England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr Andrew Sutcliffe QC
[2013] EWHC 3179 (Ch)

		Royal Courts of Justice Strand, London, WC2A 2LL
		16th January 2014

Lord Justice Richards : This is the judgment of the court.

1. This is an appeal against an order dated 11 October 2013 of Mr Andrew Sutcliffe QC, sitting as a deputy High Court Judge in the Chancery Division, by which he allowed the application of the first, second and fourth respondents (to whom, for the sake of simplicity, we will refer collectively as "the respondents") for relief from sanction under CPR 3.9. The relief sought had previously been refused by Hildyard J, so this was the respondents' second application for the same relief. There are several troubling features about the deputy judge's approach, but at the hearing of the appeal we heard submissions first on whether he was right to entertain the application at all. Having considered those submissions, we announced our decision to allow the appeal, for reasons to be given in writing at a later date. These are the reasons for our decision.

The relevant facts

2. The dispute between the parties relates to the terms of an agreement for the appellant's purchase of assets from the respondents. One of those assets was a public house owned by the third respondent ("Prestige"). It is common ground that as part of the agreement the appellant was to acquire the entire share capital of Prestige, but the parties are at odds as to almost every other aspect of the agreement. The appellant contends that he was to take control of Prestige and the public house pending completion, and that he paid the respondents more than £1.5 million (as was accepted) and also expended a further £600,000 in improving the property and running the business, but the respondents failed to complete the sale. He says that he then discovered that prior to agreeing to sell the shares in Prestige to him, the respondents had agreed to give some of the same shares to another person; that at least the second and fourth respondents had sought to make themselves judgment-proof in other litigation; and that the fourth respondent, who appeared to be a de facto director of Prestige, was an undischarged bankrupt who had been disqualified from acting as a company director. Those various matters precipitated the litigation.
3. On 9 May 2013 the appellant obtained an ex parte freezing injunction ("the first order") from Arnold J and issued a Part 7 claim. The first order included a requirement that the respondents provide disclosure of assets and liabilities. When the matter came back before Arnold J at an inter partes hearing on 17 May the judge made a further order ("the second order") which contained greater particularisation of the disclosure obligation. He also made a separate order giving directions for a speedy trial, in a window running from 1 to 31 October 2013.
4. The appellant, dissatisfied with the extent of disclosure by the respondents pursuant to the first and second orders, issued an application on 10 June 2013 for an "unless" order. A hearing of that application before Henderson J fixed for 14 June had to be adjourned because of late additional disclosure. At the adjourned hearing, on 21 June, Henderson J found that the respondents' disclosure remained inadequate. He made an order ("the unless order") which provided in paragraph 1 that:

"Without prejudice to the effect of, and the obligations imposed by, the First and Second Orders generally, unless each of the First, Second and Fourth Respondents do provide the information particularised immediately below by 4pm on 1^st July 2013 then the First, Second and Fourth Respondents shall be debarred from defending the Applicants' claim and any Defence that they might have filed shall be struck out.

1.1 Details of any charges or similar such encumbrances of any real property (as defined in paragraph 8(2)(a) of the Second Order), including particulars of the specific interest that is so charged, together with the provision of bank or similar such statements covering the period 1^st October 2010 until the date of this order in respect of any and all accounts of any borrowing secured against such real property.

1.2 Details of all of the said Respondents' bank accounts, whether or not they are in their own name and whether they are solely or jointly owned and whether the said Respondents and each of them are interested in them legally, beneficially or otherwise ….

1.3 Sub-paragraphs 1.1 and 1.2 above apply also to those assets, liabilities, and bank or other accounts and statements in respect of

1.3.1. Prestige Properties Limited;

…

1.4 Full particulars as to how the said Respondents are funding the present litigation …."

The unless order also recorded an undertaking by the respondents to the court to cause letters substantially in the form of letters produced to the court to be sent to the Bank of Cyprus and five other banks.

