Greig Middleton & Company v Denderowicz [1997] EWCA Civ 2026 (4th July, 1997)

1.1 This is the judgment of the court, to which all three members of the court have contributed equally. We were invited to sit together for seven weeks after Easter this year in order to dispose of more than 100 appeals or applications for leave to appeal which had accumulated in connection with the operation of Order 17 Rule 11 of the County Court Rules. At the end of the third week of this period we gave a composite judgment entitled Bannister v SGB plc (unreported, 25th April 1997: see, for a summary, The Times, 2nd May 1997) (“ Bannister”) in which we restated the existing law and resolved a large number of outstanding issues when deciding 19 appeals and 2 applications of this kind. Copies of our judgment in Bannister were sent to all the parties in the outstanding appeals and applications, and as a result a large number of them were resolved by agreement without the need for a court hearing. In order to dispose of the remainder we sat for the next 3½ weeks in a series of two-judge divisions of the court, mainly consisting of Brooke and Waller LJJ. On 22nd May we reconstituted ourselves as a three-judge division to hear the three remaining cases in our list. In one of these cases the appeal as against one of the defendants has now been resolved without any need for a formal judgment, but because a novel point was suddenly being taken for the first time as against the other, we adjourned that part of the application in order to hear argument from both sides. Two of us (Brooke and Waller LJJ) have now heard argument inter partes in that case. This judgment contains our judgments on the two cases we have decided as a three-judge court, and some additional comments which are designed to take further forward the effort we undertook in our judgment in Bannister, in order to make it easier for judges and practitioners to operate this difficult rule.

1.2 These last three cases were selected for special treatment because they raised points on which we were able to reconsider certain obiter dicta contained in our judgment in Bannister. The present judgment affords us the opportunity of correcting or clarifying those points. Two of them also raise an important new issue, following Bannister, in relation to cases where applicants are seeking to appeal out of time. This relates to the proper approach the court should adopt where such applications are lodged out of time because the law has now been authoritatively held to be different from what it was thought to be when the losing party originally decided not to appeal against a judgment. Brooke and Waller LJJ had already heard, but reserved judgment in, four other applications of this type. In this judgment of the full court we will therefore state the principles which should be followed, and we will then go on to apply them to the application we have decided as a three-judge court in which these issues arose. We are also adding as annexes to this judgment the reserved judgments of Brooke and Waller LJJ which they are now delivering in the four other cases to which we have referred, and also their judgment in the case which was adjourned on 22nd May for an inter partes hearing.

1.3 We authorised two versions of our judgment in Bannister to be published, one in hard copy transcript form and one on the Internet. Because the page numbering of these two versions differed and because those who downloaded the judgment from the Internet are likely to have different paging systems, we have inserted paragraph numbering into the main text of the original judgment (as opposed to its Schedules). In the Schedule to the present judgment we explain the paragraph numbering we have now adopted. It also seemed to us that it would be very much more convenient if we were to incorporate into the original text of our judgment the corrections and clarifications we have mentioned, and we have directed that it is this revised version of our judgment in Bannister, as clarified and corrected, which should appear in any official law report. We have also directed that the text of the judgment which currently appears on FELIX, the judges’ electronic communications system, and on the Internet on the website of the Lord Chancellor’s Department should be replaced by this revised version, and copies of this revised version should be sent to court administrators for distribution to judges as before. In addition, this judgment should itself be distributed on FELIX and the Internet, and to court administrators for distribution to judges.

1.4 We also believed that it would be helpful to practitioners if we were to include in our present judgment a summary of the new points decided by two-judge divisions of this court during the four weeks which followed our judgment in Bannister. Most of the cases they heard raised no new points of general interest, but a few of them did, and we are including a summary of these in the final part of this judgment.

1.5 We have accordingly designed the present judgment along the following lines. In Sections 2-5 we will clarify or correct some of the things we said in our judgment in Bannister. In Section 6 we will give our judgment in the case of Greig Middleton v Denderowicz . In Section 7 we will state the general principles this court will apply when it considers an application to extend the time for appealing in cases arising under Order 17 Rule 11 where there has been an authoritatively stated change in the law since the date of the judgment now under challenge. In Section 8 we will apply those principles to the case of Olaleye-Oruene v London Guildhall University . In Section 9 we will summarise the new points that have been decided by two-judge divisions of the court since Bannister. Finally, in an annex to this judgment we set out the reserved judgments of Brooke and Waller LJJ in the outstanding cases of Cosshall v Harris, Kavia v Stavrinos, Anderson v Glyde and Raven v Curry, and their reserved judgment in King v C H Financial Services.

2. Corrections/Clarifications: (i) Date for Delivery to the Court Office and Computations of Time clarified

5.2A This Practice Direction applies to the county court by virtue of Section 76 of the County Courts Act 1984. This rule means, of course, that there can be no question of delivery of a defence being deemed to have been effected on a Saturday or Sunday, or on a Bank Holiday, and in any event the proper officer would not be present to receive the document (see Order 2 Rule 5(1)) when the court office is closed. The court should adopt the actual date when the defence is delivered to the court office by post when this date is known (for example from a date stamp which shows the date of receipt), since this will represent “proof to the contrary” of the date when delivery was effected. If in any case a judge finds that the contrary has indeed been proved by reference to the evidence before him, this court will not interfere with his decision unless it is clearly wrong”.

“Another worked up example would be: defence delivered on 3rd March: pleadings deemed closed on 17th March: guillotine date on 17th June: application for hearing date on 18th June too late. Although an application may be made by post (Order 2 Rule 5) it must be received by the proper officer at the court office on or before the guillotine date (compare Hodgson v Armstrong). If the court office is closed on the guillotine date, the request will have been made in time if it is made on the next day following the guillotine date when the court office is open (see Order 1 Rule 9(5), again applying the pragmatic approach in the Tanglecroft case, above).”

3. Corrections/ Clarifications: (ii) Fixing a hearing date

4. Corrections/Clarifications: (iii) Arbitration

4.1 In paragraph 14.6 of our judgment in Bannister we made some comments, by way of example, about the directions which are to be applied when a small claim is referred to arbitration. In making these comments we overlooked the fact that by Order 17 Rule 11(1)(c) it is expressly provided that the Rule does not apply to “proceedings referred for arbitration under Order 19”. The example we gave was therefore a misleading one, and it is not a good illustration of the point we were seeking to make. This paragraph has therefore now been deleted.

4.2 We have, however, given more thought to the situations which can occur either when an action is automatically referred to arbitration pursuant to Order 19 Rule 3, or when an application to refer an action to arbitration is made under Order 19 Rule 9. We have therefore thought it appropriate to substitute the following guidance, which will be inserted after paragraph 14.5 in the revised judgment.

14A.1 By Order 17 Rule 11(1)(c) “proceedings which are referred for arbitration under Order 19” are excluded from the ambit of Order 17 Rule 11. Proceedings can be so referred either automatically under Order 19 Rule 3, or on the application of one of the parties under Order 19 Rule 9. Where the matters in issue actually go to arbitration under either of these Rules, Order 17 Rule 11 clearly does not apply.

14A.2 A question could arise, however, as to whether Order 17 Rule 11 applies to proceedings automatically referred under Order 19 Rule 3, if the district judge then orders a trial in court under Rule 3(3). In our view, since the action has already been referred to arbitration automatically, it is within the exception contained in Order 17 Rule 11(1)(c), and it remains within that exception. If a trial is then ordered in court, the district judge must give manual directions, and in our view because the action has been excluded from Order 17 Rule 11, it is not open to the court to apply the automatic directions, or to give manual directions to which the strike-out principles inherent in automatic directions will apply: in other words, the guidance we give in paragraph 10.5 above is apposite in this context.

14A.3 The position in relation to an application to refer a matter to arbitration would appear to us to be different. Consistently with the views we will be expressing in relation to applying for summary judgment or applying for an order for the trial of a preliminary point (see paragraphs 17.1-18.5 below), the application to refer the matter for arbitration will take the action outside the ambit of the automatic directions. If, however, that application is withdrawn, abandoned, not proceeded with for any reason or refused, the court will need to give manual directions. So long as the action is one to which Order 17 Rule 11 would otherwise have applied, these manual directions could be in terms equivalent to automatic directions, with both a trigger date and guillotine date clearly expressed, to which the principles applicable to automatic directions would apply. We have described manual directions of a similar type at paragraph 11.8 above. In this context, too, it may be preferable to fix a date for trial towards which the parties will be directed to work: see paragraph 23.1 below.”

5. Corrections/Clarifications: (iv) Applications for Summary Judgment and Interlocutory Judgment

5.1 In paragraphs 16.1 and 17.1-17.3 of our judgment in Bannister we considered cases in which automatic directions are ousted because there has been a default judgment, or an application for summary judgment, or for an interlocutory judgment on an admission. We believe that it would be helpful if we expanded and clarified this guidance, although we doubt if our new advice is in practice very different from what we said before. We are taking this course because in one of the cases we heard on 22nd May we had to look in more detail at the situation where there is an admission in whole or in part, and at the express exclusion in Order 17 Rule 11(1)(o) of “an action to which Order 9, Rule 3(6) applies (admission of part of plaintiff’s claim)”, to which for completeness we should previously have referred. The treatment of admissions in Order 9 also appears to us to merit separate consideration from the treatment of applications for summary judgment.

