Civil appeal – Judgment – Court refusing appellant’s application to set aside order for damages made in her absence – Whether appellant entitled to appeal order out of time — Appeal dismissed – Application refused
The appellant purchased a property from the respondents on terms that they could live there for the rest of their lives. The bank agreed to lend the appellant £238,000 secured by way of a first legal charge over the property. The appellant was registered as the proprietor and the bank’s charge was registered against the title.
In 2006, on discovering that the arrangement was fraudulent, the bank brought possession proceedings against the respondents as the occupiers of the property and the appellant as the registered proprietor. The respondents defended the claim and counterclaimed against the appellant seeking rescission of the transfer of the property to her and rectification of the register to re-register them as the owners. Although the appellant took no part in the proceedings, the court made an order rescinding the sale of the property and ordered her to pay almost £300,000 to the bank and damages to the respondents.
The appellant’s application to set aside the order under CPR 39.3 was refused on the ground that she had failed to satisfy two of the three requirements in CPR 39.3(5), namely that she had failed to act promptly after discovering that the judgment had been given and had not provided a sufficiently good reason for not attending the trial.
The appellant appealed against the judge’s refusal to set aside the order and applied for permission to appeal out of time against the original order made in her absence. Issues arose as to the relationship between an application to set aside an order under CPR 39.3 and the right of appeal under CPR 52.
Held: The appeal was dismissed. The application was refused.
CPR 39.3 provided a defendant with the opportunity to present its case to a judge. If it had no good reason for missing the trial or failed promptly to apply to set aside an order, it would lose the chance afforded by the rules to set aside the original judgment and present its case at a rehearing. If the defendant failed to persuade the judge at a CPR 39.3 hearing that it would have an arguable case at a rehearing, setting aside the original judgment would be pointless.
Although the purpose of CPR 39.3 was apparent, the relationship between a defendant’s application under CPR 39.3 to set aside an order and an attempt to appeal against it was more difficult. The following guidelines would assist:
Where the defendant sought a new trial on the ground of its non-attendance at the original trial, it should, even though it might have other possible grounds of appeal, proceed under CPR 39.3, provided that it reasonably believed that it could satisfy the three requirements of CPR 39.3(5). If the defendant failed to establish a good reason for not attending the trial and/or to make the CPR 39.3 application promptly, it could none the less seek to appeal against the trial judge’s decision in the same way as any other defendant.
In such circumstances, its right to appeal the trial judge’s order should be no different from what it would have been had the application not been made. Unless the defendant appealed against the dismissal of the CPR 39.3 application, it would be unable to argue that the judgment should be set aside because it was given in its absence.
Where a defendant made a CPR 39.3 application that failed on the ground that its arguments on the substantive issues would have no prospect of succeeding at a retrial, it would not be entitled to raise the same arguments on appeal. The proper course would be to challenge the refusal of the CPR 39.3 application on that ground.
If the CPR 39.3 application failed, the defendant would find it difficult to contend, by way of appeal against the trial judge’s order, that it should be entitled to rely on evidence that was not before the trial judge or that it should have a retrial. In such cases, the appellate court’s approach would depend on the facts. If the defendant appealed the trial judge’s decision and sought to submit new evidence or an order for a retrial, similar considerations would apply. However, since a determination as to whether the three requirements of CPR 39.3(5) were met would not have been made, the appellate court might itself have to reach that decision.
In most cases, a judge hearing an application under CPR 39.3 should not allow oral evidence. He or she could properly: (i) accept all the factual evidence given by the applicant, and allow the application; (ii) dismiss the application even if the applicant’s evidence was true; (iii) allow the application even though some of the applicant’s evidence was or might be untrue; or (iv) reject some or all of the applicant’s evidence on the basis that it was inconsistent or inherently improbable, and accordingly dismiss the application. In the instant application, option (ii) applied on the basis that the application had not been made promptly. If it had not applied, option (iv) would be applicable, on the basis that the judge did not accept that the applicant was at the time unaware that the case was to be heard or that she remained unaware for a further 18 months.
Joanna Shaw (instructed by Andersons Solicitors, of Croydon) appeared for the appellant; Gary Lidington (instructed by Aldridge & Brownlee Solicitors, of Bournemouth) appeared for the respondents; the bank did not appear and was not represented.
Eileen O’Grady, barrister
