COURT WAS CORRECT TO REFUSE TO GRANT RELIEF FROM SANCTIONS WHO WAS IN DEFAULT (OH, AND THE PROCEEDINGS HAD NEVER BEEN SERVED PROPERLY ANYWAY…)

In Lumsden v Charles [2025] EWCC 7 HHJ Peter Marquand refused a claimant’s application for relief from sanctions. The claimant had issued Part 8 proceedings but failed to serve the witness evidence and particulars with the proceedings by the rules.  The judge upheld the decision of the District Judge to refuse relief from sanctions.   There are additional elements to this case (i) the claimant required relief from sanctions to amend the notice of appeal to run arguments that were not in the original notice: (ii) the claimant had not served the defendant properly in any event. The claimant could not rely on s.214 of the Housing Act in relation to the address for service at a time when they were no longer the defendant’s tenant.

“The Appellant appeals the decision of the Judge below to refuse relief from sanction for having failed to file the witness evidence in support of a Part 8 claim for damages under section 214 of Housing Act 1987. The result of the Judge’s decision was the claim was dismissed as there was no evidence upon which it could succeed. I have rejected the Appellant’s argument that service of the claim form at an address given under section 48 of the Landlord and Tenant Act 1987 was valid after the end of a tenancy. This argument was not raised before the Judge below. In any case, I have also rejected the other grounds of appeal against the exercise of the Judge’s discretion and for those reasons the appeal is dismissed and the Judge’s order affirmed.”

THE CASE

The claimant issued Part 8 proceedings against the defendant alleging that her deposit payment on a rented property was not protected. The claimant argued that she was entitled to damages up to three times the deposit.

The claimant served the claim form with no evidence and with no details of claim. She served it on address that the defendant did not reside in.  The claimant was aware of the defendant’s current address because there had been other litigation in which the defendant had used that address.

The claimant obtained default judgment and a third party debt order was made against the defendant.

The defendant then applied to set aside the judgment and strike the action out. The claimant made an application for relief from sanctions.

THE INITIAL HEARING AND THE STRIKING OUT OF THE CLAIM

At the hearing the judge refused the application for relief from sanctions.  The claimant should have served witness evidence with the Particulars of Claim.   There was no good reason to grant the claimant relief from sanctions.

1. 1. On 12 March 2024, the Judge had before him 2 applications. First, the Respondent’s application to strike out the claim and secondly, the Appellant’s application for relief from sanction. The Respondent had emailed the court stating that she was not available to attend the hearing, but no formal application had been made. The Judge decided to proceed in the Respondent’s absence.

1. 1. In his judgment, the Judge set out the background including that there were brief details of the claim provided within the claim form, totalling 3 paragraphs, one of those paragraphs consisting just of a single line of text and with no additional evidence included. At paragraph 6 of the judgment the Judge noted that he was not sure whether the 2^nd or 3^rd defendants had in fact been served with the claim and noted that there was no address for either of them. He stated: “…they should have an address for service included in the claim form and they should be served with the claim and so, I am very confused as to why this has not been the case.” The Judge recorded that the Respondent was served at the Michels Row address. The Judge recorded the Respondent’s application dated 11 October 2023 and referred to the Onslow Road Address as the one at which she should have been served. The Judge also sets out that the basis of the Respondent’s application before him was a failure to comply with CPR 8.5(1) by the Appellant not filing any evidence upon which they intended to rely when filing the claim form.

1. 1. The Judge rejected the Appellant’s argument that when the claim form was served on the Respondent it was accompanied by the Witness Statement and so there was no breach of CPR 8.5(1). This finding is not subject to an appeal. Having done so he went on to state at paragraph 13:

“…I have not heard any evidence that the claim has been served on the 2^nd or 3^rd defendants and I do not see how it could have been in any event. What is said by the claimant in their evidence is that they are estranged from their parents, being the 2^nd and 3^rd defendants, and that they are in Egypt. I have not seen any evidence of any attempts to serve them with any of the papers, or find an address for them, or for permission to serve them outside of the jurisdiction.”

1. 1. The Judge went on to consider the test in Denton and it was accepted by the Appellant that the breach was serious and significant. The Judge rejected that the inexperience of the fee earner and a misunderstanding of the CPR was a good reason for a breach of the rules and this aspect of the judgment is not in dispute.