5. The respondents provided further documentary disclosure on 28 June and a further affidavit on 1 July, but the appellant maintained that there had been a failure to comply with the unless order. He issued an application seeking a declaration that the sanction in the unless order had come into effect and an order striking out the defence and counterclaim. The respondents cross-applied for relief from sanction pursuant to CPR 3.9. The applications came before Hildyard J on 9 August.
6. In his judgment on those applications Hildyard J said that "the defendants are constrained to accept that in a number of respects the order has not been complied with" (para 3). He went on to cite instances of non-compliance. The first concerned the charge documentation: there had been a failure to provide the charges identified in correspondence, the excuse for which (that the Bank of Cyprus had refused to co-operate in this regard) was not accepted by the judge. A second instance concerned the requirement to disclose documents relating to the funding of the litigation: there had been an obvious failure to provide the details which were required in order that the claimant and the court could be satisfied that the funds were coming out of a disclosed source and were being used only for purposes not inconsistent with the general tenor of the freezing orders. A third instance concerned a late entry in the documentation, in the form of a statement of an account at HSBC "which, in the evidence, the defendants have suggested was not an account in the name of any company named in the relevant paragraph of Mr Justice Henderson's order but which, it transpires, without any doubt or equivocation, is a Prestige Properties Limited account" (para 12). The judge described this revelation as "a very unsettling turn of events which, of course, impacts also on the question which I have to address under CPR 3.9" (para 13). A fourth instance to which the judge referred was a material failure to explain the fact that although the approved letters sent off to financial institutions specified that any documents should be returned not to the defendants but to the claimant's solicitors, they were returned instead to the defendants. Taking into account the four instances he had indicated, the judge concluded that serious failures to comply with the unless order had been established.
7. He then turned to the application for relief from sanction. Drawing on Tarn Insurance Services Limited v Kirby & Others [2009] EWCA Civ 19, he said that the court "when asked to give relief from sanctions in the context of an unless order and, in particular, in an unless order which has been made to enforce and police compliance with the provisions of a freezing order, should adopt a rigorous approach" (para 21). He referred to the areas where there had been a failure to take all reasonable steps and to the concerns he had felt in consequence of the late revelation about the position with HSBC. He continued (at para 29):

"When I add all this in the mix and test it against the prescription which CPR 3.9, in its newest form, conveys, namely that the court must be very cautious before granting what, in effect, is a dispensation from an order previously made, and when I take into account the factual context more generally, which includes the fact that the unless order was made after five previous applications, and where I also take into account the somewhat remarkable instances where the defendants have not provided the evidence that one would have expected, to explain themselves, I feel constrained to refuse any relief from the sanctions."

8. Accordingly, the judge made an order ("the debarring order") declaring that "the First, Second and Fourth Defendants have failed to comply with the Unless Order and are debarred from defending the First Claimant's claim", and ordering that their defence and counterclaim be struck out. He also ordered that the determination of the remaining heads of relief claimed by the appellant be adjourned for a disposal hearing to take place in the current trial window or at such earlier time as the court might list it on the appellant's application.
9. There was no appeal against the debarring order or any of the earlier orders to which we have referred.
10. The trial window fixed by the second order made by Arnold J opened on 1 October 2013 and the trial itself was listed to start on 3 October. On 1 October, however, the respondents filed a second application for relief from sanction. The trial was then relisted for 7 October, with the relief application to be heard on the first day of the trial. In the event, the deputy judge before whom the matters were listed allowed more than four of the five days allotted to the trial to be spent on the relief application, and on the grant of relief by him the existing trial window was vacated and a direction was given for the trial to take place in a new trial window commencing on 27 January 2014, with a revised time estimate of eight days. It was because of the imminence of the new trial date that we announced our decision on the appeal at the conclusion of the hearing.