5.2 So far as applications for summary judgment are concerned we wish to re-emphasise that the application itself takes the action outside the automatic directions whatever the eventual outcome. Thus, if the application is dismissed or withdrawn or struck out for lack of attendance, it will still be necessary for the court to give manual directions. Those manual directions can, if the action is one that would otherwise fall within Order 17 Rule 11, be equivalent to the automatic directions with a trigger date and guillotine date clearly expressed to which the principles applicable to automatic directions apply, although once again, as we said in paragraph 17.3 of the original version of Bannister (now 16.11 of the revised version), it may be better to fix a date for trial at the outset rather than reintroduce the automatic strike out concepts.

5.3 However, we overlooked the fact that in contrast to the position in the High Court, in the county court the summary procedure under Order 9 Rule 14 is only available where a document “purporting to be a defence” has been delivered. It is thus difficult, in the light of the views we expressed in paragraph 6.7 of Bannister as to what constituted a defence, to envisage any situation in which at the conclusion of an application for summary judgment the court would give directions on the basis that a defence had not yet been delivered.

16.1 We would now go rather further than it was necessary to go in Gomes. An application for summary judgment cannot be said to constitute a request for a hearing date within the meaning of Rule 11(3)(d), but this kind of application against any defendant takes the whole action outside the ambit of automatic directions, since automatic directions are concerned with taking the action forward to a full trial. Order 9 Rule 14 (4) seems to us to have been framed in a way which shows that as soon as an application for summary judgment has been made there is no immediate scope for the continuing application of any of the provisions of Order 17, whether automatic or manual. We stress that the application will take the action outside the automatic directions regime whatever its subsequent fate. Thus, if it is dismissed or withdrawn or struck out for want of attendance, it will still be necessary for the court to give manual directions.

16.2 If the application for summary judgment is determined by a decision granting the defendant leave to defend, Order 9 Rule 14(4) provides that “the court may treat the hearing as a pre-trial review and Order 17 with the necessary modifications shall apply accordingly”. Since it is difficult to contemplate that a document “purporting” to be a defence (see Order 9 Rule 14(1A)) will not in fact have constituted a defence for the purposes of Order 17 Rule 11, manual directions should always be given.

16.3 When any manual directions are given following the disposal of an application for summary judgment, provided the action is one to which Order 17 Rule 11 would otherwise have applied, it will be open to the court to re-apply directions equivalent to automatic directions, with a trigger date and guillotine date clearly expressed, to which the principles applicable to automatic directions would apply. Elsewhere in this judgment we have advocated fixing a date for trial at an early stage which avoids the automatic strike out. Nothing we say here should be regarded as detracting from that view.

16.4 Much of Order 9 is concerned with actions which are not destined to go forward to a full trial, either because a defendant has admitted liability in full, or because he has admitted liability for part of a claim and the plaintiff is willing to accept the part admitted in full satisfaction of the whole claim or, in a default action, because no defence is delivered. In such cases judgment may be obtained by an administrative procedure, and there is no question of Order 17 Rule 11 applying, even if there is an ongoing dispute about time for payment. If in a fixed date action judgment is obtained in respect of a partial admission or in default of defence (under Rules 4 and 4A), manual directions must be given in respect of any part of the claim that is still outstanding.

16.5 Even if the action proceeds against other defendants, Order 17 Rule 11 will not apply for the reasons we have set out in paragraph 6.10 above. We have already rejected the idea of trigger dates operating retrospectively in cases where one or more defendants do not, in the end, deliver a defence for whatever reason, and one of the reasons for such non-delivery might be that an admission of liability by such a defendant obviates the need for a defence; and it would be chaotic if there were to be one regime in cases where an admission of liability by one defendant precedes the delivery of other defendants’ defences, and a different regime in cases where one of the defences is delivered before an admission (which disposes of the claim as against that defendant) is forthcoming from one of his co-defendants.

16.6 It follows that if a default judgment is entered against one of several defendants it will be necessary for the court to give manual directions. If that judgment is subsequently set aside it may then be necessary to give further manual directions in order to adjust the earlier timetable. This question does not arise if a default judgment is entered against the only defendant in the action, and if that judgment is subsequently set aside, we see no reason why automatic directions should not apply, since a defence must then be delivered, and there will be no difficulty in identifying a trigger date, calculated from the time when the only defence in the action is delivered.

16.7 Order 9 Rule 3(6) is concerned with a situation in which the defendant has admitted part of the plaintiff’s claim and the plaintiff notifies the proper officer that he does not accept the amount admitted. Order 17 Rule 11(1)(o) expressly excepts an action to which Order 9 Rule 3(6) applies, but we would emphasise, as one of the cases we have decided shows, that this sub-rule only applies when both its requirements are met. In other words there must be both a partial admission and a notification by the plaintiff to the proper officer that he does not accept the amount admitted.

16.9 In cases where an application to a member of the judiciary is required before judgment may be entered on an admission (for example, under Order 11 Rule 3(7)(b), or where there is a dispute as to whether an admission has been made, and the court declines to allow judgment to be entered by administrative process), the making of such an application must in our view have the same effect as an application for interlocutory judgment, and manual directions will be required for the conduct of the balance of the action.

16.10 If a defendant makes an application under Order 9 Rule 2(4) to withdraw an admission of a type which has allowed or would allow one of the procedures for obtaining interlocutory judgment to be put in train so as to dispose of the action (at any rate so far as liability is concerned), and the court permits him to do so, manual directions will once again be required. We are not here concerned with an application to withdraw an admission which is simply part of a defence in an action to which Order 17 Rule 11 already applies, because there is no reason why the automatic directions should not continue to apply whether or not such an admission is allowed to be withdrawn.

16.11 When we refer in this section to manual directions, provided that the action would otherwise be within Order 17 Rule 11, there is no reason why manual directions should not be given equivalent to the automatic directions, with a trigger date and guillotine date clearly spelt out, to which the principles applicable to automatic strike out would apply. If this course is adopted, a form of words such as “Directions in the same form as Order 17 Rule 11(3)” should not be used, because this could lead to the court ignoring the need to consider the timetable which would be appropriate for the particular action at the time when such directions are being given. Once again, we would strongly encourage the giving of directions which will include the fixing of a date for trial from the outset to which everyone can work.

18.1 We believe that we need to stress, although it will be quite obvious from this judgment, that there will be many occasions when the provisions of Order 17 Rule 11 will have been ousted in actions which might otherwise have been thought to fall within that rule. Both district judges and circuit judges will have to be diligent in ensuring that such actions are not left directionless.

18.2 We realise that a burden will also be imposed on court staff who will have to identify the cases in which the issuing of an application has taken the action outside the automatic directions regime, so that all such cases may be brought to the attention of the district judge. Where, for example, an application for summary judgment, albeit later withdrawn, has taken a case outside the automatic directions regime, that case will become directionless unless appropriate action is taken. In order to make the present rule work, administrative procedures will have to be set up for identifying and referring to the district judge all the cases in which relevant applications have been made, for example, applications for reference to arbitration, for summary or interlocutory judgments, or for orders for the trial of preliminary points.

18.3 If this cannot be done, and if it is still impossible nine years later to implement Recommendation 41 of the 1988 Report of the Review Body on Civil Justice - “computer facilities for the management of lists and individual cases should be made available as a matter of priority” - then a rule which is really only appropriate for simple single-defendant actions which have no significant interlocutory excursuses, should be changed without delay.

6.1 In this action, started in the Westminster County Court, the plaintiffs, who are stockbrokers, claimed over £10,000 from one of their customers in relation to transactions they had handled for him on the Stock Exchange. The defendant completed Form N9B in which he admitted that £204.50 was owing to the plaintiffs, but he otherwise denied the claim and stated that a fully pleaded defence was to follow. It was common ground that this form was received by the court by, at the latest, 30th April 1992.

6.2 The case was transferred to Gateshead County Court under Order 9 Rule 2(8). On 15th May 1992 that court erroneously issued a notice to the effect that the action had been referred to arbitration under Order 19 Rule 2(3) (whose current, amended, equivalent is Order 19 Rule 3(1)) and that there would be a preliminary hearing on 14th July. Shortly afterwards the court issued a further notice to the effect that the automatic directions applied and that these replaced this preliminary hearing. On 23rd July the defendant delivered a defence settled by counsel.

6.3 There then followed a long history of applications to the court. For reasons that will become apparent it is not necessary to go through this history. Suffice it to say that on 1st February 1995 Deputy District Judge Dodds decided that the action had not been automatically struck out, on the grounds that the plaintiff had applied for an extension of time before the guillotine date. The defendant unsuccessfully appealed to Judge Cartlidge and now, with the leave of a single Lord Justice, appeals to this court.

