ON APPEAL FROM MANCHESTER DISTRICT REGISTRY
REF: 8MA40076,  EWHC 600 (QB)
Strand, London, WC2A 2LL
B e f o r e :
Vice President of the Court of Appeal, Civil Division
LORD JUSTICE MUNBY
LORD JUSTICE LEWISON
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Mr Peter Elliott appeared in person
Hearing date : 4 September 2012
Crown Copyright ©
Lord Justice Maurice Kay :
"the court may grant the application only if the applicant –
(a) acted promptly when he found that the court had exercised its power … to enter judgment or make an order against him;
(b) had a good reason for not attending the trial; and
(c) had a reasonable prospect of success at the trial."
Those are the requirements of Rule 39.3(5). The present appeal is concerned with the question whether Mr Peter Elliott "acted promptly" when he applied to set aside an order made against him in his absence.
The factual background
"The Claimant provides the following Undertaking provided that he is not subject to any defamatory or slanderous statements coming to his attention from the Defendant or his companies. If the Claimant does receive knowledge of such statements he will put into writing to the Defendant his concerns and ask for a retraction within 7 working days of such statements. If he does not receive such a retraction then the Claimant is at liberty to defend himself as he sees fit in the circumstances.
I, Peter Elliott, on behalf of myself, my servants, agents or howsoever (to which all reference to 'I', 'myself' or like expressions in these Undertakings refer), undertake from the date hereof:
A that I shall not, whether by myself or by procuring, counselling or encouraging others to do so, make, permit, repeat or cause to be repeated, any allegation whatsoever to any third party, whether directly or indirectly, in whatever form or medium howsoever, whether orally or in writing (and if in writing in any medium whatsoever, including any electronic form):
(a) that [WADI], any associated company or firm, or their respective directors, employees or agents or howsoever, have acted in respect of the operation of any or all aircraft (be they fixed wing or otherwise), in a manner which is in breach of any statutory or other regulatory requirements of either the United Kingdom or the United States of America, or any other country, and/or which is otherwise contrary to the law of any country, save as I may be required to do so by compulsion of law.
(b) is otherwise defamatory of [WADI], any associated company or firm, its directors, employees, servants or agents or howsoever;
(c) with the intention of causing harm to the legitimate financial business interests of [WADI], any associated company or firm, its directors, employees, servants or agents or howsoever.
B to keep the facts of this dispute, this settlement and the terms of the settlement confidential and not to repeat the same to any third party without the express written permission of WADI and signed by a director save that I shall be at liberty, in answer to a specific question concerning this dispute, to respond that it has been settled amicably between the Claimant and the Defendant.
C to repeat these undertakings to a court of competent jurisdiction if required by WADI to do so.
These undertakings are given in full and final settlement of any previous allegations I made or may have made of a like nature to those paragraphs A (a), (b) and (c) above."
"This is to confirm that, in my opinion, the above named is not medically fit to attend court on Monday 15 March 2010."
On 12 March, the court listing officer had sent an email to Mr Elliott informing him that in the absence of a formal application to vacate the matter remained listed for trial on 15 March. Mr Elliott denies having received that email.
"… whatever happens, he will be able to apply to set aside the judgment as long as he provides (a) why he was not here, he might succeed on that, and (b) it shows a real prospect of success either on defending the claim or on counter-claiming …"
A short hearing then ensued at the conclusion of which the judge granted a permanent injunction. He dismissed Mr Elliott's counter-claim and made a general civil restraint order for two years.
"104 ….[Mr Elliott] relies broadly on two matters: first his mental health, and second his ignorance that he could apply to set aside the judgment. As to the first, the Claimants say the medical evidence provides no plausible excuse for the Defendant's inaction. As to the second it is said by the Claimants that even if the Defendant was unaware that he could make an application, his ignorance is merely an explanation not an excuse. The Claimants naturally draw attention to the period of one year and eight months between when the Defendant found out about the judgment and his application for permission to bring this current application. [Counsel] submits that however flexible the concept of promptness, it cannot stretch to accommodate these facts. He refers in addition in general terms to the potential prejudice to the Claimants if a trial were now to take place because of the lapse of time since the relevant events, and the potential for memories to fade. Taking the latter point first, on the material I have seen, I regard it as unlikely in the extreme that anyone involved in any of the material events has anything other than a vivid recollection of their involvement in them."
"106. In my view, such an approach enables the court to do justice in the instant case in accordance with the overriding objective, which is what the Civil Procedure Rules are designed to achieve.
107. Here, the Defendant was in my judgment under a significant disadvantage throughout the material period as a result of the combination of the health problems to which I have referred (albeit they appear to have become more acute more recently: see letter of 6 September 2011 from a doctor who is an associate specialist in psychiatry) and the fact that he was acting in person, for all but one very short period when solicitors came on the record for a period of about two weeks shortly after the Claimants applied to commit him for contempt on 27 May 2011. I should mention too that the Defendant says, and I am disposed to accept, that his mental difficulties were triggered by his imprisonment in Strangeways for contempt in 2009. This was his first experience of prison since he was of previous good character.
108. It is true [Counsel] says that the Defendant was meanwhile doing various things relating to the litigation. For example, trying to issue judicial review proceedings in relation to the grant of planning consent at Southend Airport, and applying for permission to appeal against the order made by HH Judge Tetlow on 30 November 2009. However, I accept that the Defendant did not really understand that he could apply to set aside the judgment until he was refused permission to appeal in October 2011 where the fact that he could have made such an application was mentioned by Sir Richard Buxton as one of the reasons for refusal. Though setting aside judgment was mentioned at the hearing on 15 March 2010, the Defendant did not obtain the transcript until September 2011, but even then, he did not appreciate what he could do until after he received the reasons for refusing permission to appeal. It is also understandable in my view that the Defendant did not apply immediately after receiving those reasons. As he said, he had an outstanding application for permission to appeal which he intended to renew orally, and he been roundly criticised for making too many applications, with the result that he had been made the subject of the GCRO.
109. A litigant seeking to have a judgment set aside after this length of time would normally face an uphill struggle to persuade a court that he should be allowed to do so. In my view however this is a special case on its facts, and having regard to all the circumstances the Defendant has persuaded me that it would be right to do so.
110. This case is also unusual because permission to appeal against the order made by HH Judge Tetlow on 15 March 2010 has already been refused. But that in itself is not a bar to the grant of relief since, as [Counsel] accepts, the 'merits' issue on this application is whether the defence has a reasonable prospect of success. This a broader 'fact based' question, permitting examination of evidence, than the question addressed on the permission application, which is whether there is an arguable ground of appeal: see Bank of Scotland v Periera  EWCA Civ 241 … in particular the observations of Lloyd LJ at paragraph 82.
111. It follows therefore that the judgment on the claim and counter-claim granted in the Defendant's absence will be set aside."
Sharp J did not rule upon the general civil restraint order, preferring to remit that for a further hearing.
"The first issue is whether or not the application was made promptly. [Counsel] began his submissions by saying that promptness was a flexible concept. I think that a note of caution should be struck here. The dictionary meaning of 'promptly' is 'with alacrity'. I have grave doubts as to whether Mr Carnall acted with the requisite degree of alacrity but in view of my conclusion on other matters I need not decide this point. The principal 'other matter' was that Mr Carnall did not have a reasonable prospect of success."
"However broadly the concept of promptness might have to be regarded, for instance in a case where the appellant has an excellent case on appeal, in my judgment Mr Carnall here on any view failed to act promptly. He took another 26 or so days to make his application."
That quantification seems to have been an underestimate by about four days.
"44. But I wish to touch briefly on the question of promptness. As is pointed out in the footnote 39.3.7 to the Spring 2000 Civil Procedure White Book:
Note that the wording of Rule 29.3(5) provides more stringent requirements than CPR 0.37 r.2 which it replaces. The court no longer has a broad discretion. There is only jurisdiction to set aside a regular judgment if the party seeking to have the order set aside can satisfy all three requirements in R39.3(5).
45. This consideration must, I think, inform the court's approach to the construction of the word 'promptly' in pre-condition (a). At first blush it might be thought that any inappropriate delay whatever on the part of an applicant would require that he be found not to have acted promptly. Yet such a construction would carry with it the draconian consequence that, even if he had a good, perhaps compelling, reason for not having attended the trial, and a reasonable – perhaps, indeed, excellent – prospect of success at trial, the court would still be bound to refuse him a fresh trial. I would accordingly construe 'promptly' here to require, not that an applicant has been guilty of no needless delay whatever, but rather that he has acted with all reasonable celerity in the circumstances. That said, I too would regard the appellant here as having failed even in that obligation. Thirty days was altogether too long a delay before making this Part 39 application. Having regard to the long, and generally unsatisfactory, history of the proceedings to that point, the application plainly could, and in my judgment reasonably should, have been issued well before it was."
His Lordship then emphasised that it was not so much upon that ground but upon the lack of any worthwhile case on the facts, that he regarded the judgment below to have been plainly correct. He also noted (at paragraph 46) that in a case where all three preconditions are satisfied, "any residual discretion … must necessarily be somewhat narrow".
"24. An application to set aside judgment given in the applicant's absence is now subject to clear rules. As was made clear by Simon Brown LJ in Regency Rolls Ltd v Carnall … , the court no longer has a broad discretion whether to grant such an application; all three of the conditions listed in CPR 39.3(5) must be satisfied before it can be invoked to enable the court to set aside an order. So, if the application is not made promptly, or if the applicant had no good reason for being absent from the original hearing, or if the applicant would have no substantive case at a retrial, the application to set aside must be refused.
25. On the other hand, if each of those three hurdles is crossed, it seems to me that it would be a very exceptional case where the court did not set aside the order. …
26. The strictness of this trio of hurdles is plain, but the rigour of the rule is modified by three factors. First, what constitutes promptness and what constitutes a good reason for not attending is, in each case, very fact sensitive, and the court should, at least in many cases, not be very rigorous when considering the applicant's conduct; similarly, the court should not prejudge the applicant's case, particularly where there is an issue of fact, when considering the third hurdle. Secondly, like all other rules CPR 39.3 is subject to the overriding objective, and must be applied in that light. Thirdly, the fact that an application under CPR 39.3 to set aside an order fails does not prevent the applicant seeking permission to appeal the order. It is not very convenient, but an applicant may be well advised to issue both a CPR 39.3 application and an application for permission to appeal at the same time, or to get agreement from the other party for an extension of time for the application for permission to appeal.
27. An appeal against a judge's decision under CPR 39.3 to refuse (or indeed to allow) an application to set aside a judgment does not, at least normally, involve challenging a discretion. However, an appellate court should be slow to overturn a decision of this nature, unless satisfied that the judge went wrong in principle. … Another way of making essentially the same point is that the appellate court normally has a reviewing, as opposed to a rehearing, function in such a case, and it can therefore only interfere if satisfied that the judge was wrong."
"In my judgment, although promptness may not be the controlling factor under CPR 13.3, it is plainly a very important factor, as is evident from the fact that it is singled out in the Rule as a matter to which the court must have regard. It is a very important factor because there is a strong public interest in the finality of litigation. Put simply, people are entitled to know where they stand."
Lord Justice Munby;
Lord Justice Lewison;