The Honourable Mr Justice Julian Knowles:
Introduction
- The Claimant, TPE seeks damages for personal injury and loss arising out of sexual offences committed against him by Harvey Franks in 1997-8. Mr Franks is the Appellant in this appeal, and TPE is the Respondent.
- TPE's identity has been anonymised by an order of this court dated 13 June 2017 and this is a case to which the provisions of the Sexual Offences (Amendment) Act 1992 apply. No matter relating to TPE shall during his lifetime be included in any publication if it is likely to lead members of the public to identify him as the victim of a sexual offence.
- Before me is an appeal by the Appellant against the judgment of Master McCloud dated 13 November 2017 in which she refused to set aside the default judgment entered against the Appellant in TPE's favour on 24 August 2017. She did so on the basis that the Appellant had no reasonable prospects of defending the claim, in particular, on the grounds that the claim was brought outside the three-year period provided for in s 11 of the Limitation Act 1980 ("the 1980 Act"), the claim having been issued in 2017. It was conceded by TPE that the claim had been brought out of time, however the Master held that it was inevitable that any judge would exclude the time limit pursuant to the equitable power to do so in s 33 of the 1980 Act.
- The Appellant challenges that conclusion on a number of grounds, namely:
a. The Master erred by considering s 33 of the 1980 Act at all in conjunction with the Appellant's application to set aside the default judgment. His argument is because the claim was conceded to be out of time (subject to the exercise of the power in s 33), the Master was bound to conclude there was a real prospect of the Appellant defending the claim, and so should have set aside the default judgment without more.
b. Alternatively, in the event that s 33 properly fell to be considered in relation to that application, the Master should have adjourned the argument because the Appellant was only put on notice by TPE that s 33 was to be relied upon on the day of the hearing.
c. Further or alternatively, the Master applied the wrong test on whether the Appellant had a reasonable prospect of successfully defending the claim.
- Permission to appeal was granted by Butcher J on 10 May 2018.
- The Appellant is represented by Mr Hayden. TPE is represented by Mr McClenaghan. Both advocates appeared below.
The statutory provisions
- It is convenient at the outset to set out the relevant statutory provisions.
- Section 11 of the 1980 Act provides:
"Special time limit for actions in respect of personal injuries.
(1) This section applies to any action for damages for negligence, nuisance or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under a statute or independently of any contract or any such provision) where the damages claimed by the plaintiff for the negligence, nuisance or breach of duty consist of or include damages in respect of personal injuries to the plaintiff or any other person.
(1A) This section does not apply to any action brought for damages under section 3 of the Protection from Harassment Act 1997.
(2) None of the time limits given in the preceding provisions of this Act shall apply to an action to which this section applies.
(3) An action to which this section applies shall not be brought after the expiration of the period applicable in accordance with subsection (4) or (5) below.
(4) Except where subsection (5) below applies, the period applicable is three years from—
(a) the date on which the cause of action accrued; or
(b) the date of knowledge (if later) of the person injured."
- Section 33 provides:
"Discretionary exclusion of time limit for actions in respect of personal injuries or death.
(1) If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which—
(a) the provisions of section 11 or 11A or 12 of this Act prejudice the plaintiff or any person whom he represents; and
(b) any decision of the court under this subsection would prejudice the defendant or any person whom he represents;
the court may direct that those provisions shall not apply to the action, or shall not apply to any specified cause of action to which the action relates.
…
(3) In acting under this section the court shall have regard to all the circumstances of the case and in particular to—
(a) the length of, and the reasons for, the delay on the part of the plaintiff;
(b) the extent to which, having regard to the delay, the evidence adduced or likely to be adduced by the plaintiff or the defendant is or is likely to be less cogent than if the action had been brought within the time allowed by section 11, by section 11A or (as the case may be) by section 12;
(c) the conduct of the defendant after the cause of action arose, including the extent (if any) to which he responded to requests reasonably made by the plaintiff for information or inspection for the purpose of ascertaining facts which were or might be relevant to the plaintiff's cause of action against the defendant;
(d) the duration of any disability of the plaintiff arising after the date of the accrual of the cause of action;
(e) the extent to which the plaintiff acted promptly and reasonably once he knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to an action for damages;
(f) the steps, if any, taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he may have received."
The facts
- TPE was born on [a date in] 1982. In or about 1996, when he was approximately 14 years old, TPE joined the Football Association and began to train as a linesman (as they were then called; they are now known as assistant referees). The Appellant was in charge of the training course which TPE undertook. On a date between 2 July 1997 and 28 July 1998, when he was aged 15 or thereabouts, TPE was raped by the Appellant at his house where he was tutoring TPE for a referee's exam.
- TPE achieved his majority in 2000. He reported the rape to the police in 2003. However, at that time he was suffering from chronic depression and so felt unable to pursue the allegations. In January 2014 TPE reported the matter again to the police and was interviewed. In due course the Appellant was prosecuted, and on 8 July 2016 at Croydon Crown Court he was convicted following a trial of raping TPE. The Appellant was also convicted of the indecent assault of another boy.
- On 2 August 2016 the Appellant was sentenced to a total of 15 years' imprisonment for these offences. He was later convicted of a further offence against another boy and sentenced to a further two years' imprisonment to be served consecutively, meaning that the Appellant is now serving a total sentence of 17 years' imprisonment.
- On 19 May 2017 the Court of Appeal refused the Appellant's renewed application for permission to appeal against conviction and sentence: see [2017] EWCA Crim 768.
- A letter before claim was sent to the Appellant in prison in May 2017. The claim was issued and TPE was granted anonymity on 13 June 2017.
- The claim was served on the Appellant in prison on or about 1 August 2017. No acknowledgement of service or defence was entered.
