Tarnjit Singh Gill v Sanjay Anand & Anor

By a claim form issued on 22 September 2020 the Claimant, a former longstanding friend of the First Defendant sought repayment of six loans made in early 2018 in the total sum of £3,280,000, together with interest thereon and legal costs. By his Defence, served in December 2020, the First Defendant contended that the loans were made to the Second Defendant. The Second Defendant has never participated in the proceedings.

Following a series of procedural defaults by the First Defendant, his Defence was struck out and the claim proceeded to assessment before Elizabeth O’Neill, sitting as a Deputy High Court Judge in the Autumn of 2024. The Judge however stayed execution of the Order made following the assessment hearing pending the outcome of the application that is now before me.

By an application notice dated 5 December 2024 the First Defendant seeks relief from sanction pursuant to CPR 3.9 of the Civil Procedure Rules with the following consequences:

In summary, the First Defendant contends that he suffered a number of significant personal circumstances, including depression, anxiety, drug and alcohol dependency, divorce proceedings, the illness and death of his mother, the breakdown of his relationship with his father, and the loss of his job and inheritance. He also encountered issues corresponding with direct access counsel.

There is no dispute as to the applicable rules and principles, which are clear and well-established.

CPR 3.9 provides as follows:

A three-stage test, set out by the Court of Appeal in Denton v TH White Ltd [2014] 1 WLR 3296; [2014] EWCA Civ 906, applies:

In relation to the first stage, when considering whether a breach of an “unless” order is serious or significant it is necessary to look at the underlying breach and, as Jackson LJ observed in British Gas Trading Ltd v Oak Cash and Carry Ltd [2016] 1 WLR 4530; [2016] EWCA Civ 153 at [41]: “The very fact that X has failed to comply with an ‘unless’ order (as opposed to an ‘ordinary’ order) is undoubtedly a pointer towards seriousness and significance”.

In relation to the second stage, the court will need to ascertain whether there is a good reason for the breach and, where there is, relief is likely to be granted (See White Book 2025 vol 1, §3.9.5).

In relation to consideration of all of the circumstances of the case at the third stage, the factors in CPR 3.9(1)(a) and (b) are two factors of particular importance (per Lord Dyson MR and Vos LJ in Denton). In British Gas Trading Ltd, the lack of promptness in applying for relief was the critical factor. This was because, when that delay was added to all the other factors, it could be seen that the Defendant’s default had substantially disrupted the progress of the action.

In relation to the application seeking variation of paragraph 5 of Master McCloud’s Order (removal of the requirement to pay £350,000 in to court), the key guidance was given by the Court of Appeal in Tibbles v SIG Plc [2012] EWCA Civ 518; [2012] 1 WLR 2591. The discretion to vary an order under CPR r.3.1(7) is broad and unfettered but considerations of finality and the need to avoid undermining the concept of appeal, pushed towards “a principled curtailment” of an otherwise apparently open discretion. In order to exercise the discretion, there would normally need to be either: (i) a material change in circumstances since the order was made; or (ii) the facts on which the original decision was made were (innocently or otherwise) misstated.

Before turning to the substance of the First Defendant’s application, it is necessary to give a detailed account of the procedural history.

By a claim form issued on 22 September 2020 the Claimant sought repayment of six loans made in early 2018 in the total sum of £3,280,000, together with interest thereon and legal costs. The claim was made against the First Defendant, and the Second Defendant in the alternative, it being noted on the face of the claim form that the First Defendant had asserted that he was acting as agent for the Second Defendant and was not therefore liable to repay any of the loans. The Particulars of Claim were attached.

On 20 November 2020 the First Defendant served a Defence drafted by his direct access Counsel (“Counsel”). By that Defence the First Defendant contended that the loans were made to the Second Defendant, and that the Claimant was aware of this and of their purpose. The Second Defendant did not serve any Defence.

The next substantive procedural step in the progress of the claim was the issue by the Claimant of an application notice dated 17 March 2023 seeking summary judgment in respect of his claim in relation to the first of those loans – made on 10 January 2018 in the sum of £350,000 (“the Summary Judgment Application”). The application notice was accompanied by a witness statement of the Claimant of the same date, together with exhibits.

