England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM HER HONOUR JUDGE MURFITT
SITTING IN THE CROWN COURT AT CHELMSFORD
ON THE HEARING OF A SMALL CLAIMS TRACK TRIAL
ON 24th SEPTEMBER 2015

		Royal Courts of Justice Strand, London, WC2A 2LL
		18/01/2016

Mr Justice Sweeney :

Introduction

1. This is an application for an extension of time of around 48 days to file a Respondent's Notice. It was filed on 14 December 2015 - some 3-4 days before the appeal was otherwise due to be heard.
2. It is conceded that CPR 3.9 applies, and that the Respondent "cannot fully satisfy" either stage 1 (serious or significant breach) or stage 2 (good reason) of the test enunciated in Denton v TH White Limited ("Denton") [2014] EWCA Civ 906.
3. Accordingly, applying the guidance at [31] – [45] in Denton, stage 3 of the test (consider all the circumstances of the case so as to enable the Court to deal justly with the application) is critical to the outcome of the application.
4. Issues also arise as to the service (some 6-7 days before the appeal was otherwise due to be heard), and content, of the Respondent's skeleton argument.
5. I heard the arguments whilst sitting in Court 37 and (because of the pressure of work in the Court that day) reserved my ruling.

Background

6. The underlying claim was brought by the now Respondent against the now Appellant (one of its former clients) for monies said to be due in respect of unpaid professional estate agency fees.
7. The small claims track trial took place before Her Honour Judge Murfitt in the Chelmsford County Court on 18 August 2015. The Respondent was represented (as before me) by Miss Kumar whereas, at that stage, the Appellant appeared in person. The Respondent relied upon the decision of the Court of Appeal in Foxtons Limited v Pelkey Bicknell & Anr ("Foxtons") [2008] EWCA Civ 419.
8. Her Honour Judge Murfitt handed down judgment on 24 September 2015. She awarded the Respondent the sum of £5,645 (inclusive of the £245 Court fee); gave the Appellant permission to appeal; and suspended the enforcement of the judgment pending appeal.
9. In summary, the matters of fact and law found by the Judge included the following:

i) On 13 January 2012 the Appellant instructed other estate agents 'Douglas Allen', on a joint agency basis with another firm known as 'Balgores', as to the sale of her property.

ii) On 29 January 2012 Mr and Mrs Guyon (the eventual purchasers of the property) requested a viewing via Douglas Allen and that was arranged for the evening of 31 January 2012.

iii) On 31 January 2012, prior to the Guyons' viewing, Mr Brennan, a valuer employed by the Respondent, attended the Appellant's property and conducted a marketing appraisal. The Appellant told Mr Brennan about the Guyons' forthcoming viewing, and he told her that would be fine as she was still on the market with Douglas Allen.

iv) On 2 February Mr Brennan attended the Appellant's property again, on which occasion she signed a Sole Agency Agreement with the Respondent.

v) Under the TPO Codes of Practice Mr Brennan was under a professional obligation to verbally point out to the Appellant that she may well be liable to pay more than one fee having previously instructed Douglas Allen who, as he knew, had earlier sent round the Guyons who were interested viewers.

vi) As a result of Mr Brennan's failure to do so, and by his encouragement of the Appellant to believe that the possibility of a dual fee in relation to the Guyons should not be considered, the Respondent had significantly misled the Appellant into signing the Agreement.

vii) When contracts were exchanged with the Guyons on 17 July 2012, the Respondent's contract with the Appellant was still in place.

viii) The Appellant had paid Douglas Allen what was due under her contract with them.

ix) Notwithstanding the judgment of the Court of Appeal in Foxtons (above) to the effect that an "effective cause" term can readily be implied into an estate agency contract; and that (in that particular case) "a purchaser introduced by us" should be construed as meaning "a person who becomes a purchaser as a result of our introduction"; and the fact that she was not entirely sure why the Respondent sought to rely upon it; the written terms of the instant contract permitted no such implication or construction, and therefore the Appellant was liable to pay the Respondent's fees.

x) Although it may have been that the Appellant had a good defence to the claim on the ground that the contract was voidable for non disclosure of a material fact, that had not been pleaded by the Appellant or argued and it would be wrong to reject the claim on that basis – since the relevant principles were not within her own judicial expertise.

