The test of promptness under the CPR.

June 30, 2016

“Delay always breeds danger; and to protract a great design is often to ruin it.” (Cervantes).

 

In the recent case of TBO Investments Limited v Mohun-Smith [2016] EWCA Civ 403 the Court of Appeal handed down some helpful guidance on the application of the ubiquitous test of promptness. The decision is also important for its accompanying examination of the ‘good reason’ for not attending trial requirement contained in CPR r. 39.3(5)(b) and that element of it will be examined in a subsequent article.

 

The facts of the case are far from straightforward. TBO was the Defendant to a £2.1M claim by two investors in respect of the provision of allegedly negligent investment advice. The trial was eventually listed for a 5-day hearing starting on 30th June 2014.

 

18 days before the trial date, TBO’s solicitors came off the record and the company proceeded to represent itself through one of its two directors, a Mr Robinson. As the trial date loomed, Mr Robinson became ill. He claimed to be suffering from stress (caused by the proceedings) and, ultimately, he did not attend at Court on the first day of the trial. What did materialise that day was a request (forwarded to the Court by TBO’s former solicitors) by TBO for an adjournment on the basis that Mr Robinson was unwell. That application was refused, TBO’s Defence was struck out and judgment entered against it with costs, in part on the indemnity basis.

 

On 18th July 2014, upon receipt of the order made on 30th June, TBO applied pursuant to CPR 39.3(3) for the Judgment to be set aside. The main basis of the application was the same as the adjournment application on 30th June i.e., Mr Robinson’s illness and his unfitness to attend the trial. The application also stated that the applicable criteria had been met, namely that there was a good reason for non-attendance (Mr Robinson’s illness), the application had been brought promptly and that the Defence had a reasonable prospect of success.

 

The set aside application was supported by fresh evidence from Mr Robinson’s GP.

 

The application was refused though, the Court concluding that the medical evidence was “wholly insufficient” and that TBO had failed to act promptly in bringing the application.

 

TBO appealed that decision in the Court of Appeal where only the first two conditions in CPR r.39.3(5) (promptness and good reason) were in issue.

 

The appeal was allowed. Lord Dyson MR gave the lead judgment with which Macur and Lindblom LJJ both agreed.

 

PROMPTNESS

 

The Judge who dismissed the set aside application held that TBO had not acted promptly in doing so. TBO was aware of the decisions of the 30th June by 3rd July at the latest and Mr Robinson was made aware of it at some point between 3rd and 8th July yet (and despite knowing the extent and nature of the 30th June decisions) he spent the next 10 days visiting clients across the UK rather than make the set aside application until it was issued on 18th July. In the Judge’s view, on those facts TBO did not act promptly as required by CPR r. 39.3 (5) (a).

 

In his judgment, Lord Dyson MR referred to the well known and oft cited test of promptness as set out by Simon Brown LJ in Regency Rolls Ltd v Carnall [2000] EWCA Civ 379 (a CPR 13.3 application): the applicant had to show that they had acted with all “reasonable celerity” (or “alacrity” (per Arden LJ)) and that they had not acted with “needless delay” in issuing the application, which test is to be applied in the light of the guidance provided by Lord Neuberger MR in Bank of Scotland Plc v Pereira [2011] 1 WLR 2391.  That guidance is that the exercise of assessing promptness is “very fact-sensitive” and that the Court should avoid too rigorous an approach.

 

In finding that the approach of the Judge at the set aside application had been “too draconian” in its assessment of TBO’s and Mr Robinson’s conduct and that there had been a failure to consider the Pereira guidance, Lord Dyson MR went on to say that assessing promptness does not simply require an assessment of the time taken to make the set aside application. It is necessary to consider the time taken to issue the application ‘in context’ and he found that a) the context of the TBO case was that of “a complex and very substantial” claim and that b) the time taken to make the application was only a matter of days.

 

The Master of the Rolls did not consider that if the Judge who decided the application had applied the Pereira guidance, he could reasonably have concluded that TBO had failed to act promptly.

 

The end result of all this is that when a court is assessing whether an applicant has acted with reasonable celerity or alacrity in issuing the application, it must not simply look at the length of time that has been taken from being put on notice (formal or informal) of the decision that is sought to be overturned. Delay is entirely a matter of context, it is fact sensitive and no hard and fast rules should be applied. Previous cases such as Khan v Edgbaston Holdings [2007] EWHC 2444 (QB) have been interpreted as suggesting that there is a maximum number of days beyond which promptness will be impossible to establish (59 in Khan), but that approach is wrong and the Court of Appeal has sent a very clear message to that effect. 

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