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Court of Appeal shows leniency in considering whether to adjourn a trial, or set aside a judgment, on medical grounds

  • United Kingdom
  • Financial services disputes and investigations

24-05-2018

Solanki v Intercity Telecom Ltd and others [2018] EWCA Civ 101 

In this case, the Court of Appeal considered appeals by Mr Solanki on the following points:

  • A refusal by the court to adjourn a trial on health grounds;
  • A refusal by the court to set aside judgment under CPR 39.3 on the basis that Mr Solanki was medically unfit to attend trial; and
  • A niche costs point that this note will not cover. 

The Court of Appeal allowed Mr Solanki’s appeal on all of the above points.

Background

“Following the departure of Mr Solanki, who had been a senior manager at Intercity Telecom Ltd (“IT”), it was alleged by IT that Mr Solanki had breached his contract of employment rights by “downloading highly confidential customer information from their databases onto memory sticks and by using electronically stored information” to solicit customers. Mr Solanki denied wrongdoing but admitted that he had copied information onto memory sticks and so was in contempt of court for breaching the terms of a court order”.

Shortly before trial in February 2015, at which he was not present, Mr Solanki applied for an adjournment on health grounds.  He attached a letter from his GP which stated that he was suffering from severe depression, was experiencing suicidal thoughts, and was medically unfit to represent himself in court.  That application was refused, as was a further application made on the morning of the trial in which Mr Solanki also sought to adduce new witness evidence (which he had also tried to do previously).

His defence and counterclaim were struck out for non-attendance and IT was awarded damages of over £290,000 for breach of contract.

Mr Solanki then applied to set aside the judgment pursuant to CPR 39.3(3) (where a party does not attend and the court gives judgment or makes an order against him, the party who failed to attend may apply for the judgment or order to be set aside).  He also applied to adduce the new witness evidence, and vacate the sanctions hearing regarding his contempt of court.  The application was unsuccessful.

Mr Solanki appealed, on the grounds that his rights under Article 6 of the European Convention on Human Rights had been breached because he was not afforded a fair trial, he was prevented from calling witnesses of fact to rebut the allegations made against him and was not given adequate time for the preparation of his defence.  He also argued that the judge had erred in refusing to set aside the judgment under CPR 39.3(5).

The Court of Appeal’s decision

The Court of Appeal allowed the appeal on all counts, and set aside the previous judgment, directing a new trial in the Circuit Commercial Court.  It held that the circuit judge was wrong to refuse the adjournment and the application to set aside his judgment.  Mr Solanki was given permission to rely on the additional witness evidence.  

The Court of Appeal commented that the judge’s own view, “apparently based on his observation of the appellant in court, was no substitute for the professional medical evidence provided by the general practitioner which clearly demonstrated that the appellant had a genuine history of depression and mental problems, for which he had been prescribed medication over a period of time”.   The Court of Appeal further stated that the judge failed to give satisfactory reasons for his decisions to refuse Mr Solanki’s applications.  The Court of Appeal also stated that the additional evidence might have been of “critical importance” to Mr Solanki’s defence to the claim. 

Adjournment

This was the key issue before the Court of Appeal.

The Court of Appeal followed the case of Teinaz v Wandsworth LBC[1], where it was confirmed that a litigant whose presence is needed for the fair trial of a case, but who is unable to be present through no fault of his own, will usually have to be granted an adjournment.  However, the court would need to be satisfied that the inability of the litigant to be present is genuine, and the onus is on the litigant to prove the need for an adjournment.  

In this case the judge had given no reason why he believed the medical evidence to be inadequate.  It seemed on the face of it that the judge had decided that Mr Solanki was disingenuous in outlining his condition, despite the evidence to the contrary.  In any event, the Court of Appeal noted that, where medical evidence was produced which could be considered to be deficient, it would be more appropriate to order a short adjournment to allow the applicant to remedy that deficiency. 

There was also the issue of Mr Solanki’s application to adduce further witness evidence, which the Court of Appeal deemed to be critical enough to warrant an adjournment.   The Court of Appeal deemed it was fair to allow for an adjournment on the merits, and that it would not prejudice IT.

Setting aside the judgment

The key provisions of the CPR are as follows(CPR 39.3) :

(1) The court may proceed with a trial in the absence of a party but –

(a) if no party attends the trial, it may strike out the whole of the proceedings;

(b) if the claimant does not attend, it may strike out his claim and any defence to counterclaim; and

(c) if a defendant does not attend, it may strike out his defence or counterclaim (or both).