On 31 October 2023 the Court sent notice that the Summary Judgment Application had been listed for hearing before Master McCloud on 22 February 2024.

At 4.18pm on 21 February 2024 Counsel emailed a witness statement of the First Defendant of the same date in response. In it, the First Defendant apologised for its late submission, stating that he had been told by the Second Defendant that he was dealing with the matter on his behalf “as it is him that owes the Claimant money. It transpires that he was not in fact dealing with this matter.” He went on to say “I appreciate that the court may take the view that I should have been attending to this matter myself. I can only apologise”. Among other things, the First Defendant also stated, with reference to the Second Defendant and his family, that “My family is also located in Manchester and they too are extremely wealthy”. That witness statement made no reference to any personal difficulties of the First Defendant as having impacted on his ability to give instructions or engage with the litigation. Nor did it state how or when he had learned that the Second Defendant was not dealing with the matter on his behalf, or exhibit any document evidencing communications between himself and the Second Defendant to that effect.

In relation to the loan forming the subject of the Summary Judgment Application, the First Defendant stated that the Claimant did not lend him the money. He said that there had been a meeting on or about 5 January 2018 at which the Claimant and both Defendants were present. At that meeting, the Claimant had been made aware that the First Defendant was acting as a conduit through which the Claimant, through one of his companies, would pay the loan to him, and which he would then pass on to the Second Defendant. Exhibited to his witness statement were a number of documents. These included documents which showed £350,000 transferred into his account, a transfer out of £345,000 (to the Second Defendant) and £5,000 to a bureau de change to be paid in cash (which he explained was his father’s bureau and was also going to be paid to the Second Defendant as the Second Defendant had requested payment of that sum in cash.

The Claimant served a witness statement in reply at around 3am on 22 February 2024. In it, he accepted that there had been a meeting on 5 January 2018, but said that it had been only between the First Defendant and himself. He did not know, and had not met, the Second Defendant; it was only after all of the loans had been paid, and when he started to chase for payment, that the First Defendant tried to pass the debt on to the Second Defendant.

At the hearing before Master McCloud the Claimant was represented by Mr Cutting and the First Defendant was represented by Counsel. His Counsel sought an adjournment of the hearing for two reasons.

First, Counsel informed the court that late that morning, the First Defendant had instructed him that there was further evidence supportive of his case in the form of admissions from the Second Defendant that it was he who owed the Claimant the money. These were said to be contained in: (a) two text messages sent by the Second Defendant to a friend of the Claimant’s; and (b) a further text sent by the Second Defendant to the First Defendant. (In the event, it appears that no such evidence has ever been adduced, and by the time it came to settling his evidence for the application for relief, the First Defendant could no longer recall why the court had given permission for further evidence from him.)

Second, Counsel had not had the opportunity to read and consider the reply evidence of the Claimant.

Mr Cutting informed the Master that the Summary Judgment Application had been served on the First Defendant in person on 20 March 2023, and was also sent to Counsel. Thereafter a ream of emails was exchanged between the Claimant’s solicitor, Counsel, Mr Cutting’s clerk and the court from March to May regarding listing. Mr Cutting further explained that the application had been issued in the Commercial Court and was then transferred to the King’s Bench Division by Order dated 17 May 2023.

Mr Cutting further explained that it was not until 31 October 2023 that the Summary Judgment Application was listed. The hearing notice had been copied by his instructing solicitor to both the First Defendant and to Counsel that same day.

During the hearing Counsel made the following statement:

“Can, can I, actually I should just say a quick word about [the Second Defendant]. He comes from a, an extremely wealthy family in, in Manchester, as does my clients, my client. So, both families are based in Manchester. They are well known in the Punjabi community. They are, as I say, multimillionaires, if not billionaires…”

Following detailed submissions on behalf of both parties, during which extensive reference was made to the witness statement and documentary evidence in support of and in response to the Summary Judgment Application, Master McCloud said as follows:

“But in relation to this adjournment, I am going to allow it because I think the evidence that is said to exist in terms of admissions is potentially so significant that it would be unjust not to allow D1 to address its case and put its case fully before the Court and to allow the Claimant time to think about that and to deal with it and to choose whether it wishes to carry on with this application for summary judgment. Because I have to say, and given that I am not hearing it, I think I can be robust, I have grave doubts that this summary judgment will be granted given the present position, if it established to any degree of credibility before a different Master.”