- On 16 August 2017 TPE applied for summary judgment. This was granted on 24 August 2017, with the order being sealed on 30 August 2017. It was served on the Appellant on 1 September 2017. On 21 September 2017 TPE wrote to the Appellant seeking an interim payment on account of damages and costs.
- On 25 September 2017 the Appellant's solicitors notified TPE's solicitors that they were now acting.
- On 5 October 2017 the Appellant made an application to set aside default judgment and relief from sanctions for failure to file or serve an acknowledgement of service.
- On 18 October 2017 TPE filed and served his costs budget for the CCMC.
- The Appellant's application to set aside was served on TPE on 27 October 2017.
- On 1 November 2017 the Appellant filed and served his costs budget and made an application for relief from sanctions for failure to file it in time.
- On 13 November 2017 the Master heard the Appellant's application to set aside the default judgment, and in an extempore judgment, refused it. On 1 December 2017 the Appellant filed his Notice of Appeal against the Master's decision.
The hearing before the Master
- I have been supplied with a full transcript of the hearing before the Master on 13 November 2017.
- It is clear that there was some confusion as to precisely what had been listed for hearing and whether it was to be a CCMC or a hearing of the Appellant's application to set aside default judgment. Mr Hayden, who appeared for the Appellant, told the Master:
"Mr Hayden: Master, we are in a strange situation. There was default judgment, as a result of a failure to acknowledge service and/or file a defence, it was set down today for a costs and case management hearing, budgets have been filed.
Master McCloud: Yes
Mr Hayden: The Defendant has made an application to set aside the default judgment. Unfortunately, today has not been listed for that, and there have been attempts, I believe by both parties, as well, in fact, to ascertain whether or not the Court will hear the application, but there has not been a response and it has never been listed."
- Mr Hayden went to indicate that it was only when he received TPE's Skeleton Argument very shortly before the hearing that he became aware that TPE was arguing that the time limit applicable to the claim by virtue of s 11 of the 1980 Act (ie, three years), should be excluded pursuant to s 33.
- Mr McClenaghan for TPE said his position was that relief from sanctions should not be granted and in any event the application to set aside should be dismissed on its merits. There was then a discussion about the service of the default judgment on the Appellant, and the time it had taken for him to apply to set it aside, and for relief from sanctions, following his receipt of it. Mr McClenaghan submitted that the Appellant had not engaged with the Claimant's solicitors, having been on notice since May 2017 that proceedings would be issued, and that he had not acted promptly (cf. CPR r 13.3(2), which provides that in considering whether to set aside, the court must consider whether the person seeking to set aside the judgment made an application to do so promptly).
- Following this discussion, the Master concluded that the Appellant had acted promptly, and said that she would look at the merits of the application to set aside, but then commented that, "I have the problem of defence counsel [ie, Mr Hayden] not being instructed in terms of responding to the limitation point" (Transcript, p14).
- Mr Hayden accepted that although the draft Defence denied the allegation of which the Appellant had been convicted which gave rise to the claim, in light of the Appellant's conviction, it was going to be impossible for the Appellant to successfully defend the claim on that basis, and so the Appellant's only realistic defence was limitation. That concession was plainly correct. The Appellant's conviction is admissible in the civil proceedings under s 11(1) of the Civil Evidence Act 1968 to prove that he committed the offence, ie, the tort giving rise to the claim for damages. Whilst it is open to a convicted defendant in civil proceedings to seek to prove his conviction was wrong, and it is not necessarily an abuse of process to do so (see CXX v DXX [2012] EWHC 1535 (QB)) on the material before the Master there was plainly not a real prospect of the Appellant doing so.
- Shortly before that, there had been a discussion between the Master and the parties as to whether it was for the Appellant, as part of his application to set aside, to show that s 33 should not be applied so as to exclude the time limit that would otherwise be prima facie applicable, or whether it was sufficient, in order for the Appellant to demonstrate pursuant to CPR r 13.3(1)(a) that he had a real prospect of successfully defending the claim, for him to point to the time limit which prima facie applies, and for it then to be for TPE to show that s 33 should be applied so as to exclude it.
- In summary, Mr Hayden's position was that because the rape took place no later than July 1997 (the end date of the indictment period), and the claim was issued in 2017, the time limit in s 11 applied and the Appellant therefore had a limitation defence which stood a realistic prospect of success so that judgment in default should be set aside. He said that, there having been no application by TPE to apply s 33, his application had to succeed, and it was not for him to argue against its application by way of 'advance rebuttal' (my words), the matter not having been put in issue by Mr McClenaghan for TPE prior to the service of his Skeleton Argument on the day of the hearing.
- The Master expressed her view on this issue as follows (Transcript, p20) (sic):
"The question is not is there a defence, but is there a real prospect of success for the defending and, in my judgment, when we are talking about an application to set aside a default judgment, real prospect means a real prospect of the defence succeeding. Having a prima facie rebuttal defence does not, by itself, establish a real prospect of succeeding if any prospect of that defence not being met by an extension that succeeds. In other words, if the Defendant fails to satisfy me that it has, at least, more than a fanciful prospect of defeating that application for an extension, unless that is achieved, then the Defendant does not have a real prospect of success, because real prospect of success is, of course, equated in authorities with a more than fanciful prospect."
- There was then further discussion between the Master and the parties, including further discussion of the listing issue. She then considered, referring to the Appellant and his representatives, whether she should she should "cut them some slack" (her words), they being not ready to deal with the limitation point. Earlier, Mr Hayden had candidly told the Master (Transcript, p5):
"The difficulty, I think, is that there has not been any response to the application, there has been no witness statements filed and, so when my learned friend turned up, today, with this skeleton argument, this is the first and only time we have now been made aware of what the Claimant's position is in response to the application and it contains arguments that I am not prepared for."
