England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE AYLESBURY COUNTY COURT(SITTING IN LUTON)
(HIS HONOUR JUDGE FARNSWORTH)

		Royal Courts of Justice Strand London, WC2 Friday, 8th November 2002

Friday, 8th November 2002

1. LADY JUSTICE HALE: The applicant is not at court today, but there is a letter on the court file dated 12th March 2002 giving him clear notice that this hearing would take place today at or after 10.00 a.m and warning him that he would receive no further notice of that hearing date. He seems to have been given such a very long period of notice because of a letter dated 25th January 2002 to the Civil Appeals Office informing them that the applicant "is in America for the launch of the company's first venture and will be based there for a period of six months". The only communication which the respondent has had with him was very recently when they served their schedule of costs upon him by first class post on Wednesday of this week. Given the length of notice which the applicant has had of this hearing, in our view it is appropriate for us to proceed to determine it in his absence.
2. The applicant is the claimant in these proceedings. He bought the lease, goodwill, fixtures and fittings of restaurant premises in Old Amersham from the defendants. He made various claims against them, most of which were struck out, but a claim in respect of allegedly defective equipment remains. They counterclaimed for the money owing from the agreed purchase price.
3. A trial took place before District Judge Tetlow on 10th April 2000. The District Judge refused the claimant's application for an adjournment and the trial went ahead in his absence. On 13th April the District Judge handed down a written judgment, giving judgment for the defendants on their counterclaim and dismissing the claim. The claimant appealed. His appeal was dismissed by His Honour Judge Farnsworth on 11th July 2000. The claimant then sought permission to appeal to this court. On 11th May 2001 Mance LJ refused him permission to appeal against the judgment on the counterclaim. He also refused permission to appeal on a number of other points raised by the claimant; but on one point alone he adjourned the application for a hearing on notice to the defendants with the appeal to follow if permission were granted.
4. It follows from this that this is an application to make a second appeal, two courts already having dealt with the case. Such an application can only be granted if the criteria in section 55(1) of the Access to Justice Act 1999 are fulfilled. Mance LJ was unable to say that this case raised an important point of principle or practice, but he thought it possible that there might be thought a sufficient case of injustice to constitute a compelling reason for an appeal. The point he identified was whether it was proportionate in the circumstances to refuse a further short adjournment on 10th April 2000. But it is quite clear from his judgment that he did this only with some misgivings.
5. The agreement for the sale of the restaurant was reached on 11th September 1998. A written document was signed, but this was expressly subject to contract. It contained a warranty that the fixtures and fittings were in working order at that time to the best of the vendors' knowledge and belief. The claimant went into occupation that same day so as to begin refurbishment works. A formal contract of sale was entered into on 20th November 1988, with completion by 18th December at the latest. This did not contain the warranty there had been in the September agreement. The claimant did not complete by the due date. On 19th January 1999 a second contract was entered into in place of the November agreement. Completion took place simultaneously. The purchase price agreed was £55,000, payable in 24 monthly instalments. The first instalment was paid on completion. The following ones were not paid.
6. In March 1999 the defendants began the bankruptcy process in order to recover the debt. The claimant's attempts to have the statutory demand set aside and the petition dismissed failed and, shortly thereafter, in July 1999 the claimant began the present proceedings the Aylesbury County Court. The claimant initially claimed around £47,000. The defendants filed their defence then applied for summary judgment. They were successful before Deputy District Judge Crick on 22nd September 1999. The claimant was represented by counsel at that hearing.
7. The claimant appealed. The appeal came before His Honour Judge Serota in the Milton Keynes County Court on 8th December 1999. His Honour Judge Serota reinstated the claim for some £9,000 in respect of five items of equipment: the extractor system in the kitchen, two refrigerators, a Merry Chef convection oven, an ice-making machine and a dishwasher. But he only did so on condition that the claimant pay £12,500 into court by 23rd December 1999. The defendants undertook to apply to withdraw the bankruptcy proceedings as soon as possible after he had done that.
8. The defendants were given leave to file an amended defence and a Part 20 claim by 16th December. Obviously that was to replace the bankruptcy proceedings in respect of their counterclaim for the price agreed. Judge Serota also gave directions that, upon the claimant making the payment in, the case would be allocated to the fast-track with standard disclosure; witness statements were to be exchanged by 1st February 2000; there was liberty to apply for permission to call expert evidence; listing questionnaires were dispensed with; and the parties were to apply for a trial date accompanied by dates of availability after 15th February. He did not assign a trial window at that time, one assumes because the order that he had made was, in any event, conditional upon the payment into court. The order itself was not drawn until 21st December. The claimant paid the money into court then. On 22nd December His Honour Judge Serota ordered the defendants to file their amended defence and counterclaim and take immediate steps to withdraw the bankruptcy petition. The amended defence and counterclaim are dated 29th December 1999.
9. The Milton Keynes County Court made an order on 11th January 2000 allocating a trial window from 22nd March to 12th April, requiring the parties to provide dates of availability during that window by 1st March 2000 and the claimant to pay the setting down fee by the same date. The defendants served their witness statement in accordance with Judge Serota's order.