6.5 First it was argued that the part admission in Form N9B (which is to be treated as the defence for the purpose of calculating the trigger date; see Bannister paragraph 6.8) meant that the action fell outside the provisions of Order 17 Rule 11, since Rule 11(1)(o) excepts from that Rule “an action to which Order 9 Rule 3(6) applies (admission of part of plaintiff’s claim).”

6.6 Order 9 Rule 3(6) on its face applies “where the defendant admits part of the plaintiff’s claim and the plaintiff notifies the proper officer that he does not accept the amount admitted.” In that event the rule prescribes an automatic transfer to the defendant’s home court and a special procedure for a pre-trial review or the fixing of a day for the hearing of the action. This is the reason why, when the sub-rule applies, the automatic timetable in Order 17 Rule 11 is expressly displaced. In its context the sub-rule is dealing with a case where the plaintiff is not prepared to accept an admitted sum in full satisfaction of his claim, in contrast to the earlier parts of Order 9 Rule 3, which deal with cases where the plaintiff is so satisfied.

6.7 In the present case the defendant sent a cheque to the plaintiffs for the amount he admitted was due shortly after the proceedings began. They accepted this as a payment on account, but they failed to notify the proper officer that the amount was not accepted as satisfying the claim. In those circumstances the proceedings did not become “an action to which Order 9 Rule 3 (6) applies” for the simple reason that one of the two conditions for the application of this sub-rule was not fulfilled (see, now, paragraph 16.7 of the revised version of Bannister).

6.9 Order 19 Rule 2(3), as it then read, provided that any proceedings in which the sum claimed or amount involved did not exceed £1000 “shall stand referred for arbitration by the district judge upon the receipt by the court of a defence to the claim, but the district judge may, on the application of any party, refer the proceedings for arbitration by the judge or by an outside arbitrator.”

6.10 The argument advanced to us was to the effect that this sub-rule (now to be found in Order 19 Rule 3(1) but with the higher limit of £3000) required the district judge to refer the matter to arbitration, and that this must have happened in the present case, so that there was by judicial act a reference to arbitration under Order 19 Rule 2(3), which accordingly took the action out of Order 17 Rule 11.

6.11 The short answer to this argument is that the words “the district judge” identify the person who is to arbitrate, not the person who is to refer the matter to arbitration. Were this not so, then the rule would not identify the arbitrator at all. The words “shall stand for arbitration” make it clear that provided the proceedings fall within the stipulated description, the matter will be arbitrated by the district judge without the need for an order to that effect, unless the district judge refers the proceedings to another arbitrator. In other words, in such cases the reference to arbitration is automatic, although later parts of Order 19 Rule 2 (as it then was) made provision for such a reference to be rescinded in certain circumstances.

6.12 In the present case the proceedings did not fall within the stipulated description, since the amount claimed was in excess of £1,000. Accordingly there could be no automatic reference to arbitration. The notice issued by the county court was not notice of any judicial determination that the matter should be referred to arbitration. It was simply an error on the part of an executive officer of the court who for some reason thought that there had been an automatic reference, an error which was corrected a few days later. It was not, and could not be, suggested that such an error could have the effect of referring the action to arbitration, whether under Rule 2(3) or otherwise. It follows that these proceedings were not referred for arbitration under Order 19, so that the action was not excepted for this reason from Order 17 Rule 11.

7.1 In Note 59/4/4 of the Supreme Court Practice 1997 it is said, correctly, that it is entirely in the discretion of the court to grant or refuse an extension of time. Some of the decided cases which touch on different aspects of the exercise of this discretion may be helpful (subject to what we say below) in identifying the principles which the court should apply on an application to extend time, so as to bring about a measure of consistency. As the Note says, the factors which are normally taken into account are (1) the length of the delay; (2) the reasons for the delay; (3) the chances of the appeal succeeding if time for appeal is extended; and (4) the degree of prejudice to the potential respondent if the application is granted. The original modern authority for these propositions is CM Van Stillevoldt BV v EL Carriers [1983] 1 WLR 207, to which we will refer again below. The point we wish to emphasise at this stage is that the extent to which a defendant may be entitled to rely on the fact that an appeal is now to be re-opened will depend on the facts of the individual case. If a decision has been made not to appeal, and the defendant is told of this, the fact that he may later have to face an appeal that he thought was not to be pursued is a factor of considerable weight to put in the balance in his favour.

7.2 We are here concerned with the exercise of the court's discretion in relation to granting an extension of time for appealing where, following a decision at first instance, the applicant originally decided not to appeal. In each of the cases we have had to consider, either as a two-judge division or a three-judge division, the law has subsequently been clarified so as to demonstrate either that the original ruling was wrong or, at the very least, that there is a strong argument that it was wrong. We have therefore been referred principally to a line of cases concerned with applications to extend time for appealing following a later decision of an appellate court which demonstrates that the first decision was wrong, or may well have been wrong. It should be remembered in this context that judicial attitudes can change over the years, and at the end of the day each case will depend on its own facts. We would deplore the citation of authority designed to show the way in which other courts in the past have carried out the necessary balancing exercise on different facts, since the facts in no two cases are the same. Statements of principle are, however, important, and we are therefore setting out below the way in which this court has developed the relevant principles over the years.

“No fund remained in court, there were no accounts to be taken, the whole litigation was at an end. If the plaintiff meant to appeal, his appeal ought to have been brought within a year ..... thereupon subject to the judicial discretion of the Court of Appeal to enlarge the time for appealing, the right of the defendant under the judgment of the Vice Chancellor was complete.”

“But even going further, and supposing that there had been an unanimous opinion of the Court of Appeal in accordance with the view of the Lord Chief Justice, I think it would have made no difference with regard to the present application. It would only have come to this, that more than a year after the decision in Craig v Phillips the Court of Appeal had come to a different decision on a vexed point of law. In my opinion that is not sufficient ground, in the absence of very special circumstances, to deprive a man of a judgment which has been given in his favour. I can understand a different view being taken in cases where the time limited for appeal is very short, as in appeals under the Winding-up Acts, and where accounts are still pending and the assets undistributed; in such a case a creditor whose proof had been refused might be allowed further time to appeal; but the same considerations do not apply to a case like the present. There are no special circumstances at all in this case; and it does not appear to me that the rights of the defendant ought to depend on the accident that this vexed point of law was differently decided after the expiration of the year allowed for appealing.”

“That is sufficient to dispose of this application. But I think it ought also to fail on the ground of the applicant’s delay in making it. The judgment in Twycross v Grant 2 CPD was delivered in June, 1877, after the year for appealing had already expired. That judgment was not delivered secretly or in an unimportant case. On the contrary, it was immediately reported in the public journals, and it must have been known to every member of the profession who took an interest in the subject. I cannot therefore leave out of consideration the time which elapsed between the delivery of that judgment and the present application. I do not think the plaintiff has shewn due diligence in coming to the Court on the 15th December, on account of a decision delivered on the 2nd of June; and of course any person who comes to ask the Court to relax the provisions of the rules in his favour, must shew great diligence, and not unnecessary delay, in doing so.”

7.7 In Esdaile v Payne (1888) 40 Ch D 520 the situation, in broad terms, which faced this court was that some defendants had appealed against the decision of the judge at first instance and others had not. Those that appealed lost in the Court of Appeal but then succeeded in the House of Lords. Following their success in the House of Lords, some of the others sought leave to appeal. Cotton and Bowen LJJ originally granted leave on the basis that it would be most unjust for the defendants who had not appealed to have to pay the tithes which were the subject of the litigation when in that very litigation it had been decided that they were in fact not so liable. But before their order was drawn up, the matter was re-argued when a further defendant who had not so far appealed applied for leave, and when some further evidential material had become available. This new evidence demonstrated that third parties had probably acted vis a vis the defendants who had not appealed on the basis that they were not going to appeal. This possible change of circumstance was enough to lead the court, now composed of Cotton, Lindley and Lopes LJJ, to refuse leave to appeal. In refusing leave, however, Cotton LJ said he was not sure that the first decision was right, now that fuller argument had been heard, and Lindley LJ added:

“It may appear harsh that these Defendants should be bound by a decree which the House of Lords has decided to be wrong, but the more I consider the matter, the more I think it just. Suppose an action for tithes brought against six holders of property, and a decree made against them all. Five out of the six submit and allow the time for appealing to expire. It is important that a state of things so brought about should not lightly be disturbed. The sixth Defendant is bolder; he appeals; and at last he obtains from the House of Lords a decision in his favour. The other five then naturally wish to appeal. What ought to be done? In my opinion it is for the interest of the public that litigants should know as soon as possible when certainty has been reached, and that if people have deliberately elected to let the time for appealing go by, the Court should not give them leave to appeal without special circumstances. I make these remarks because I wish that there should be no doubt as to the general principle.”