- According to the Appellant's Skeleton Argument on the appeal, he received Mr McClenaghan's Skeleton Argument just 20 minutes before the start of the hearing.
- The Master gave her decision on this issue – in effect, whether to adjourn the limitation argument - at p24 of the Transcript. She held that the there had been a failure by the Appellant's solicitors to check what had been listed and so she would not adjourn. She said (sic):
"Right now I am still considering whether, what to do about the suggestion that they are not ready to deal with it, the limitation point, whether I should cut them some slack on that or not. Whether there has been unfairness somehow in them not being made aware that today was co-listed. My judgment on that is that, having been asked and having already made the application, they should then have followed up and checked to see whether I had approved it because, in fact, I had, it was in the diary, and asking the staff would [inaudible]. I have not been given any evidence that they did call the staff to check, it is their application and it is in their hands to ascertain whether their request has been actioned and, in fact, they got what they, well, they sort of got what they wanted, so it would be today.
As a matter of fact, therefore, it is listed today and it is down to them and not asking the listing staff on their own application, whether it is listed, but they do not know it is listed, and if they did that, they would have instructed counsel in relation to the limitation point, how far they can go in terms of instructing counsel when they do not know their opponents' position is, inevitably, limited but I do think that it is right that we deal with the limitation question today, because that is before the Court and I am not inclined to just put if off to another day.
That, obviously, leaves counsel for the Defendant in the difficult position that he needs to think about how to respond to the point that you have made. Does your skeleton set out the substance of why you say limitation would be extended ?"
- Pausing at this point, and drawing matters together, the position at the hearing was this:
a. The Appellant had applied to set aside the default judgment on the grounds that he had a real prospect of defending the claim on limitation grounds. This was on the straightforward basis that the tort had been committed in 1997/8, the claim had not been issued until 2017, and so it was out of time under s 11 of the 1980 Act. That was Mr Hayden's position at the hearing.
b. However, for some reason, Mr Hayden arrived for the hearing only thinking it was to be a CCMC. His solicitors had not ascertained from the Court what had been listed.
c. Minutes before the hearing Mr McClenaghan handed Mr Hayden a Skeleton Argument raising s 33, and referring to at least two authorities (namely, Raggett v The Society of Jesus Trust 1929 for Roman Catholic Purposes [2009] EWHC 909 (QB) and Maga v Trustees of the Birmingham Archdiocese of the Roman Catholic Church [2009] EWHC 780 (QB)). This was the first time that Mr Hayden knew that the Claimant would be seeking to defeat his application at the hearing by relying on s 33 and by arguing that the Appellant had no real prospect of showing that the trial judge would not exclude the s 11 time limit pursuant to s 33.
- The Master then moved to hear submissions on limitation and the application of s 33. Although the application to set aside was the Appellant's application and, as was and is common ground, the burden was on the Appellant to show that the discretion under CPR r 13.3(1)(a) should be exercised in his favour, the Master began by hearing submissions from Mr McClenaghan for the Respondent as to why an application to exclude the time limit under s 33 would inevitably succeed. Mr Clenaghan conceded that the claim had been brought outside the limitation period. But, relying solely on a psychiatric medical report from Dr Ruth Jarman, a consultant psychiatrist, which concluded that the Appellant suffered from a number of mental health issues as a result of the abuse he had suffered, as well as other issues not connected with the abuse, Mr McClenaghan submitted this report by itself amounted to material from which the Master could be sure that an application to extend time would inevitably succeed, so that there was not a real prospect of the Appellant defending the claim on that basis and therefore the application to set aside should be refused.
- Dr Jarman was asked by TPE's solicitors to prepare a report for the claim. She was asked to consider:
a. What damage TPE had suffered and would continue to suffer;
b. Causation of the damage;
c. Prognosis;
d. Any therapy needs TPE may have;
e. Earning capacity and whether the damage suffered by TPE has restricted him in his earning capacity;
f. Limitation, and whether the delay in bringing the action was reasonable.
- In her report dated 7 May 2017 Dr Jarman concluded as follows:
a. TPE has suffered with symptoms of PTSD as a direct result of the abuse he suffered. His symptoms reduced but once the abuse "came to light" they became moderately severe. This is the primary diagnosis. Dr Jarman thought this would be permanent.
b. He also has Emotionally Unstable Personality Disorder, ie, deploying maladaptive coping strategies to deal with early childhood trauma.
c. He has moderate depression as a result of the abuse.
d. On the balance of probabilities, TPE's earning capacity has been affected by his abuse.
e. The doctor thought the delay in TPE bringing the litigation was "reasonable". At the end of her report she said:
"He spoke of how he had disclosed the abuse in his late teens but does not believe he was taken seriously at that time. He also spoke of how he wanted to protect his family, especially his father. TPE had subsequently feared that he would not be believed due to his offending behaviour and also the impact he felt that it would have on his mental health. He had always put the abuse to the back of his mind fearing that disclosure would destabilise him which was another reason why he held back from disclosing the abuse. It was only until he had his own children and had an awareness of their own vulnerability that he wanted to seek action to prevent Franks from doing anything to others that he had done to him."
- The Master then addressed Mr Hayden and asked him to explain, "how you get over the real prospects of success ?" (sic) There was then a discussion of the test for granting summary judgment, and there was reference to CPR r 24.2.3.
- Mr Hayden pointed out that the medical report was not in proper form and not verified by a statement of truth and merely recited what TPE had told Dr Jarman. Mr Hayden then made a number of points with regard to the report, including parts of the account given by TPE to the doctor which he said were undermined by other evidence, thus damaging his credibility. He said that it was not a "slam dunk" application to exclude the limitation period and, to the contrary, there were good grounds for concluding that it would not be disapplied.