1. 1. The Judge considered the 3^rd stage of Denton, namely all the circumstances of the case, so as to enable the court to deal justly with the application including r.3.9(1)(a)(b). The Judge dealt with this at paragraph 17 onwards and referred to:

i) Service of the proceedings as being “One of the major issues that I do take into account”. The Judge concluded that the claim form did not appear to have been properly served on the first defendant in accordance with CPR 6.3. The Judge went on to detail the Third-Party Debt Order, setting judgment aside and that the Appellant had the Respondent’s current address from the claim G0QZ53E1 and referred to this as the address which: “should have been used” and that there was no evidence from the Appellant to the contrary.

ii) The claim form not including an address for service for Mr and/or Mrs Sheppard and the requirement in CPR 19.3 that they should have been joined as defendants because of their interest in the claim and that they could lose out financially.

iii) The promptness of the Appellant’s application. The Judge concluded that the breach was on 23 December 2022 when the claim was issued and the application for relief from sanction was dated the 10 January 2024. The Judge recorded his opinion that it appeared that the application for relief was only prompted by the Respondent’s application to strike out for the failure to comply with CPR 8.5(1).

iv) The prejudice suffered by the Respondent. The Judge referred to this as being “some prejudice”, although he agreed that it was “not substantial in and of itself.”

v) The delay in the proceedings. This was referred to as “huge” as a result of the Appellant failing to use the Respondent’s Onslow Road Address and that if relief from sanction was given there would be further delay because, the Judge stated, there would be an ongoing issue of service on the 2^nd of the 3^rd defendants. The Judge stated that: “delay always causes some amount of prejudice to a party, albeit a delay is not always unreasonable.”

vi) The overriding objective and the Judge did not agree with the Appellant’s admission that the Respondent would avoid a successful claim and the only remedy available to the Appellant was to pursue her solicitors for negligence and that would cause additional trouble for the court. The Judge stated that if the Appellant had a claim against her solicitors and it was clear-cut then that could be accepted, but the Judge stated: “I do not need to make a judgement on that issue but would still leave the [Appellant] options which are available to her if I were not to grant relief from sanctions.”

vii) The pre-action timescale being 7 months or so before the claim was issued without good reason for issuing expeditiously. The Judge discussed the value of the claim between £2,100 and £6,300 as not a “huge sum of money”. The Judge referred to the significant number of orders from the court, 2 applications and still not being “further along with getting towards final hearing”. The Judge stated he needed to deal with matters proportionately and stated that: “we cannot move forward in any event today even if I were to grant relief from sanction because of the issue of service on the 2^nd and 3^rd defendants”.

1. The Judge declined to grant relief from sanction and struck out the claim as there was no evidence upon which the Appellant could succeed.

THE CLAIMANT’S APPLICATION TO AMEND THE APPEAL NOTICE

The claimant appealed.  The Skeleton Argument in support of the appeal had an additional ground that was not dealt with in the Notice of Appeal.  The claimant needed relief from sanctions to run that argument on appeal. That application was granted. However to little avail. The claimant had not properly served the claim form.

1. 1. CPR 52.17 requires the court’s permission to amend an appeal notice. The notes to the White Book at paragraph 52.17.1 indicate that where the proposed amendment raises something argued in the lower court, if the application is made promptly and it may not prejudice the other parties it may be permitted, subject to general principles governing amendments. The principles on an appeal on a point not raised at trial are identified in the White Book at paragraph 52.21.1.1. Referring to the authorities, the paragraph (insofar as it is relevant to this case) states the appellate court will be cautious in allowing a new point to be raised, but where that is a question of law the appellate court will only allow it to be raised if 3 criteria are satisfied. First, the other party has had adequate time to deal with the point. Secondly, the other party has not acted to its detriment on the basis of the failure to raise the point earlier and thirdly, the other party can be adequately protected in costs.

1. 1. I granted permission to appeal at an oral hearing on 14 November 2024 where the argument was based upon the skeleton argument. No application to amend the grounds of appeal was made and my order does not include such permission. During the hearing of the appeal, Mr McKie orally applied for permission to amend the Grounds and that was opposed by Mr Bishop. Mr McKie’s argument was that the Respondent had been fully aware since November 2024 of the skeleton argument and the points that it raised. It was in the interests of justice to allow the argument on section 48 the Landlord and Tenant Act 1987 (the “Section 48 Ground”). It was clear that it was the basis for permission to appeal being granted and the Respondent had dealt with it in her skeleton argument. None of the other matters had come as a surprise to the Respondent and they had been dealt with in her skeleton. Mr Bishop submitted that the arguments in the Appellant’s skeleton argument that I have referred to at paragraph 20 (ii) above were not in the Grounds. As to the Section 48 Ground, it was not raised and it should have been. It been argued before another District Judge by a different counsel in a hearing in October 2023. This was therefore not a case where a new counsel discovered a new point. Mr Bishop also stated that he had not been provided with the skeleton argument until 3 February 2025 and he was taken by surprise over the Section 48 Ground. He had to amend his skeleton argument. However, he accepted that he had had time to deal with it.

