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04/08/2015

Clear water emerges between Mitchell and Denton – by Phillip Patterson

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Phillip Patterson

 

The recent judgment of the Court of Appeal in Michael Wilson & Partners Ltd v Sinclair [2015] EWCA Civ 774 definitely confirms that Denton v TH White Ltd [2014] 1 W.L.R. 3926 marked a departure from the principles set down in Mitchell v News Group Newspapers [2014] 1 W.L.R. 795 regarding the circumstances in which a court will grant relief from sanctions.

The previously low-profile corner of civil procedure dealing with relief from sanctions was thrust firmly into the academic spotlight with the decisions of the Court of Appeal in Mitchell and Denton. Few in the profession remain unaware of those cases and the tests laid down in them. A lingering question remained, however, in the months which followed those judgments, as to the extent to which Denton represented a departure from Mitchell or merely a clarification.

The sanction imposed in Michael Wilson & Partners v Sinclair (MWP) was the stay of a company’s appeal (of a decision of Teare J to strike out a claim as an abuse of process) on the grounds that it has failed to pay a sum into court within a specified period. The company applied to Lewison L.J. to lift the stay. At that time, judgment had been given in Mitchell but not in Denton. Lewison L.J. declined to grant the relief sought. He concluded that the company’s failure to pay the sum into court could not be dismissed as a trivial breach and he found no good reason for the breach. Accordingly, His Lordship declined to lift the stay.

A short while after Lewison L.J. made this determination, the Court of Appeal gave judgment in Denton. Upon considering the effect of Denton, the company immediately appealed.

In giving judgment on 23 July 2015, Richards L.J. (at [42]) felt able (applying Denton) to grant the company’s appeal, whilst at the same time apparently stressing that Lewison L.J.’s impugned decision was consistent with the principles set out in Mitchell:

“In conclusion on this issue, I see why Lewison LJ took the draconian approach he did on the basis of his understanding of the principles laid down in Mitchell. Leggatt J’s decision in the Summit Navigation Ltd case shows that a very different approach was possible in a similar context even in the light of Mitchell. It was not until Denton, however, that it became clear that Lewison LJ’s approach was mistaken. Applying the restatement in Denton – recognising that this was a significant or serious breach and that there was no good reason for it, giving particular weight to the two factors specifically mentioned in rule 3.9(1) but having regard at the same time to all the other circumstances to which I have referred – I am left in no doubt that Lewison LJ’s decision was wrong.”

There remains a judicial reluctance to declare that Mitchell has been overruled. Repeatedly in MWP, Denton was described as a restatement. Nevertheless, this case provides a useful real-world example of a case in which the guidance in Mitchell and Denton would seem to lead to different results.

Perhaps soon, this judicial deference towards Mitchell will fall away. The Court of Appeal in Denton set out a clear, workable test which is entirely self-standing and requires no reference to Mitchell. We now know, following MWP, that the guidance in Denton is to be preferred to that in Mitchell. The use of Mitchell as an authority on relief from sanctions will likely begin to fade in the coming months and years.

Phillip Patterson
4-5 Gray’s Inn Square
Phillip has lectured (alongside Stephen Brown) on the topic of relief from sanctions in civil procedure and the impact of the decisions in Mitchell and Denton. Readers interested in hearing Phillip lecture on this topic should contact Steven Newbery.

 

 
 

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