In a recent decision, the High Court held that an application to admit witness evidence which had been filed and served late should be treated like an application for relief from sanctions under CPR 3.9: Wolf Rock (Cornwall) Ltd v Langhelle  EWHC 2500 (Ch).
The courts have previously implied sanctions into various rules and orders which contain no express sanction. In such cases, applications for relief from the consequences of a failure to comply with the relevant rule or order are subject to the provisions of CPR 3.9 and the relatively strict approach set down by the Denton/Mitchell principles (outlined here).
In the present case, the court held that the ”obvious inference” in relation to an order that evidence should be filed and served by a certain time was that evidence filed and served late would not be admitted, except with the permission of the court. As such, although the order contained no express sanction, the consequence of non-compliance was the same as if there had been a sanction (ie that late evidence would not be admitted). As a result, there were good policy reasons for treating the application to admit the late evidence in the same way as any other application for relief from sanctions.
This decision follows similar decisions by the Court of Appeal in relation to late applications for an extension of time for the filing of an appellant’s notice (Sayers v Clarke Walker  EWCA Civ 645) and for the filing of a respondent’s notice (Altomart Ltd v Salford Estates (No 2) Ltd  1 WLR 1825, which we considered here).
The decision is of particular interest in suggesting that the courts may imply a sanction, for policy reasons, even where it cannot be said that the unexpressed intention of the rule-maker or judge was to impose a sanction for breach – essentially, the judgment suggests, a sanction may be implied where the courts consider the consequence of non-compliance to equivalent to an express sanction. However, there remains a lack of clarity as to exactly when that will be the case.
The respondent, Ms Langhelle, was the (substituted) petitioning creditor for the winding up of the appellant company, Wolf Rock, under section 122(1)(f) of the Insolvency Act 1986. Ms Langhelle claimed that Wolf Rock had failed to pay various sums owing to her in relation to her salary, expenses she had incurred on its behalf and loans she had made to it. Wolf Rock denied these claims.
The district judge gave directions as to the service of evidence, including that Wolf Rock must file and serve any further witness statement by 24 July 2019. The deadline was subsequently extended to 16 August 2019.
On 22 November 2019, Wolf Rock filed and served three additional witness statements (the “22 November Statements”), including a statement which set out details of a significant cross-claim which would overtop Ms Langhelle’s claims.
At the substantive hearing on 6 December 2019, Wolf Rock applied for permission to rely on the 22 November Statements. The district judge refused permission, holding that the application was similar to an application for relief from sanctions under CPR rule 3.9 and that Wolf Rock had not satisfied the Denton/Mitchell principles.
Wolf Rock appealed this decision, arguing that (amongst other things) there was no need for an application for relief from sanctions as the 22 November Statements were not in breach of any relevant court order.
The High Court (HHJ Paul Matthews sitting as a High Court judge) dismissed the appeal.
He noted that no specific sanction was prescribed for breach of the order in this case, but said that in recent years case law has built up the concept of the “implied sanction”, to which the Denton/Mitchell principles are equally applicable. Having reviewed the relevant authorities, the judge said he understood the position to be that:
“…although there are cases where the rule or order does not expressly state a sanction and the court by a process of interpretation nevertheless construes the rule or order as impliedly containing one, there are also cases where there is no intention to create a sanction but the law for policy reasons treats the case as one analogous to an application for relief from sanctions, and applies the Denton/Mitchell principles”.
In other words, an application for relief from the consequences of breach of a rule or order which contains no express sanction should be treated as an application for relief from sanctions if either:
- it was the unexpressed intention of the rule-maker or judge that there should be a sanction attaching to the relevant rule or order, applying a process of construction in the relevant context; or
- there are policy reasons for treating the case as an application for relief from sanctions.
The court also agreed that it would be wrong to imply a sanction in all cases where the relevant rule or order uses the word “must”.
The court doubted whether comments of the Chief Master in the recent of case Djurberg v Richmond London Borough Council (considered here) were completely compatible with the Court of Appeal’s decision in Altomart, in particular that it would be “rare of the court to be able to reach the threshold for implication” of a sanction, since “if it is so obvious that the court intended there to be a sanction, why was it not expressed”. While that may be the case for an implied intention in fact to impose a sanction (the first category referred to above), it had no application to the second category where the question is whether the case should be treated as analogous to an application for relief.
On the facts, the court concluded that the district judge had exercised his powers under CPR 32.1 to control the evidence, in particular by requiring that evidence had to be filed and served in accordance with the prescribed timetable if it was to be admissible. Consequently, the 22 November Statements, which had been served and filed late, were not admissible, except with the permission of the court. This was comparable to the position in Sayers, where the prospective appellant could not appeal without permission to file an appellant’s notice late, and Altomart, where a respondent could not rely on additional grounds for upholding an appealed judgement without permission to file a respondent’s notice late. Accordingly, for the same policy reasons, the application for permission to admit the 22 November Statements should be treated like an application for relief from sanctions.
The court also dismissed Wolf Rock’s submission that the district judge had not applied the Denton/Mitchell principles correctly. Whether the present court would have reached the same conclusion was irrelevant. There was no basis for challenging the district judge’s decision.