In case we were all in danger of thinking the courts' approach to breaches of rules and court orders had relaxed nearly to pre-Jackson levels of tolerance, two very recent Court of Appeal decisions act as a bit of a wake-up call. As these decisions show, there is clearly continuing scope for tough decisions against those who fail to comply, particularly where they do not make a prompt application for relief from sanction. The lesson for litigating parties is obvious.

In British Gas Trading Ltd v Oak Cash & Carry Ltd [2016] EWCA Civ 153, the court dismissed a defendant's appeal against the strike-out of its defence resulting from a two-day delay in filing a listing questionnaire pursuant to an unless order. That means a default judgment entered against the defendant for some £200,000 will stand.

Significantly, Lord Justice Jackson (who gave the leading judgment) suggested that a prompt application for relief from sanctions would have been granted; however, the delay in applying for relief had led to substantial disruption in the progress of the action, in particular the loss of the trial date, and so it was not appropriate to grant relief.

In Gentry v Miller [2016] EWCA Civ 141, the Court of Appeal held that the lower courts should have refused to set aside default judgment, where the defendant had delayed in making the application, despite evidence that the claim may have been fraudulent. This decision also highlights the fact that the Denton test for relief from sanctions (outlined here) applies equally to an application to set aside default judgment for failure to file an acknowledgement of service or defence.

The two decisions are considered in more detail below.

British Gas v Oak Cash & Carry


The defendant's defence was automatically struck out on 19 February 2014 because it failed to comply with an "unless order" requiring its listing questionnaire to be filed by that date.

The day before the deadline expired, a trainee solicitor at the firm representing the defendant had filed a directions questionnaire (not a listing questionnaire) at the court. The solicitors filed the correct document two days late (on 21 February) but did not then apply for relief from sanctions.

On 25 February the claimant applied for judgment in default of defence (on the basis that the defence had been struck out) and default judgment was entered for £211,388 on 18 March. On 24 March the defendant applied for relief from sanction. It did not apply to set aside the judgment in default.

The district judge granted relief from sanction and set aside the judgment in default. That decision was overturned on appeal to the High Court, so that the default judgment was restored. The defendant appealed to the Court of Appeal.


The Court of Appeal dismissed the appeal, with Lord Justice Jackson giving the lead judgment.

In considering whether relief from sanction should have been granted under CPR 3.9, it was necessary to apply the three-stage test established in Denton:

Stage 1: Was the breach serious or significant?

In assessing the seriousness or significance of a breach, the court must ignore historic breaches and look only at the particular breach in respect of which relief is sought. However, where there is a breach of an "unless order", that breach does not stand on its own; it is necessary to look at the underlying breach which resulted in the unless order being made.

Lord Justice Jackson commented:

"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. This is for two reasons. First, X is in breach of two successive obligations to do the same thing. Secondly, the court has underlined the importance of doing that thing by specifying an automatic sanction in default (in this case the Draconian sanction of strike out)."

Not every breach of an unless order would be serious or significant – so for example in the Utilise case (heard with Denton), a 45 minute delay in complying with an unless order was held to be trivial, in circumstances were there was no underlying breach of the rules onto which the unless order was attached.

Here, however, the defendant had had three months to comply with the original order to file the listing questionnaire (which was made on 1 November 2013) and had missed the original deadline by 18 days (it expired on 3 February 2014) as well as missing the extended deadline by 2 days. It was not possible to classify the breach as anything other than serious and significant.

Stage 2: Was there good reason for the default?

In Mitchell, the Court of Appeal gave some examples of good reasons, including that if a party or his solicitor suffered from a debilitating illness or was involved in an accident then, depending on the circumstances, that might constitute a good reason.

Here the fact the defendant's solicitor's wife was suffering from health problems did not constitute a good reason for the default. The health problems had been known for many months. The firm should have provided appropriate cover for the solicitor's cases and provided appropriate supervision for the trainee dealing with the matter. In addition, the solicitor had in fact attended the office on 17 February and approved submission of the directions questionnaire, when it should have been obvious it was not the correct document.

Stage 3: All the circumstances, including specific factors set out in CPR 3.9

At stage 3, the court must consider all the circumstances of the case, but must attach particular weight to the factors set out in CPR 3.9, namely the need for litigation to be conducted efficiently and at proportionate cost, and to enforce compliance with rules, practice directions and orders.

Here, the defendant's lack of promptness in applying for relief was the critical factor that led to the appeal being dismissed. Lord Justice Jackson commented that, if the defendant had made an immediate application for relief at the same time as, or very soon after, filing its listing questionnaire, he would have been strongly inclined to grant relief. At that point, the late filing of the listing questionnaire had not had any adverse impact on the smooth conduct of the action or the court's administrative processes.

However, by the time the defendant applied for relief, on 24 March, the trial dates of 30 April / 1 May had been lost and so the default had substantially disrupted the progress of the action. Bearing in mind the specific factors set out in rule 3.9 (which under Denton must be given particular weight) the court was required to refuse the application for relief.

Gentry v Miller


The underlying claim arose out of a road traffic accident. The facts are complex, but in essence the defendant's insurer failed to engage properly with the claim, despite being notified that the claimant was incurring charges for a replacement vehicle under a credit hire facility and would continue to do so until the insurer paid the claim.

Ultimately the claimant entered judgment in default of acknowledgement of service against the defendant on 8 August 2013. The claimant was awarded damages of £75,089 plus costs at a disposal hearing on 17 October 2013, which neither the defendant nor its insurer attended.

On being notified of the award of damages and costs, the insurers instructed solicitors who, on 25 November, applied to set aside the judgment in default alleging that the claim was in fact fraudulent and that the claimant and defendant had known each other before the accident. The district judge set aside the judgment and the recorder dismissed the appeal. The claimant appealed to the Court of Appeal.


The Court of Appeal allowed the appeal, Lord Justice Vos giving the leading judgment.

It was accepted that the application to set aside the default judgment under CPR 13.3 was to be treated as an application for relief from sanctions under CPR 3.9. It was also accepted that the principles established in Denton applied regardless of the allegations of fraud.

The appropriate course was first to apply the express requirements under CPR 13.3, namely whether the defendant had a real prospect of successfully defending the claim or there was some other reason the judgment should be set aside, taking into account the promptness of the application to set aside. After that, the Denton tests came into play.

The Court of Appeal noted that there must be finality to litigation and the rules of court must be obeyed, so a default judgment could not be set aside as a matter of course just because an arguable fraud was alleged, however long the delay in making the application. At some point, the court must leave the applicant to vindicate its rights by bringing an action based on the fraud. When that point arose could be resolved by the application of the relevant tests under CPR 13.3 and the Denton criteria.

Here, the court found that the insurer had not made the application promptly. It delayed inexcusably from the point when it could reasonably have obtained a sufficient knowledge of the default judgment to enable it to apply to set aside, which was by at least 19 September (even though it was not immediately served with the default judgment, as it ought to have been).

Applying the Denton tests: (1) the breach which allowed default judgment to be entered was serious or significant; (2) there was some explanation for the failure, though not a complete one; (3) taking into account all the circumstances, and in particular the need for litigation to be conducted efficiently and to enforce compliance with rules and order, the application to set aside ought to have been refused.

Lord Justice Vos concluded with comments on what he recognised might seem a harsh decision:

"In my judgment, Mitchell and Denton represented a turning point in the need for litigation to be undertaken efficiently and at proportionate cost, and for the rules and orders of the court to be obeyed. Professional litigants are particularly qualified to respect this change and must do so. Allegations of fraud may in some cases excuse an insurer from taking steps to protect itself, but here this insurer missed every opportunity to do so. …. The insurer must in these circumstances face the consequences of its own actions."