A recital to Master McCloud’s Order (misdated 13 February 2023) sealed on 1 March 2023 records that the Court noted “that the First Defendant has breached the Civil Procedure Rules in respect of the Application” and consequent “need to ensure the First Defendant’s future compliance”. The Master: adjourned the hearing of the Summary Judgment Application to the first open date after 1 April 2024 (at para 1); gave permission to the First Defendant to file and serve one further statement in response to the application by 4pm on 7 March 2024 (at para 3); required the First Defendant to pay the sum of £350,000 by the same time and date (at para 5); required the First Defendant to pay the Claimant’s costs summarily assessed on the indemnity basis in the sum of £11,010 by the same time and date, failing which his Defence be struck out without further order (at para 6); and refused the First Defendant’s application for permission to appeal (at para 7). I note that the ‘unless’ order was made only in respect of the payment of costs.

On 14 March 2024 Master Gidden made an order that, in light of the apparent failure of the First Defendant to comply with paragraphs 3, 5 and 6 of Master McCloud’s Order, that: the First Defendant’s Defence be struck out unless he showed cause in writing within 7 days (at para 1); the Claimant be granted summary judgment against the First Defendant for a sum to be assessed (at para 2); the First Defendant pay the Claimant’s costs of the claim on the standard basis to be the subject of detailed assessment if not agreed (at para 3); and that any application to vary or set aside the order was to be made within 7 days of service of it (at para 8).

On 17 April 2024 Master Gidden made a further order upon the First Defendant’s failure to comply with paragraph 1 of the 14 March Order that: the matter be listed for an assessment hearing on the first available date after 1 July 2024 (at para 1); and the Claimant to file and serve any evidence relied on by 31 May 2024, and the First Defendant to file and serve any evidence in response by 15 June 2024 (at para 2).

The assessment hearing was listed for 15 October 2024 before Deputy High Court Judge O’Neill. On that date, the First Defendant attended in person and made an oral application for an adjournment of it. It was in making this application that the First Defendant made first reference to his personal difficulties, stating that he had had a “mental breakdown”.

The Judge adjourned the hearing and re-listed it for 19 November 2024. In the recital to the Order, the Court noted “that the First Defendant has breached the Civil Procedure Rules and various Court Orders in respect of this matter”. Among other things the Judge also ordered that unless the First Defendant paid the Claimant’s costs thrown away in the sum of £9,756 by 4pm on 29 October 2024, he would be debarred from adducing any further evidence at the assessment hearing.

The First Defendant instructed solicitors (Lawrence Stephens Ltd) on 24 October 2024 and a Notice of Acting was filed and served on 28 October 2024.

The costs thrown away ordered on 15 October 2024 were paid on 29 October 2024.

On 31 October 2024 the First Defendant signed a witness statement pursuant to paragraph 3 of the Order of Deputy High Court Judge O’Neill dated 15 October 2024. In it, he did not mention any personal difficulties. He stated that there had been a breakdown in the relationship between himself and Counsel with the result that he did not have suitable representation to advise him. He also asserted that he had believed that Counsel had been handling proceedings on his behalf, but that he had failed to do so. He said that he did not fully understand the matters relating to the summary judgment application that had been issued by the Claimant and the order which had been made by the court in relation to it.

The First Defendant went on to say that he had been advised by his new solicitors of the severity of the Orders of 1 and 14 March 2024 and that they had also advised him that his Defence had been struck out because he did not engage with the terms of those Orders. He said that it was therefore his intention to make an application for relief from sanctions in respect of those orders and that the adjourned assessment hearing listed for 19 November 2024 “may require a further period of adjournment in order to deal with my prospective application for relief from sanctions”.

