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Court of Appeal clarifies Denton test when seeking relief from sanctions imposed by unless order

In British Gas Trading Ltd v Oak Cash & Carry Ltd [2016] EWCA Civ 153 Jackson LJ has clarified the Denton test when seeking relief from sanctions imposed by unless orders and reiterated the need to act promptly.

He considered whether the court was entitled to take into account the original breach giving rise to the unless order when assessing the seriousness or significance of the breach at “stage one” of Denton. In paragraph 27 of Denton, the majority held that the court should not consider “other unrelated failures” at stage one, but should concentrate on “the very breach” in respect of which relief was sought. In Jackson LJ’s view, “unrelated failures” referred to earlier breaches of rules or orders.

However, an unless order was usually only made where a breach already existed, and could not be viewed in isolation. In assessing the seriousness and significance of breaching an unless order, it was necessary also to consider the underlying breach. Applied to an unless order, “the very breach” meant “the failure to carry out the obligation which was (a) imposed by the original order or rule and (b) extended by the unless order”.

Here, filing a pre-trial checklist (PTC) 18 days late under the original order (which allowed three months for compliance), and two days late under the unless order, was serious and significant. A fee earner’s absences due to family illness were not a good reason for the default.

Jackson LJ would have been “strongly inclined” to grant relief at stage three had the defendant applied when (or very soon after) filing its PTC. The claimant might (and should) have consented to a prompt relief application. However, the defendant failed to apply until a week after default judgment was issued, by which time the trial date had been lost. This delay was critical and meant that relief must be refused.

The full case can be found here:

http://www.bailii.org/ew/cases/EWCA/Civ/2016/153.html

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