7.8 In In re J Wigfull & Son’ Trade Marks [1919] 1 Ch 52 Neville J at first instance had rectified the register, removing the respondents’ trade mark. Three years later the Court of Appeal dissented in a different case from the view that that judge had adopted in relation to the construction of the Trade Marks Act 1905. The plaintiffs then applied for leave to appeal out of time. Although the earlier cases were cited to him, Swinfen Eady MR stated the relevant test in the following simple terms:

7.9 He then referred to the fact that others might have used the mark in reliance on Neville J's original decision over the three years since that decision was made, and to the fact that the only excuse for not appealing at the time was that a relevant decision of the Court of Appeal had been given later. The court refused leave, Eve J referring to the well settled rule that:-

7.10 In Re Berkeley [1945] 1 Ch 1, a slight softening of approach may be detected. In May 1943 Cohen J decided that on the basis of a recent judgment of Simonds J an annuity in favour of Lady Berkeley was payable free of tax. No appeal was brought in time. In 1944 this court overruled Simonds J’s decision in the earlier case, and in October of that year an application for leave to appeal out of time was made by beneficiaries of the will who might receive nothing if Lady Berkeley received her annuity without deduction of tax. Lord Greene MR cited In re Wigfull & Sons’ Trade Marks and put the matter in this way:

“I find no difficulty in reconciling the statement that the different decision is not necessarily a ground for enlarging the time with the statement that the court can enlarge the time if it is just in the circumstances to do so. It seems to me that the principle to be extracted is that it is not sufficient for a party to come to the court and say that a subsequent decision of a superior court has determined that the principle of law on which his case was decided was wrong. The court will say to him: “That bald statement is not enough. What are the facts? What is the nature of the judgment? Who are the parties affected? What, if anything, has been done under it?” and so forth. In other words, the whole of the circumstances must be looked at. If the court in the light of those circumstances, considers it just to extend the time, then it will do so.”

7.11 In Ward v James [1966] 1 QB 273 Sellers and Russell LJJ granted leave to appeal out of time in November 1964 from an order made by Roskill J in July 1963 directing trial by jury in a personal injuries action. The defendants did not seek to appeal against the order when it was originally made, but they did so after three decisions of this court had cast doubt on the proposition that it was right to order trial by jury in a personal injuries action when the injuries were severe. In granting leave to appeal out of time Sellers LJ said at p 278 that he recognised that a mere alteration in the law might not be sufficient ground for extending time. However, the authorities cited to the court were all cases of appeals against a final judgment, and they were not therefore applicable to an interlocutory appeal of the present character, particularly where the form of the trial was an issue and the action was still some way from reaching trial. In the event a five-judge court, while giving general guidance on the way the discretion to order jury trials should be exercised, affirmed the judge’s order because of the defendants’ acquiescence in it for many months and the lateness of their appeal.

7.12 Lord Greene’s approach in Re Berkeley was followed in Property & Reversionary Ltd v Templar [1977] 1 WLR 1223. In that case Judge Edgar Fay QC held in November 1974 that since landlords had failed to comply with the strict letter of a rent review clause, their tenant was entitled to go on paying the original rent until at least the time of the next rent review, which was due to take place in 1979. In March 1977 the House of Lords cast doubt on the necessity for strict compliance with the wording of a rent review clause in a similar context. After citing Lord Greene’s judgment in Re Berkeley Roskill LJ said:-

7.13 The landlords were willing to undertake not to claim back rent for the two and a half years which had elapsed since Judge Fay's decision, and the issue in dispute was therefore limited to the question whether the landlords should be entitled to argue in this court that they should be entitled to recover the higher rent for the 18 months until the next rent review, or whether they should have to wait until that review before being entitled to increase the rent. Roskill and Cumming Bruce LJJ concluded that the continuing contractual relationship provided the necessary special circumstances for allowing the landlords leave to appeal out of time. As Cumming Bruce LJ said, “it does not seem just that future obligations between the parties to the lease should depend upon the construction now shown to be wrong.”

7.14 In CM Van Stillevoldt v EL Carriers [1983] 1 WLR 207 Griffiths LJ was concerned with an application for leave to appeal out of time from a decision of Staughton J that he had no jurisdiction to extend the time of appointment of an arbitrator. The Registrar of this court had refused an extension of time, relying inter alia on the fact that this was the second time that the would be appellants were craving indulgence, the whole case being concerned with the late appointment of the arbitrator. Griffiths LJ held at p 213 that the Registrar was entitled to take that fact into account, but in the exercise of his own discretion he extended time, holding that the delay was short (days not weeks); there were personal reasons of the solicitor (the burden of work and his wife's illness, plus, for some short part of the delay, being lulled into a false sense of security by the opposing solicitors); there was certainly an arguable case on appeal; and, finally, there was no question of the opposing side being prejudiced “save for this fact of course, that they will now have to face the appeal rather than the [would be appellants] having the door slammed in their faces at this stage.”

7.15 In Note 59/4/4 of the Supreme Court Practice this dictum is taken as authority for the proposition that “the fact that a judgment or order will be re-opened if the application is granted does not count as prejudice for these purposes, because that is inherent in every application for an extension of time.” What Griffiths LJ said does not seem to us to be correctly reflected in this Note, which should be approached with some caution. It may well be that where the delay in appealing is as short as it was in that case, the fact that the case will be re-opened will carry little weight, but the longer time goes by, particularly if the defendant has been told, or reasonably assumes, that no appeal will be pursued, the greater the weight that will be attached to this factor.

7.16 In Norwich & Peterborough Building Society v Steed [1991] 1 WLR 449 this court was concerned with an applicant who was seeking leave to appeal six and half months out of time. The whole of that period had been taken up with his efforts to obtain legal aid. It was a case in which, as McCowan LJ pointed out, he always intended to appeal. At the outset of his judgment McCowan LJ said that the things which a court takes into account in deciding whether to grant an extension are “first, the length of delay; secondly, the reasons for the delay; thirdly, the chances of the appeal succeeding; and, fourthly, the degree of prejudice to the respondent if the application is granted.” After weighing up the different factors in that case, the court granted leave to appeal out of time.

7.17 In re Winston Lloyd Dennis (a Bankrupt) CAT 27 October 1993, judgment at first instance was given in May 1992, and the unsuccessful party decided not to appeal. In February 1993 counsel by chance came across an 1801 decision which was highly relevant to the issues in the case. He drew this decision to the attention of his instructing solicitors and suggested that different counsel should now be instructed. The solicitors applied for legal aid the next day, and emergency legal aid was eventually granted on 22nd March 1993. On 14th April 1993 new counsel was instructed, and the application for leave was made on 23rd April 1993. The court considered the four factors identified by McCowan LJ in the Norwich and Peterborough case. After showing that the court had been referred to Craig v Phillips and Templar, Sir Thomas Bingham MR said that he thought it was important that the case was not one “in which a party seeks to appeal because a later decision throws doubt on the decision in question, but is an application made for the reasons I have indicated, that through a failure to discover an old authority the case was put to the judge on a basis that may have led to a wrong decision.” He finished his judgment by putting the matter in this way:

“One starts from the position that it is the duty of the parties to appeal within the time limit and therefore the court does not by any means as a matter of course, and indeed at all readily, grant leave to appeal out of time. It particularly does not do so if the party has taken a decision not to appeal and has then changed its mind. But ultimately, and overriding or embracing all the factors which go into the exercise of discretion on a matter of this kind, is the question as to what the interests of justice require on the facts of a particular case.”

7.19 The only other rulings we need to mention are three which have been very recently given in the context of Order 17 Rule 11. In Seagaram v Grant CAT 16th December 1996, this court was concerned with a boundary dispute between neighbours in which substantial costs had already been incurred. On 14th June 1995 the judge held that the action had been automatically struck out, and the plaintiffs decided not to appeal. Instead an unsuccessful application was made to reinstate the action. New solicitors were instructed on 23rd October 1995, and they sent instructions to counsel in early December to consider the claim against the first solicitors. Through quite exceptional personal circumstances counsel did not deal with the papers until May 1996. At this stage she appreciated that on the authority of Downer, which was reported in The Times on 19th January 1996, the judge’s original decision that the case had been struck out was wrong. An application for leave to appeal was then lodged ten months out of time. (It is right to add that a second action could have been started, but a question would have arisen as to whether the costs of the first action would have to be paid if this second action was not to be stayed).

“It is of course always difficult in a situation of this sort to find the proper balance. However, on the facts that are before this Court, I am satisfied that the balance comes down in the plaintiffs’ favour. The period of delay is undoubtedly substantial. It is a period where the Court would normally today want very clear reasons for giving that length of extension, and, speaking for myself on this matter, it does seem to me that one would normally expect this to be the maximum amount of delay which one could ordinarily regard as being acceptable to this Court if the answer to the other issues to be considered point to an extension of time.”

