England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT AT CROYDON
His Honour Judge Ellis
1CR00468

		Royal Courts of Justice Strand, London, WC2A 2LL
		29th April 2015

Lord Justice Moore-Bick :

Background

1. In January 2012 the appellant, Mr. Patel, and the respondent, Mr. Mussa, entered into an agreement to compromise certain proceedings then pending between them relating to their joint business ventures. As will become apparent, it is unnecessary for the purposes of this appeal to describe in any greater detail the nature of those proceedings. It is sufficient to say that the terms of the compromise were contained in a schedule to a Tomlin Order, pursuant to which the proceedings were stayed, save that the parties were given permission to apply to the court for the purposes of enforcing the agreement.
2. In due course Mr. Patel applied to the court for an order enforcing the agreement. On 16^th January 2014 the matter came before District Judge Jackson in the County Court at Croydon, who, after hearing argument, dismissed the application. The next day Mr. Patel's solicitors wrote to the court asking for permission to appeal, but, having received no response, after some days they made an application to a circuit judge for permission to appeal.

The proceedings below

3. On 18^th February 2014 the application came before His Honour Judge Ellis, who listed the hearing of the appeal for 12^th May 2014 and gave the following, among other, directions:

(i) that the appellant file and serve a skeleton argument by 4^th April 2014;

(ii) that the respondent be at liberty to file a written submission in response if he considered that there was some material inaccuracy in the papers placed before the court; and

(iii) that the appellant file a bundle of documents for use in the appeal, paginated and indexed, not less than three clear days before the hearing of the appeal.

4. Mr. Patel failed to comply with the directions. His skeleton argument was not filed by 4^th April 2014, but was sent to the court by email at 7.07 am on Monday, 12^th May 2014, the day of the hearing. The appeal bundle should have been filed no later than Tuesday, 6^th May 2014. On Friday 9^th May 2014 Mr. Patel's solicitors sent to the court by fax and email 36 pages of documents extracted from the three lever-arch files that had been lodged for the hearing before the district judge and were still in the court's possession. According to the solicitors, they were assured by court staff that the bundle would be placed before the judge that afternoon. At 9.30 am on 12^th May 2014 a bundle containing hard copies of the documents sent to the court electronically on 9^th May was lodged at court with a request that it be placed before the judge immediately "for his convenience". A second copy of the main bundle was also delivered to the court that morning.
5. On 12^th May 2014 two matters were listed for hearing before Judge Ellis: Mr. Patel's application for permission to appeal and an unrelated application for summary judgment. Mr. Patel's application was estimated to last one hour and the application for summary judgment the rest of the day. Although Mr. Patel's application was second in the list, the judge, unsurprisingly, decided to take it first. When the application was called on the judge complained that he had received the papers only ten minutes earlier and had not had time to read the bundle, much less to refer to the three lever-arch files which constituted the main bundle. He said that rather than adjourn the matter to another day he would apply the Mitchell principles. The failure to comply with his earlier directions was not trivial and no reasonable excuse for it had been put forward. He therefore dismissed the application.

The judge's order

6. On 13^th May Judge Ellis completed Form N460 in which he gave the reasons for his decision. In the box with the side heading "Result of hearing or trial" he wrote:

"Application dismissed. In breach of the directions order made and the CPR the appellant filed the skeleton argument and hearing bundle at court 10 minutes before the hearing. The breaches were not trivial – Mitchell applied."

7. In the box headed "Brief reasons for decision to allow or refuse appeal" he wrote:

"Non-compliance not trivial. No good reason for the default. In light of Mitchell an appeal would have no reasonable prospect of success."

8. The order disposing of the application provided that the application for permission to appeal against the decision of District Judge Jackson "is dismissed."