The assessment hearing took place before Deputy High Court Judge O’Neill on 19 November 2024. As the judgment handed down on 18 December records, at the outset of that hearing the First Defendant, by his new counsel Edward Knight, applied for a further adjournment on the basis that he intended to apply for relief from sanctions in relation to Master McCloud’s Order and the 14 March Order of Master Gidden. The basis of the relief application would be that the First Defendant has been suffering from serious mental health issues, interlinked with alcohol and substance abuse. Mr Knight was unable to give any commitment as to when that application would be made. Accordingly, the Judge declined to order a second adjournment but proceeded with the assessment on the basis that enforcement would be stayed pending any application made within 14 days of judgment.

Prior to the hand-down of judgment, on 5 December 2024, the First Defendant issued the application for relief from sanctions that is before me.

By Order of 18 December 2024 the First Defendant was ordered to pay the sum of £4,276,208.75 plus interest to the Claimant and £66,166.98 on account of costs by 4pm on 31 December 2024, with enforcement of the same to be stayed pending the resolution of the First Defendant’s application.

This application for relief from sanctions was originally listed to be heard on 4 July 2025 before Master Gidden. Shortly before that hearing, the First Defendant again changed legal representation to Viceroy Legal – who remained instructed at the hearing before me. On 30 June 2025 they wrote to the Claimant’s solicitors indicating that the issue of adjournment was being considered. In the event, however, the hearing was adjourned at the court’s instigation for unrelated reasons.

On 11 July 2025 the First Defendant’s solicitors requested the account details of the Claimant’s solicitors. These were provided on 18 July 2025.

On 23 September 2025 (ie, on the day before the hearing of this application), the First Defendant settled the outstanding costs of £11,010 which Master McCloud had ordered to be paid by 7 March 2024.

As foreshadowed at the assessment hearing, the First Defendant seeks relief from sanction on mental health and substance abuse grounds. In support of that application, the First Defendant served evidence which included a further witness statement from himself and, among the exhibits, an undated letter from his therapist, Kevin Hempstead, a letter dated 3 December 2024 from Dariusz Bird, a friend and former drugs welfare worker, and a report of Chartered Psychologist Dr Liliya Korallo dated 28 November 2024.

In his evidence, the First Defendant states that he has suffered serious alcohol and drug dependency issues since early 2022 as a result of ongoing struggles with depression and anxiety. These issues worsened in consequence of a series of distressing life events including his wife re-initiating divorce proceedings begun in 2020. He exhibits a letter from his counsellor which confirms that he has been suffering from severe anxiety and depression which escalated following the death of his mother in May 2023. At this point, the First Defendant’s wife, having witnessed the decline in his mental health and lack of communication or engagement with the divorce proceedings, attempted to help him by arranging for him to go to a rehabilitation centre – which he refused to do. By October 2023, however, he was amenable to speaking to a drugs welfare counsellor and did so on various occasions between 2023 and 2024.

The First Defendant goes on to state that in November 2023 he and his wife attempted to reconcile, but this was short-lived because he had not treated or addressed his mental health issues properly and he was not able to put into practice the advice given to him by the drugs welfare counsellor. His alcohol and drug abuse worsened again as he was struggling with distressing thoughts including suicidal ideation.

The First Defendant states that on two occasions in or around February 2024 his father called the police to attend his property (where the First Defendant was living at the time) in order to address the First Defendant’s substance misuse. On the second occasion, his father requested that they remove him. He was warned not to return. As a result he was in a vulnerable position as he no longer had a place to live. In the same period, his father manipulated him into transferring a property into his wife’s name and then colluded with her to evict him from it. As a result, the First Defendant had no choice but to sleep on the sofa at his offices in Paddington.

The First Defendant also states that his father took steps to strip him of all responsibilities in relation to a company, Mercury Danati, which he had helped grow and in which he worked, and on 12 August 2024 his father confirmed his decision to cut him out of the business, transferring his entire shareholding to the First Defendant’s son. By the end of August 2024, he was in such a deep state of depression that he had completely stopped engaging with the requirement to make repayments on his buy to let properties in London and Grimsby, as a result of which steps were taken by the lenders to put the properties into receivership. His son had to take over in order to refinance them out of receivership.

The First Defendant states that had there been any developments in the proceedings in 2022, it is likely he would not have been aware of them from the end of 2022 onwards “as I was not able to engage properly with my instructed counsel or with the details of the case by that time”.

