England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MANCHESTER DISTRICT REGISTRY
CHANCERY DIVISION
(HIS HONOUR JUDGE PELLING QC)

		Royal Courts of Justice Strand, London, WC2A 2LL
		13th November 2007

Sir Henry Brooke:

1. This is an application by the third and fourth defendants for an order setting aside an order that I made as a single member of the court on paper, when I granted the claimant permission to appeal and an extension of time for appealing.
2. This application has brought to light a practical difficulty over the application for the rules for seeking permission to appeal to the Court of Appeal, if the parties and the judge in the court below do not have their eye on the ball throughout.
3. When the Civil Procedure Rules introduced a well-nigh universal regime for permission to appeal -- see CPR 52.3 (1) -- the rule makers introduced a tough regime in order to avoid the progress of appeals being delayed while leave to appeal was being sought from a lower court. Recommendation 14 on page 142 of the Bowman Review of the Court of Appeal (Civil Division) (September 1997) was to the effect that:

"An application for leave to appeal should continue to be made to the court below either at the moment of decision or subsequently, provided it can be placed before the judge who made the decision against which it is sought to appeal."

CPR 52.3(2)(a), however, provided more prescriptively that:

"(2) An application for permission to appeal may be made –

(a) to the lower court at the hearing at which the decision to be appealed was made."

The practice direction to CPR part 52 states in paragraph 4.6:

"An application for permission should be made orally at the hearing at which the decision to be appealed against is made."

4. If it was not made at that hearing the judge in the lower court had no power to grant permission to appeal, and any permission he purported to grant was a nullity (see Lloyd Jones v T-Mobile UK Ltd [2003] EWCA Civ 1162). CPR 52.4 describes the procedure where the appellant seeks permission from the Appeal Court. As now amended, the rule reads, so far as is relevant:

"(1) Where the appellant seeks permission from the Appeal Court it must be requested in the appellant's notice.

(2) The appellant must file the appellant's notice at the Appeal Court within –

(a) such period as may be directed by the lower court (which may be longer or shorter than the period referred to in sub-paragraph (b); or

(b) where the court makes no such direction, 21 days after the date of the decision of the lower court that the appellant wishes to appeal."

5. So long as the judges in the courts below conducted oral hearings everyone knew where they stood. At the end of the judgment delivered orally the unsuccessful party could ask for permission to appeal. If it was granted the notice of appeal did not have to contain an application for permission all over again. If it was refused the Notice of Appeal had to be filed within three weeks unless the judge in the court below directed a longer or a shorter period. Time for appealing now ran from the date of the decision delivered orally in court and not from the sometimes much later date, as under the former practice, when the order of the court was drawn up and sealed.
6. Problems arose, however, if the judge delivered a written reserved judgment; particularly if the attendance of the parties was dispensed with when judgment was formally handed down. In Owusu v Jackson & Ors [2002] EWCA Civ 877 at [24-27] I said that there must be an occasion when the judgment was formally delivered in court, and that the time for appealing will run from the date of this formal hand down. The Civil Procedure Rules Committee then acceded to a request that practice might be changed so as to permit the judge in the court below to grant an adjournment to allow a party further time to make an application to that court for permission to appeal. This led to a new paragraph, 4.3B, being added to the practice direction for CPR part 52 in the following terms:

"Where no application for permission to appeal has been made in accordance with rule 52.3(2)(a) but a party requests further time to make such an application, the court may adjourn the hearing to give that party the opportunity to do so."

7. Nothing was said in the Rules at the time when this amendment was made about the time within which permission to appeal should be made to the Court of Appeal if the judge in the lower court refused permission to appeal at this adjourned hearing. This lack of clarity should be contrasted with paragraph 21.7(3) of the same practice direction which relates to Asylum and Immigration appeals. This provides that:

"The appellant's notice must be filed at the Court of Appeal within fourteen days after the appellant is served with written notice of the decision of the Tribunal to grant or refuse permission to appeal."