The appeal

9. On 29^th May 2014 Mr. Patel filed a notice of appeal in this court against Judge Ellis's order. In his first ground of appeal he referred to section 55(1) of the Access to Justice Act 1999, which imposes more stringent requirements for a second appeal to this court, and submitted that his appeal satisfied those requirements because it raised the question whether the Mitchell principles, and in particular Judge Ellis's application of them, were compliant with article 6 of the European Convention on Human Rights ("the Convention"). His second ground of appeal was that, in believing that the skeleton argument and appeal bundle had been filed ten minutes before the hearing, the judge had misunderstood the true position and had exercised his discretion on a false basis. In his third ground of appeal he referred to CPR 3.9(1) and alleged that the judge had failed to give any or any adequate weight to all the circumstances of the case. He therefore contended in his fourth ground of appeal that the application for permission to appeal ought to have been heard and judged on its merits rather than being summarily dismissed.
10. It was necessary for Mr. Patel to obtain permission to appeal from this court, for which he duly applied in his notice of appeal. His application was considered on paper by Aikens L.J., who granted permission on the sole ground that it was arguable that there had been unfairness in the process of Judge Ellis's decision to refuse permission to appeal and that there had been a breach of Mr. Patel's rights under article 6 of the Convention. In so doing he expressed the hope that the court, when hearing the appeal, would take the opportunity to reconsider the ambit of the so-called "residual jurisdiction", by which he meant the jurisdiction recognised in CGU International Insurance Co. Plc v AstraZenica Insurance Co. Ltd [2006] EWCA Civ 1340, [2007] Bus LR 162.

The residual jurisdiction

11. The concept of a residual jurisdiction vested in the Court of Appeal to hear appeals from the High Court in certain cases was originally developed in response to section 69(8) of the Arbitration Act 1996. As is well known, section 69 of the Arbitration Act 1996 imposes on the right of appeal to the High Court against an arbitration award stringent restrictions, which are themselves reinforced by section 69(8). Section 69(8) provides that leave to appeal against an order of the High Court refusing leave to appeal against an arbitration award can be granted only by the High Court itself. On the face of it, therefore, this court has no jurisdiction to give permission to appeal against such an order.
12. In North Range Shipping Ltd v Seatrans Shipping Corp [2002] EWCA Civ 405, [2002] 1 WLR 2397 an application for leave to appeal against an arbitration award was dismissed by the judge on the grounds that it did not meet the statutory criteria. He did not elaborate on his reasons for reaching that decision and refused leave to appeal. The appellant sought leave to appeal from this court to enable it to seek an order that the application be remitted to the High Court for rehearing because the judge had failed to give adequate reasons for his decision.
13. The court recognised that as a result of section 69(8) of the Arbitration Act it had no jurisdiction to entertain an appeal on the merits of the judge's decision, but it was persuaded that, since a party's right to complain of an unlawful judicial act is limited by section 9(1) of the Human Rights Act 1998 to the exercise of a right of appeal, the court was required to afford the applicant a right of appeal to enable it to complain that the process by which the judge had reached his decision was unfair and contravened article 6 of the Convention. Basing himself on certain dicta of Mustill L.J. in Aden Refinery Co. Ltd v Ugland Management Co. Ltd [1987] Q.B. 650 to the effect that the court has power to intervene in cases where the judge in truth never reached a decision at all, whether as a result of bias, chance, whimsy or personal interest, Tuckey L.J., giving the judgment of the court said:

"If, as is accepted, there is a residual jurisdiction in this court to set aside a judge's decision for misconduct then there can be no reason in principle why the same relief should not be available in a case of unfairness. Each is directed at the integrity of the decision-making process or the decision-maker, which the courts must be vigilant to protect, and does not directly involve an attack on the decision itself. This court has of course the general power to set aside decisions under CPR 52.10 (2)(a) and we do not think in the exceptional circumstances envisaged by such a case that the court's powers are circumscribed by s. 69 of the 1996 Act."

