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Isabel Hitching secures relief from sanctions under CPR 3.9: Bir Holdings v Mehta

Bir Holdings v Mehta - Birmingham High Court, Chancery Division, HHJ David Cooke 15 July 2014

In a decision applying the guidance recently laid down by the Court of Appeal in Denton v TH White Ltd [2014] EWCA Civ 906 (judgment 4 July 2014) the court granted relief from sanctions under CPR 3.9 and dismissed an application to strike out the claim under CPR 3.4.

Isabel Hitching successfully appeared for the Claimants.

The Claimants were in multiple default over a seven month period breaching directions relating to disclosure, service of witness statements, instruction of experts, filing a pre trial checklist and paying the setting down fee. 

The court was persuaded that the reason for the default was the clinical depression of the partner with sole conduct of the case and that the lay client was unaware of the defaults.  The court, whilst expressing concern at the apparent lack of systems at the Claimants' solicitors' firm enabling such defaults to go unnoticed, found the depression to be a 'good' reason under the second stage of the Denton test referring to paragraph 41 of the judgment in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537.

Addressing the third stage of the Denton test (evaluating all the circumstances of the case, so as to enable the court to deal justly with the application including consideration of the matters specifically listed at paragraphs (a) and (b) of CPR 3.9), the court in particular noted that the Defendants were themselves in similar default as a result of a 'mistaken, deliberate and tactical' decision by their solicitors that doing so would enable them to succeed either on a strike out application or at trial.  The court found that it would be 'an excessive sanction to visit the whole consequences of equal defaults on the Claimants'.  The court further held that 'The Defendants took a tactical decision and are poorly placed to say that they suffer any injustice if the trial can proceed.  It just means that their tactical gamble was unsuccessful'.  Crucially amended directions could be ordered so that the trial date (only some two and a half months away) could still be kept.

The transcript of the judgment is awaited.


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