8. If all the parties including the judge have their wits about them there should be no difficulty in practice. If, when the judge says he will reserve judgment and excuse the appearance of the parties and one of them wishes to seek permission to appeal should the decision go against him, the judge should, after handing down judgment in an empty court, formally adjourn the hearing to give that party the opportunity to apply for permission to appeal. Then when he has granted or refused permission, he should make a direction extending the period within which Notice of Appeal should be filed at the Court of Appeal. Strictly he should grant this extension at the time when he adjourns the hearing. Ordinarily he would grant a further three weeks from the date of his refusal of permission.
9. Unfortunately, in the present case nobody had their wits about them, not even the judge. The hearing lasted three days, and the judge originally intended to give judgment on 15^th March 2007, the morning of the fourth day. He then told counsel he needed more time to consider his judgment, and he had a discussion with them about what should happen next. It was decided that he would hand down a written judgment the following week when neither counsel would be available in Liverpool to attend court, and that he would make any ancillary directions on a later occasion after giving directions as to how written submissions should be served.
10. Leading counsel for the appellant distinctly remembers mentioning to the judge an application for permission to appeal if the decision went against his client. Counsel for the respondent does not recall this but he does not dispute that it may have happened.
11. When the judge handed down the judgment in court on 23 March 2007, we have been told that he made it available to the parties' solicitors, who were present, shortly before handing it down formally. No application was made on that occasion by either of the solicitors, even assuming that they had rights of audience, to have the hearing adjourned for the purpose of considering an application for permission to appeal.
12. On 12 April 2007 the judge made an order on paper that counsel for the parties were to exchange draft submissions covering costs and as to what other orders and directions were to be given by no later than 4 pm on 17 April 2007. The order then provided for final submissions to be exchanged not later than 4 pm on 30 April 2007, and the file was to be placed before HHJ Pelling QC on the first available date after 30 April 2007, so that he might consider the submissions made in the first instance on paper. Although the order drawn by the court refers to counsel for the claimant and counsel for the third and fourth defendants being present and being heard, we have been told by counsel that this is wrong and that this was an order issued by the court on paper without a hearing on 12 April.
13. The parties then exchanged written submissions as directed by the judge. The appellant's written submission included an application for permission to appeal with reasons being given, and the respondents' written submission in answer dealt with that application, setting out reasons why permission to appeal should not be granted. The way was then open to the judge to consider these submissions. It appears that he drafted his order on 21 May 2007. It was not, however, drawn up until 4 June; and the first that the parties knew about it was that it was served on 6 June. It contained a refusal of permission to appeal.
14. The appellant's Notice of Appeal was filed at the Civil Appeals Office on 27 June, 21 days after 6 June. It included in double spacing a skeleton argument of no fewer than thirty eight pages signed by leading counsel and contained reasons why an extension of time should be granted. It appears that it was the Civil Appeal Office who raised the question as to whether the judge had actually made the order which was issued by the court on 4 June, and received the answer that the judge made his order on 21 May. The Civil Appeals Office appears to have concentrated on that date in making it clear that an extension of time was necessary.
15. However that may be, when I considered the papers I took the view when granting permission to appeal that the time for appealing should be extended without considering it necessary to give any reasons. No doubt I considered that the judge had adjourned the hearing of the application for permission to appeal pursuant to paragraph 4.3 (b) of the practice direction, and that it was reasonable to allow the appellants three weeks from the time they received notice of his decision on this application, particularly as, as I have said, the Notice of Appeal was accompanied by a very substantial skeleton argument signed by leading counsel. It was not as if this was a very simple and straightforward matter which could be dealt with quickly.
16. On receipt of my order extending time the defendants sought to have it set aside, arguing that the application was made very considerably out of time -- that time ran from 23 March -- and that they would be caused substantive prejudice if the order was not set aside.
17. We have been referred to the various rules relating to applications to set aside. My feeling is that if the matter concerns an extension of time on which the other side is entitled to be heard in accordance with Court of Appeal practice, the respondents are entitled to a hearing of their application of the extension of time to be set aside, pursuant to the principles set out in part 23, without having to show a compelling reason.
18. Mr Elleray QC for the appellants argued that rule 52.9 applied, requiring a compelling reason to be shown, and suggested that the provision on which Mr Dowding QC relied for the respondents, which was contained in paragraph 5.3 of the practice direction to CPR part 52, only applies in a case where permission to appeal has been granted by the lower court but the application for an extension of time is needed because the appellant's notice has not been served in time.
19. However that may be, I do not consider it necessary to decide that point in this extemporary judgment because I am satisfied that there could be a compelling reason for having my order set aside, given the extremely confusing history which has been set out and the powerful arguments which have been addressed by Mr Dowding for having it set aside. It is certainly appropriate for us to consider the matter afresh.
20. Accordingly I consider the matters set out in CPR 3.9 in accordance with the court's injunction in Sayers v Clarke Walker [2002] EWCA Civ 645, [2002] 1 WLR 3095. Mr Dowding has referred the court to my judgment in Smith v Brough [2005] EWCA Civ 261, in which I said in unqualified terms that if there is a delay of more than two months then the court will bear in mind the principles set out by Lord Woolf, Chief Justice, in Taylor v Lawrence [2002] EWCA Civ 90, when deciding where the interests in the administration of justice truly lie. This is a quite different case from Smith v Brough. It is certainly correct that, as no steps have been taken to seek to have HHJ Pelling's orders rectified to show whether or not he meant to grant an adjournment and an extension of time for appealing, in the absence of that rectification one is looking at a two and a half month delay from 21 days after 23 March. This is, as I have said, a quite different case. It is not a case where the application for permission to appeal came out of the blue; indeed the respondent was busy arguing it on paper at the end of April and was waiting for the judge's decision on that application until early June when it was eventually delivered.
21. So in my judgment, given the fact that everybody seems to have had their eye off the ball, and everybody seems to have embarked on a process not recognised by the Rules (unless specific orders were made) whereby it took the better part of two and a half months to deal with the application for permission to appeal in the court below, I do not consider that the interests of the administration of justice weigh heavily in this case as they did in Smith and Brough. The application for relief certainly was made promptly, insofar as it was an application for an extension of time made very soon after the judge's decision was made. The failure to comply was not intentional; it was because counsel did not have their eye on the strict letter of the Rules and the practice direction, and in that sense there is a good explanation for the failure.
22. This is not a case where there was persistent disobedience of rules or orders by the appellant during the course of the action. The respondent was quite entitled to draw attention to the fact that, in the notice of appeal which was before me, the case was rather overstated in relation to the claimant's conduct of the action, where it was said that she had throughout the course of the claim complied with all practice directions and court orders. Our attention has been drawn to what happened after District Judge Needham made the original order for preliminary issues to be heard as long ago as 2004, but this is not a case of persistent failure to comply with orders. The failure to comply was caused by the legal representative and not by the claimant. The hearing of the appeal has been fixed for a day and a half in January before a very suitable court including two chancery members of the court, and that date can still be met. The effect which the failure to comply had on each party is difficult to assess in a situation as confused as this; but it may well be that if the claimant had gone back to HHJ Pelling, he would have decided to rectify his orders and the appellant would not therefore be out of time. The effect which the granting of relief would have on the respondents is that they would be relieved of having to fight again to hold the judgment they received in the court below about which I have expressed the view that they are points which are properly arguable in the Court of Appeal. Mr Dowding says that the effect of the decision to grant permission to appeal has frozen this block of flats and that none of them can be sold until the matter is resolved. We also had a letter, which counsel only saw today, which was sent to the Civil Appeals Office on 4 October without a copy being sent to the parties to the appeal, making it clear that the Residents Association were very concerned at the continuing uncertainty.
23. However that may be, the effect which the granting of relief would have on the claimant would be that she would immediately have to pay very large sums by way of costs in relation to an unsuccessful judgment being entered against her that I consider to be properly appealable; and in my judgment, given that the matter can be heard in January, it is not a case in which it would be appropriate to set aside the order I have made.
24. For those reasons, while considering that it was wholly proper for the respondents to air this matter, and for my part considering that the costs of this application should be directed to be costs in the appeal, I would dismiss this application. This case does raise issues of general importance; and subject to my Lord, I would direct that it be released from the general restriction on the reporting and citation of judgments on applications.