- The Master's judgment can be summarised as follows:
a. The test was whether there was a defence which was not merely fanciful. She reminded herself that she was not trying the case summarily.
b. In terms of the commission of the tort, there was no realistic prospect of defending that given the Appellant's conviction and what the Master described as "the wealth of medical evidence".
c. TPE had capacity from 2000 (when he turned 18), so the Appellant "got off the ground" in terms of pleading a limitation defence.
d. However, the Appellant had to go further than that and show that he had some real prospect of defeating what she called "the inevitable application to extend time" so as to exclude the time limit in s 11 of the 1980 Act. She said:
"In other words, is there a real prospect of success on the limitation point, or is this in reality a 'slam-dunk' for the Claimant in terms of, ultimately, defeating the limitation point ? Is there a real prospect of success for the Claimant overall ?" (sic)
The reference in the penultimate line should obviously be to "the Defendant" rather than "the Claimant".
e. There was clearly no prejudice, because the conviction would prove the tort.
f. Looking at the medical evidence, in the Master's view that showed that between 2000 and 2005 the Claimant was very unwell, and so the court would not do anything but extend time for that period.
g. Going forward to 2013, TPE went to the police and the criminal proceedings and conviction followed in 2017. The Master said she thought it was "fanciful" to suppose that a Court would "hold that against the Claimant".
h. The Master then asked: "What about the period 2005 up to 2013 ?" She then cited certain parts of Dr Jarman's report. At paras 16-18 she concluded:
"16. The summary of the assessment was that he appeared at the threshold for diagnosis of Autistic Spectrum Disorder. He had long term difficulties with social communication and interaction and restricted behaviours, as well as his level of learning. That is just on, if you like, autism aspects and his restricted ability to deal with some of the central aspects of everyday life, on top of the other diagnoses that he has, depression, PTSD and so on.
17. That is the picture during the interim period. Would a judge hearing an application to extend time, in an otherwise bang to rights case, decline to extend time ? I do not think there is any prospect a judge would decline to extend time, given that background. He is a man with multiple deficits, some of which may have been caused by these assaults and some may not. He may have been born autistic, but either way, when you look at that package, there just is not, applying my critical faculties, a reasonable prospect of that relief in the form of dispensing with limitation being refused. I do not think I strictly have to go as far even as concluding that point as clearly as I have in the event done, in order to conclude that the application is defeated.
18. It follows that the one, potentially viable defence, which is the defeating an application to extend time, is not realistically viable in substance, so I will not set aside the default judgment. I do not see any other reason for setting aside the judgment and having a trial."
The parties' submissions
- On behalf of the Appellant, Mr Hayden submits, firstly, that the Master should not have considered s 33 at all. He points out that before the Skeleton Argument was served, the Claimant had not raised the issue, for example, by way of a Reply to the application to set aside. He says that the Claimant at least needed to plead s 33 in any reply to the application. He says that given that the claim was barred by the 1980 Act, and there had been no request by the Claimant to disapply the time limit under s 11, there was an absolute defence and the Master should have set aside the judgment in default.
- Next, if contrary to his first submission the Master was entitled to consider s 33, Mr Hayden submits that the Master should not have heard the limitation argument on 13 November 2017. He says that his client was "ambushed" by the Claimant at the hearing when the Skeleton Argument was served 20 minutes before the hearing, raising s 33 for the first time. He says that he was not in a position to deal with s 33 at the hearing and should not have been forced to do so.
- Thirdly, Mr Hayden says the Master applied the wrong test. He says that the Master wrongly placed the burden of showing that the court would not disapply the limitation act period on the Applicant, and the Master placed "too high a burden" on the Appellant.
- Mr Hayden says that with respect to the Appellant's application to set aside default judgment, the burden was with the Appellant, but with respect to any request to exercise its discretion the burden lay with the Claimant.
- In reply, Mr McClenaghan submits that the Master was correct to determine whether the Appellant's limitation act defence had a real prospect of success, and that she was not bound to hold that there was such a prospect merely because it was conceded that the claim had been brought beyond the three year period in s 11. He submits that simply raising a limitation defence does not mean that it has a reasonable prospect of success. Notwithstanding that it had not been raised before the hearing, he submits that to have ignored on the Appellant's application would have been to ignore the obvious: it is plain that TPE would be relying upon s 33.
- Second, Mr McClenagahan submits that the Master was right to determine the s 33 issue at the 13 November hearing because that had been the request of the Appellant's solicitors in an email of 1 November to the Master.
- Finally, Mr McClenaghan submits that the Master was right to hold that an application under s 33 would inevitably succeed.
Discussion
The test on this appeal
- The test which I have apply on this appeal is contained in CPR r 52.21(3), which provides:
"(3) The appeal court will allow an appeal where the decision of the lower court was—
(a) wrong; or
(b) unjust because of a serious procedural or other irregularity in the proceedings in the lower court."
- Later I will say more about what 'wrong' means in this context.
The test the Master should have applied
51. CPR r 13.3 provides:
"(1) In any other case, the court may set aside or vary a judgment entered under Part 12 if –
(a) the defendant has a real prospect of successfully defending the claim; or
(b) it appears to the court that there is some other good reason why –
(i) the judgment should be set aside or varied; or
(ii) the defendant should be allowed to defend the claim.
(2) In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly."
- The approach which the Master should have adopted in relation to the application to set aside the default judgment is that set out in the judgment of Christopher Clarke LJ in Regione Piemonte v Dexia Crediop SpA [2014] EWCA Civ 1298, paras 38-41, which was approved in Gentry v Miller [2016] 1 WLR 2696, paras 23-24. In the former case, Christopher Clarke LJ said:
"38. A question arose at the hearing of the appeal as to the extent to which the principles laid down in Mitchell v News Group Newspapers Ltd [2014] 1 WLR 795 applied to applications to set aside a default judgement. Since the hearing this Court has given judgment in Denton v TH White Ltd [2014] EWCA Civ 906 and the parties have made written submissions on it. Neither case was concerned with applications to set aside a judgment.
