No Relief For Late Filed Costs Budget | Application To Set Aside Appeal Order Refused

The First Respondent (Deng) argued that:

1. Bahia 2 should be admitted as it provided important evidence on notice of the appeal hearing.
2. The statement reiterated the factual position that was known to all parties regarding the receipt of the court’s email.
3. The second part of Bahia 2 would enable the First Respondent to respond properly to the appeal if Saini J’s order was set aside.
4. The admission of Bahia 2 was necessary for the court to deal justly with the application.

The Appellants (Zhang and Chen) argued that:

1. Bahia 2 should not be admitted due to its very late service, well beyond the 23 July 2024 deadline set by Saini J.
2. Alternatively, only the first part of Bahia 2 should be admitted, dealing with the notice of the appeal hearing.
3. The second part of Bahia 2, challenging the approved note of the hearing before the Master, was unfair and prejudicial to the Appellants.
4. The First Respondent had previously been given the opportunity to comment on the draft note of the hearing but had not engaged with that process.
5. Admitting the late statement would be inconsistent with the overriding objective, particularly given the pattern of non-compliance by the First Respondent.

Decision

Mrs Justice Hill decided to admit the late witness statement (Bahia 2) from the First Respondent’s solicitor, applying the Denton test:

“I accept that the very late service of Bahia 2 is a serious or significant breach of Saini J’s 25 June 2024 order. It involved the First Respondent providing evidence the day before the hearing that should have been available some seven weeks before it. […] However, the first part of Bahia 2 is relatively brief. Effectively, all it does is show that the First Respondent now accepts the position as advanced by the Appellants in terms of the 22 December 2023 communication from the court. […] Accordingly, evaluating all the circumstances of the case, I consider it necessary to admit the first part of Bahia 1 to enable me to deal justly with the application.” [46-49]

She then determined that the First Respondent did not have a good reason for not attending the appeal hearing:

“I am satisfied that Mr Bahia has provided “genuine and honest” evidence that he was unaware of the appeal hearing. However, […] that in itself is not sufficient to make a “good” reason: it is necessary to ask why that was. The answer is, on Mr Bahia’s evidence, that he did not read the 22 December 2023 email from the court giving notice of the hearing. […] However the Court of Appeal was clear in Mitchell at [41] that overwork alone is unlikely to assist a solicitor in obtaining relief from sanctions: “41…mere overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason. […] Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all.”” [58-62]

Furthermore, she found that the First Respondent had weak prospects on the merits of the appeal:

“As to the merits of the appeal, the evidence from Mr Shi clearly shows that the First Respondent did not properly file and serve the costs budget dated 2 May 2023. The court records make clear it was not filed. Mr Shi’s evidence and correspondence shows that it was not properly served on the Appellants. […] Accordingly there is a very good argument that the Master was in fact misled in being told both by Mr Bahia in his evidence in support of the relief from sanctions application, and by the First Respondent’s counsel at the CCMC (no doubt acting on instructions), that it had been both filed and served.” [67-69]

Mrs Justice Hill concluded that setting aside Saini J’s order would be inconsistent with the overriding objective:

“The first aspect of the Yeganeh guidance, drawn from MA Lloyd & Sons Ltd, makes clear that regard must be had to the overriding objective and the need, where reasonably practicable, to allot any given case an appropriate share of the court’s resources. The issue of the First Respondent’s costs budget has already, in my judgment, comfortably exceeded the allocation of court resources that it deserves, in light of the procedural history set out above.” [70]

In her final determination, she dismissed the application to set aside Saini J’s order:

“For all these reasons I am satisfied that it is not appropriate to exercise the discretion to set aside Saini J’s 20 March 2024 order: other than promptness, my analysis of each of the other factors and tests set out above mitigates against granting the order sought by the First Respondent. […] Accordingly I grant the First Respondent permission to rely on Bahia 2 on the application, but dismiss the application on its merits. The order Saini J made therefore stands. The Claimant is refused permission to rely upon his Precedent H Form dated 2 May 2023 and pursuant to CPR 3.14 is treated as having filed a budget comprising only the applicable court fees.” [72-74]