14. The decision in North Range Shipping was considered in CGU International Insurance v AstraZeneca, another decision on section 69(8) of the Arbitration Act 1996. The respondent to the application for permission to appeal argued that the decision in North Range Shipping had been reached per incuriam and should not be followed, but the court rejected that submission and held that it was bound by that decision, which was in any event right. Rix L.J., with whom Sir Anthony Clarke M.R. and Longmore L.J. agreed, made it clear, however, not only that a distinction is to be drawn between a decision on the merits (against which no appeal lies) and a decision affected by unfairness (in respect of which the residual jurisdiction may be invoked), but that the unfairness must be of such a quality that it invalidates the decision: see paragraph 79.
15. The dictum of Mustill L.J. in Aden Refinery v Ugland Management and the various ways in which the principle was expressed in both North Range Shipping, CGU v AstraZenica and Philip Hanby Ltd v Clarke [2013] EWCA Civ 647, to which our attention was also drawn, all make it clear that the court is vested with a residual jurisdiction to review a decision that is so flawed by unfairness of one kind or another that it cannot be regarded as a proper decision at all. As such, the residual jurisdiction fills the gap that would otherwise be created by statutory provisions which purport to exclude altogether the power of this court to intervene and thus provides a means of protecting the integrity of the decision-making process.
16. The statutory provision with which this appeal is concerned is section 54(4) of the Access to Justice Act 1999, which provides as follows:

"No appeal may be made against a decision of a court under this section to give or refuse permission (but this subsection does not affect any right under rules of court to make a further application for permission to the same or another court)."

In my view it creates in relation to the High Court a position analogous to that which arises under section 69(8) of the Arbitration Act 1996.

The issues arising on the appeal

17. An appeal against District Judge Jackson's order lay to a circuit judge sitting in the county court and required the permission of either the district judge herself or a circuit judge. Permission to appeal not having been granted by District Judge Jackson, an application to a circuit judge for permission to appeal was the only remaining step open to Mr. Patel. Mr. Buckhaven submitted that although by virtue of section 54(4) Mr. Patel could not appeal to this court on the merits against an order of the circuit judge refusing permission to appeal, he could invoke the residual jurisdiction to appeal against such an order if it was the result of an unfair process which involved a breach of article 6 of the Convention. Mr. Heap did not seek to challenge the existence of the residual jurisdiction, nor did he seek to argue that it could not apply to a case of the present kind. He did submit, however, that it had no part to play in this case, because the judge had simply imposed on Mr. Patel a sanction for failing to comply with the court's directions for the conduct of the appeal and that his decision was far from unfair.
18. In the light of these submissions the first question that calls for consideration is the true nature of the judge's order. The order drawn by the court simply stated that

"The application for permission to appeal the decision of District Judge Jackson made on the 16^th January 2014 is dismissed."

The use of the word "dismissed" suggests that the application was determined on its merits, and if that had been the judge's intention and the true import of the order, I think Mr. Patel would have had grounds for complaint, since it is clear that the judge did not consider the application on its merits. However, the order cannot be read in isolation and there are many indications in the surrounding circumstances that it was meant to give effect to a decision of a quite different kind.

19. The only evidence before us of what occurred at the hearing is what appears in the Form N460, to which I have already referred. In my view it is clear (as indeed was substantially confirmed by Mr. Buckhaven in the course of argument) that the judge was satisfied that, as a result of what he considered to have been a signal failure on the part of those representing Mr. Patel to comply with the directions for the hearing, the matter could continue only if the hearing were adjourned and that, in the absence of any reasonable explanation, that failure should be visited with a sanction in the form of the dismissal of the application. That seems to me to be the only conclusion that can be drawn from his reference to the case of Mitchell (Mitchell v News Group Newspapers [2013] EWCA Civ 1537, [2014] 1 WLR 795)[Diagram or picture not reproduced in HTML version - see original .rtf file to view diagram or picture][Diagram or picture not reproduced in HTML version - see original .rtf file to view diagram or picture]. In formal terms his intention might have been better reflected if the order had provided that the application for permission be struck out, but in practical terms it came to the same thing. The judge did not purport to deal with the application on the merits; he simply disposed of it peremptorily by way of a sanction.
20. In those circumstances, I think, with great respect to Aikens L.J., that he was wrong to treat Judge Ellis's order as a decision on the merits refusing permission to appeal. This is not a case in which the application itself was determined in an arbitrary manner or in a way that fundamentally invalidated the decision, so that it could be said not to constitute a decision at all. The judge's order was, in effect, a case management order and as such was independent of the application for permission to appeal. As a case management order it was amenable to appeal (subject to permission) in the same way as any other case management order. Accordingly, whatever may be said about the merits of the judge's decision, I do not think it is one that engages the court's residual jurisdiction. That much, indeed, was recognised by Mr. Patel in his grounds of appeal, in which he sought to challenge the Mitchell principles as a whole and Judge Ellis's application of them in this case in particular.
21. However, even if I am wrong about that, I do not think that this is a case in which Mr. Patel can invoke the court's residual jurisdiction. In each of the three cases dealing with the residual jurisdiction to which I have referred, North Range Shipping, CGU v AstraZenica and Philip Hanby Ltd v Clarke, the decision being challenged was that of the High Court. Here, by contrast, the court is concerned with a challenge to a decision of the county court. In R (Sivasubramaniam) v Wandsworth County Court [2002] EWCA Civ 1738, [2003] 1 WLR 475 this court held that a decision of the county court is amenable to judicial review, although the court would be unlikely to give permission to proceed with such a claim, save in exceptional cases, because the appeals process provided litigants with fair, adequate and proportionate protection against the risk that the judge of the lower court might have acted without jurisdiction or fallen into error. However, Lord Phillips of Worth Matravers M.R. delivering the judgment of the court recognised that there might be exceptional cases in which it could be shown that the litigant had been unfairly denied a hearing. In paragraph 56 he said:

"The possibility remains that there may be very rare cases where a litigant challenges the jurisdiction of a circuit judge giving or refusing permission to appeal on the ground of jurisdictional error in the narrow, pre- Anisminic sense, or procedural irregularity of such a kind as to constitute a denial of the applicant's right to a fair hearing. If such grounds are made out we consider that a proper case for judicial review will have been established."

22. The circumstances in which the court envisaged that permission to proceed with a claim for judicial review might be given are substantially the same as those which, in relation to a decision of the High Court, are sufficient to engage the Court of Appeal's residual appellate jurisdiction. However, where the decision can be challenged by way of proceedings for judicial review, as is the case with a decision of the county court, such proceedings provide an adequate means by which a remedy for a breach of article 6 may be obtained and so ensure compliance with section 9(1) of the Human Rights Act 1998. In those circumstances there is no justification for extending the residual appellate jurisdiction of the Court of Appeal to encompass decisions of the county court which breach article 6, since appropriate forms of procedure exist by which a suitable remedy can be obtained. Support for that conclusion can be found in the decision of this court in Gregory v Turner [2003] EWCA Civ 183, [2003] 1 WLR 1149, in which, following the enactment of section 54(4) of the Access to Justice Act 1999, the court described judicial review as "the only possible route" left open to challenge a decision of the circuit judge refusing permission to appeal against a decision of the district judge. Sivasubramaniam and Gregory v Turner were both cited with approval in R (Cart) v Upper Tribunal [2011] UKSC 28, [2012] 1 AC 663.

The substance of the appeal

23. The question then arises whether, despite the terms of the order giving permission to appeal, Mr. Patel can challenge the order below on the grounds that it involved an improper exercise of judicial discretion. Aikens L.J. granted permission to appeal

"on the sole ground that it is arguable that there was unfairness in the process of HHJ Ellis's decision to refuse permission to appeal . . . "

because he thought that Judge Ellis had refused permission to appeal, but also because he clearly thought that the course of events before the judge had arguably been unfair and justified consideration by this court. In those circumstances I think it would be wrong to hold that Mr. Patel is restricted to arguments based on the residual jurisdiction which he did not raise in his grounds of appeal and which, on closer examination, have no application to this case.