1. 1. During the hearing, I was not specifically addressed on the application of the tests in Denton to such an application. However, after the hearing I gave the parties an opportunity to deal with this in writing. Mr McKie accepted that the principles in Denton were applicable. He accepted that it was a serious and significant breach. However, he said there was a good reason, which was the matter was considered as part of counsel’s later skeleton argument and the issue was developed in that way, which is not uncommon when drafting updated arguments to put the case in a slightly different way from that raised in the original grounds. On the 3^rd stage of Denton, Mr McKie said there was no prejudice to the Respondent given that they been able to fully develop their submissions in response to these amended points at the hearing and provided a full response to the Appellant’s case. The points had been in the oral renewed application for permission to appeal and it would be in the interests of justice that the Appellant should be able to rely upon the amended grounds for the purposes the full appeal hearing.

1. 1. Mr Bishop’s submissions were that there was no evidence about why the breach occurred. An argument that grounds of appeal often change/develop was not a good reason. As to stage 3 of the test, this was a relief from sanction application in a relief from sanction case and was not proportionate bearing in mind the value of the claim. The application was not prompt. My order for directions for the appeal had been breached by late service of the skeleton argument and Mr Bishop’s time to deal with the issue was restricted and this is one more breach of the CPR in a case with several such breaches.

1. 1. There was a further development at the hearing of the appeal in that Mr McKie confirmed that he was abandoning the argument set out in Ground 2 of the appeal as originally drafted. In other words, in relation to service of the claim form he solely relied upon the Section 48 Ground.

1. 1. CPR 3.9 concerns relief from sanction and states:

“(1) 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.

(2) An application for relief must be supported by evidence.”

1. 1. The test in Denton and others v TH White Ltd [2014] EWCA Civ 906 is well known in its application to CPR 3.9. The first stage is to identify and assess the seriousness and significance of the failure to comply with any rule, practice direction or court order which engages rule 3.9(1). The second stage is to consider why the default occurred. The third stage is to evaluate all the circumstances of the case, so as to enable the court to deal justly with the application including factors in CPR3.9(1) (a) and (b).

1. 1. Ground 2, 3 and 4 as originally drafted raise issues that go to the exercise of the Judge’s discretion. The factors set out at paragraph 20(ii) above are not specified within those grounds of appeal, but they are an amplification of the same argument, namely that relevant matters were not taken into account. The Section 48 Ground was not argued in the court below, but the Respondent has dealt with the point and has not acted to her detriment and could be adequately protected in costs, if necessary. Although Mr Bishop argued that the Section 48 Ground should have been made before the Judge, it was not. However, I will take this argument into account when it comes to the application of the 3 stages in Denton.

1. 1. Turning to those stages now, it is accepted by the Appellant that the failure to make the application earlier was serious and significant. I do not accept that there is a good reason for failing to deal with this earlier in relation to all of the proposed amendments. Once the argument is identified an application should have been made to amend the grounds of appeal. The whole purpose being to make sure that the parties know what argument they have to meet on the appeal. It goes to compliance with the overriding objective of dealing with matters fairly and at proportionate cost. Turning to the 3^rd stage of the Denton test the following features are against allowing the amendment. There has been a failure to comply with the rules, particularly in the context of a case where the issue on appeal concerns a failure to comply with the rules by the Appellant. The are a number of breaches of the CPR in the case. Additional cost will have been incurred by the Respondent in amending the skeleton argument. The application was not made formally and was not made promptly. I do not accept that because I gave permission to appeal without identifying the amendments that in some way absolves the Appellant from first, pointing out the amendments during the oral permission hearing and secondly, making a prompt formal application to amend. This is even more pertinent because the Respondent was not present at the oral permission hearing (and for the avoidance of doubt there was no obligation on the Respondent to be present). In addition, the breach was serious and significant and there was an absence of a good reason, as I have found. I also bear in mind here for the Section 48 Ground that this was not a brand-new point, it having been raised at the application in October 2023. The factors in favour of granting relief from sanction are that without doing so the Appellant’s claim will fail as the Section 48 Ground, if not permitted to be advanced, will determine the appeal. The Section 48 Ground and the matters in paragraph 20 (ii) were matters on which I considered there to be a real prospect of success at the permission to appeal hearing and I should consider whether it is right to deprive the Appellant of advancing those arguments at the full appeal. Furthermore, albeit at short notice, the Respondent has been able to deal with the arguments that were raised.