39. In essence Piedmont submits that the Mitchell/Denton principles do not apply to an application to set aside a default judgment. The majority in Denton considered that the Mitchell decision was correct to attribute a particular importance to the factors listed at CPR 3.9 (1) (a) (the need "for litigation to be conducted efficiently and at proportionate cost") and (b) (the need "to enforce compliance with rules, practice directions and orders") because the Civil Procedure Rule Committee had rejected a recommendation in the Review of Civil Litigation Costs Final Report that CPR 3.9.1 should be reworded so that 3.9.1 (b) read "the interests of justice in the particular case". But the Final Report did not propose any amendment to CPR 13.3 so that the reasoning of the majority in Denton does not apply to it. There is thus, it is submitted, no reason to conclude that the Mitchell/Denton principles apply to an application under CPR 13.3 or that promptness under CPR 13.3 should be regarded as anything more than a factor. I disagree.
40. In my judgment the matter stands thus. CPR 13.3 requires an applicant to show that he has real prospects of a successful defence or some other good reason to set the judgement aside. If he does, the court's discretion is to be exercised in the light of all the circumstances and the overriding objective. The Court must have regard to all the factors it considers relevant of which promptness is both a mandatory and an important consideration. Since the overriding objective of the Rules is to enable the court to deal with cases justly and at proportionate cost, and since under the new CPR 1.1 (2) (f) the latter includes enforcing compliance with rules, practice directions and orders, the considerations set out in CPR 3.9 are to be taken into account: see Hussein v Birmingham City Council [2005] EWCA Civ 1570 per Chadwick LJ at [30]; Mid-East Sales v United Engineering and Trading Co (PVT) Ltd [2014] EWHC 1457 at [85]. So also is the approach to CPR 3.9 in Mitchell/Denton. The fact that the Court's judgment in Denton was reinforced by the fact that CPR 3.9 was not reworded in the manner proposed by Jackson LJ does not detract from the relevance of CPR 3.9, and what was said about it in Denton, to applications under CPR 13.
41. Denton makes clear that any application for relief against sanctions involves considering (i) the seriousness and significance of the default (ii) the reason for it and (iii) all the circumstances of the case. At the third stage factors (a) and (b) in CPR 3.9 are of particular, but not paramount, importance."
- In fact, the Master decided the question of promptness first, having been invited to do so by Mr McClenaghan, and held that the Appellant had, given the circumstances of his incarceration, acted promptly, and she then went on to consider whether the limitation defence had a real prospect of success. That was the wrong way around. As the case law I have quoted makes clear, the Master should first have considered the merits of the Appellant's claim that there was a real prospect of succeeding in a defence and, if she was in the Appellant's favour on that issue, then gone on to consider how to exercise her discretion in light of her conclusion on promptness and the other factors identified by Christopher Clarke LJ. In saying this, I do not intend to be critical of the Master. She was not assisted by the way in which the advocates presented the issues to her. It does not appear that she was shown the relevant authorities, although Denton was referred to in passing.
- However, had she adopted the correct approach, in my judgment the Master would have been bound to conclude that if there was a real prospect of the Appellant defending the claim, then her discretion should be exercised in the Appellant's favour to set aside the default judgment. There is no Respondent's Notice in respect of her findings on promptness, and in any event I am inclined to agree with her.
- It follows that this appeal turns on how the Master approached the limitation defence, both procedurally and substantively, and whether she was correct in her conclusions.
Was the Master entitled to consider s 33 at all ?
- I do not consider that Mr Hayden is correct in his submission that the Master was not entitled to consider s 33 at all on the application under CPR 13.3(1), and that she was bound to set aside the judgment in default on the simple basis that the cause of action arose in 1997/8 and the claim was not issued until 2017. True it is that the Claimant had not pleaded it in a Reply. But there could not have been a Reply because the Claimant had obtained judgment in default in the absence of a Defence.
- As the White Book 2018, Vol 2, says at para 8-94.7, the question of whether to exclude a time limit under s 33 can be determined at trial or as a preliminary issue or at an interlocutory stage. It goes on to point out that the 1980 Act does not lay down any specific procedure whereby the statutory power under s 33 is to be invoked. Then, it says this (sic):
"In order to preclude any undue prolongation of an action which it may not be equitable to permit to proceed and in seeking to limit the burden of costs which may be imposed on the defendant, an application by the defendant to stay the claim under CPR r 3.1(2)(f) would, provided that the claimant has given due notice of the defendant's intention to rely on the section, serve to initiate the investigation contemplated by s 33."
- I think there may be some words missing in this passage. It appears to be derived from what Shaw LJ said in Walker v Precision Forgings Ltd [1979] 1 WLR 1228, 1238 in relation to the analogous provisions in the Limitation Act 1979 as amended by s 1 of the Limitation Act 1975:
"The Act of 1975 does not lay down any specific procedure whereby the statutory power under section 2D is to be invoked and considered in relation to an action instituted by a writ issued after the expiry of the primary period of limitation. It would seem, therefore, that the question can be raised at any appropriate stage of the litigation so commenced. It may await the actual trial of the substantive issues in the action; indeed it may in some situations be so intimately and inextricably bound up with them as to make any summary resolution of the question impracticable. More generally, in order to preclude any undue prolongation of an action which it may not be equitable to permit to proceed and in seeking to limit the burden of costs which may be imposed on a defendant, a summons by him to stay the action would serve to initiate the investigation contemplated by section 2D. In a clear case the action may be thus summarily terminated."