The judgment of Mr Andrew Sutcliffe QC

11. The deputy judge's judgment is lengthy. It recites the background facts and allegations and the procedural history in considerable detail. It then turns to the respondents' second relief application. It notes that following Hildyard J's order the respondents consulted new solicitors and took steps to prepare a lengthy further affidavit, which was filed in support of the application on 1 October 2013. The respondents' principal submissions are summarised as follows (at para 22):

"… First, that they have now complied with the disclosure requirements of the order of Mr Justice Henderson dated 21^st June. The breach of the unless order was remediable and has now been remedied. Second, that compliance has been delayed is in part due to the wide-ranging nature of the disclosure sought and the limitations on the availability of funding for legal costs …. Third, they submit that they have not acted with intent to frustrate the operation of the freezing injunction; on the contrary, they consented to the disclosure sought by the Claimant at the hearing on 17^th May and then took steps to comply although it is accepted that there has not been complete compliance until provision of the affidavit dated 1^st October. They say that the history of the case demonstrates a considerable effort to comply although they accept that these efforts were judged to have fallen short. Fourth, while accepting that the Defendants, as the parties, are principally responsible for compliance with court orders their submission is that the historic failings in disclosure were at least in part due to their former solicitors. Finally, they submit that the effect of the refusal of relief is to leave the court to try the claim in circumstances where (1) there is a substantial dispute of fact not capable of fair resolution by reference to the documents alone; (2) the Claimant has not provided disclosure or witness statements in compliance with the Directions order of 17^th May; and (3) the Defendants may still participate in any trial subject to the court's inherent jurisdiction to determine how proceedings are managed but their involvement would be limited as to the issues which it is open to them to pursue …."

12. The judgment then summarises the appellant's response. The appellant's primary argument was that the second application for relief was an abuse of process: it was tantamount to revisiting Hildyard J's refusal of relief in circumstances where there had been no appeal against that order and the conditions for variation or revocation of the order pursuant to CPR 3.1(7) were not met. The second argument was that the unless order and the striking out of the defence and counterclaim were wholly warranted and that in any event the respondents had still not complied with the unless order.
13. Turning to his discussion of the rival submissions, the deputy judge derived the following principles concerning CPR 3.9 from the then recent first instance decisions in Rayyan al Iraq Co Ltd v Trans Victory Marine Inc [2013] EWHC 2696 (Comm) and Ian Wyche v Care Force Group Plc [2013] EWHC 3282:

"28. … First, the matters contained in the old checklist in CPR 3.9 remain of relevance to an application for relief from sanction. Second, the change in CPR 3.9 did not mean that relief should be refused where that would be a disproportionate response and would give the opposing party an unjustified windfall. Third, that the court should not apply the new rules unthinkingly and should make allowance for human error. Fourth, that the amended Rules should not be permitted to encourage parties to exploit minor errors for tactical gain. These decisions show in my judgment that the court in each case while accepting that the purpose of the amended Rule is to counter a culture of deliberate delay still had principal regard to the requirement to do justice between the parties."

14. He then considered the status of the previous orders:

"29. The Defendants do not seek here to challenge the orders that have gone before. However, they submit – and I accept – that it is appropriate in the circumstances of this case in considering the application for relief and the extent of the previous compliance with those orders for the court to have regard to the following matters. First the burden imposed on the Defendants in complying with these orders and particularly the fact that the disclosure required of the Defendants went beyond that ordinarily required as ancillary to a freezing injunction. Second, the fact that that the orders required cooperation from third parties not within the Defendants' control. Third, the fact that the Defendants relied on their solicitors to advise them in relation to whether or not they had complied with the court's orders."

