012 the trustees in bankruptcy made an application to the Croydon County Court for an order in the follow terms:

"1.

A declaration that the freehold property (hereinafter called the ‘Property’) known as and situated at 102 Kingsway, West Wickham, BR4 9JQ … is held by the Applicants and the Second Respondent in equal shares.

2.

Such other declaration as may be appropriate as to the legal and beneficial interests in the Property.

3.

An order that the Property shall vest in the Applicants for the purpose of selling under section 44 of the Trustee Act 1925.

4.

An order pursuant to section 14 on the Trusts of Land and the Appointment of Trustees Act 1996 that the Property may be sold and that the Applicants may have conduct of sale.

5.

An order that the rights of occupation (if any) of the Respondents and any other occupiers in respect of the Property be terminated pursuant to sections 335(a) [sic] and/or section 226 (which should be 336) and/or section 337 of the Insolvency Act 1986 and/or section 33 of the Family Law Act 1996 and the respondents and any other occupiers do give vacant possession of the Property to the Applicants within 28 days from the date of this order to enable the Property to be sold to realise the bankrupt's beneficial interest.

6.

In the alternative to the relief sought in paragraphs (1) to (5) above, in the event of the mortgage lender or any other interested party obtaining possession (or an order for possession and sale) a declaration that the Applicants are entitled to net sale proceeds of the Property (or such other proportion of the net sale proceeds as defined by the Court).

7.

An order for costs against the Second Respondent.

8.

Liberty to apply."

The Application Notice is headed ‘In the Matter of the Insolvency Act 1986’ and follows Form 7.1A of the Insolvency Service forms. It refers to Rule 7.3 of the Insolvency Rules 1986 and states that the application is in insolvency proceedings already before the court under reference number 93 of 2011. It was the application set out in this Notice which was determined on 26th February 2015.

On 26th March 2013 there was a hearing in this case of an application to discontinue an application to annul, which had been brought by Mrs Roberts, apparently on behalf of Mr Roberts, and for directions for evidence in the application for possession and sale. The matter was listed for further review and directions on 25 June 2013.

The appellant relied on the annulment aspect of this hearing as an example of Mrs Roberts bringing proceedings and not following through with them. My attention was also drawn to an application for an adjournment she made on 18 December 2012 which was dismissed and found by the court to be totally without merit.

Further directions were made on 25 June 2013 and the matter adjourned until 20 August when it was further adjourned until 3 December 2013 when further directions were made including directions for evidence, disclosure, setting down for a final hearing before a district judge on the first available day after 21st February 2014 with a time estimate of one day, hearing bundles and exchange of skeletons. It also provided by paragraph 5 that:

"With the exception of the Applicants, unless otherwise ordered on any application to be issued before 14/02/2014, all parties shall attend for cross examination at the final hearing."

On 31st December 2013 Mrs Roberts made an application to challenge the directions given on 13 December for reasons relating to other litigation with which she appears to have been involved. The relevant fee for that application was not paid and Mrs Roberts did not reply to numerous reminders from the court. Her application was struck out by an order of 24 July 2014. Meanwhile, on 20 February 2014 the possession application was adjourned until another directions hearing on 24 July 2104 and, either at that hearing or some other, a final hearing date was fixed for 30 September 2014.

Sometime before 16 June 2014 Mrs Roberts issued a Part 8 claim containing an application under section 14 of TOLATA, with the first Respondent herein as Defendant. It was supported by a witness statement and came before the court on 16 June 2014. By an order of that date it was provided that the TOLATA claim be heard at the same time as the application for possession (case 93 of 2011), the trustees in bankruptcy were given permission to intervene, various other procedural orders were made, the 30 September 2014 hearing of the possession action was vacated and the matter was restored to the first open date with a time estimate of two days, both matters to be heard together.