10. The Appellant served her Grounds of Appeal on the Respondent in draft on 6 October 2015. The Notice of Appeal itself was lodged on 13 October 2015 and was served on the Respondent two days later.
11. There are 3 Grounds of Appeal, namely that:

i) The Judge was wrong to find that the Appellant was liable for the commission claimed by the Respondent in the light of a number of her findings and observations – in that the Agreement should have been construed on the basis that commission was only payable to the Agency who had been the effective cause of the introduction of the purchasers, and the Judge was not referred to the correct and up-to-date case law about effective cause and the interpretation of such Agreements.

ii) The Judge was wrong to find that the Appellant was not entitled to assert that, as a result of the misrepresentation of the Respondent, she was not liable for the commission claimed for the Respondent.

iii) The Judge was wrong to find that the Appellant was liable to the Respondent on the basis that by reason of her findings about the conduct of the Respondent, and the "significant misleading" of the Appellant, the Agreement had been varied so that it was a term of the Agreement that no commission was due to the Respondent in the event that the Guyons purchased the property.

12. By virtue of CPR 52.5 – (2)(b) a Respondent who wishes to ask the appeal court to uphold the order of the lower court for reasons different from or additional to those given by the lower court, must file a Respondent's Notice. Where, as here, permission to appeal has been given by the lower court, the combined effect of CPR 52.5 – (4)(b) & (5)(a) is that the Respondent's Notice must be filed within 14 days of service of the Notice of Appeal. That was not done in the case.
13. Paragraphs 6.3 of Practice Direction 52B – Appeals in the County Court and High Court requires that, as soon as practicable, but in any event within 35 days of the filing of the Appellant's Notice, the Appellant must file a paginated and indexed bundle containing documents relevant to the appeal. By virtue of paragraph 6.4 (1) (b) & (c) such documents include any Respondent's Notice and any Respondent's skeleton argument.
14. After prompting by those now representing the Appellant, the Respondent eventually provided copies of certain documents for inclusion in the appeal bundle – but still did not seek to file a Respondent's Notice, nor to serve a skeleton argument.
15. Paragraph 6.6 of Practice Direction 52B requires that any relevant document (such as a Respondent's notice or Respondent's skeleton argument) which is obtained or created after the appeal bundle has been filed should be added to the appeal bundle as soon as practicable and, in any event, no less than 7 days before the hearing of the appeal or any application.
16. On 25 November 2015 those representing the Appellant wrote to the Respondent enclosing a copy of the appeal bundle that had been filed. The letter stated that they looked forward to receiving the Respondent's skeleton argument as soon as possible. That was followed up in further correspondence sent on behalf of the Appellant, but without response.
17. In the meanwhile, on 30 November 2015, the court informed the parties that the appeal would be listed on either 17 or 18 December 2015.
18. On Friday 11 December 2015, after close of business, the Respondent sent the Appellant a draft unissued Respondent's Notice, a batch of further documentation, and a skeleton argument.
19. The Notice refers to the Foxtons case (above) and to the Judge's reference to it. It asserts that the case is directly applicable to the issue of introduction to the purchase and / or effective cause of the transaction which is said to be one of the key issues in the case. It further asserts that the judgement should be upheld not only on the ground, as found, of the express terms of the contract, but additionally on the ground that the Respondent introduced the purchasers to the purchase and were therefore the effective cause of the transaction. That is also dealt with, immediately after paragraph 42, in the Respondent's skeleton argument.
20. As already touched on above, the application to file out of time was filed on 14 December 2014. On that same date, the Appellant wrote to the Court, setting out the background and inviting the Court to remove the appeal from the List and to list instead the application for relief from sanction.
21. The papers were placed before me, and after consideration of them, I so ordered. Hence the instant application was listed before me on 18 December 2015. I saw no merit in the Respondent's assertion, made during the hearing, that it had been wrong to remove the appeal itself from the list.

The Arguments

22. Given the Respondent's concessions in relation to stages 1 and 2 of Denton (above) the argument concentrated on stage 3.
23. On behalf of the Respondent Miss Kumar argued, amongst other things, that:

i) The Respondent's Notice sought to uphold the judge's decision on just one additional ground, namely that the Foxtons case (above) applied.

ii) That should come as no surprise to the Appellant since that case had been relied upon by the Respondent at trial and was referred to in the judgment.

iii) There had been no prejudice to the Appellant in the Notice being served out of time - since it would be a very simple matter for the Court to decide whether it agreed with the Respondent that the appeal should be upheld on the proposed new basis.

iv) It was, in reality, an application that the Appellant should have discussed and agreed with the Respondent – rather than objecting to it.

v) The combination of the Respondent's Notice and skeleton argument did not mean that the Appellant would have to seek an adjournment to obtain a transcript of the proceedings, which would not assist in any way.

vi) Nor was the Respondent seeking to challenge the judge's factual findings in any way.

vii) Although there had been a previous breach by the Respondent in relation to the service of witness statements in the court below, that bore little weight as the Respondent had succeeded on appeal in obtaining relief from sanctions and, in any event, that breach was counterbalanced by the Appellant having requested an adjournment at one stage, and by the fact that the appeal bundle had not been received within 35 days.

