England and Wales Court of Appeal (Civil Division) Decisions

		Neutral Citation Number: [2002] EWCA Civ 1135
		Case No: A3/2001/2571

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (MR JUSTICE HART)

		Royal Courts of Justice Strand, London, WC2A 2LL
		31st July 2002

B e f o r e :

LORD JUSTICE MUMMERY
LADY JUSTICE HALE
and
LORD JUSTICE CARNWATH
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Between:


	FRANK HENRY BRAZIL	Appellant
	- and -
	FRANK BRAZIL	Respondent

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Miss Bridget Williamson (instructed by Davies Lavery) for the Appellant
Mr Karl King (instructed by Wheelers) for the Respondent
Hearing dates : 23rd July 2002
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Lord Justice Mummery :

1. This is an appeal from the order of Hart J dated 12 November 2001. He decided that Mr Frank Brazil, the respondent to this appeal, had a “good reason” for failing to attend the trial of the proceedings, in which he was the only effective defendant. I shall refer to Mr Frank Brazil hereafter as “the defendant.” Hart J’s unreported judgment has been summarised in the First Cumulative Supplement to the 2002 Edition of the White Book under CPR 39, paragraph 39.3.7. The proceedings were heard and determined against the defendant by Deputy Master Lloyd on 1 June 2001. They were brought under CPR Part 8, which is available where a decision of the court is sought on a question which is “unlikely to involve a substantial dispute of fact.”
2. Hart J exercised his discretion under CPR 39.3 (5) (b) to grant the defendant’s application to set aside the order for rectification of the Land Register made by the Deputy Master in favour of the claimant, Mr Frank Henry Brazil, and ordered that the costs be costs in the case. The effect of the substantive order for rectification made in the defendant’s absence was that he would forever lose his home and his claim to a good title in the Quadrant (now known as Brazil’s Yard), Lakeside Road, Ash Vale, Guildford, Surrey GU12 5AA (the Property). He has lived there all his life. He was born in 1965. His mother, his wife (Julie) and his son also live there. Since 20 January 1993 he has been registered as proprietor of it with Title Possessory at HM Land Registry under Title No SY 631025. Under the Deputy Master’s order the claimant was to be registered instead as proprietor with title absolute.
3. Permission to appeal was granted by Robert Walker LJ on 14 December 2001. He pointed out that it was a marginal case for permission and that the appellant’s advisers should carefully consider whether to proceed with an appeal. Despite those wise words, the appeal has proceeded against both the substantive order and the costs order. Although the claimant’s case has been skilfully argued by Miss Williamson, I am unpersuaded that Hart J erred either in law or in fact in accepting the defendant’s case that he had a “good reason” for failing to attend the trial. In those circumstances and in the absence of any other criticism of the judge’s exercise of his discretion, the appeal on the substantive point should be dismissed. I shall deal with the appeal on costs separately in paragraphs 25 and 26.

Background to Application

4. The claimant is the great-great-grandson of Mr James Brazil, who died intestate in 1923. Mr James Brazil acquired the Property at the turn of the century. It was used as a stopping place for members of the Brazil family. As a gypsy family, they used it for grazing and resting their horses, and for stationing caravans.
5. In the 1970’s part of the Property was compulsorily acquired by the Guildford BC. Flats were built on it. There was litigation about recovery of the title deeds. The matter of compensation is still unresolved. The claimant applied to the Land Registry for first registration of title to the Property. An objection was raised by the defendant, who is also a descendant of Mr James Brazil, and lives on the Property.
6. On 4 November 1999 the claimant began proceedings for rectification of the Land Register in his capacity as administrator de bonis non of Mr James Brazil. He joined the defendant, as he was in occupation and asserted a title to the property under a voluntary conveyance dated 14 January 1993 from his father Mr Tom Brazil. A Statutory Declaration was made by Mr Tom Brazil on the same date, repeating the substance of a declaration made by him on 10 January 1973. He stated that his grandfather, Mr James Brazil, had purchased the Property in about 1900; that the Property had been occupied by the Brazil family since then; that he had lived on the Property since his birth in 1920; that following the death of his father, also called Tom Brazil, in 1937, he had been in full free and uninterrupted possession of the Property; and that no adverse claim had been made against him.
7. In his detailed judgment the Deputy Master stated that the defendant had taken no part in the proceedings; that he had been given permission to serve evidence, but had not done so, and that he had been served with a bundle for use at the hearing a week previously, but had not attended or taken any part in the hearing. There was another defendant, Mrs Eileen Giles, who had informed the court by letter that she proposed to take no part in the proceedings. Counsel for the claimant took the judge carefully and fairly through the whole case, drawing attention to matters which could have been relied in by the defendant had he taken an active part.
8. The Deputy Master concluded that the evidence before him, even treating as evidence witness statements prepared for the defendant for other proceedings, was quite inadequate to show adverse possession of the Property by the defendant or his predecessors.