Lord Justice Sedley:

25. I too think that the history of this application reflects little credit on any of those involved. Something which the Civil Procedure Rules make clear provision for -- the prompt disposal of applications for permission to appeal -- has been allowed to drift until finally coming to land before us. For the reasons which my Lord has given I too, without any enthusiasm, would enlarge the claimant's time for appealing to 27 June 2007, which is the date on which it appears that the appellant's notice was lodged. I put it in this way rather than as a decision not to set aside the initial enlargement of time granted by my Lord on the desk application because it may be that the tension between CPR 52.9(2) -- that permission to appeal, once granted, is not to be set aside without compelling reason -- and practice direction 52 PD 5.3 -- that the respondent has a right to be heard in relation to time after the grant of permission to appeal -- ought on principle to be resolved by providing a level playing field and not requiring the respondent to play uphill. It will then be a compelling reason to set aside permission to appeal in such a situation if it appears that time ought not to have been enlarged. This approach to the rules may, I recognise, not be quite the same as my Lord's but the result is the same.
26. I wish lastly to record my profound alarm at learning that, in a dispute about a figure likely to be around £100 per annum for each flat or share in this block, costs in the scores of thousands of pounds have already been incurred on each side and are going to continue to escalate. The fact that a refusal of an extension of time would at least put a stop to this nightmare cannot, I am afraid, play any part, for reasons explained by my Lord, in our present decision. The claimant has a viable appeal of which we would not, in the unfortunate circumstances of this case, be justified in depriving her. How anyone can be allowed by their advisers to fall into this bottomless pit of costs and to drag their neighbours in with them I do not begin to understand; but that is not a matter for us today.
27. The decision of this court is therefore that the grant of an extension of time on the without notice application will not be set aside; the appeal will proceed; costs will be in the appeal; and this decision will be reportable.

Order: Application refused.