- I think therefore that the extract from the White Book that I have quoted should read at the end:
"… , an application by the defendant to stay the claim under CPR r 3.1(2)(f) would, provided that the claimant has given due notice of [his] intention to rely on the section, serve to initiate the investigation contemplated by s 33."
- Be that as it may, I consider that the point is clear. No particular procedure is required before s 33 can be considered. Whether or not it will be appropriate to do so at an interlocutory stage will depend on the facts. I agree with Mr McClenaghan that it cannot be the case that the prima facie existence of the expiry of the time limit under s 33 can by itself justify the setting aside of a judgment in default, any more than it can by itself the staying of a case under CPR r 3.1(2)(f). As he says, that approach would be to ignore the obvious.
- It follows that it was open as a matter of principle to the Master to consider s 33 and she was not bound to aside default judgment on the basis of the dates alone.
- However, I emphasise the words 'given due notice' in the extract from the White Book. In Ground 2 Mr Hayden's complaint is that he was not give due notice, and so to that issue I now turn.
Should the Master have adjourned the hearing ?
- The question is whether the Master should have adjourned the hearing once it became apparent that TPE was relying on s 33 and that Mr McClenaghan had only served his Skeleton Argument on Mr Hayden immediately before the hearing, so that he was only then on notice that that matter was to be litigated.
- I am firmly of the view that this should not have happened. In the modern era, civil litigation should be conducted so that both parties 'put their cards on the table' and give proper and fair notice of their position. It is simply not acceptable to serve a Skeleton Argument plus authorities on an opponent 20 minutes before a hearing, as Mr McClenaghan did in this case. Mr Hayden is justified in his complaint that he was "ambushed".
- The Appellant's Skeleton Argument refers to the fact that Mr McClenaghan's Skeleton Argument was dated 10 November 2017. Even in the absence of a direction for the service of skeleton arguments Mr McClenaghan should have served his Skeleton Argument, authorities and evidence well in advance of the hearing together with a letter clearly identifying that TPE was relying upon s 33 and that he would be inviting the Master to conclude that the Appellant had no real prospect of defending the claim on limitation grounds because an application under s 33 would inevitably succeed.
- As well as potentially unfairly prejudicing the Appellant, the approach taken by TPE's legal advisers did not assist the Master if, as I assume, she too only received the Skeleton Argument shortly before the hearing. Queen's Bench Masters have to deal with an enormous volume of work and are entitled to proper notice and adequate time to consider the matters that they are going to be asked to adjudicate upon.
- The question whether or not to adjourn the hearing was a matter for the Master's discretion, and her decision is not lightly to be interfered with on appeal. However, I am bound to say, with respect, that I think her conclusion was wrong and the reasons which she gave for not adjourning do not bear scrutiny.
- I have already set out the relevant part of the Master's reasoning. Her reason for not adjourning was because she said that the Appellant's solicitor had not checked with the court as to what the hearing was listed for. That misses the point of what Mr Hayden was complaining about. Even if his solicitors had checked, and been told that the set aside application was to be heard that day, Mr Hayden would have come to court believing that in order to show that the Appellant had a real prospect of defending the claim, he simply had to point to the fact that the tort was committed in 1997/8 and the claim not issued until 2017. He would still have been ambushed by the Claimant's Skeleton Argument. The default on the part of the Appellant's solicitors which the Master rightly or wrongly concluded had occurred was not therefore causally related to the prejudiced position which Mr Hayden found himself.
- For the same reasons, the fact that the Appellant's solicitors sought to have the hearing as the set-aside hearing is nothing to the point. Mr Hayden would still have been ambushed.
- In my judgment the Master should, as a matter of fairness, have adjourned the hearing on the limitation issue for the Appellant to have a proper opportunity to consider the Claimant's argument, authorities and evidence and to formulate a proper response.
- However, in light of my overall conclusion on the appeal, namely that the judgment in default should be set aside because the Master was wrong not to have concluded that there is a real prospect of the Appellant defending the claim, it is not necessary to say anything further on this ground of appeal.
Did the material before the Master demonstrate that the Appellant has a real prospect of defending the claim on limitation grounds ?
- Section 33 involves the exercise of discretion. In KR and others v Bryn Alyn Community (Holdings) Ltd (in liquidation) and another [2003] EWCA Civ 85 Auld LJ observed at paras 68 – 69 that the discretion of a judge under s 33 is fettered only to the extent that it provides a non-exhaustive list of circumstances to which he should have regard. However, the matter is not determined simply by assessing comparative scales of hardship: Long v Tolchard & Sons Ltd [2001] PIQR P18. The overall question is one of equity, namely, whether it would be 'equitable' to disapply the limitation provisions having regard to the balance of potential prejudice weighed with regard to all the circumstances of the case, including those specifically mentioned in s 33(3): Nash v Eli Lilly & Co [1993] 1 WLR 782 and Whitfield v North Durham Health Authority [1995] 6 Med LR 32, 39 per Waite LJ.