As at the time that the Summary Judgment Application was issued (in March 2023), the Second Defendant assured him that he was resolving the matter as he was liable for all loans that formed the subject matter of it. The First Defendant states that it was the Second Defendant who provided the initial funds to instruct Counsel in respect of it. When he was personally served with a copy of the application on or around March 2023, he forwarded it to Counsel, who he expected to deal with it and advise him accordingly. After that he does not recall any further communications as his mental health crisis escalated. He says that on or around 19 February 2024 his son received a call from Counsel because he was unable to contact him. With his son’s assistance, instructions were provided so that a witness statement could be drafted. He says that following the hearing his son and he received copies of Master McCloud’s Order but states that he was not in a position to understand his obligations or the consequences of his failure to comply with them.

The First Defendant goes on to state that it was not until after 30 September 2024 that he fully understood the sanctions he was facing as a result of his breaches, and then only after consulting a friend who is a professional in the insolvency industry. He then made the oral application to adjourn on 15 October 2024.

He explains that, on 26 November 2024, he submitted to psychological assessment of his mental health with Dr Liliya Korallo. He says that the assessment was carried out for the purposes of evaluating the issues he had faced over the last 2 years “and in particular, the last 10 months during which I have been unable to engage in Court proceedings”.

In her report, dated 28 November 2024, Dr Korallo states her instructions were to prepare a report to address the following issues:

“We would like you to address questions of Jay’s mental state specifically during the period between January 2024-October 2024 with a view to dealing with the diagnosis for any mental condition he was and is still suffering with (as presented by him today and your assessment of his circumstances). You will also need to opine on:

1.

Whether you believe Jay’s lack of capacity and struggles during this time affected Jay’s ability to conduct his business affairs and the Court proceedings over the last 10 months. The consequences of the issues he was facing are critical (rather than focusing on the cause of the issues referred to above)

2.

Any course of psychological or medical treatment you recommend he undergoes and your confirmation that he has been advised to receive this treatment imminently with a view to improvement of his condition.”

Dr Korallo records that for the purposes of preparing her report she was provided with a letter of instruction dated 26 November 2024, an Order of Judge Moses dated 2 February 2023, an Order of Judge Doman dated 6 December 2022 (neither being an order made in these proceedings), a copy of a death certificate dated 8 May 2023 and an undated letter from Mr Kevin Hempstead (psychotherapist). She also spent two hours assessing the First Defendant on 26 November 2023. Dr Korallo was not provided with access to his medical or therapy records and does not report having requested access to them. She does note that the First Defendant informed her that he had seen several therapists but that unfortunately she had not had sight of any letters other than the one from Mr Hempstead.

Dr Korallo concludes that the First Defendant suffers from Anxiety and Depression and that he suffered from these conditions during the index period. She does not, however, opine on either his capacity or his ability to conduct his affairs, despite express instruction to do so.

In addition to relief from sanction, the First Defendant seeks variation of paragraph 5 of the Order of Master McCloud requiring payment into court of £350,000. He contended that he is not in a position to arrange payment into court in that sum because he does not have the money and his father will not assist. Further, the four properties in his name are investment properties and are overleveraged.

Nor was he in a position to make the payment ordered at the time that the order was made. The submissions made by his representative at the hearing before Master McCloud as to his wealth were inaccurate.

In relation to the first stage, the First Defendant submitted that whilst the breaches were “not insignificant”, they relate to a summary judgment application in respect of a relatively small part of the total claim.

As to the second stage, a debilitating illness is capable of being a good reason for non-compliance: Denton at [12]. The First Defendant had given evidence of significant psychiatric issues, including severe depression and anxiety, supported by exhibited statements of his counsellor Kevin Hempstead, Dariusz Bird and a report from chartered psychologist Dr Liliya Korallo.

Whilst the court can take into account the promptness of an application for relief, any delay in the present case should be considered in the context of issues which were ongoing at the time the application was made. The report of Dr Korallo dated 28 November 2024 diagnoses severe and ongoing anxiety and depression and recommends treatment and the application was issued one week later.

As to the third stage, the court must consider whether the striking out of the entire defence was a proportionate sanction for the breach: Denton at [65]. The First Defendant submitted that, for the reasons set out at above, it was wholly disproportionate in all the circumstances.

The First Defendant submitted that the Claimant was asking the court inappropriately to speculate as to the likelihood of future compliance by the First Defendant and as to his ability to fund litigation. He submitted that this was particularly inappropriate in light of the facts that he had complied with the most recent costs order made against him and was funding this application. He has sought treatment, received assistance from his son, provided an updated address and e-mail address for service and engaged solicitors.

In relation to the application to vary, the First Defendant submitted that it would not be just or in accordance with the overriding objective to stifle a defence to a claim for more than £4,000,000 by requiring him to make a payment which he is unable to make in respect of a liability which is disputed. The First Defendant contended that it is inappropriate to impede access to the court in this way, citing CIBC Mellon Trust Company v Mora Hotel Corporation NV [2002] EWCA Civ 1688 at [38].

The Claimant pointed out that the First Defendant’s non-compliance with the CPR and/or Court orders has resulted in two different judges making unless orders against him. He submitted that this non-compliance has had a significant impact on the conduct of the Claim, summarised as follows:

In relation to the first stage of the Denton test, the Claimant submitted that it is plain that the breach and failure to pay the costs ordered as being thrown away in paragraph 6 of Master McCloud’s Order was both a serious and significant breach. He points to the fact that the Court had exercised its discretion to make an unless order against him on account of his past conduct in failing to comply with the CPR. He cites Jackson LJ in British Gas Trading Ltd (see [8] above).

The Claimant submitted that if the Court also takes into account the fact that the First Defendant was given a further opportunity to comply with the unless order by paragraph 1 of Master Giddens March Order, the seriousness and significance of his breach is brought into even starker focus.

Further, the Claimant had pointed out, in a Skeleton Argument dated 2 July 2025, that the First Defendant continued to fail to seek to comply with the unless order by his continuing non-payment of the costs ordered by Master McCloud for some 16 months thereafter. This did not stimulate any attempt by the First Defendant to pay, and in the event did not settle the sum outstanding until 23 September 2025 - the day before the hearing.

In relation to the second stage of the Denton test, the Claimant submitted as follows:

In summary, none of the evidence establishes that the First Defendant was unable to engage in the litigation or unable to instruct counsel. It simply does not address core questions as to capacity and ability to engage with litigation.

In relation to the third stage of the Denton test, the Claimant submitted that:

In relation to the application to vary, the Claimant submitted that there had been no material change in circumstances and that, if Master McCloud’s Order to make a payment into court had been made on the basis of the provision to her of inaccurate information as to the First Defendant’s wealth, then this could and should have been appealed. Counsel had spoken to the First Defendant during a break in proceedings on the day. He is an experienced barrister, acting on instructions. The evidence produced does not demonstrate what the First Defendant’s financial position was at the time that the order was made and is in any event incomplete (there being no bank statements covering the relevant period, for example). Further, there is no evidence from Counsel.

Having set out the law, evidence and submissions, I turn now to my assessment and conclusion.

In relation to the application for relief from sanction, I remind myself at the outset that CPR 3.9 requires me to consider all the circumstances of the case so as to deal justly with the case, including the need for litigation to be conducted efficiently and proportionately, and to enforce compliance with rules, practice directions and orders.

As to the first of the three Denton stages, I note that no less than two ‘unless’ orders have been breached in this case, together with a number of other orders, and over a substantial period of time. Further, that as a result, judgment has been entered and damages assessed. But for this application, the proceedings in relation to the First Defendant would have concluded. In all the circumstances, it seems to me that the breaches cannot be characterised otherwise than serious and significant.

As to the second stage, there is clear evidence before me that the First Defendant suffers, and at all material times has suffered, from anxiety and depression. He has experienced a number of significant life events which have impacted negatively upon him in this regard, and he has also had alcohol and substance misuse issues as a result.