1. The circumstances are such that I consider it would be within the range of acceptable decisions to refuse relief from sanction, given the significant failure to comply with the rules in relation to appeals and lack of promptness, notwithstanding the factors that are in favour of granting relief that I have identified above. However, I consider that it would be too Draconian a step to prohibit the Appellant from advancing these arguments at the appeal, given that the Respondent has been able to deal with them. The failure to comply with the CPR and directions lies with her legal advisers and she should not be debarred from making arguments that I have previously considered had a real prospect of success when such a procedural step would resolve the appeal against her. Therefore, taking into account the points I have raised above I grant permission to amend the grounds to include the Section 48 Ground and the matters at paragraph 20 (ii).

SERVICE ON THE DEFENDANT

The judge rejected the claimant’s argument that she could rely on s.48 of the Landlord and Tenant Act 1987.   The claimant was a former tenant of the defendant.    In order to rely on s.48 the relationship had to be current.

1. 1. Mr McKie’s submissions were that section 48 of the Landlord and Tenant Act 1987 was clear and there was nothing to the contrary in the statute. Where the statute provided that the landlord must give notice then it was incumbent upon the landlord, when he or she changed their address, even as a former landlord, to provide a further notice of the address to which documents should be served. Furthermore, on the evidence there was no suggestion that the Property address or Michels Row Address were wrong and the Appellant had not provided a response to any pre-action correspondence. The Respondent’s position that the other set of proceedings meant that the Appellant should have looked at the Onslow Road Address as the last known address, but this ignored the interplay between CPR 6.9 and 6.8. CPR 6.8 contained specific provisions about serving upon a landlord. There was no authority and nothing in the CPR to state that section 48 was no longer applicable to a former tenant and therefore that the Appellant was not entitled to rely upon it for service. The argument by the Respondent that it was only applicable whilst the relationship of landlord and tenant was in existence was misconceived and the answer was found within section 48 and CPR 6.8.

1. 1. Mr Bishop’s submissions were that the lease came to an end on 7 January 2020 the claim form was issued two years later. Even if section 48 continued to be applicable the Respondent as landlord had given further notice of her new address by virtue of the claim form in the case number G0QZ53E1. However, Mr Bishop submitted that there was no existing landlord and tenant relationship and that there was no obligation on the tenant to give an address: how could a landlord serve any updated address under section 48? The proposal by the Appellant was not a practical one. In any case, the wording of CPR 6.8 referred to “a tenant” and “a landlord” which was not consistent with a “former tenant” and/or “former landlord”. The purpose of section 48 was to deal with service charge notices under the statute and the clear intention was to know the address of the landlord to deal with matters under the Landlord and Tenant Act 1987 Act. There was no wording to support an argument that it applied to a former relationship. To interpret CPR 6.8 to apply to former relationships would be to strain the construction and create an unworkable situation.

1. 1. Section 48 states that the address given applies as the address for service of notices and: “including notices in proceedings”. In other words, it goes beyond just notices in and under the act itself. Similarly, CPR 6.8 states that address can be used “in any claim” and its use is not restricted to claims under the Landlord and Tenant Act 1987 between a tenant and a landlord. The purpose of CPR 6.8 is set out in the heading to the rule namely that service can be affected at an address given by defendant where the defendant is either a business within the UK and has given the address for that purpose or is a landlord who has provided an address under section 48. To say that this provision covers a former landlord is, it seems to me, contrary to the drafting of the rule. The drafting envisages a current relationship between a business and a claimant under CPR6.8(a) as the address for service must have been provided for the purposes of the proceedings. This supports an interpretation that the relationship between a landlord and tenant must also be current. Furthermore, the phrasing of any claim by “a tenant” against “a landlord” supports a current relationship. In this case if the question had been asked: is this a claim between a tenant and a landlord the answer would have been “no”. This is a claim by a former tenant against a former landlord. I am reinforced in this conclusion by the practical difficulties that Mr Bishop identified if my interpretation was not correct.

1. 1. In any case, even if my conclusion above is wrong, I find that adequate notice was given by the Respondent of her address for service under section 48 by virtue of the address that she gave on the claim form for the claim G0QZ53E1.

1. Accordingly, I dismiss this ground of appeal and it follows that the claim was never served and is therefore void. The Respondent is therefore successful in upholding the Judge’s order on the Ground she advanced in the Respondent’s Notice.