Application to Set Aside

9. On 17 August 2001 the defendant issued an application for permission to appeal against the order of 1 June 2001. At a hearing before Hart J on 26 September 2001 the application was treated as an application to set aside the order of the Deputy Master under CPR 39.3 and was adjourned to a date to be fixed with directions for evidence.
10. CPR 39.3 is concerned with the failure of a party to attend the trial. It provides that

“ (3) Where a party does not attend and the court gives judgment or makes an order against him, the party who failed to attend may apply for the judgment or order to be set aside.

(4) An application …under paragraph (3) must be supported by evidence.

(5) Where an application is made under …..paragraph (3) by a party who failed to attend the trial, the court may grant the application only if the applicant-

(a) acted promptly when he found out that the court had exercised its power to strike out or to enter judgment or make an order against him;

(b) had a good reason for not attending the trial; and

(c) has a reasonable prospect of success at trial.”

11. It was contended on behalf of the claimant that the evidence failed to establish that the defendant had a “good reason” for not attending the trial on 1 June 2001 and that the judge was not therefore entitled to consider the exercise of the discretion to set aside the Deputy Master’s order. There was no challenge to the promptness of the application or to the defendant’s reasonable prospect of success at the trial.
12. There has been some debate before us, as there was before the judge, about what is or is not capable of being a “good reason.” In my opinion the search for a definition or description of “good reason” or for a set of criteria differentiating between good and bad reasons is unnecessary. I agree with Hart J that, although the court must be satisfied that the reason is an honest or genuine one, that by itself is not sufficient to make a reason for non-attendance a “good reason.” The court has to examine all the evidence relevant to the defendant’s non-attendance; ascertain from the evidence what, as a matter of fact, was the true “reason” for non attendance; and, looking at the matter in the round, ask whether that reason is sufficient to entitle the applicant to invoke the discretion of the court to set aside the order. An over analytical approach to the issue is not appropriate, bearing in mind the duty of the court, when interpreting the rules and exercising any power given to it by the rules, to give effect to the overriding objective of enabling it to deal with cases justly. The perfectly ordinary English phrase “good reason” as used in CPR 39.3(5) is a sufficiently clear expression of the standard of acceptability to be applied to enable a court to determine whether or not there is a good reason for non-attendance.

