Relief From Court Sanctions

Supreme Court agrees that applicants must demonstrate a "material change of circumstances" in order for relief from sanctions to be granted following a previous refusal of relief

Thevarajah v Riordan & Ors (2015)

In a rare judgment by the Supreme Court on when courts are entitled to refuse second applications for relief from court sanctions, it clarified that applicants must demonstrate that there has been a material change of circumstances (such as inheritance/liquidation) following the first refusal of relief, in order to succeed on the second application. Merely complying with an unless order, (non-compliance with which led to the first application for relief), is not sufficient to amount to such a material change in circumstances.

The appellants, Mr John Riordan & Others entered into a contract with the respondent businessman Mr Thavatheva Thevarajah, who issued proceedings seeking specific performance of the contract. He obtained a freezing order which required Riordan & Ors to provide disclosure relating to their assets, They failed to comply and the judge made an "unless" order, providing that they would be debarred from defending the claim if they did not provide disclosure by a specified date. They did not do so and the judge debarred them from defending the claim and dismissed their application for relief from sanctions. Some two months later, Riordan & Ors made a second application for relief from sanctions, the day before the trial was due to start. Their application was accompanied by a lengthy affidavit, purporting to provide full disclosure. The deputy judge discharged the debarring order. However, the Court of Appeal restored the debarring order, holding that because the first application had already been refused, rule 3.1(7) of the Civil Procedure Rules applied and the deputy judge therefore could not accede to the second application unless there had been "a material change of circumstances", which there had not been.

Agreeing with the Court of Appeal and dismissing the appeal, the Supreme Court held that CPR r.3.1(7) applied to the second application for relief from sanctions, requiring Riordan & Ors to show that there had been a material change of circumstances since the first relief application. The deputy judge had been effectively asked to "vary or revoke" the debarring order. Even if r.3.1(7) did not apply, as a matter of ordinary...