A debilitating illness, such as anxiety and depression, may, in different circumstances, amount to good reason for breach. In this case, however, that is not the position. Whilst the absence of medical evidence that the First Defendant lacked capacity, or was otherwise unable to give instructions or engage in the litigation is compelling, it is not the beginning and end of the matter. I also take into account the facts that, during the period in which he was unwell, the First Defendant was (albeit with the assistance of his son), able to give instructions to Counsel and settle a witness statement for the purposes of the Summary Judgment Application, and for the purposes of the assessment hearing. Further, he was able to represent himself on 15 October 2024.

The above evidence demonstrates that the First Defendant was (at least periodically) able to give instructions, settle evidence, and speak up on his own behalf in Court. Most importantly, he was able to engage in the litigation on the very day when Master McCloud made the ‘unless’ order requiring payment of costs and the payment in to court. An application for permission to appeal was made to the Master on the day, and refused. Accordingly, it seems to me that the First Defendant’s mental health and personal difficulties do not provide a good reason for his defaults, and in particular where it is apparent that he could have taken remedial steps much earlier than he did.

As to the third stage, I must evaluate all the circumstances of the case, so as to enable the court to deal justly with the application, including consideration of the CPR, including, of particular importance, the need for litigation to be conducted efficiently and proportionately, and to enforce compliance with rules, practice directions and orders. The length of the delay in this case is enormous and has resulted in the proceedings reaching a conclusion. The First Defendant’s defaults have substantially disrupted the progress of the action such that, if I were to grant the application, the proceedings revert to a stage prior to case management conference.

As I have already noted above, there is firm evidence that, despite his difficulties, the First Defendant has been able to give instructions and engage with the litigation. For that reason alone, I have determined that they do not amount to good reason. I note, further, however, that, until 15 October 2024 there was no suggestion from him that they were impacting upon his ability to engage with the litigation. In February 2024 he was stating that he had understood that the Second Defendant was running things for him, and despite his representations to the court about his mental health on 15 October 2024, by the time he came to settle his witness statement of 31 October 2024 he did not reference his personal circumstances but was instead stating that there had been a breakdown in his relationship with Counsel, alleging that he believed that Counsel had been handling proceedings on his behalf, but that Counsel had failed to do so.

Whilst it is fair to note that he did comply with the Order of Deputy High Court Judge O’Neill, he at no time made any attempt to make any payment of any amount either to the Claimant or in to court pursuant to Master McCloud’s Order, and only paid the costs order on the day before the hearing – around 1 year and 7 months after it was made. Whatever the reasons for his default prior to instruction of solicitors on 24 October 2024 there can be no proper excuse for continuing wholesale default thereafter. He could have offered to pay small amounts, in instalments, for example. It is also of note that despite the instruction of solicitors, he did not issue his application for relief until over a month later – on 5 December 2024.

Further, the First Defendant has, through these proceedings, established an unfortunate pattern of leaving preparation to the last minute, seeking late adjournments, non-compliance with orders and repeated changes of representation.

Taking into account all the above circumstances, I have little if any confidence that, were this court to grant him the relief he seeks, the First Defendant would be compliant from now on. On the contrary, a determination in his favour would be highly likely to end in a repeat run of his defaults to date, putting the Claimant to even more cost and requiring even more court time.

I appreciate that, if he is not granted the relief he seeks, the First Defendant will be left in a situation where he is liable to pay to the Claimant a very large sum of money in respect of loans which he contends were never made to him, but to the Second Defendant, who is understood to be in Canada. At the hearing before me, the First Defendant began by attempting to demonstrate the overall merits of his case. I am not, however, in a position to do any more than observe that, overall, it appears that the First Defendant does have a triable defence to the claim.

Whilst I have taken this into consideration as part of all of the circumstances of the case, I will not, for the reasons canvassed above, grant the First Defendant the relief he seeks. The application is refused.

In the circumstances, I am not required to determine the application to vary. Had I been persuaded to grant relief, it is likely that I would have stayed paragraph 5 of Master McCloud’s Order, pending adjournment, to enable the First Defendant to provide full financial evidence from an appropriate expert both as to his position at the time and now. If I were to be persuaded to vary it, it would have been on the basis of material change in (financial) circumstances, rather than inaccuracy. The statement made by Counsel at the hearing before Master McCloud reflects what the First Defendant himself said at paragraph 11 of his witness statement for that hearing.

For the above reasons the First Defendant’s application is dismissed.