15. Having considered the further disclosure now made, the deputy judge found that "the Defendants have complied with the unless order albeit belatedly" (para 34). In relation to previous non-compliance, he referred to the respondents' evidence, supported by a limited waiver of privilege, that they were advised by their former solicitors in advance of the hearing on 9 August 2013 that they had in fact complied with the unless order, and he found that the respondents were justified in relying on their solicitors to ensure that they had complied with the orders. He also referred to the appellant's own failure to comply with earlier directions, in particular as to disclosure and inspection, a matter which he took into account later in his judgment as strengthening his conclusion that the respondents should be granted relief from sanction.
16. The deputy judge next expressed the view that "notwithstanding the fact that they are currently debarred from defending the claim and subject to the court's inherent jurisdiction to regulate its own process, the Defendants are entitled at trial to require the Claimant to prove his claim, to cross-examine and to make submissions" (para 40); and that "whilst not entitled to challenge the issue of liability, the Defendants would be entitled to make submissions to the court on the appropriate form of relief as well as challenging the Claimant's liquidated claim" (para 47). All this, however, was obiter, since the deputy judge went on to say that he had reached "the very clear conclusion that in all the circumstances the interests of justice in this case dictate that the Defendants should be granted relief from sanction" (para 48).
17. He said that in reaching that conclusion he had considered and rejected the appellant's submission that the current application for relief was an abuse of process and should be dismissed for that reason alone. He referred to Woodhouse v Consignia plc [2002] EWCA Civ 275, [2002] 1 WLR 2558 ("Woodhouse") as clear authority that a second application for relief is permissible. He then distinguished Tarn Insurance Services Ltd v Kirby, on which Hildyard J had relied in refusing relief from sanction:

"55. Tarn Insurance Services was a case where the Applicant seeking relief remained in breach of the unless order at the time of the application for relief and was unable to show good reason for his continued non-compliance. In contrast, as I find, the Defendants have now complied with their disclosure obligations and I also find that this compliance itself amounts to a material change of circumstances between the time that the matter came before Mr Justice Henderson and Mr Justice Hildyard and the time of this further application for relief. On the basis of the Woodhouse decision, I find that in the circumstances of this case, where the disclosure obligations placed upon the Defendants were significant and wide-ranging and there is no evidence that the Defendants have wilfully failed to comply with the court's orders (on the contrary, on each occasion the evidence is that they have attempted to comply and acted on their solicitor's advice), the Defendants are entitled to make a second application under Rule 3.9 for relief from sanction."

18. After referring to observations by Lewison LJ in Fred Perry Holdings Ltd v Brands Plaza Trading Ltd [2012] EWCA Civ 224, by Master McCloud in her first instance judgment in Mitchell v News Group Newspapers Ltd [2013] EWHC 2355 (subsequently upheld by the Court of Appeal, as considered below) and by the Master of the Rolls in the 18^th Jackson Implementation Lecture concerning the new approach towards securing compliance with rules, practice directions and court orders, the deputy judge set out the following "Conclusion on CPR 3.9":

"Of course I have full regard to these dicta but I am quite satisfied that in the circumstances of this case it is entirely appropriate to grant relief from sanction under CPR 3.9. The Claimant seeks to rely on the Defendants' delay of some 7 weeks between the order of Mr Justice Hildyard dated 9^th August 2013 and the issue of the present application on 1^st October 2013. However I do not regard this delay as significant, in particular in the context of the fact that this case only began in March this year, was the subject of a speedy trial in May, and is now before the court for trial in October. Although an adjournment of the trial is required to enable outstanding directions to be complied with and the case got ready for trial, that adjournment need not be for an excessively long period."

19. He then returned to the appellant's submission that the respondents could not have a second bite of the cherry under CPR 3.9 but had to make their application under CPR 3.1(7). He referred to Collier v Williams [2006] 1 WLR 1945 and to Tibbles v SIG Plc [2012] 1 WLR 2591. He then set out an "Overall conclusion" as follows:

"61. Having given full consideration to both those Court of Appeal authorities, I am firmly of the view that the appropriate rule of court to consider on this application is CPR 3.9. To the extent that Mr Justice Hildyard's order of 9^th August needs to be varied or revoked pursuant to CPR 3.1(7), I consider that the matters set out in this judgment fully justify such a variation or revocation and that in the circumstances it is appropriate to grant the Defendants' application."

20. In the event, the order made by the deputy judge did vary Hildyard J's debarring order. Thus, paragraph 1 of the deputy judge's order provided that "The First, Second and Fourth Defendants be granted relief from the sanction of the Unless Order and paragraphs 1, 2 and 3 of the Debarring Order be set aside".

The relevant procedural rules

21. The appeal turns on the application of two procedural rules. First, CPR 3.1(7) provides:

"A power of the court under these Rules to make an order includes a power to vary or revoke the order."

Judicial guidance on the exercise of the power to vary or revoke an existing order is considered below.

22. Secondly, CPR 3.9, in the version which has been in effect since 1 April 2013, provides:

"On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –

(a) for litigation to be conducted efficiently and at proportionate cost; and

(b) to enforce compliance with rules, practice directions and orders."

The judgment of the Court of Appeal in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537 ("Mitchell") – which we observe, in fairness to the deputy judge, postdated his judgment in the present case – sets out the former version of the rule and the background to the change, and gives authoritative guidance on the application of the rule in its present form.

The second application for relief from sanction: discussion

23. The deputy judge evidently considered that a second application for relief from sanction could be made under CPR 3.9 without needing to rely on CPR 3.1(7), and that CPR 3.1(7) had no more than a secondary role in relation to any necessary variation or revocation of the earlier order refusing relief from sanction. In our judgment, however, this put matters the wrong way round. The debarring order had given effect to Hildyard J's refusal of relief from sanction by declaring that the respondents were debarred from defending the appellant's claim and by ordering that the defence and counterclaim filed by the respondents be struck out. Unless and until the relevant provisions of that order were set aside by means of a variation or revocation of the order, they were effective to debar the respondents from defending the claim. It was not open to the deputy judge simply to make an inconsistent order granting relief under CPR 3.9. He appears ultimately to have recognised this by making an order setting aside the relevant provisions of Hildyard J's order. That part of his order must have been made pursuant to CPR 3.1(7).
24. The conditions for varying or revoking an order pursuant to CPR 3.1(7) are set out in the cases of Collier v Williams and Tibbles v SIG Plc ("Tibbles") to which the deputy judge referred. In Collier v Williams, at paras 39-40, the Court of Appeal endorsed the following approach adopted by Patten J in Lloyds Investment (Scandinavia) Ltd v Christen Ager-Hanssen [2003] EWHC 1740 (Ch):

"Although this is not intended to be an exhaustive definition of the circumstances in which the power under CPR 3.1(7) is exercisable, it seems to me that, for the High Court to revisit one of its earlier orders, the applicant must either show some material change of circumstances or that the judge who made the earlier order was misled in some way, whether innocently or otherwise, as to the correct factual position."

25. In Tibbles, at para 39, Rix LJ reached the following more elaborate conclusions after consideration of those and other authorities:

"(i) Despite occasional references to a possible distinction between jurisdiction and discretion in the operation of CPR 3.1(7), there is in all probability no line to be drawn between the two. The rule is apparently broad and unfettered, but considerations of finality, the undesirability of allowing litigants to have two bites at the cherry, and the need to avoid undermining the concept of appeal, all push towards a principled curtailment of an otherwise apparently open discretion. Whether that curtailment goes even further in the case of a final order does not arise in this appeal.

(ii) The cases all warn against an attempt at exhaustive definition of the circumstances in which a principled exercise of the discretion may arise. Subject to that, however, the jurisprudence has laid down firm guidance as to the primary circumstances in which the discretion may, as a matter of principle, be appropriately exercised, namely normally only (a) where there has been a material change of circumstances since the order was made, or (b) where the facts on which the original decision was made were (innocently or otherwise) misstated.

(iii) It would be dangerous to treat the statement of these primary circumstances, originating with Patten J and approved in this court, as though it were a statute. That is not how jurisprudence operates, especially where there is a warning against the attempt at exhaustive definition.

…

(vi) Edwards v Golding is an example of the operation of the rule in a rather different circumstance, namely that of a manifest mistake on the part of the judge in the formulation of his order ….

(vii) The cases considered above suggest that the successful invocation of the rule is rare. Exceptional is a dangerous and misleading word: however, such is the interest of justice in the finality of a court's orders that it ought normally to take something out of the ordinary to lead to variation or revocation of an order, especially in the absence of a change of circumstances in an interlocutory situation."

26. Rix LJ went on to consider the possibility that there might be other circumstances in which the rule could be invoked, for example that there might be room within it for a prompt recourse to the court to deal with a matter which ought to have been dealt with in an order but which in genuine error was overlooked by the parties and the court. In that context he underlined the need for promptness, stating at para 42:

"The court would be unlikely to be prepared to assist an applicant once much time had gone by. With the passing of time is likely to come prejudice for a respondent who is entitled to go forward in reliance on the order that the court has made. Promptness in application is inherent in many of the rules of court: for instance in applying for an appeal, or in seeking relief against sanctions (see CPR 3.9(1)(b)) …."

27. In Mitchell this court emphasised the distinction between an application under CPR 3.9 for relief from sanction and an application to vary or revoke under CPR 3.1(7) the order imposing the sanction in the first place:

"44. … An application for relief from a sanction presupposes that the sanction has in principle been properly imposed. If a party wishes to contend that it was not appropriate to make the order, that should be by way of appeal or, exceptionally, by asking the court which imposed the order to vary or revoke it under CPR 3.1(7). The circumstances in which the latter discretion can be exercised were considered by this court in [Tibbles]. The court held that considerations of finality, the undesirability of allowing litigants to have two bites at the cherry and the need to avoid undermining the concept of appeal all required a principled curtailment of an otherwise apparently open discretion. The discretion might be appropriately exercised normally only (i) where there had been a material change of circumstances since the order was made; (ii) where the facts on which the original decision was made had been misstated; or (iii) where there had been a manifest mistake on the part of the judge in formulating the order. Moreover, as the court emphasised, the application must be made promptly. This reasoning has equal validity in the context of an application under CPR 3.9.

45. On an application for relief from a sanction, therefore, the starting point should be that the sanction has been properly imposed and complies with the overriding objective. If the application for relief is combined with an application to vary or revoke under CPR 3.1(7), then that should be considered first and the Tibbles criteria applied. But if no application is made, it is not open to him to complain that the order should not have been made, whether on the grounds that it did not comply with the overriding objective or for any other reason …."

28. The court was not there considering a second application for relief under CPR 3.9, but the reasoning tends to support, and is certainly fully consistent with, the view that the Tibbles criteria apply where it is sought to set aside by a second application the provisions of a previous order refusing relief under CPR 3.9.
29. It is true that in Woodhouse, upon which the deputy judge relied (see para 17 above), the Court of Appeal allowed for the possibility of a second application under CPR 3.9 without making any reference to CPR 3.1(7) or to the criteria applicable to the variation or revocation of an earlier order. In that case, actions had been stayed automatically by virtue of a practice direction relating to transitional arrangements on the coming into force of the Civil Procedure Rules: the stay was the equivalent of a sanction, so that CPR 3.9 was engaged in relation to the decision whether to lift the stay. The circumstances of the relevant appeal were that the claimant's application for the stay to be lifted had been refused and the claimant then made a second application, which was struck out by the district judge as an abuse of process without considering the merits of the application. The Court of Appeal disapproved that approach, stating:

"55. The application of 8 November 2000 was undoubtedly a 'second bite at the cherry'. It was supported by evidence that was available at the time of the first application. There was no good reason for the failure to place that evidence before the court on the first occasion. We accept that the fact that the evidence relied on in support of the application that was made on 8 November could and should have been put before the court in support of the earlier application is material to the exercise of the discretion conferred by CPR r.3.9(1). There is a public interest in discouraging a party who makes an unsuccessful interlocutory application from making a subsequent application for the same relief, based on material which was not, but could have been, deployed in support of the first application. In some contexts, this is partly because, as Chadwick LJ said in Securum Finance Ltd v Ashton [2001] Ch 291, there is a need for the court to allot its limited resources to other cases. But at least as important is the general need, in the interests of justice, to protect the respondents to successive applications in such circumstances from oppression. The rationale for the rule in Henderson v Henderson (1843) 3 Hare 100 that, in the absence of special circumstances, parties should bring their whole case before the court so that all aspects of it may be decided (subject to appeal) once and for all is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever, and that a defendant should not be oppressed by successive suits where one would do ….

56. In our view, although the policy that underpins the rule in Henderson v Henderson has relevance as regards successive pre-trial applications for the same relief, it should be applied less strictly than in relation to a final decision of the court, at any rate where the earlier pre-trial application has been dismissed.

…

58. In the present case, it is clear that both the district judge and the judge considered that the fact that the application of 8 November 2000 was a second bite at the cherry was decisive. In our view, they were wrong to do so. They failed to take into account the evidence of Mr Collins, and to consider how cogent the case was for lifting the stay, having regard in particular to the provisions of CPR r.3.9(1). In short, they failed to exercise their discretion at all. In these circumstances, it is necessary for us to exercise our discretion afresh."

30. The reasoning in that passage does not sit altogether comfortably with the policy of the April 2013 rule changes giving effect to the Jackson reforms, as underlined by the Mitchell judgment in relation to CPR 3.9 in particular. But in any event the court in Woodhouse was not addressing a situation where, as here, a "second bite at the cherry" under CPR 3.9 involves setting aside a previous order refusing relief from sanction. That presumably explains the absence of any reference to CPR 3.1(7) or to the criteria relevant to its application. We are satisfied that the judgment in Woodhouse is not to be read as displacing the normal operation of CPR 3.1(7) in a case involving CPR 3.9; and in so far as the deputy judge proceeded on the basis that the judgment in Woodhouse permitted the course adopted by him in the present case, he was wrong to do so. The respondents' "second bite" application was in substance an application under CPR 3.1(7) for the setting aside of the provisions of Hildyard J's order refusing relief under CPR 3.9, and as such it had first to satisfy the criteria in Tibbles.
31. The respondents' application manifestly failed to satisfy those criteria. The only argument advanced in relation to them was and is that there had been a material change of circumstances since Hildyard J's order was made, in that the respondents had now, as of 1 October 2013, given the full disclosure that the unless order required to be given by 1 July 2013. The deputy judge held at para 55 of his judgment (quoted at para 17 above) that "this compliance itself amounts to a material change of circumstances" since the date of Hildyard J's order. Whether the respondents had in fact complied with the disclosure requirements in the unless order was a matter of dispute before us, but there is no need to examine that issue. Even if the required disclosure had been made at last, some three months after the date for compliance under the unless order itself and almost two months after the date of Hildyard J's refusal of relief from sanction for non-compliance, it could not in our view amount to a material change of circumstances for the purposes of an application under CPR 3.1(7). It could not alter the fact of non-compliance with the unless order or amount to a good reason for that non-compliance, nor would it undermine the reasoning that led Hildyard J to refuse relief from sanction. There was nothing here by way of material change of circumstances, and there was no other basis for an application under CPR 3.1(7) to vary or revoke Hildyard J's order.
32. In our judgment, therefore, the deputy judge ought to have rejected the respondents' second application under CPR 3.9 on the threshold ground that no proper basis had been put forward for revisiting Hildyard J's order refusing the first application for the same relief.
33. To the extent that the points considered above were not raised explicitly by the appellant's notice, we gave permission at the hearing to Mr Smith QC (ultimately – and realistically – without opposition from Mr Davenport QC on behalf of the respondents) to amend the notice to cover them and to advance them in support of the appeal.