Good Reason: the Evidence

13. A significant fact is that the defendant is illiterate, though the claimant was unaware of that fact. The defendant is able to read individual letters, but not sentences. This became important after Messrs Stevens & Bolton, who acted as his solicitors, ceased to act for him for all practical purposes in December 1999, as he was unable to put them in funds, and he became a litigant in person. There was a case management conference on 15 January 2001. The defendant did not attend and was not represented. Master Bowles gave directions for evidence by the claimant and by the defendant and adjourned the matter to 19 March 2001 for further directions. A copy of the order was sent to Messrs Stevens & Bolton, as they were still on the record. The defendant accepted that he received a copy of that order.
14. On 31 January 2001 Messrs Stevens & Bolton filed a notice with the court and notified the claimant that they were no longer acting in the action for defendant, that he was now acting in person and that all notices should be forwarded to “ The Quadrant, Lakeside road, Ash Vale, Aldershot, Hampshire.” The notice was countersigned by the defendant. The address given in the notice is not the correct postal address of the Property where the defendant lives, although it is the address of the defendant appearing in the Proprietorship Register at HM Land Registry and under CPR 42.2 (3) it was now the defendant’s new address for service by the claimant and the court.
15. At the adjourned hearing on 19 March 2001 an order was made that the case be listed for hearing on 1 June with a time estimate of half a day. The court sent a copy of that order to the defendant at the address given by Messrs Stevens & Bolton in the notice of 31 January 2001. The defendant denies that he ever received a copy of the order and says that he did not know that the hearing was going ahead.
16. On 24 May 2001 the claimant’s solicitors took steps to serve the defendant with a trial bundle and a covering letter (which referred to the order of 19 March 2001 and to the hearing on 1 June 2001) by courier. The accompanying letter was incorrectly addressed to “FH Brazil Esq”, which is the name of the claimant, not of the defendant. He queried whether the bundle was really intended for him. After some initial reluctance, he accepted the documents. The claimant’s solicitors sent a further letter on 25 May enclosing a document for the bundle. He was unable to read the papers and did not have them read over to him.
17. According to the defendant’s evidence, on which he was not cross examined, he did not know that the trial was going ahead on 1 June 2001.He only discovered that it had taken place when his mother in law told him of the contents of a letter dated 13 June 2001 from the claimant’s solicitors, inquiring as to the date when he would be giving up possession of the Property pursuant to the court order for rectification of the Register into the claimant’s name. He said that he had formed the view that, once the solicitors had ceased to act for him, it would not be possible for anything to happen if he took no further steps. So he took no steps to obtain assistance to advise him of the contents of important communications received by him from the claimant’s solicitors. He simply put the papers in a drawer underneath his bed and did nothing about them.

The Appellant’s Submissions

18. Miss Williamson submitted that the judge was wrong to find that non-receipt of the order of 19 March was, despite the covering letter of 24 May 2001, a “good reason” for the defendant not attending the trial. She made the following detailed points:

i) The defendant had been properly served with the proceedings and his solicitors had acknowledged service. So he was aware that there were proceedings on foot relating to the Property.

ii) Illiteracy cannot provide the defendant with an adequate excuse for failure properly to deal with his own affairs. It is not a defence to the consequences of failure to understand a document. The defendant should have had the covering letter of 24 May, which was delivered to him with the trial bundle of documents, read to him. He should not have left it unread. It contained all the essential information. It was wrong to visit on the claimant the consequences of the defendant’s failure to conduct his own affairs properly. He was responsible for his own state of ignorance of the hearing date. A “good reason” for non-attendance was one which was outside the control of a party.

iii) It was wrong for the judge to absolve the defendant from responsibility for non-service of the order of 19 March. The court had sent it to the address supplied by Messrs Stevens & Bolton in a document countersigned by him. It was the same address as had been supplied to the Land Registry when he was entered on the proprietorship register. He was properly served with the order setting the date of the hearing.

iv) Non-service of the order of 19 March did not, in any event, make a difference to his response. It was not, and was not relied on by him as being, the effective cause of his non-attendance. Receipt of the earlier order of 15 January 2001 had not caused him to appear at the hearing on 19 March.

