Relief From Sanction: No Relief From The Supreme Court

Since 2013 when the relevant court rules were amended, it has become significantly more difficult to obtain relief from sanction imposed for breach of a court rule, practice direction or court order. It is rare for what amount to case management decisions to find their way to the Supreme Court. But, in Thevarajah v. Riordan [2015] UKSC 78, the Supreme Court had the chance to review the principles in this area. It took the opportunity to approve the current approach by the lower courts and confirmed that it will be especially difficult for a defaulting party to succeed in any attempt to have a "second bite of the cherry" by renewing its relief application.

The facts

Thevarajah and Riordan were in dispute over a share sale agreement. The buyer, Thevarajah, sought specific performance and obtained a freezing order against the seller, Riordan. As part of that order, Riordan had to provide disclosure of assets by a specified date. Riordan failed to comply and the court made an order that, unless Riordan gave the disclosure by 1 July 2013, he would be debarred from defending the claim and his defence would be struck out.

Riordan failed to meet the new deadline. In August 2013 he applied for relief from sanction under CPR 3.9. The court dismissed the application and confirmed the debarring order. Riordan did not appeal against that decision. Instead, some eight weeks later and two days before the trial start date, he made a second application for relief from sanction. On this occasion the judge granted the application, effectively revoking the August order debarring Riordan from defending the claim.

Thevarajah appealed. The Court of Appeal overturned the order granting relief. It held that Riordan's second application involved the exercise of the court's discretion under CPR 3.1(7) because it, in essence, sought variation or revocation of the earlier order. This, in turn, required a material change in circumstances since the court had made that order. Riordan appealed to the Supreme Court.

The relevant court rules

The appeal gave the Supreme Court the opportunity to consider the interplay between an application under CPR 3.9 for relief from sanction and one seeking exercise of the court's discretion under CPR 3.1(7) to vary or revoke an earlier order.

Under rule CPR 3.9 the court, when dealing with an application for relief from any sanction imposed for breach of any rule, practice direction or order, has to consider all the circumstances of the cases so as to enable it to...