Other concerns about the deputy judge's approach

34. We make the following brief observations about certain other aspects of the deputy judge's approach, though we did not hear oral submissions on these matters and we do not need to base our decision on them.
35. First, we think it plain that, even if he had been entitled to give fresh consideration to the question of relief from sanction, his general approach to the application of CPR 3.9 in its present form was wrong in principle. It lacked the robustness called for by the guidance subsequently given by this court in Mitchell and gave insufficient consideration to the need (a) for litigation to be conducted efficiently and at proportionate cost, and (b) to enforce compliance with rules, practice directions and orders, considerations which "should now be regarded as of paramount importance and be given great weight" (Mitchell para 36). It also failed to take as its starting point that the sanction in the unless order, which had not itself been the subject of appeal or an application under CPR 3.1(7) for variation or revocation, had been properly imposed and complied with the overriding objective (Mitchell para 45). Whilst referring to the first instance judgment which was upheld in Mitchell and to the observations of the Master of the Rolls in the 18^th Jackson Implementation Lecture which were endorsed in Mitchell, the deputy judge does not appear to have been guided by them. Instead, he appears to have placed weight on principles derived from Rayyan al Iraq Co Ltd v Trans Victory Marine Inc and Ian Wyche v Care Force Group Plc (see para 13 above), first instance decisions which were subject to critical comment at paras 47-51 of Mitchell. There is more generally a striking contrast between the deputy judge's approach and that of Hildyard J in his judgment of 9 August. The approach of Hildyard J sits well with the guidance in Mitchell.
36. Secondly, the deputy judge paid insufficient attention to the fact that the second application had not been made promptly but came almost two months after Hildyard J had refused relief and just two days before the trial was due to start. The importance of promptness in relation to applications under CPR 3.1(7) was underlined in Tibbles (see para 26 above). It was emphasised in Mitchell in relation to applications under CPR 3.9 (see, for example, paras 40 and 46 of the Mitchell judgment); and the judgment of this court in Durrant v Chief Constable of Avon & Somerset Constabulary [2013] EWCA Civ 1624, at paras 49-51, placed particular weight on the failure to make a prompt application under CPR 3.9 in concluding that relief from sanction should be refused. The deputy judge was wrong to regard the respondents' delay in making the second application as of no significance (see para 18 above). Further, his approach was all the more surprising given that a speedy trial had previously been ordered.
37. Thirdly, the deputy judge allowed the hearing of the application for relief from sanction to take up a disproportionate amount of court time (see para 10 above), with the result that the trial date would have been lost even if the application had been refused. We are sceptical of the view he expressed that the case was not ready for trial by reason of the appellant's own failure to comply with earlier directions; but even if that view was correct, it did not justify the taking up of so much time on an application (let alone a second application) for relief from sanction.
38. Fourthly, we are troubled by the deputy judge's observation that even if the respondents remained debarred from defending the claim they would be "entitled at trial to require the Claimant to prove his claim, to cross-examine and make submissions" (see para 16 above). The cases to which he referred in that connection, namely Culla Park Ltd v Richards [2007] EWHC 1687 and JSC BTA Bank v Ablyazov (No. 8) [2013] 1 WLR 1331, do not appear to us necessarily to support so sweeping a proposition. This issue, however, will be a matter for decision by the judge who hears the trial; and, having put down a marker in relation to it, we think it better to say no more on the subject at this stage.

Conclusion

39. Whilst we have sought to explain in this judgment why we consider there to be several troubling features about the deputy judge's approach to the application before him, the operative reasons for our decision to allow the appeal against his order are those given in the section at paras 23-33 above.