(3) Where a party does not attend and the court gives judgment or makes an order against him, the party who failed to attend may apply for the judgment or order to be set aside.

(4) An application under…paragraph (3) must be supported by evidence.

(5) Where an application is made under paragraph (2) or (3) by a party who failed to attend the trial, the court may grant the application only if the applicant –

(a) acted promptly when he found out that the court had exercised its power to strike out or to enter judgment or make an order against him;

(b) had a good reason for not attending the trial; and

(c) has a reasonable prospect of success at the trial.

The Court of Appeal confirmed that under CPR 39.3(3) when deciding if Mr Solanki had good reason for not attending the trial, paramount importance should be given to dealing with the case justly, as per the overriding objective (CPR 1), and to Mr Solanki’s right to a fair trial, as per the ruling in Bank of Scotland v Pereira[2].  It was held that the assertion of ill health by a sick note will not necessarily be accepted, but a court “should not generally adopt too rigorous an approach” on such applications.  The Court of Appeal applied Pereira when deciding whether Mr Solanki had a good reason for his non-attendance at trial.  This was particularly important where the applicant would have a reasonable prospect of success at trial, because he would have no opportunity to have an adjudication on the merits at all if the application failed.  This case was therefore a rare instance of the denial of justice, leading the Court of Appeal to their decision.   

The Court of Appeal concluded that the first instance judge was undoubtedly wrong to refuse the adjournment and in his refusal to set aside his judgment. .  The judge gave no satisfactory reasons why he regarded the medical evidence supporting the adjournment as inadequate.  From the tone of his language ("a further purported application on the grounds of ill-health") the judge indicated that he thought that the appellant was putting on an act.  However, the Court of Appeal deemed that the judge's own view was no substitute for the professional medical evidence provided by the GP which demonstrated that the appellant had a genuine history of depression and mental problems, for which he had been prescribed medication over a period of time.

The Court of Appeal stated that the judge was correct in considering the fairness to IT in making his decision, but the reality was that by the time Mr Solanki had filed his applications to set aside, his contempt of court had been purged, the relevant materials had been delivered, and Mr Solanki had given undertakings, or agreed to be subject to injunctions, which removed any urgency from the need for an early trial date.  

Finally, the judge had given scant attention to the substance of the application to rely on the additional evidence.  The Court of Appeal opined that Mr Solanki’s Article 6 rights and the irreversible prejudice occasioned to him as a result of the refusal of an adjournment, clearly outweighed the costs and unavoidable inconvenience to IT that would have been occasioned by a short adjournment.

The Court ruled that this case met the conditions to set aside a judgment as per CPR 39.3(5).  The Court stated that Mr Solanki had acted promptly when finding out that the judgment had been made against him; there was good reason for his non-attendance (his medical evidence forwarded by his GP); and the additional evidence he wished to bring had a reasonable prospect of amounting to a successful defence of IT’s claim.  In denying Mr Solanki’s application, the original judge had not dealt with the case justly, in accordance with Mr Solanki’s Article 6 rights or the overriding objective. 

Comment

This decision demonstrates how an appeal court will, when considering a refused application to adjourn, assess the fairness of the decision and not just whether relevant factors were considered.  If an adjournment is applied for, which outlines a good, fair reason for the trial to be adjourned (e.g. satisfactory medical evidence) then an applicant should at the very least be allowed a short adjournment.  That being said, if it is applied for after judgment has been entered, then an application to set aside is more likely to be successful. 

Under an application to set aside a judgment made in the defendant’s absence, the court should consider if the reason for non-attendance was a good one (39.3(5)(b)), precisely the issue on an adjournment application.  However, after the judgment has been entered, the court has to consider the merits of the defence as well (39.3(5)(c)).     

The test for a set aside application is therefore wider, which means that the courts’ approach to the same should be less draconian.  The judge in this case was too draconian in his approach to Mr Solanki and Mr Solanki’s submissions regarding his non-attendance at trial. 

Mr Solanki was assisted in this case by the strength of the proposed additional evidence to materially affect the outcome of the trial.  It also helped that the adjournment did not prejudice IT.  This ruling provides further clarity court’s approach to applications to adjourn and/or set aside. 
 


[1] [2002] EWCA Civ 1040

[2]  [2011] EWCA Civ 241