Mrs Roberts did not comply with the 16 June 2014 order and the trustees brought the matter back before the court on 24 July 2014. Mrs Roberts did not attend the hearing. DJ Bishop struck out the 31 December 2013 application (see §9 above (the reference is mis-dated as 2014)), struck out the TOLATA claim as an abuse of process, provided that the application for possession be listed for hearing with a time estimate of 2 days, provided that no further evidence be filed without permission of the court and that an application be made to him for fixing a date. On that same day DJ Bishop ordered that the trustee’s application for possession and sale be listed on 26 February 2015.

On 15th August 2014 Mrs Roberts made an application to adjourn the 26th February hearing. The application got lost somewhere and was never acted upon by the court or, indeed, by anybody else. The matter proceeded to the 26^th February 2015 and the Paul order.

Turning back to the issues and whether or not what took place on 26th February was a "trial" within the meaning of 39.3, that rule does not itself clarify what is meant by the word. Mr. Gale submits that the meaning of the word "trial" depends upon the context and in that respect he said he was supported by the notes in the White Book. The relevance of the hearing being a trial appears from the words of CPR 39.3 which are as follows:

“Failure to attend the trial

39.3

- (1) The court may proceed with a trial in the absence of a party but –

(a)

if no party attends the trial, it may strike out(GL) the whole of the proceedings;

(b)

if the claimant does not attend, it may strike out his claim and any defence to counterclaim; and

(c)

if a defendant does not attend, it may strike out his defence or counterclaim (or both).

(2)

Where the court strikes out proceedings, or any part of them, under this rule, it may subsequently restore the proceedings, or that part.

(3)

Where a party does not attend and the court gives judgment or makes an order against him, the party who failed to attend may apply for the judgment or order to be set aside.

(4)

An application under paragraph (2) or paragraph (3) must be supported by evidence.

(5)

Where an application is made under paragraph (2) or (3) by a party who failed to attend the trial, the court may grant the application only if the applicant –

(a)

acted promptly when he found out that the court had exercised its power to strike out or to enter judgment or make an order against him;

(b)

had a good reason for not attending the trial; and

(c)

has a reasonable prospect of success at the trial."

The question of what is or what is not a trial came for consideration by the Court of Appeal in Forcelux Ltd v Binnie [2009] EWCA Civ. 854. In paragraphs 18 to 49 of that judgment Warren J goes through various matters relating to what is and what is not a trial and concludes that the first hearing of a possession order under CPR 55, whatever it is, is not a trial. One of the reasons he gives is that first hearings sometimes resolve the dispute between the parties and sometimes do not and that you cannot tell beforehand what is going to happen. Therefore, it is not appropriate to consider that first hearing to be in the nature of a trial, and he gives other reasons as well.

Whether a matter is or is not a trial governs or may govern the test which applies when one of the parties does not turn up, as is what happened here. If the matter is a trial the position is set out in 39.3(5) and there is authority to the effect that unless a party overcomes all three hurdles of that rule, then there is no jurisdiction to set aside the order made (Bank of Scotland v Pereira [2011] EWHC Civ 241, [24] – [26], but see paragraph 56 below).

The significance in the present context is that DJ Hay concluded that there was no good reason for Mrs Roberts not attending what she called the trial (see paragraph 2 above). However, in respect of this question there has been an application to adduce further evidence. That application was not resisted and in reaching my conclusions on this matter I have taken into account Mrs Roberts’ further evidence.

The position with respect to hearings such as possession hearings under CPR Pt 55 is dealt with by, in particular, Arden LJ in Hackney LCB v Findlay [2011] EWCH Civ. 8. She refers to the Forcelux case and says this:

"1.