24. On behalf of the Appellant Mr Emerson agued that:

i) The assertions made in paragraph 35 of the Respondent's skeleton argument (in particular that the judge was wrong to have accepted the Appellant's evidence that she would not have signed the Agreement had she been told that she could be liable to pay two fees) should have been included in the Respondent's Notice. Their pursuit would make it necessary to obtain a transcript of the Appellant's evidence.

ii) The situation was a mess because the Respondent had done nothing - even though it had known since the judgment had been handed down that permission to appeal had been given, and despite prompting by the Appellant.

iii) The only evidence in support of the application was in the Notice itself at Part C – which did not even attempt to explain the delay from 6 October 2015 (when the Respondent had been supplied with the Grounds of Appeal in draft) onwards. Hence there was an unexplained delay of some 48 days, for which no good (or any) reason had been advanced.

iv) The Court should take into account that the size of the claim is small; that the Appellant had in the past had to incur costs as a result of the Respondent's breach: that there would now be further delay and costs which was solely the fault of the Respondent (which had simply ignored deadlines and conducted itself in an inappropriate way); and that nothing that the Appellant had done, or not done, provided a counterbalance to that.

The Merits

25. Whilst the Respondent goes only so far as to concede that it "cannot fully satisfy" stages 1 & 2 of the Denton test, I have no doubt that the failure to file, or to seek to file, the Respondent's Notice until 14 December 2015 was a serious or significant breach, and that there was no good reason whatsoever for it.
26. Of course, that does not mean that the application for relief from sanctions must automatically fail. Rather, I must consider all the circumstances of the case so as to enable me to deal justly with the application – including the need for litigation to be conducted efficiently and at proportionate cost and the need to enforce compliance with rules, practice directions, and orders.
27. Against the background that this is a small claims case, the conduct of the Respondent in relation to the Respondent's Notice (and also the provision of their skeleton argument at or around the last possible moment) has, in my view, prevented the parties from conducting the litigation at proportionate cost. Equally, this is the second time in the case that the Respondent has been in breach – albeit that it eventually obtained relief in relation to the first breach.
28. Looking at all the circumstances it is clear that, having been granted permission to appeal, the Appellant repeatedly sought to engage with the Respondent, and that the Respondent repeatedly failed to do so until it was too late.
29. Equally, whilst I accept Miss Kumar's assurance that there is no question of the Respondent seeking to challenge the Judge's findings of fact in any way, I reject her submission that the consequences of granting the application would be minimal – albeit that the Foxtons case features in the judgment. Nor, in any event, do I see any arguable merit in the point sought to be relied upon.
30. Accordingly, I conclude that the way to deal justly with the application is to refuse it. In the result, the Respondent may not rely upon the Respondent's Notice as drafted, nor upon any other matter that should have been included in it – in particular the assertion in paragraph 35 of the Respondent's skeleton argument that the judge was wrong to have accepted the specified aspect of the Appellant's evidence.
31. It is clearly important, in advance of the hearing of the Appeal, and if necessary by further ruling, to specifically identify all matters in the Respondent's skeleton argument that should have been in the Respondent's Notice and upon which the Respondent is thus now debarred from relying. In written submissions following the provision of this judgment in draft to the parties, the Appellant argues that the Respondent should not be able to rely on paragraphs 6-8, 13-15, 19, 35 (now dealt with above) and 43-48 of its skeleton argument. On behalf of the Respondent it is indicated that the skeleton argument will be amended, but not to the extent sought.
32. Against that background, I require the Respondent to serve its proposed amended skeleton argument by 4pm on 25 January 2016. I will then rule on what, if any, aspects of its content should have been in the Respondent's Notice (and upon which, therefore, the Respondent cannot rely).

Conclusion

33. For the reasons set out above, the application is refused.
34. As indicated to the parties, I will deal with any consequential applications administratively. In particular, written submissions as to costs must be served by 4pm on 25 January 2016. The appeal itself must be listed as soon as reasonably practicable.