10. On 18th February 2000 the claimant faxed the Aylesbury County Court saying that he was not satisfied that everything ordered by Judge Serota had been done and asking that all matters be dealt with before listing the case for trial. The bankruptcy proceedings, which were still in the Aylesbury County Court, were dismissed on 24th February 2000. On 1st March 2000 Aylesbury replied to the claimant's fax, saying that the matter would not be listed for trial until the parties applied and provided dates of availability. Obviously that letter had failed to take into account the Milton Keynes order of 11th January. On 2nd March Milton Keynes County Court sent the claimant a notice to pay the setting down fee. On 6th March 2000 the claimant wrote to Milton Keynes confirming a telephone conversation that day, confirming payment of the setting down fee and enclosing a copy of his fax of 18th February to Aylesbury County Court. On 7th March 2000 Milton Keynes replied to that copy by requiring a formal application and enclosing an application form. None was made. On 10th March 2000 Milton Keynes issued a notice that the trial would take place on 10th April at Milton Keynes. The claimant's case is that he never received that notice.
11. On 31st March the claimant responded to Aylesbury's letter of 1st March, copying it to Milton Keynes, saying that he would be available for trial after 15th May 2000. On 4th April 2000 Milton Keynes replied to that letter, reminding the claimant of the trial window and advising him that he would have to make a formal application on notice to have the trial date vacated or adjourned. On that same day the defendant's solicitors served trial bundles on the claimant, with a letter giving him the trial date. On 5th April 2000 Milton Keynes wrote to him, enclosing a copy of the notice of the trial date and pointing out that the case file had been with them since 8th December and all correspondence should be addressed to them.
12. On Friday 7th April the claimant applied to vacate or adjourn the trial date. His letter, dated 6th April, did not mention any other engagement but merely argued that all the conditions in His Honour Judge Serota's orders had not been complied with, in part because the defendants had not applied to the Land Registry to vacate the charge registered because of the bankruptcy proceedings. Milton Keynes faxed a reply, saying he should attend on 10th April if he wanted an adjournment. The claimant did not attend on Monday 10th April, nor did he send anyone to represent him. He faxed a letter of that same date, explaining that he was opening a new restaurant, the date had been fixed many weeks ago and he had to take a commercial decision.
13. District Judge Tetlow first considered that application to adjourn and refused it. The reasons given in his written judgment were that within days of the letter from Aylesbury of 1st March the claimant knew that he should have been corresponding with Milton Keynes, even if this had not already been obvious to him from the order of 11th January. He was entitled to assume that the claimant had received the order of 11th January and the notice of the trial date. He was not satisfied that the claimant had not done so. But, even if the claimant had only learnt on 4th April, he could have applied immediately on notice for an adjournment, and that would have been heard on Friday 7th April. Further, at the very least, he could have been represented before the District Judge.
14. So the judge proceeded to deal with the substance of the matter. He clearly had before him the witness statements, including the witness statement filed by the claimant with exhibits which had been before His Honour Judge Serota for the December proceedings. He held that the September agreement did not give rise to a contract because it was expressly subject to contract. But in so far as it contained representations of fact upon which the claimant relied in entering into the contract in November and again in January, those representations, if they proved false, might give rise to a claim for damages. That is obviously a correct statement of the position. He went on to hold that the warranty given in September that the equipment was in working order did not include a representation that it would remain so for any period of time. He also took the view that the claimant had not relied upon it, or, if he had done so, he had had ample opportunity to examine the equipment before completing the contract (or indeed, it might be said, before entering into the November agreement at all), as he had been in possession of the premises since September. Nor had the claimant shown that any item was defective. There was no cogent evidence as to the state and condition of the equipment in question, apart from the refridgerators, which had only required a small sum to repair. He therefore gave judgment for the defendants on their counterclaim and dismissed the claim.
15. The claimant's written application to appeal to His Honour Judge Farnsworth goes into great detail on the history of the litigation. It makes the point that his conduct to date does not suggest that he is not anxious to pursue matters. He had, after all, paid £12,500 into court and paid the setting down fee. He does seem to think that payment into court was voluntary, whereas it must have been a condition of being allowed to proceed and a condition of expecting the defendants to withdraw their bankruptcy petition, not surprisingly as they had been kept out of their money for such a long time. That written application does not mention why he did not attend on Monday 10th April. At the hearing, however, he gave evidence, and his evidence was that he did know of the trial window: he had had the order of 11th January but he had not had the notice of the trial date. His Honour Judge Farnsworth made no finding as to the latter point. The reason the claimant gave for not attending on 10th April was that he had to attend the opening of another fish restaurant. However, His Honour Judge Farnsworth observed that he was also clearly not ready for trial. Somewhat to the judge's surprise, he had "not looked very deeply" into the counterclaim. He complained that the defendants had been late in filing their defence and counterclaim and in procuring the discharge of the bankruptcy proceedings, but the judge took the view that he had had the former early in January, at the very latest, and the latter did not in any way interfere with the preparation of the evidence.
16. His Honour Judge Farnsworth referred to CPR Practice Direction 28, paragraph 5.1 and 5.2: if there is a failure to comply with case-management directions, it is for the party who wishes to apply for a sanction to do so without delay. He also referred to paragraph 5.4(6):