The substantial question for decision on this appeal is whether the matters listed in CPR 39.3(5) (which I set out in paragraph 3 of this judgment) are highly relevant factors to be taken into account when the court is asked by a tenant to exercise its discretion to set aside a possession order made in his absence. This question arises out of the recent decision of this court in Forcelux Limited v Binnie [2009] EWCA Civ 854. In that case, this court held that, where the court makes a possession order in the absence of the tenant, following forfeiture of a lease for non-payment of the ground rent, and the tenant subsequently applies to have that order set aside, the court has a wide discretion under CPR 3.1(2)(m) to set aside the possession order 'if, in its discretion, it considers that the interests of justice demands it' ([52] per Warren J, giving the judgment of this court). The court considered that CPR 39.3, that is, the rule dealing with applications to set aside judgments obtained at trial in the absence of a party, did not apply because the hearing at which a possession order is made is not a 'trial' for the purposes of the relevant rules. In the present case, we are concerned not with a landlord and tenant in the private sector but a local authority and secure tenant. We are told that prior to Forcelux the courts in practice applied CPR 39.3. This would require among other matters that the tenant should provide a good explanation for failing to attend the hearing. The more restricted approach in CPR 39.3 is, it is said, important for the efficient management of social housing.

2.

The relevant provisions of CPR 3 are as follows:

'3.1 The court's general powers of management

(1)

The list of powers in this rule is in addition to any powers given to the court by any other rule or practice direction or by any other enactment or any powers it may otherwise have.

(2)

Except where these Rules provide otherwise, the court may.

...

(m)

take any other step or make any other order for the purpose of managing the case and furthering the overriding objective.

(7)

A power of the court under these Rules to make an order includes a power to vary or revoke the order.

...

3.9

Relief from sanctions

(1)

On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order the court will consider all the circumstances including -

(a)

the interests of the administration of justice;

(b)

whether the application for relief has been made promptly;

(c)

whether the failure to comply was intentional;

(d)

whether there is a good explanation for the failure;

(e)

the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant pre-action protocol;

(f)

whether the failure to comply was caused by the party or his legal representative;

(g)

whether the trial date or the likely trial date can still be met if relief is granted;

(h)

the effect which the failure to comply had on each party; and

(i)

the effect which the granting of relief would have on each party.

(2)

An application for relief must be supported by evidence.

3.

CPR 39.3 provides:

'39.3 Failure to attend the trial

(1)

The court may proceed with a trial in the absence of a party ...

(3)

Where a party does not attend and the court gives judgment or makes an order against him, the party who failed to attend may apply for the judgment or order to be set aside.

(4)

An application under paragraph (2) or paragraph (3) must be supported by evidence.

(5)

Where an application is made under paragraph (2) or (3) by a party who failed to attend the trial, the court may grant the application only if the applicant -

(a)

acted promptly when he found out that the court had exercised its power to strike out or to enter judgment or make an order against him;

(b)

had a good reason for not attending the trial; and

(c)

has a reasonable prospect of success at the trial.'

...

24.

Thus, in my judgment, in the absence of some unusual and highly compelling factor as in Forcelux, a court that is asked to set aside a possession order under CPR 3.1 should in general apply the requirements of CPR 39.3(5) by analogy. This is in addition to, and not in derogation of, applying CPR 3.9 by analogy, as this court did in Forcelux, as that provision requires the court to have regard to all the circumstances in any event. However, in my judgment, for the reasons given above, in the absence of the unusual and compelling circumstances of a case such as Forcelux, this court should give precedence to the provisions of CPR 39.3(5) above those enumerated in CPR 3.9. Even that is subject to a qualification in the case of a secure tenant. Parliament clearly contemplated in s 85(2) of the Housing Act 1985 that the tenant should have the chance there described of persuading a court to modify an outright possession order. It follows that the requirements of CPR 39.3(5) need not be applied in such a case with the same rigour as in the case of a final order that does not have this characteristic. (It is only fair to Mr Findlay to make the point that DJ Manners expressly had the possibility of a subsequent application by him in mind when she made her order). Accordingly, the court should not decline to exercise its power to set aside a possession order if in consequence the statutory purpose in s 85(2) would be defeated. Moreover, in my judgment the court can have regard to the wider social context in which these cases come before the courts. Accordingly, in deciding whether the tenant has a good reason for non-attendance the court can in my judgment have regard to the provisions of the Rent Arrears Pre-Action Protocol and to best practice among social landlords. It may conclude that, while in the ordinary case a defendant might have had no proper excuse for not attending a court hearing at which the possession order was made, given best practice of social landlords and the provisions of that protocol, a tenant is in fact able to provide an appropriate explanation."

Paragraph 24 makes the point that in the case of possession orders the requirements of CPR rule 39.3(5) should in general apply by analogy absent some unusual and highly compelling factors such as were present in the Forcelux case.

The test might be different, and I say at this stage only might be, if the application were a Part 23 application. On such an application, in Riverpath Properties Ltd v. Brammall 2000 WL 463 Neuberger J (as he then was) said the discretion to set aside is very flexible. The case was referred to more recently by Mr. Halpern QC in Yeganeh v Freese and others [2015] EWHC 2032 (Ch) as follows:

"26.

CPR rule 23.11 gives the court power to re-list any application which has proceeded in the absence of a party. Ms. Kyriakides referred me to Riverpath Properties v Bramall [2000] WL 463, where Neuberger J said:

'It would be a very rare case where the court exercised this jurisdiction to set aside an order that had been made, where it was satisfied that there was no real prospect of any new order being different from that which it originally made.'

27.

She also referred me to MA Lloyd & Sons Ltd v PPC International Ltd [2014] 2 Costs LR 256, where Turner J said at [14]:

'Of course, the court has power under CPR 23.11 to re-list an application where it has previously proceeded in the absence of one of the parties but this is a power which is likely to be exercised sparingly in the light of the specific regard with the court must now have for the need, where reasonably practicable, to allot to any given case an appropriate share of the court's resources.'

Although that decision pre-dated Denton v TH White Ltd (Practice Note) [2014] 1 WLR 3926 and must therefore be read subject to the latter cased, I am satisfied that the general approach set out by Turner J remains good law.

28.

I therefore approach the application of the power under rule 23.11 on the following basis:

28.1

The power is to be exercised sparingly and having regard to the Overriding Objective; and

28.2

The merits will be an important factor if either party can satisfy the test for summary judgment."

I was treated to a number of submissions as to what matters are relevant for the purpose of deciding what is and what is not a trial for the purposes of CPR 39.3. Mr. Gale, for the appellants, drew attention to the following matters which he said were important in the present case. First he said that the matter was listed for a two-day hearing which he said suggests that it was going to be a serious occasion and that something would be decided. Next he relied on the purpose of the hearing (to decide the issues in dispute) and on the fact that this purpose was known in advance of the hearing. He said that the purpose was not for directions or some procedural matters but to resolve the issue between the parties as to whether or not there should be an order for possession and sale. He said that procedural orders had provided for disclosure, evidence by both sides and cross-examination in open court. He submitted that the result of the hearing would be a finding which was final and binding upon the parties subject only to appeal.

Mr. Gale suggested that listing had not made reference to the event as a trial but as a hearing, merely because the application was not proceeding under Part 7 of the CPR. He submitted that the proceeding was under the Insolvency Act which, by virtue of rule 7.51 of the Insolvency Rules 1986, applies the rules of the CPR to matters of this kind. To show that the matter was under the Insolvency Act, he drew my attention to section 335A of the Insolvency Act 1986 which provides that the application must be made to the court with jurisdiction over the bankruptcy, in this case the Croydon County Court.

Finally, he submitted that it was a substantive application listed for a hearing in which there would be a final determination, evidence under cross-examination and he said that all these were attributes of a trial as that word is used as a matter of language and, accordingly, it was a trial. He said that if it were a trial, CPR 39.3 applied and since the DJ Hay had found there was no good reason for not attending the trial, she was wrong to set aside the Paul order.

In that context the judgment of DJ Hay is a little confusing because, although referring to the hearing as a trial she does not appear to decide or reach any conclusion as to whether the hearing was a trial or not. She gave two judgments and in the first of which she decided there was no good reason for Mrs Roberts not appearing and she referred to rule 39.3 or 3.9. She said that whichever rule was applicable she was obliged to consider other factors and all the circumstance of the case. She was mistaken in that respect since CPR 39.3 provides that the court may grant the application only if each of the three specified matters, one of which is good reason, is satisfied, subject to the overriding objective.