7.21 Sadiq v London Buses Ltd CAT 20 February 1997 was a case in which negligence had been admitted: it was therefore a meritorious claim. On 17th May 1995 the judge held that it had been automatically struck out. This court’s decision in Ferreira was published in The Times on 30th June 1995 and it showed that the judge’s decision was wrong. The plaintiff's solicitors took immediate steps to try to protect their client, but they adopted the wrong route by asking the judge in the county court to rectify matters. That application failed on 20th September, and leave to appeal was sought from this court within a fortnight of that date. Leave to appeal out of time was granted. Brooke LJ said at page 6 :-

“In my judgment the circumstances in which Roskill LJ spoke as he did in the Templar case are quite different from the present, where the delay is comparatively short, the reason for the delay has been explored, which, although it shows a lack of understanding by the plaintiff’s solicitor of the nature of the court’s inherent jurisdiction, nevertheless shows a commendable desire to save time and costs involved in bringing an appeal to this court, and we are concerned with comparatively new provisions of the County Court Rules which this court is working out on a case-by-case basis, and, in the context of this case, by chance the relevant decision was taken shortly after the judge made his ruling in this case.”

7.22 In Noviello & another v Ele International Ltd & another CAT 20th February 1997, the plaintiffs had applied for an extension of time for requesting a hearing date on 28th July 1994. The guillotine date was 14th August 1994, and in November 1994 the district judge extended time. The plaintiffs out of caution issued a second set of proceedings on 22nd December 1994. On 30th March 1995 the judge reversed the district judge. He held that the action was struck out, and he refused to reinstate it. On 30th June 1995 the decision in Ferreira was published in The Times which showed that the first of these rulings was wrong. The application for leave to appeal was not made until 5th September 1995. (The second action was struck out under Order 9 Rule 10 on 22nd December 1995, no steps having been taken to pursue it).

7.23 The plaintiffs’ advisers put forward no explanation for the two months’ delay between the decision in Ferreira and the lodging of the application for leave, and in his judgment Brooke LJ stressed that such delays ought to be explained. However, given that the process of straightening out whether it was right to appeal to this court following the decision in Ferreira was a complex one and the long vacation had intervened, he considered that the overall interests of justice required that the application should not fail simply because no reasons were given. In the result the court granted leave to appeal out of time, and the subsequent appeal was immediately conceded.

7.24 Counsel for the defendants have submitted to us that in the last three cases, where an extension of time for appealing has been granted following authoritative rulings by this court in relation to Order 17 Rule 11, the court has been failing to have proper regard to the principle that a change in the law does not in itself provide a ground for extending time for appealing. They have also pointed out that now that Bannister has been decided, there may be a flood of applications for leave to appeal out of time, and a firm stand should be taken by this court if it is not to be once again swamped with satellite litigation of a type of which it disapproves so much.

7.25 In our judgment it would be quite wrong to contemplate taking an approach which was dictated simply by the fear that there might be too many cases arriving at this court which would otherwise justify the granting of leave to appeal if the proper principles were applied to them. The right course is to attempt to identify whether there are indeed any circumstances in which an extension of time for leave to appeal should in justice be given in such cases. If there are, then it ought to be possible to give guidance to parties contemplating the possibility of applying for leave to appeal out of time which will lead in some cases to the application for leave not being resisted and in others to there being no attempt to obtain it. In that way it is to be hoped that satellite litigation will be discouraged, but in a way that does not add to the possible feeling of injustice that might otherwise exist.

7.26 It is important to recognise two matters in relation to Order 17 Rule 11 cases. The first is that the rule has led to actions being struck out where there has been no trial on the merits. In other words, this is a quite different context in which to apply the general principle that there must be finality in litigation. Second, it is difficult to imagine circumstances more special than those which have flowed from the introduction of Rule 11(9). The difficulties that the rule has created are manifest from the many decisions of this court on the meaning and effect of the rule, and there have certainly been significant areas of dispute where there was room for more than one legitimate view as to the appropriate construction of the rule, or as to the approach the court should take in relation to different factual situations. For example, in the months that followed the decision in Rastin it was not readily foreseeable that Williams v Globe Coaches would provide an exception to Rastin. It was not easy to foresee the decision in Ferreira. And there will be aspects of Bannister where it may be possible to show that advice not to appeal against a judge’s ruling was completely reasonable advice at the time it was given. Accordingly, if a party can show that he acted on reasonable advice in the context of Order 17 Rule 11, and that he did not appeal immediately in reliance on that advice, and if he can also show that if an extension of time for appealing were granted he has a very strong argument that his appeal will succeed, then there will be the beginnings, in our view, of a successful application for an extension of time on the basis of special circumstances.

(a) if there is any inexcusable delay in applying for an extension of time. The period for serving a notice of appeal in the ordinary way is 28 days. Order 17 Rule 11 cases are concerned with situations in which substantial delays have already occurred. There is no reason why every effort should not be made to lodge an application within that timescale once a relevant change in the law has been reported, and to notify the potential respondent as soon as it has been lodged. For example, an applicant will have to explain why he could not lodge the application without legal aid, and/or why, if it can be shown that it was necessary to have legal aid before lodging the application, he could not obtain it for that purpose (even if the pursuit of the appeal was ultimately dependent on advice for which further legal aid was necessary), and why he did not tell the respondent what he had in mind at the earliest practicable moment. The plaintiffs in Seagaram and Sadiq were exceptionally fortunate. In Seagaram, however, there was the added feature that in any event the boundary dispute was continuing and another action could still be launched at any time, and in Sadiq the plaintiff had started a second action, so that the finality of the litigation on the strike-out was not absolute.

(c) if the respondent can demonstrate that he or his insurers have reasonably acted on the basis that the claim is at an end and their affairs have been conducted on this basis or if prejudice has been suffered in any other way. The respondent should normally adduce the evidence of the conduct or prejudice on which he relies. The longer the time since the decision which is now sought to be challenged, the easier it will be for him to discharge this burden. There will be a strong presumption, which would not require any evidence unless the contrary is asserted, that the respondent or his insurers have conducted themselves on the basis that the litigation is over if they have received no notice of any intention to continue to pursue it for many months after the decision was made. In this context, again, if it can be seen that the dispute between the parties is a continuing one and can still be the subject of a further action, this will be a material factor to counter any claim the respondent might make that he had assumed the claim had been finally disposed of and conducted his affairs on that basis.

(d) if the plaintiff has actually pursued a second action, causing the respondent to incur costs in defending it. In such cases, however, if there has been no application to stay the second action until after the costs of the first have been paid, it would be legitimate in any application made in the second action not to insist on the costs of the first action being paid as a basis for allowing the second action to continue if it could at the time of that application be seen that the first action should in fact never have been held to have been struck out.

8. Taiwo Olaleye-Oruene v London Guildhall University

8.1 In this action, commenced on 27th April 1992, the plaintiff, who acted in person, claimed that the defendants had discriminated against her by reason of her race in various matters between October 1990 and June 1991. A defence was delivered to the court office on 28th August 1992. The trigger date was therefore 11th September 1992, and the guillotine date 11th December 1993. On 24th September 1992 the district judge gave directions, which included a direction that the trial be set down on a joint certificate of readiness signed by both parties. On the authority of Downer it is highly arguable that that order would have taken the action outside the automatic directions. In May 1993 the plaintiff served a Race Relations Act questionnaire. There was then a dispute as to whether proper leave had been obtained, but in any event the defendants did not answer the questionnaire, and the plaintiff took no steps to ensure that they did. She then tried to set the action down for trial on 2nd August 1994. This was resisted by the defendants on the ground that the action had been automatically struck out.

8.3 On 22nd May 1995 the plaintiff instructed her present solicitors. They advised her to apply to the judge ex parte for leave to appeal, but he refused leave three days later. On 29th May an application for emergency legal aid was submitted for the purposes of pursuing an appeal. This was refused and an appeal against the refusal failed two weeks later. On 11th August 1995 the appeal against the refusal of legal aid in relation to the plaintiff’s previous solicitors was also refused.

8.4 Between August 1995 and November 1995 the plaintiff’s new solicitors conducted research under the green form scheme which led them to believe that it might be arguable that the order of 24th September 1992 had taken the action outside the automatic directions. In the result a further application for legal aid was made on 29th November 1995. This was refused in mid-December. An appeal against this refusal was lodged on 3rd January 1996. It is alleged that the papers were then mislaid by the Legal Aid Board. However that may be, on 15th March 1996 legal aid was granted limited to taking counsel’s opinion. In the meantime Downer had been decided: the report of this decision appeared in The Times in January 1996.