- I have already mentioned that the question for me under CPR r 52.21(3) is whether the Master's decision was 'wrong'. In Bryn Alyn Auld LJ said that the width of the discretion under s 33 is such that an appellate court should not intervene save where the judge was so plainly wrong that his decision exceeded the ambit within which reasonable disagreement is possible: Coad v Cornwall and Isles of Scilly Health Authority [1997] 1 WLR 189, 197, per Ward LJ. That includes the exercise of wrong principles, taking account of irrelevant factors, ignoring relevant factors or the making of a decision that is 'palpably or 'plainly wrong: Farthing v North East Essex Health Authority [1998] Lloyd's Rep Med 37 and Margolis v Imperial Tobacco Ltd [2000] MLC 204. If the court intervenes on any of those grounds, it should treat the matter as at large and exercise its own discretion in accordance with s 33
- It is plain from the authorities that the reasons why the claim was brought outside of the relevant time limit is a central consideration in relation to s 33. In A v Hoare [2008] 1 AC 844, the House of Lords over-ruled its own previous decision and held that the time limit for bringing a claim for intentional injuries could be extended under s 33. In giving the leading judgment Lord Hoffmann held that the question as to the effect on an actual Claimant of his psychological state in consequence of the injury could be taken into account under s 33(3)(a). In considering the effect of the decision of the House on the exercise of the discretion under s 33 he emphasised at para 49 that the discretion was unfettered: Horton v Sadler [2007] 1 AC 307. At the end of that paragraph, he concluded:
"The judge is expressly enjoined by subsection (3)(a) to have regard to the reasons for delay and in my opinion this requires him to give due weight to evidence, such as there was in this case, that the Claimant was for practical purposes disabled from commencing proceedings by the psychological injuries which he had suffered."
- The cases also make clear that the Claimant's evidence is very important. In AB and others v Nugent Care Society [2010] 1 FLR 707, para 21 the Court of Appeal said:
" … we think that there are now likely to be many cases in which a judge will consider that it is not feasible to decide the issues simply by reference to the pleadings, written witness statements and the extent and content of discovery. He or she may well conclude that it is desirable that such oral evidence as is available should be heard because the strength of the Claimant's evidence seems to us to be relevant to the way in which the discretion should be exercised. We entirely agree with the point made at vii) that, where a judge determines the s 33 application along with the substantive issues in the case he or she should take care not to determine the substantive issues, including liability, causation and quantum before determining the issue of limitation and, in particular, the effect of delay on the cogency of the evidence. To do otherwise would, as the court said, be to put the cart before the horse.
22 That is however simply to emphasise the order in which the judge should determine the issues. When he or she is considering the cogency of the Claimant's case, the oral evidence may be extremely valuable because it may throw light both on the prejudice suffered by the Defendant and on the extent to which the Claimant was reasonably inhibited in commencing proceedings. Thus, if the Claimant's case is beset by inconsistencies and the Claimant shows himself in evidence to be unreliable, the court may conclude that the delay is likely to prejudice the Defendant in the way contemplated in Eli Lilly, namely by being put to the trouble and expense of successfully defending proceedings and then not being able to recover costs against impecunious Claimants. In those circumstances, viewing the matter more broadly, as A v Hoare enjoins the courts to do, it may well be that it would not be equitable to allow the Claimant to proceed. On the other hand, if the evidence of the Claimant is compelling and cogent that the abuse occurred, and it is said that it was the abuse that inhibited him from commencing proceedings, that is surely a compelling point in favour of the Claimant."
- The central question for the Master was whether the material before her (and that which could be reasonably anticipated at trial) showed that the Appellant had a real prospect of defending the claim on the grounds of limitation. In other words, having regard to the fact that the burden would lie on the Claimant of demonstrating that it would be equitable under s 33 to exclude the s 11 time limit, the question for the Master was whether there was a real prospect that the Claimant would fail to demonstrate that it would be equitable to exclude the time limit having regard to the factors set out in s 33 ? In posing the issue this way, it is important to emphasise that the burden that would be borne by the Claimant is a heavy one: Raggett, para 118.
- Whilst recognising that s 33 conferred a wide discretion upon the Master, and that I as an appellate court should only interfere if I conclude that the Master's decision was wrong in the sense I have explained, in this cases these principles could be regarded as being tempered to a degree by the fact that the Master did not hear live evidence, but judged the matter on the same materials as are before me. In that sense, therefore, I am in the same position as the Master in deciding whether the Appellant has a real prospect of defending the claim. However, true to the authorities that I have cited, my approach is that I may only interfere on the bases set out in those cases.
- Despite that deferential approach, I have reached the clear conclusion that the Master erred as a matter of principle such that I must exercise the s 33 discretion for myself.
- I begin my discussion with the observation that the Master did not specifically analyse the medical report – which was the only material relied on by the Claimant - in terms of the s 33(3) criteria. She ought to have done so, because of the language of s 33(3) (emphasis added): '… the court shall have regard to all the circumstances of the case and in particular to …' the criteria which are set out in s 33(3). The Master should have taken each of the relevant criteria and considered it in light the medical evidence, and then expressed her overall conclusion in light of her findings. That was the methodology adopted by Swift J in Raggett (and which was approved on appeal by the Court of Appeal in [2010] EWCA Civ 1002) and I respectfully agree that it is the correct approach. The Master did not do that, and that was a fundamental error of principle.
- The Master also erred in her treatment of the relevant time period. What she did was to determine (correctly) that time ran from 2000 when the Claimant turned 18 until 2017 when the claim was issued, but she then divided that period of 17 years into different sections, namely 2000 – 2005, 2013-2017, and considered whether in relation to each period the court would extend time. For example, in relation to 2000-2005), she said '… between 2000 and 2005 there is not a prospect, the Court would not do anything other than extend time because he is claiming he was unwell, very unwell.' But the question was not whether time should be extended for 2005; it was whether it was equitable to exclude the s 11 time limit having regard to the fact that the claim was issued in 2017. What she should have done was to consider the period as a whole, and applied the s 33(3) to that whole period, rather than dividing it into sections. But in any event, as I have said, even in relation to each section that Master did not consider the factors that she was required to take into account.
- It therefore falls to me to consider whether the Appellant has shown that there is a real prospect of defending the claim on limitation grounds on the material that is before me. I have reached the view that there is such a real prospect. That is for the following reasons.
- The first matter that should have been considered under s 33(3)(a) was the length of, and the reasons for, the delay on the part of the Claimant. As to the length of the delay, taking time as starting to run from 2000 when the Claimant became an adult, that period is 17 years. As to the reasons for the delay, there is no evidence; or certainly, none directly from the Claimant. All that there is are a few lines at para 13.5 in Dr Jarman's report as to what she says the Claimant told her were his reasons, namely, fear of not being believed; a wish to protect his father; fear that disclosure would destabilise him; and that his motivation to report was his own children and their vulnerability. However, he also told the doctor that he had, in fact, disclosed the abuse in his late teens.
- The Appellant does not accept this evidence. It points to matters which it says undermine the Appellant's credibility. First, there are his criminal convictions, among which are convictions for dishonesty. Also, by way of example, Mr Hayden pointed to the Appellant's claim that the abuse ended his aspirations to be a professional footballer and contrasted this with evidence given at the criminal trial that in fact that had ceased to be a realistic goal, which is why the Claimant had begun the referring course which brought him into contact with the Appellant.
- It seems to me that the evidence as to the reasons for the delay, such as it is, lacks any real cogency. There is no reason why the Claimant could not himself have given evidence in proper form about these matters and about the history more generally. I do not know and cannot speculate what he might say. It is here that the burden of proof in relation to s 33 comes into play. It would be for him to show that the time limit should be excluded and therefore the absence of cogent evidence about the reasons for the long delay counts against him in the overall determination whether the Appellant has shown there is a real prospect that the Claimant would not prevail in a s 33 application.
- This absence of evidence is significant because, as is said in McGee, Limitation Periods (8th Edn) at para 8-062:
"Clearly, the longer the delay on the claimant's part, the more cogent the explanation will need to be. What is required is an explanation that will account for whatever delay has taken place"
- The medical report describes a number of entries in the Claimant's GP records including for attempted suicide and depression between 1998 and 2004. The Master said that 'realistically, between 2000 and 2005 there is not a prospect, the Court would not do anything other than extend time because he is claiming he was unwell, very unwell.' However, there is nothing to suggest that the Claimant lacked capacity despite being unwell. In fact, during this period, the report reveals that the Claimant gained a conviction for fraud, and it states that a clinical psychologist noted in 2001: '… in enacting the fraud TPE is the person in control and affecting the harm rather than the individual who has lost control …' There do not appear to be any GP records or other medical notes for the period 2004 and 2013 nor any evidence as to why the claim was not brought during this period.
- Overall, there is in my judgment no proper explanation as to why this claim was issued 17 years after the Claimant achieved his majority in 2000. There could be such explanation, but the Claimant did not deploy it before the Master.
- The next matter which ought to have been considered under s 33(3)(b) is the cogency of the evidence, and the extent to which the delay has rendered the available evidence less cogent than it would have been had the action been brought within the time-limit in s 11. The Master did obliquely refer to this consideration when she said that there could be no prejudice as to whether the Appellant did the act complained of, because of the criminal conviction. She also said that there would be prejudice in relation to the issue of causation of loss. It seems to me both of these were correct observations, and they weigh in favour of the court excluding the time limit under s 11.
- The next matter which fell to be considered is the Appellant's conduct after the cause of action arose (ss 33(3)(c)), and whether there was any obstructive conduct on the part of the Appellant. There was no evidence of any such conduct.
- The next matter to be considered under s 33(3)(d) is the Claimant's disability. Account must be taken of the duration of any disability of the Claimant arising after the date of accrual of the cause of action. The term 'disability' as used in s 33(3)(d) is a term of art, being defined for the purposes of the 1980 Act by s 38(2) as referring to a person who is an infant or who is of unsound mind. I take account of the period 1997/8 – 2000, when the Claimant was still a minor by determining the period in question to be 2000 – 2017. What about the period thereafter after the Claimant had become an adult ? In McGee at para 8.067 it is observed that incapacity falling short of disability can be taken into account as being another relevant factor in exercising the discretion, even though it does not fall under this paragraph as a 'disability'. Therefore, the Claimant's mental health problems, as described in the medical report, would be taken into account in favour of excluding the s 11 time-limit.
- The next matter which must be considered, pursuant to s 33(3)(e), is the Claimant's conduct. The court must consider the extent to which the Claimant acted promptly and reasonably once he knew whether or not the act or omission of the Appellant, to which the injury was attributable, might be capable at that time of giving rise to an action for damages. As with s 33(3)(a), there is no evidence about this, and the burden lies on the Claimant to explain and justify his conduct and his reasons for not issuing the claim until 2017. There is no such explanation or justification, or certainly none with the requisite degree of cogency.
- The final factor to be considered under s 33(3)(f) are the steps, if any, taken by the Claimant to obtain medical, legal or other expert advice and the nature of any such advice he may have received. There is no evidence as to this.
- I now have to make an assessment of how a court would view the overall exercise of its discretion under s 33 in light of these matters. In my judgment, in the absence of any evidence from the Claimant himself about why he waited as long as he did, it cannot be said that an application to exclude the time period under s 33 would definitely succeed. If an application under s 33 were to be made and were to be supported by proper evidence then it might well do so, but on the material before the Master, which is also before me, that conclusion cannot be reached with certainty.
Disposal
- Having concluded that there is a real prospect of the Appellant defending the claim, and the Master having concluded that the Appellant acted promptly in the circumstances, I exercise my discretion under CPR r 13.3(1) in the Appellant's favour and I set aside the judgment that was entered in default for the Claimant. I grant relief from sanctions and give leave to the Appellant to file and serve his Defence.
- I invite the advocates to draw up an order reflecting the terms of this judgment and containing consequential direction for the remission of this claim to the Master for further case management.