Mr. Jacob, for the second respondent, submitted that whatever the hearing on 26 February was it certainly was not a trial. The first submission was that the proceedings were not insolvency proceedings. The reason for this, he said, was that in substance, if not in form, they were or were akin to an application for possession under section 14 of TOLATA. He drew my attention to the relief sought (set out at paragraph 4 above) and submitted that the first four orders sought were are all appropriate for an application under section 14. He came unstuck with paragraph 5 but submitted that the matters therein were ancillary to the main point.

Mr. Jacob said that, since the proceedings were not insolvency proceedings, they were proceedings under either Part 8 or Part 7 of the CPR. He said that if they were proceedings under Part 8 then, perhaps, they should have been transferred to Part 7, since there were disputes of fact, but that had not happened. Although he recognised that there were disputes of fact, he pointed out that there were no pleadings and, that being so, the matter could not have proceeded under Part 7.

Mr Jacob attached much importance to the form in which the actual proceedings had gone forward. He submitted that since the proceedings were not insolvency proceedings, and not formally Part 7 or Part 8, Part 29 of the CPR could not apply. If Part 29 had applied then the case would have been allocated to multi-track and would have ended up as a trial, but Part 29 (which provides for multi-track proceedings leading to a trial) did not apply.

He submitted the only solution to the dilemma as to what on earth was going on was to conclude that the application was one to which Part 23, which provides general rules about applications for court orders, applies. He submitted that, accordingly, the originating process, i.e. the process starting things off in December 2012, was either a Part 23 application notice or a Part 8 claim form. The relevance of it being a Part 23 notice is CPR 23.11 which is as follows:

"Power of the court to proceed in the absence of a party.

23.11

(1) Where the applicant or any respondent fails to attend the hearing of an application, the court may proceed in his absence

(2)

Where –

(a)

the applicant or any respondent fails to attend the hearing of an application; and

(b)

the court makes an order at the hearing,

The court may, on application or of its own initiative, re-list the application."

Mr. Jacob submitted the discretion to set aside an order made in the absence of a party is very much broader under CPR 23.11 than 39.3 or 3.9 (by analogy), the test being that set out in either Riverpath or Yeganeh (see above).

Mr. Jacob submitted that the event on February 26 2015 was not a trial and he gave three reasons. First, as a matter of listing, it was listed as a final hearing and not a trial. Second, he said that the Part 7 procedure had not been used and that that would have been the proper procedure had the trustees wanted the matter determined at a trial. Third he submitted that the order for directions made express provision for cross-examination. He said that had the matter been proceeding to trial, then such an order would not have been necessary as oral evidence and cross-examination were natural features of a trial. Mr Jacob did not suggest, however, that the hearing on February 26^th 2015 would, in and of itself, have been in any way different if it had been a trial within 39.3.

When it was pointed out that paragraph 5 of the directions order of 3rd December 2013 was a little unusual in that it provided that the applicants did not need to attend for cross-examination, he submitted that that did not bear upon the issue because the maker of this order, DDJ Mohabir, recognised that this dispute would not be resolved at a trial. He submitted the only rationale for the order was that the determination hearing was not to be a trial.

The difficulty with this last submission is that it contemplates that DDJ Mohabir had in his mind the nature of the event which would resolve the matter - i.e. would it be a trial or would it be some other process for resolving the dispute, not called a trial and not subject to CPR rule 39 in the event that Mrs Roberts did not attend? That seems to me to be something which is extraordinarily unlikely.

In my view, the default position with respect to whether or not what takes place at a hearing can be properly described as a trial within CPR 39.3 depends on the context, depends upon the purpose of the hearing and upon the procedural orders which have been made leading up to the hearing, rather than upon the form of whatever has been used in order to get to that hearing.

A part of my reasoning is that trials, as distinct from interim hearings, lead to an order which carries with it finality and, if there is no appeal, the issue which has been determined will become res judicata and only in very unusual circumstances will the matter be re-opened.