8.6 It would seem that in this particular case it was not the publication of Downer which alerted the plaintiff’s solicitors to a point which they had not thought previously available. It appears to have been the intention of the plaintiff to appeal from the very moment the judge made his decision on 16th May 1995, and on any view by November 1995 her solicitors thought that there was a point worth arguing. It is puzzling why, if the plaintiff, having regard to her difficulties in obtaining legal aid, was able to go back before the judge to apply for leave, she could not personally lodge an application with this court within 28 days after the judge’s decision, or at the very least fairly soon after her solicitors had researched the point in November 1995. In that context the failure, following the granting of legal aid for the obtaining of advice in March 1996, to issue any application for leave until 22nd August 1996, by then some 15 months after the decision in an action which was already very stale, was the final straw. This application must be dismissed.

9.1 In Edmondson v Scottish Breweries plc (23rd May 1997) the court held that a notice in Form N233, issued on the direction of a district judge following the delivery of a brief defence in Form N9, was not necessarily an order for pre-trial directions such as to take the action outside the scope of automatic directions pursuant to Order 17 Rule 11(2)(a). The mere fact that the district judge evinced a wish to consider with the parties whether he should give directions pursuant to Order 17 Rule 10, and directed Form N233 to issue for that purpose, did not ipso facto constitute an order for pre-trial directions within the meaning of the Rule. In that case the district judge first postponed, and then abandoned the idea of giving any such directions, and the court held that automatic directions applied throughout.

9.3 The court held that the trigger date occurred 14 days after the defence arrived at the court office of the correct county court. On the proper construction of Order 9 Rule 2(6) the defence had to be delivered to the court office for the county court in which the action was proceeding. This was a Rule relating to procedure, as opposed to the statutory provision which was considered in Sharma v Knight [1986] 1 WLR. 757, which went to jurisdiction.

Bannister, paragraph 7.11: effect of High Court order preceding transfer 9.4 In Rajah v Garner (29th April 1997) the court had to consider an order of a High Court Master transferring the action to the county court which contained the following directions:9.4 In Rajah v Garner (29th April 1997) the court had to consider an order of a High Court Master transferring the action to the county court which contained the following directions:

9.5 The court held that this order was a manual order which displaced automatic directions in their entirety and replaced them with directions for the timetable to like effect, where relevant, to the automatic directions in Rule 11(3). It did not, however, introduce a strike out sanction (for which clear words would be needed: see Bannister para 11.8) and the proper sanction for failure to apply for a hearing date in those circumstances was therefore an “unless” order and not an automatic strike out.

9.6 In Bourne v British Telecommunications Plc (7th May 1997) the plaintiff had applied for an extension of time prior to the guillotine date. This application was due to be heard after the guillotine date, but before it was heard the plaintiff’s solicitor actually applied for the hearing date to be fixed. He then consented to the dismissal of the application for an extension of time before it was heard. The court rejected the argument that by withdrawing the application for an extension, the plaintiff had “nullified” the implied request (see Bannister para 12.8), in the sense that it turned it into something that had never existed, so that by the time the plaintiff made an actual request the action had already been automatically struck out. The court held that the implied request was alive at the guillotine date and was then continued and subsumed in the express request, and that it would be quite unreal to contemplate that in such circumstances an abandonment of the application for an extension of time carried with it the abandonment of a request to fix a hearing date.

9.7 In Pearson v Export Packaging Services (14th May 1997), on a first application to extend time for the fixing of a hearing date, the district judge granted an extension to a certain date and ordered that the Order 17 timetable for setting down be extended to [a new guillotine date] “and in default thereof the action be deemed struck out”. The plaintiff made an application for a further extension of time which was heard and refused two weeks before the new guillotine date, and thereafter made no express application to fix a hearing date before that new date. The court rejected the argument that this was not a circumstance in which the implied request as described in Ferreira or Bannister (pp 28 and 29) was intended to apply so as to prevent automatic strike out - either because the implied request did not exist at all where the hearing of the application for an extension of time predated the guillotine date, or because the failure to request a hearing date expressly showed that the implied request had been abandoned. It ruled that the principles identified in Ferreira, as restated in Bannister, recognised that an application for an extension of time for requesting a hearing date contained the implied request, and that there had to be clear evidence of abandonment for that request to be withdrawn. The court held that all requests for an extension of time for the fixing of a hearing date contained the implied request, and that there was no evidence of abandonment on the facts of the present case.

9.8 In Smithson v Palmer and Harvey Ltd (15th May 1997) the guillotine date was in February. The previous year the plaintiff had issued an application in the early autumn to extend the time for fixing a hearing date until 31st December. Neither party attended the hearing of this application in October, and the district judge adjourned it with liberty to restore. The plaintiff’s solicitor never explained why he did not attend: the defendant’s solicitors said they had never received notice of the application. The plaintiff’s solicitor took no steps to restore the application for hearing, either before 31st December or before the guillotine date. It was eventually restored in March, and because nobody appreciated that the guillotine date had passed, an extension of time to some future date was granted. The district judge and, on appeal, the circuit judge both held, in essence, that the application to extend time was not in these circumstances “alive” at the guillotine date. This court considered that it was not possible to hold that they were clearly wrong, and that after nobody had attended in October, and no application was made to restore the hearing before 31 December, it was reasonable to hold that the application had been abandoned.

9.9 In Khela v Pone (21st May 1997) an issue arose in relation to the date on which an action was automatically struck out. In response to a query, an executive officer of the county court replied, incorrectly, that the action had been automatically struck out on 29 June, whereas the correct guillotine date was 23 August. This court held that nothing that might be said by an executive officer of the court could alter the way the Rules were to be applied, and it was wrong to say that the “court automatically struck the action out on 29 June”. It distinguished this situation from a case in which a member of the judiciary made a judicial declaration identifying the guillotine date.

Annex

Five Judgments of Brooke & Waller LJJ on applications for leave to appeal out of time

1. Anthony Lee Cosshall & others v Stuart Hollis

The plaintiffs were injured in a road traffic accident on 4th June 1990. Proceedings were commenced on 3 June 1993. The defence was delivered to the court office on 9th July 1993. The trigger date was therefore 23rd July 1993 and the guillotine date 23rd October 1994. The defendants’ solicitors also sent a copy of their defence, dated 9th July 1993, under cover of a letter to the plaintiffs’ solicitors bearing the same date. On 28th July 1993 they wrote a further letter to the plaintiffs’ solicitors saying that “despite the terms of the defence served and filed in this matter, liability is no longer in issue...” At this stage, therefore, the plaintiffs’ solicitors would have understood that a defence had been delivered to the court office, that the trigger date would be calculated from the date it was delivered, and that that date was likely to be about 9th July 1993, the date on the defence they had received.

The action was automatically struck out on 23rd October 1994. The plaintiffs’ solicitors issued an application on 8th November 1994 for an extension of time for requesting a hearing date. If the guillotine date had been calculated by reference to the inaccurate date on the N450, it would have been 16th November 1994. On that basis their application would have been before the guillotine date, and on the authority of Ferreira it would have contained an implied request for the fixing of a hearing date.

On 1st December 1994 District Judge Evans held that the action had been automatically struck out. On the same day an application was issued for the reinstatement of the action. This was heard in due course by Deputy District Judge Calver who refused to reinstate it. Appeals from both orders came before Judge Colyer QC on 19th April 1995. The appeal against District Judge Evans’ decision was not pursued, and after argument as to whether, having regard to the mistake made by the court, it was right to apply Rastin with its full rigour, the judge dismissed both appeals.

In May 1995 the plaintiffs instructed new solicitors in relation to a possible action against their predecessors. In September 1995 the new firm sent a letter before action, and between October 1995 and February 1996 it was engaged in quantifying the plaintiffs’ claim. In the meanwhile, in December 1995 this court decided Williams v Globe Coaches, which was reported in The Times on 18th January 1996 .

On 29th March 1996 the Solicitors’ Indemnity Fund (“SIF”) took the point on behalf of the first firm of solicitors that in the light of the recent Court of Appeal decisions an effort ought to be made, in mitigation of the plaintiffs’ loss, to re-instate the original action. It took until 6th May to transfer legal aid into the new firm’s name, and then until 23 July 1996 to obtain the required amendments to the legal aid certificate in order to launch an appeal. On 5th August counsel was instructed to advise on the merits and to draft the necessary application. He advised that the SIF should provide an indemnity for the costs of any appeal. The SIF did not agree to provide such an indemnity until late November, and the present application for leave to appeal out of time was not issued until 24th January 1997.

Applying the general principles set out in Greig Middleton , it seems to us for a number of reasons that this is not a case in which it would be right to extend time for appealing. First, there was a 21-month period of delay between the decision of the judge and the publication of the decision of this court in Williams v Globe Coaches . It is not necessary to decide whether that period of itself was too long in this case, but on any view it is an unhappy background against which to view the next period of delay. This second period, which lasted another 12 months after the decision in Williams v Globe Coaches was published, was in itself a quite unacceptable delay . We do not understand why it was not possible to put in at the very least a holding application for leave to appeal out of time at a very early stage. In any event, if one has regard to the fact that 28 days is the prescribed period for appealing, it took a further two months over Christmas 1996 to issue the application for leave even after the dispute as to whether the SIF should provide an indemnity had been resolved. Finally, and in any event, the prospects on the appeal could not be described as very strong. The plaintiffs’ original solicitors knew that a defence dated 9th July 1993 had been delivered to the court office, and any mistake they made was really a mistake about the proper construction of the rules. This application is therefore dismissed.