24. It is convenient at this point to refer briefly to article 6 of the European Convention on Human Rights, on which Mr. Patel placed some emphasis in his grounds of appeal and to which reference was made in the order granting permission to appeal. Although article 6 provides that "in the determination of his civil rights and obligations . . . everyone is entitled to a fair . . . hearing", it is well established that courts are entitled to give directions for the proper and efficient conduct of proceedings before them and to impose sanctions on parties who fail to comply with their orders. Such sanctions may, in an appropriate case, include striking out proceedings. Provided such powers are exercised fairly, they do not constitute a breach of article 6. The question in the present case, therefore, is simply whether, in dismissing Mr. Patel's application for permission to appeal as a sanction for failing to comply with his earlier directions, the judge exercised his discretion improperly.
25. The directions which Judge Ellis gave on 18^th February 2014 were straightforward and not difficult to comply with. Although the order was made on the court's own initiative, no one has suggested that they were in any respect inappropriate. They were intended to ensure that the all the papers needed for the hearing were made available to the judge in time to enable him to prepare properly for the hearing, but the late delivery of both the skeleton argument and the working file made that all but impossible. Contrary to popular belief, judges often do give up some of their free time to work at week-ends, but the profession is not entitled to assume that they will do so or that they have no other more pressing commitments, whether professional or private. In the present case it was wholly unsatisfactory for a bundle of papers which should have been served three clear days in advance to be sent to the court electronically during the afternoon of the last working day before the hearing. It was, if possible, even more unsatisfactory for a skeleton argument, which should have been filed about five weeks earlier, to be sent to the court electronically on the very morning of the hearing. In my view it was not reasonable to expect the judge to have read and considered those papers in the short time available to him before the day's sittings began and I am not surprised that he took the view that it would be necessary to adjourn the matter to enable him to read and consider them. That would have caused further delay and almost certainly a degree of disruption to the court's business.
26. The judge applied the Mitchell principles, by which, as I understand it, he meant a rigorous approach to compliance with the court's directions backed up by stringent sanctions in order to promote a more orderly and efficient approach to litigation. In Mitchell itself the court was concerned with an application under CPR rule 3.9 for relief from sanctions. In paragraphs 40-41 of its judgment the court suggested that a judge considering such an application should begin by considering the nature of the breach. If it could not be described as trivial (for example, because it amounted to a failure of form rather than substance, or involved the narrow missing of a deadline), it would be for the applicant to persuade the court to grant relief. In that context one important question would be whether the breach had occurred for some good reason, but the court was at pains to emphasise that merely overlooking a deadline would not ordinarily constitute a good reason. Although the case itself was concerned with an application for relief from sanctions, the principles to which it sought to give effect were of more general application. In my view the judge was right to treat it as endorsing a more rigorous approach to compliance with the rules of procedure and the directions of the courts in relation to the conduct of litigation. The Mitchell principles were restated and refined in Denton v T.H. White Ltd [2014] EWCA Civ 906, [2014] 1 WLR 3926,[Diagram or picture not reproduced in HTML version - see original .rtf file to view diagram or picture][Diagram or picture not reproduced in HTML version - see original .rtf file to view diagram or picture] although with rather greater emphasis on the need to evaluate all the circumstances of the case in order to dispose of the application justly.
27. In my view the judge was entitled to regard the failures to comply with his earlier directions as far from trivial. I would describe each of them as serious. The filing well in advance of the hearing of a skeleton argument and the production of a bundle of documents for use at the hearing were both essential if the judge was to have an adequate opportunity to prepare. The fact that three lever-arch files of documents had been lodged with the court in connection with the application before the district judge is nothing to the point. If only a small selection of documents were required for the hearing, it was essential that they be identified and copies provided for the judge in some convenient form. In the event, neither the skeleton argument nor the bundle was provided until just before the hearing.
28. No good reason was put forward for the failure to comply with the judge's directions. The solicitors candidly admitted that the failure to lodge the bundle of documents in time had been the result of an oversight. Mr. Buckhaven submitted that the judge had had ample time to consider the papers between Friday afternoon and Monday morning, but, as I have already pointed out, parties are not entitled to assume that judges have no other calls on their time at week-ends. In any event, to provide a bundle of documents without a skeleton argument during the afternoon of the day before the hearing does not make up for a failure to lodge it three days earlier as required.
29. In the circumstances the judge was, in my view, entitled to regard the failure to comply with his directions as serious and unjustified and to impose a sanction of some kind. Whether this court would have taken the same course is not the point. The only question we have to consider is whether in dismissing the application Judge Ellis took a course that was not open to him in the exercise of his discretion. Mr. Buckhaven submitted that he could have put the matter back until later in the day, but the other case in the judge's list was estimated to require the rest of the day, so I do not think he can be criticised for not taking that course. In my view the course he took was severe, but in all the circumstances I am not persuaded that was one which he could not properly take. I would therefore dismiss the appeal.

Lord Justice Lewison :

30. I agree.

Lady Justice King :

31. I also agree.