"Litigants and lawyers must be in no doubt that the court will regard the postponement of a trial as an order of last resort."

The judge proceeded to apply the criteria laid down by the CPR 39.3 dealing with failure to attend trial: if one who fails to attend trial applies for a further hearing, the court may only grant that application if the criteria in rule 39(5) are fulfilled. Such criteria must obviously also apply if the same some application is made by way of an appeal. The application can only be granted 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 trial; and.

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

These were all to be considered in the light of the overriding objective of dealing with cases justly.

17. The judge concluded as to (a) that the claimant had acted promptly but as to (b) that he did not have a good reason for not attending the trial. The judge had earlier regarded it as the claimant's own decision to attend another function, and he also pointed out that the claimant was not ready when there was no good reason for his not being ready. As to (c) he concluded that the claimant had no reasonable prospect of success either on his own claim or in defending the counterclaim. According to the note taken by the defendant's counsel at the time, the judge pointed out that dealing with the claim justly involved justice to both parties. The claimant had not prosecuted the claim so as to be ready for trial. It would be quite disproportionate to grant any further time with the attendant expense.
18. Mance LJ, in adjourning part of the current application, was more sympathetic to the claimant on point (b): given that he had had so little notice of the trial date it would have been difficult for him to omit to attend an alternative commitment fixed many weeks before. For my part, I would be very reluctant to interfere with the judgment of a judge who had heard the claimant give evidence of his reasons for not attending court, especially in the light of the circumstances of this particular case. In any event, there is no reason at all why a claimant whose case was that he had to attend the opening of a new £400,000 restaurant could not afford to send someone along to make whatever additional points he wanted made or to pursue the application for an adjournment. The reality is, as His Honour Judge Farnsworth said, that he was not ready for trial, he had staved off the bankruptcy by making his claim, but had not, in fact, paid what he owed for the restaurant on any calculation. As to point (c), the judge was entirely right: the claim had no real prospect of success for the reasons given by District Judge Tetlow.
19. For my part, I am quite unable to say that such a serious injustice has been done to the applicant that there is a compelling reason for this court to hear an appeal. Indeed, I would also say that an appeal has no real prospect of success, were that to be the test governing this application. In my view a serious injustice would be done to the defendants if there is further delay in meeting their legitimate claim to be paid what they are owed.
20. The application will be dismissed.
21. LORD JUSTICE KEENE: I agree.

Order: Application dismissed with costs summarily assessed in the sum of £7,250.49. In the event of an application for a rehearing of this application, it is a condition of that being entertained on this court that the Applicant pays the counterclaim.