2. Kishor Kavia v John Stavrinos

On 7th June 1994 the plaintiff’s solicitors applied for an extension of time for requesting a hearing date. On 2nd November 1994 District Judge Tetlow granted an extension of time, but on 6th March 1995, Judge Goldstone allowed the defendant’s appeal. He held, pre- Ferreira, that the action had already been struck out when the matter came before the district judge, since no request for a hearing date had been made before the guillotine date.

The decision in Ferreira was drawn to the attention of the plaintiff’s solicitor in the first week in July. It took him, however, until 9th November 1995 to issue the application for leave to appeal. Again we remind ourselves that the period for appealing is 28 days, and by the first week of July the plaintiff was already well out of time. Why did it take so long to issue an application to this court? Emergency legal aid to advise on the merits was obtained on 13th July 1995. Counsel was not then instructed to advise until 11th August. The defendant’s solicitors, it is fair to say, were put on notice on 17th August. Counsel advised on 1st September, and the scope of the legal aid certificate was enlarged on 22nd September to include applying for leave to appeal out of time. Instructions were not, however, sent to counsel until 4th October, he did not return the papers until 18th October, and it then took until 9th November to issue the application, over four months after the decision in Ferreira was published.

It may seem hard to scrutinise the timetable and count the days in a busy lawyer’s life, but where an action has been struck out because there have on any view been delays in relation to a simple accident case which took place in 1990, and where, as we stress again, 28 days is the normal time for appealing, absolutely top priority must be given to the matter if leave to appeal out of time is going to be granted.

3. Teresa Anderson v Frederick George Glyde

The plaintiff was a passenger injured in a car accident on 15th April 1990. Proceedings were commenced on 14th April 1993, and the defence was delivered to the court office on 14th May 1993. The trigger date was therefore 28th May 1993, and the guillotine date 28th August 1994. It seems that the court did not send out a Form N450 when it received the defence, but the plaintiff’s solicitors knew that a defence had been delivered to the court, and indeed they received a sealed copy themselves on 9th June 1993.

When a new representative of the plaintiff’s solicitors’ firm, Mr Hazell, took over the conduct of the action during 1994, he appreciated that the case was not by that stage ready to be set down for trial. He then noticed, however, that there was no Form N450 on the file, and he sought to obtain information from the court as to the date from which the automatic directions ran. By a letter dated 27th April 1994 an administrative officer of the court responded that the district judge had stated that the pleadings were deemed to be closed on 31st May 1994, i.e. after the date of the letter. Mr Hazell deposed in his affidavit that he wrote again to the court to query this date, but this time he received no reply apart from a Form N450, in which the date from which the automatic directions was said to run was 27th April 1994. When the defendant’s solicitors invited the court later to clarify the matter after a dispute had arisen as to whether the action had been struck out on 28th August 1994, the court explained, perhaps not surprisingly, that there had been an error in the original letter which should have read 31st May 1993.

On 20th December 1994 District Judge Ing declared that the action had been automatically struck out, and on 22nd March 1995 he refused to reinstate the action. Judge McNaught upheld both decisions on 26th June 1995. Consistently with the later decision of this court in Williams v Globe Coaches, he ruled that the N450 had not altered the timetable, and he added that he was not sure that the plaintiff’s solicitors would have been entitled to rely on it anyway, since they had had a copy of the defence back in June 1993.

The time for appealing expired on 24th July 1995. The plaintiff was advised to seek fresh legal advice. On 18th January 1996 the decision in Williams v Globe Coaches was reported in The Times. It took until 1st April 1996 for the application for leave to appeal out of time to be issued. This time is said to have been taken up with discussions with the plaintiff’s former solicitors and their insurers, which resulted in the plaintiff re-instructing those solicitors to apply for leave to appeal out of time.

Nearly seven months had therefore elapsed between Judge McNaught’s decision and the publication of the decision in Williams v Globe Coaches . Against the background of that delay and despite the fact that the period allowed to lodge an appeal is only 28 days, a further two months elapsed before an application was made to this court. Again, it is difficult to see why arrangements could not have been made to lodge an application straightaway. In any event the appeal cannot be said to have a very strong prospect of success. Taking all those factors together, this application is dismissed.

4. Robert Raven v Helen and Reginald Curry

The plaintiff in this action claims that he was unlawfully evicted from his home on 7th October 1992. On 20th October 1992 proceedings were commenced. The plaintiff took such a strong view about the way that he had been treated that he claimed exemplary damages. On 22nd January 1993 the district judge gave him leave to amend the particulars of claim, ordered a defence to be served within 14 days, and recorded in his order that the automatic directions should apply from the close of pleadings. A defence and counterclaim was delivered to the court office on 22nd February 1993. The trigger date was therefore 22nd March 1993. On 17th March 1993, however, the plaintiff applied for summary judgment. Although his application was dismissed on 15th April 1993, the application itself, according to Bannister, paragraph 17.1, would have taken the action outside the scope of the automatic directions, although no point to this effect was taken before us. The order of 15th April 1993 gave no manual directions. It clearly treated the automatic directions as still applying. It is also clear that the action was not treated as being outside the scope of the automatic directions thereafter.

The guillotine date would have been, and was treated as being, 22nd June 1994. On 1st June 1994 the plaintiff’s solicitors sent to the court an application that “the timetable herein be extended to 31st August 1994”. This application was dated 9th May 1994 and it had endorsed on it the consent of the defendants’ solicitors dated 24th May. On 13th June the court asked the plaintiff’s solicitors for their reasons for requiring an extension of time. It appears that they replied by letter dated 16th June, but it is not clear whether the court received their letter before the guillotine date. By a letter dated 19th September the plaintiff’s solicitors requested a hearing date. The court responded, by a letter dated 17th October, by inviting the parties to consider whether the action had been automatically struck out on 22nd June. If Ferreira had been decided, there would have been an argument to the effect that the application sent to the court on 1st June had the effect of preventing the action from being automatically struck out. In these pre- Ferreira days, however, it was accepted that the action had been automatically struck out, and the plaintiff applied for its reinstatement on 7th November 1994. This application was dismissed by the district judge on 30th January 1995.

When the plaintiff’s appeal came on before Judge Bradbury on 20th February 1995, he was asked to consider whether he should not apply a different approach to the question of reinstatement in a case where an application to extend time had been made prior to the guillotine date, as compared with a retrospective application. He decided that the approach should be no different, and dismissed the appeal on Rastin (Bannister Category 1) principles.

On 5th April 1995 the plaintiff commenced a second action. On 30th June Ferreira was reported in The Times, and on 19th July the defendants applied for an order dismissing the second action as an abuse of process. A fortnight later they applied to the High Court for an order discharging a Mareva injunction which had been granted in the first action. The plaintiff riposted on 27th September by applying for a Mareva injunction in the second action. On 16th October Sir John Wood dismissed both summonses, the defendants’ on the basis that there was now no first action in being and thus no Mareva, and the plaintiff’s on the basis that the facts did not warrant the grant of a new Mareva injunction.

On 31st October 1995 (i.e. some 4 months after Ferreira was reported, and after all the expenditure on the applications we have just mentioned) the plaintiff issued an application returnable before a district judge for a declaration that on the basis of Ferreira the first action had not been automatically struck out. On 6th November District Judge Chandler made such a declaration, and dismissed the defendants’ application to strike out the second action.

On 15th December, armed as it were with the district judge’s declaration in relation to the first action, the plaintiff applied to this court for leave to appeal out of time against Judge Bradbury’s decision on 20th February. Because his decision to refuse re-instatement was now thought to be otiose, since the plaintiff’s solicitors believed they now had a valid declaration from the district judge that the first action was still in being, the scope of this appeal was originally limited to an appeal against the order for costs made against their client. On 3rd March 1996, however, Judge Bradbury reversed the district judge’s decision. He held that he had previously decided that the action had been struck out, and that the plaintiff’s solicitors had in any event elected to treat that action as struck out.

Why, an astonished layman might ask, all this expensive activity designed to resurrect the first action when there was already a second action in being which had not been dismissed for abuse of process? The fact that the question has to be asked shows once again how the automatic strike out rule, coupled with the dilatoriness of litigation solicitors, leads to costly and protracted satellite litigation which is not concerned with the real issues which the plaintiff originally wished the court to resolve, but with a wholly peripheral matter. The answer to the astonished layman’s question is that the plaintiff and his advisers are concerned that before the second action is allowed to go any further the plaintiff is likely to be required, as is normally the case, to pay the defendants all the costs they have incurred in defending the first action. It may also be that the legal aid fund will not continue to support the second action if this condition is imposed, because the likely recovery in monetary terms, even if the second action eventually succeeds, would not be sufficient to cover the amount of costs that would have to be paid in relation to the first action.