Conclusion

19. I would dismiss the appeal on the substantive point. I agree with Robert Walker LJ that this is a marginal case. It is a pity that further time and money have been spent on pursuing it in the face of the view expressed by him in granting permission to appeal.
20. As a preliminary observation I find it surprising that this case was considered to be appropriate for the alternative procedure for claims in CPR Part 8. In the light of the registration of possessory title on the basis of the statutory declaration there was bound to be a substantial dispute of fact, especially as the defendant claimed that he had been occupying the Property for so long. The matter should have been pleaded and there should have been disclosure of documents. It is not satisfactory that the court was asked to deal with this case on the basis that it did not involve a substantial dispute of fact.
21. I agree with the judge’s conclusion that there was a good reason for the defendant’s non-attendance at the trial on 1 June 2001. The reason for his non-attendance was that he did not know that the trial was taking place on that day. The matter does not, however, stop there. In order to determine whether that was a “good reason” it is necessary to consider why he did not know of the trial date. The fact that at that time he was acting in person, that he is illiterate, and that he did not receive the order of 19 March 2001 are clearly relevant factors.
22. I would reject Miss Williamson’s submission that his illiteracy should be disregarded. She cited Barclay’s Bank v. Schwarz (1995) TLR 452 (2 August 1995) which held that illiteracy is not generally a good defence to an action to enforce a contract against a person who has entered into it, though it may be relevant to a claim in equity to set aside a transaction as a harsh and unconscionable bargain. But this case is very different from an action to enforce a contractual obligation against a party, who has freely signed a contractual document knowing that he cannot read. The question in this case raises an issue on the defendant’s state of knowledge about an event (the hearing of the proceedings) at which he is entitled to be present and the result of which could deprive him of the possession of his home and finally determine against him a claim to title to the Property.
23. I would also reject Miss Williamson’s contention that the defendant is not entitled to rely on the non-receipt of the order of 19 March because (a) it was sent in accordance with the rules to the address given on a document countersigned by him and (b) he did subsequently receive the trial bundle and covering letter. It is impossible to separate this point from the handicap of his illiteracy, which is relevant to the “good reason” issue. It is true that the claimant’s solicitors served the order of 19 March in accordance with the rules and that they subsequently made proper efforts to inform the defendant of the trial date. That, however, is not the real point. CPR 39.3(5) requires the court to focus not so much on the claimant’s compliance with the rules as on the position of the particular defendant and whether he had a good reason for not attending.
24. In my judgment the combined effect of the defendant acting in person, of his the handicap of his illiteracy and of his non-receipt of the order notifying him of the trial date is sufficient in all the circumstances to be acceptable as a “good reason” for his non-attendance and to entitle him to invoke the discretion of the court to set aside the judgment given in his absence. I would therefore dismiss the appeal on this point.

Costs

25. In ordering costs in the case the judge said that he did not find the question of costs altogether easy: the claimant bore no responsibility for the situation which had come about and there was some force in the suggestion that the defendant had contributed to it by his “wholly unacceptable attitude to his responsibilities in relation to the litigation.” His conclusion was that the right order was to make the costs of the application turn on who is correct at trial in relation to the ownership of the Property.
26. While, of course, according proper respect for the judge’s exercise of his discretion I conclude that this is plainly a case in which the defendant should not be entitled to recover his costs of the application, even if he is ultimately successful in the proceedings. It is true that he succeeded on the application, but, if he had adopted a more responsible attitude to the litigation, it would never have been necessary to make the application in the first place. He had to make the application in any event. The claimant, though unsuccessful in resisting the application, was not in any way to blame for the situation in which it was made and acted reasonably in resisting it. I would instead direct that the defendant should pay the costs of the application.

Lady Justice Hale

27. I agree for the reasons given by Lord Justice Mummery that this appeal should be dismissed.

Lord Justice Carnwath

28. I agree, not without hesitation, that the appeal should be dismissed. Where failure to attend trial has resulted in an order against a party, the court’s discretion to reopen the issue depends on his being able to overcome the threshold conditions in rule 39.3. The court may grant the application “only “ if the all three conditions are satisfied. Thus, it is not enough that he has reasonable prospects of success (c). He must have acted “promptly” (a) and have had “good reason” for not attending (b). At this threshold stage, the importance to him of the case is not a relevant factor, although that may be very relevant to the exercise of the court’s discretion, once the threshold has been crossed.
29. In the present case, it is clear that the defendant’s attitude to the litigation, which was at best risky, and which the judge himself described as “unacceptable”, contributed significantly to his failure to attend. An illiterate defendant, who knows he is party to litigation, should take steps to ensure that he has the help necessary to understand formal documents when they arrive. However, the judge in this case gave weight to the fact that the formal notice of the hearing had not been received, and he thought that the receipt of the trial bundle, which might have put a more alert defendant on notice, did not “cure” the lack of formal notice. In the unusual circumstances of the case, I think this was a permissible, if generous, view of the matter. It raises no issue of law or principle which would justify the intervention of this court. I agree that the appeal on the costs issue should be allowed for the reasons given.