Looking at the procedural history of this matter and at what happened on February 26 2015, both parties had been through various procedural steps and been subject to various procedural orders so that the matter could be finally and properly and farily determined and both parties thought the matter would be finally determined on that date. In those circumstances it seems to me that what was intended to take place on 26th February 2015 was, indeed, a trial within the meaning of rule 39.

I have reached this conclusion from a consideration of the context of the proceedings as a whole and the nature of the event on 26 February 2015 in particular.

Mr Jacob invited me to decide whether, as a matter of form, the proceedings were Insolvency Proceedings or Part 8 Proceedings or Part 7 Proceedings or some other and if so what (perhaps CPR Pt 55) Proceedings or whether the application was a Part 23 Application. Given the approach I have taken, the answer to this question does not matter save that I do not think the entire process has been under Part 23. Neither was it made clear to me why it matters whether the proceedings were insolvency proceedings or Part 8 proceedings or Part 7 proceedings or some proceedings under some other name (save Part 23 proceedings).

If I had to decide upon the formal nature of the proceedings (a matter which to me is a rather uninteresting exercise), I would conclude that the proceedings were insolvency proceedings because i) they purport to be, ii) the Insolvency Act requires them to be brought in the court in which the bankruptcy is being dealt with, iii) they appear to have been treated by the court as though they were insolvency proceedings, and iv) the proceedings are suitable to be treated as insolvency proceedings. Unless there were some special considerations of which I am not aware, I would not have decided the case differently if the proceedings were not, as a matter of form, insolvency proceedings.

The next matter to consider is whether or not there was a good reason for Mrs Roberts not attending. As I have said, DJ Hay thought that there was not. The fresh evidence that has been put in does not, to my mind, alter matters. It does not provide any reason for the non-attendance. However, the fresh evidence establishes that in August 2014 Mrs Roberts made an application to adjourn and the application was never proceeded with.

At the hearing before DJ Hay it was submitted that Mrs Roberts had made the August 2014 application, but the court could not find the relevant papers. I was invited to infer that DJ Hay took against Mrs Roberts and, possibly, did not believe her when she said that she had made that application. It was submitted that, if the DJ had reached that conclusion, then she had taken into consideration matters that she should not have taken into consideration. In that respect, and had she done so I would agree. However, what really matters is whether or not Mrs Roberts did have a good reason for not attending the hearing on February 26.

Important in this connection is Mrs Roberts’ explanation. That can be found in the witness statement filed on the application, a statement made in April 2015. The copy before the court has not been signed but nobody has suggested that it is not her witness statement and sets out her position.

Before addressing the reasons given by Mrs Roberts, it is relevant to note that when the Paul order was drawn up it contained a slip. The slip was that it was dated 20th February rather than 26th February. By mid-March Mrs Roberts knew of the slip and applied to the court for it to be corrected and it was corrected. The result is that there is an order dated 20th February as well as a correctly dated order of 26 February 2015. This is important background when we come to look at what Mrs Roberts has said.

In paragraph 15 of the witness statement dated 30th April 2015 she says this:

"At the same time [being January 2015] I engaged with Walker Morris, solicitors for the trustees, regarding a potential mediation to seek to settle matters. To put into context my state of belief in January-February 2015, on the 20th January 2015 that firm wrote to me agreeing to mediation in principle, and (in the third paragraph) making specific reference to the hearing due to take place on the 26^th-27th February. The following day the Court wrote in response to my letter of the 8th January, making reference to the Order of the 11th June 2014, and once more specifying that the linked cases were to be heard over two days from the 26th February 2015."

Thus, Mrs Roberts accepted that she had received from the court a letter dated 21st January 2015 which made clear that there was going to be a hearing of the bankruptcy case (0093-2011) on 26th February and it would last for two days.

Referring back to the fact that Mrs Roberts had applied in August 2014 for an adjournment of that hearing, and had heard nothing with respect to that application, it must have been plain to her that the hearing was going to go ahead on 26th February unless something happened to change things. That this is so appears from her evidence. She says at paragraph 17 of her witness statement:

"As matters stood, therefore, either the matter would be adjourned for mediation to take place (which I believed was likely to happen, given the contents of Walker Morris's letter to me of the 20th January), or the matter would be tried on 26^th-27th February."

With respect to her suggestion that she believed that there was likely to be mediation, there is some correspondence about that. There is a letter from the trustees' solicitors suggesting mediation and a letter in response from Mrs Roberts, dated 22nd January 2015, largely disagreeing with most of what the trustees had said. By paragraph 8 of her letter she invited the trustees to apply to the court for an adjournment of the forthcoming hearing on 26.02.15.

There is also a letter of 26th January from Mrs Roberts to the court which makes further reference to an adjournment. The letter is not easy to follow but there is no suggestion that the forthcoming hearing was adjourned, or that Mrs Roberts believed that it had been. Her position towards the end of January was that either the matter would be adjourned or it would go ahead, and that seems to be a true position.

Her next paragraph reads as follows:

“18.

At no time did I receive any warning or information, whether in writing or verbally, that these matters were to be heard on the 20th February 2015. I received no hearing notice from the Court. I was not told by my husband. I received no correspondence from Walker Morris or the trustees. I was present in the UK and resident at the property from the 4th February. I was not even contacted by the other parties regarding preparation of bundles. I simply had not the first clue that the matter was to be listed on the 20th February, and would make the point that I have been involved in legal proceedings arising from my husband’s bankruptcy and the failure of my marriage since 2011, and have a considerable interest in preserving my interest in the property. Had I known that the matter was going ahead on the 20th February I would, without fail, have attended myself, and taken steps to arrange representation. Regrettably, being ignorant of the date, I did neither.”

This is her reason for not attending the hearing. She talks about the hearing on 20th February and says that she had had no notice of that hearing and that if she had received notice she would have attended and taken steps to arrange representation.

However, that paragraph of Mrs Roberts’ witness statement was drafted in April 2015 when she knew that the hearing had not taken place on 20th February, that the reference to 20th February in the order was a mistake and that the hearing had in fact taken place when she had thought it was going to take place, i.e. the 26^th February 2015. Thus Mrs Roberts’ reasons for not attending the hearing were entirely spurious.

Mr. Jacob suggested that this paragraph of her witness statement might have been drafted by Direct Access counsel who thought that he was putting into good English the evidence of Mrs Roberts. I do not know anything about the drafting of this witness statement but I do know that it has been put forward as her evidence on this application. I must take it at its face value.

Mrs Roberts summarises her position in paragraphs 24 and 25 as follows:

“24.

I am advised that this application must be made and considered under the provisions of the Civil Procedure Rules, and that I am required to establish three things, viz:

(a)

that I acted promptly when I found out that the court had made the order;

(b)

that I had a good reason for not attending the hearing on 20/2/15; and

(c)

that I have a reasonable prospect of success at the trial.

25.

In short answer to those issues (which I expect to be expanded upon by my counsel at the hearing on 12th May I would state:

(a)

that I responded by my letter of the 4th February within a day of finding out that the court had made the order, and indeed a fortnight before I received a copy of it;

(b)

that I had an extremely good reason for not attending the hearing on 20/2/15, in that I was wholly unaware of it; and

(c)

that I have a reasonable prospect of success at the trial for all the reasons set out in my statements dated 4th June and 27th July 2014 in support of my TLATA claim (which, so far as I am aware, is undefended).”

It appears from what she says in paragraph 24 that she was advised about the hurdles in CPR 39.3. In 24(b) she refers to needing a good reason for not attending the hearing on 20th February and she says in 25 that the short answer to the point is that she had an extremely good reason for not attending the hearing on 20th February because she was wholly unaware of it. That is her summary and it is a summary which is totally inadequate when it is clear that Mrs Roberts knew that the hearing was not on 20th February, that it was on 26th February, and that she knew that the hearing was going ahead on that date. There is no explanation as to why she did not attend the hearing on 26^th February 2015. She has chosen not to tell the court what she was doing on that day and why she did not attend the hearing listed for that day.

Mr. Jacob submits that I can properly infer from her statement that she assumed that the hearing on 26th February was not going ahead because of the rival possibilities of mediation or the matter going ahead. The difficulty is that there is no basis for that assumption. Moreover, had it been the position, she could have said so but chose to provide a spurious reason.

I was asked to infer that Mrs Roberts has a poor command of English but there is no evidence of that beyond the fact that I was told that English is not her first language and I can see that her written English is not good. I was asked to assume that Mrs Roberts is unfamiliar with legal proceedings, but all I know about that is that she has apparently made a number of applications and appears to be well versed in the process. Furthermore, I was told that she takes advantage of Direct Access counsel whenever she needs advice.

DJ Hay was entirely right when she reached the conclusion that Mrs Roberts had no good reason for not attending the February 26^th hearing. Although supplementary evidence has been put in, none of it sheds any light on precisely why she did not turn up on 26th February, what she was doing on 26th February or, if she did make the assumption that the matter was not going ahead, what caused her to do that. All the documents are against it. The reason that she herself gives is entirely spurious.

It was submitted that CPR 39.3 is subject to the overriding objective and the Bank of America case does not provide otherwise, even if the three hoops of 39.3 have not been jumped through (although it may appear to, see [24] of that case). I was told that this had been established by a recent Supreme Court decision.

Regarding the position on the merits, DJ Hay reached the conclusion that Mrs Roberts had a real prospect of success in her defence based on the fact that she paid off some of the mortgage monies owing on the property. Mr Gale showed me evidence to the effect that she did so using Mr Roberts’ money and the documents I was shown were persuasive to that effect. I cannot reach any conclusion on the merits save that I am not persuaded that Mrs Roberts fails the CPR 39.3(c) test.

I think it is appropriate for me to consider this case in the light of the overriding objective. One of the matters I have to consider is use of court resources. If this matter is to go to trial then it will go back to the Croydon County Court. There will be a two-day hearing and there will be the lead up to that hearing. I am told that a further hearing may not take place for another twelve months. Thus there will be more delay in a matter which was started in 2012. Mr Gale submitted that delay itself may cause prejudice.

Mr Jacobs submitted that dismissing the appeal would cause no prejudice to the trustees, that mere delay itself was not enough. I do not quite accept that, Moreover the trustees will have to go through the whole process of bringing the matter to a final hearing once more, a further two court days will be set aside and Mrs Roberts may or may not attend. Her record of complying with court orders is not good – see for example the reasons for the strike out of her TOLATA application.

It was submitted for Mrs Roberts that she has a compelling case for dismissal of the appeal because otherwise she will be denied the opportunity to argue her case and the trustees will be presented with a windfall. It was submitted that I should approach the matter in what counsel said was the ‘looser’ interpretation of 3.9 in Forcelux as compared with the ‘narrower’ interpretation of 3.9 as put forward by Arden LJ in the Findlay case. I do not think there is any parallel in this case with the Forcelux case; in particular, there is no obvious windfall to the trustees.

Of course, if the trustees were to win any new hearing then there is no windfall at all and if the trustees were to lose it then they would lose it. The difference in Forcelux was that there was going to be a loss of a lease which would not be lost in any event; here it is merely a disputed claim. There is nothing in the nature of ‘an unusual and highly compelling factor’ which might lead me not to follow the guidance of Arden LJ in Findlay.

In those circumstances, in my judgment the appeal must succeed. This matter should have been brought to an end once and for all by the Paul order. I have reached my conclusions taking into account CPR 39(3), and the matters I have considered in relation thereto as already set out, CPR 3.9 and the overriding objective and looking at the importance of finality of proceedings, fairness to the trustees as well as to Mrs Roberts, the proportionate use of court time and resources generally. I have tried to take all matters into account.