The story we have recounted is a lamentable one. We cannot, however, undo what has happened or make an order (which at first we were tempted to make) to the effect that the parties should simply go forward and have their real dispute determined with the costs of both actions being in the discretion of the eventual trial judge. We must simply resolve the applications before us on the principles that have been outlined in Greig Middleton.

This application must be refused for the following reasons. First, whether or not there was strictly an election in the sense that that word is used in other contexts, the plaintiff pursued the second action after the decision in Ferreira was published, and made an application which forced the defendants to incur costs in that action. Secondly, and in any event, since Judge Bradbury’s decision predated the publication of the decision in Ferreira by over 4 months, and the rules allow 28 days for an appeal, it was not excusable for the plaintiff’s solicitors to take no step until 31st October 1995 to revitalise the first action. The step then taken was in fact the wrong step, and it took until 15th December 1995 to apply to this court at all. It then took a further four months to extend the scope of the application to this court in order to cover the whole of the judge’s decision. This later history can only make matters worse, not better.

We cannot see, however, that there is any merit in the appeal. The judge’s original decision was clearly taken on the basis that the action had been struck out. An appeal from that order to this court was the only basis on which his decision, which was based on a concession by the plaintiff that the action had been struck out, could be reversed. Even if in some circumstances special reasons could be found for a party not being bound in proceedings like these by something equivalent to an issue estoppel, we are doubtful whether those principles can be applied in the very action in which the original issue has been decided, and in any event we cannot conceive of them being ever applicable where a party has then elected to act, and to compel the other side to incur costs, on the basis of the correctness of that decision.

Whether in the particular circumstances of this case the plaintiff should be required to pay the costs of the first action before he is allowed to proceed with the second must be a matter for the county court. As has been pointed out in the judgment of this court in Greig Middleton , this could be a case in which a court in its discretion might decide not to order a plaintiff to pay the costs of a first action before he was allowed to proceed with a second. But this is not a matter for this court.

This is a small claim for the price of goods sold and delivered, which was commenced against the First Defendants alone in the Maidstone County Court in 1992. By their Defence, delivered on 23rd July 1992, the First Defendants averred that the relevant contract was made between the Plaintiff and/or a company called Time Basic Ltd on the one hand and Robert O Hodge and/or the Car Centre Group on the other. The trigger date for the action was 6th August 1992 and the guillotine date 6th November 1993. On 29th October 1992 the Plaintiff applied for summary judgment, and this application was heard on 21st July 1993 when leave to defend was granted. No other directions were given at that time.

On 12th October 1993 the Plaintiff applied for an order that the Second Defendants be joined to the action and that there be a six-month extension of the time for applying for a hearing date to be fixed. On 5th January 1994 District Judge Andrews granted the Plaintiff leave to join the Second Defendants by amendment, and made an order pursuant to Order 17 Rule 11(4) “that there be an extension of six months from the date of this order to the date of setting down for final hearing”. This would have suggested a guillotine date of 5th April 1995. Amended Particulars of Claim were served on 11th March 1994. The county court issued Form N450 on 25th May 1994. This suggested a new guillotine date of 8th September 1995. The Second Defendants’ original Defence, in Form N9, was dated 31st March 1994, and this averred that they did not consider they had ever had a contract of supply with the Plaintiff personally. Quite substantial pleadings were then exchanged, including Amended Defences from both Defendants, and Replies to each defence.

On 30th June 1995 the court set the action down for trial, following a request by the Plaintiff for a trial date in early June. The Second Defendants then contended, however, that the action had been automatically struck out on 5th April 1995, and sought a declaration to that effect on 1st September 1995. The Plaintiff's solicitors countered by applying for the action to be reinstated in the event that it had been automatically struck out. They did not, however, serve this application on the First Defendants who were therefore not present when both applications came on for hearing before Mr Recorder Gault on 27th September 1995. The Second Defendants consented to the order the Plaintiff proposed and did not attend the short hearing at which the Recorder made a declaration that the action had been automatically struck out on 5th April 1995, but by consent directed that it be reinstated, and directed that the action be relisted for trial on the first available fixed date after one month.

The action was listed for trial on 14th May 1996, but the First Defendants changed their solicitors shortly before this hearing date and applied successfully to Judge Coombe on 13th May that the trial be adjourned, subject to a condition that they make a payment into court of £5,000. On 1st August 1996 they obtained leave to serve an Amended Defence without prejudice to their contention that the action had been automatically struck out and had not been reinstated as against them, or at all. This was a point which their new solicitors had taken in a letter dated 8th May 1996, but they did not apply to the court for a declaration to clear the matter up once and for all. Instead they allowed the Plaintiff to incur the cost of delivering a Reply to their Amended Defence and of preparing for trial. The action as against both Defendants was provisionally listed for 15th January 1997, and on 6th November 1996 this trial date was confirmed at a directions hearing.

The Plaintiff’s solicitors originally sought leave to appeal against this ruling. When they read the judgment in Bannister, however, they realised that this challenge was doomed to failure (see Bannister paragraph 21.32). They therefore changed their tack and sought leave to appeal 19 months out of time against the ruling of Mr Recorder Gault in so far as he made a declaration that the action was automatically struck out on 5th April 1995. They contended that the effect of the application for summary judgment was to take the action outside the scope of automatic directions altogether (see the original version of Bannister, paragraph 17.1), and that if they are allowed to take this point it is bound to succeed. They said that the First Defendants have not been prejudiced by their delay in applying for leave to appeal on this ground (which they initiated very promptly as soon as they read the judgment in Bannister) since they remained active parties to the proceedings until the hearing on 15th January 1997, and thereafter the Plaintiff’s original application as against them was lodged in time, so that they could not reasonably have treated the matter as at an end.

The First Defendants contend that the court should not grant leave because of the prejudice they would suffer. They say that all the parties thought that automatic directions were running in 1994 and 1995 and that they were entitled to rely either on the Recorder’s decision in September 1995 (although they were not a party to it) or, quite simply, on the contemporary understanding anyone would reasonably have had in 1995 that the effect of District Judge Andrews’ order was to introduce an effective guillotine date on 5th April 1995. We are quite satisfied that on the law as stated in Bannister that order did not have this effect since the guillotine date was not clearly stated on the face of the order (see new paragraph 16.11 of the revised version of Bannister), and in our judgment this argument is not open to the First Defendants since they were willing to stand by in 1996 and submit to an order for a payment into court as a condition of an adjournment and continue to allow the Plaintiff to incur the costs of preparing for trial (including the costs of three interlocutory hearings) as if the action had not been struck out.

We do not accept their argument that they successfully protected their position by stating that they were behaving in this way without prejudice to their contention that the action had been struck out and that the onus was on the Plaintiff to obtain an order reinstating the action as against them. Until this court made it clear in Bannister, paragraph 31.32, that such a course was necessary, the Plaintiff’s advisers might reasonably in our judgment have taken the view, which they maintained before Mr Assistant Recorder Lobo and in their original draft notice of appeal, that the action had been reinstated in relation to all parties to it in September 1995.

When we apply the principles set out in Greig Middleton we are satisfied that it is just to grant the Plaintiff the extension of time he seeks and to grant leave to appeal. Although a long time has elapsed since September 1995, the reasons for the delay since that time are understandable and are all connected with the widespread confusion about the true effect of Order 17 Rule 11 in circumstances like these. The Plaintiff is bound to succeed on the appeal if leave is granted, and we do not consider that the First Defendants can justly complain of prejudice, since they fully participated in the action up to January 1997 and permitted the Plaintiff to continue to incur costs against them. It was wrong, in our judgment, for them to wait until the trial started to take the point that the action was still struck out as against them, and they cannot now reasonably complain about the consequences of their conduct. The Plaintiff acted promptly as soon as his advisers appreciated the effect of Bannister in relation to the summary judgment proceedings, and we are therefore willing to grant leave to appeal, treat the hearing as the hearing of the appeal, and allow the appeal.

Although we will need to make an order for the costs of the appeal, the costs of the action will be in the discretion of the trial judge who will no doubt wish to take into account the extent to which the Plaintiff’s dilatoriness has increased the overall costs of the action, even if the Plaintiff wins. We mention this because we have been told that before this appeal was launched the Plaintiff’s solicitor believed that all the parties’ costs (relating to a claim for about £6,000 for goods delivered in 1990) were in excess of £40,000, and if the parties cannot agree how these costs should fall the trial judge will have to do his best to apportion them fairly.

England and Wales Court of Appeal (Civil Division) Decisions

CCRTI 96/1365/G GREIG MIDDLETON and COMPANY v. NAPTHALI DENDEROWICZ and LTA 96/7038/G TAIWO OLALEYE-ORUENE v. LONDON GUILDHALL UNIVERSITY [1997] EWCA Civ 2026 (4th July, 1997)

LORD JUSTICE SAVILLE: