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MR D DRAY (instructed by Powell & Co W Midlands B72 1SD) appeared on behalf of the Appellant

The Respondent appeared in person

JUDGMENT

( As Approved by the Court)

Tuesday, 11th July 2000

1.	LORD JUSTICE MORRITT: This is the appeal of the defendants, Broadyard Associates Limited and Mr Borrell, brought with the permission of Brooke LJ from the order of His Honour Judge O'Rorke made on 2nd November 1999 when sitting in the Leicester County Court. Judge O'Rorke declined to reinstate the defence of Broadyard Associates and Mr Borrell, or their counterclaim both of which had been struck out by His Honour Judge Hall on 7th October 1999.
2.	The circumstances giving rise to the appeal are as follows. On 19th October 1992 a lease for 125 years in respect of Flat 2, 50 Melton Road, Leicester, was granted to the claimant, Mr Cank, by the predecessor in title to the freehold reversion of the defendant, Broadyard Associates Limited.
3.	On 2nd April 1998 as Broadyard and Mr Borrell alleged, a section 146 notice was served by them on Mr Cank asserting various breaches of covenant in refusing the landlord access so as to inspect the premises, and for failing to clean the windows once a month. Again according to Broadyard Associates and Mr Borrell on 29th April 1998 they peaceably re-entered the premises and forfeited the lease. None of these allegations was accepted by Mr Cank and he instituted proceedings on 16th June 1999 seeking relief from forfeiture on the footing that the lease had been properly forfeited or damages for a wrongful forfeiture on the footing that they had not properly re-entered and were not entitled to claim any breach of covenant.
4.	Broadyard Associates served its defence on 13th July 1999 and set out in very considerable detail its case in support of its allegation that the lease had been validly forfeited so that the claim for damages could not be sustained. The defence indicated that the claim for relief from forfeiture was not in principle opposed, provided that the Court imposed various conditions as conditions for granting relief with regard to future observation of the covenants and other terms of the lease.
5.	There was an application for interim relief in which various affidavits were sworn on both sides, including one from Mr Borrell sworn on 15th July 1999. That affidavit again went into some detail in respect of the case for Broadyard in relation to the issues raised in the action.
6.	On 19th July 1999 the matter came before Assistant Recorder Wilson. He directed that witness statements should be filed by 23rd August 1999 and he fixed the date for the trial as 25th and 26th November 1999. The reason for the direction with regard to witness statements is not immediately apparent, given that Mr Borrell had sworn a substantial and detailed affidavit; but no doubt it is to take account of the fact that the parties may wish to supplement the affidavit evidence previously filed by reference to subsequent events. Be that as it may that was the order he made.
7.	Mr Cank duly served his witness statement on 12th August 1999 but the witness statement of Mr Borrell was not served as it should have been on 23rd August but was delivered by Mr Borrell personally to Mr Cank's home on either 25th or 26th August (that was the finding of the judge); therefore it was some two or three days late. The witness statement having been served two or three days late was not, as it should have been, filed with the court. That did not occur until 1st October 1999 when it was duly filed with the court, by then of course nearly six weeks late.
8.	On 7th October 1999, Judge Hall, on the application of Mr Cank by letter and in the absence of either Broadyard Associates or Mr Borrell struck out Broadyard's defence for the failure of Broadyard to file its witness statement by 23rd August. It would seem that that order was made by Judge Hall under the provisions of CPR Rule 3.4(2)(c) which entitles a judge to strike out a claim or a defence for failure to comply with an order made in the proceedings.
9.	This prompted an application by Broadyard and Mr Borrell on 14th October 1999 seeking relief from the sanction imposed by Judge Hall. That is authorised by CPR Rule 3.9(1).
10.	The rule to which I have referred enables relief from a sanction imposed for a failure to comply with any rule, practice direction or order to be made subsequently to the court. It provides that the Court will consider all the circumstances including and there is then set out a series of lettered paragraphs of which I should refer to (g) (h) and (i) which are follows:
	"(g)   ...whether the trial date or the likely date can still be met if relief is granted; (h)   the effect which the failure to comply had on each party; and (i)   the effect which the granting of relief would have on each party."
11.	The application came before Judge O'Rorke on 2nd November 1999. He declined to grant relief against the sanction. He confirmed that the counterclaim should be struck out as well as the defence; and having put Mr Cank to his election, directed that the trial on damages should proceed on the basis that the lease was never validly forfeited. In his judgment he referred to the fact that the claim for relief of Mr Cank was:
	"That relief is basically, however he has phrased it, all that is being sought by Mr Cank in this case..."
12.	- that is to say relief against forfeiture,
	"... and it would appear on the face of it that it is resisted by the defendant, but on a careful reading of the defence it appears that an order granting relief from forfeiture is in fact not opposed."
13.	The judge quoted from paragraph 40 of the defence which I have already summarised.
14.	With regard to the application for relief from the sanction he said this:
	"This is not simply a case of a party failing to comply with time limits specifically imposed by the courts, that matter could be overlooked; it is a situation where in my view the conduct of the landlord in the case at first glance appears to be oppressive. The very remedy which is sought against the landlord is one which the landlord concedes, and there is in effect no triable issue of any real substance between these two parties which the court is going to be called upon to decide. In those circumstances, where I find as I have that Mr Borrell has been less than frank in his dealings either with Mr Cank or in his evidence with the court in relation to the service of his statement, the court is, in my view, eminently justified in striking out a defence which, on a careful reading, appears to be no defence at all but a plea that the terms imposed upon Mr Cank when he succeeds in the remedy for which he asks, are terms to be imposed on him, that he complies strictly with the terms of the lease, no more and no less, apart from the element of costs which are claimed in the case.    I therefore do not see there is any justification for overturning the sanction imposed by His Honour Judge Hall."
15.	On 25th November Judge O'Rorke refused Broadyard Associates and Mr Borrell's application for permission to appeal but stayed the proceedings pending an application for permission being made to this court. As I have indicated such permission was granted by Brooke LJ on 10th February 2000.
16.	Counsel for Broadyard has referred us to three of the more recent cases in relation to this branch of the rules. It is necessary I think only to refer to passages from two of them. The first is Biguzzi v Rank Leisure Plc [1999] 1 WLR at 1926. It is not necessary to refer to the facts of that case. Its importance lies in the fact that Lord Woolf, Master of the Rolls, referred to the position under the new procedure rules and referred to Rule 3.42(c) whereunder Judge Hall had struck out the defence in the counterclaim. Lord Woolf said this:
	"Under Rule 3.42(c) a judge has an unqualified discretion to strike out a case such as this where there has been a failure to comply with a rule. The fact that a judge has that power does not mean that in applying the overriding objectives the initial approach will be to strike out the statement of case. The advantage of the CPR over the previous rules is that the court's powers are much broader then they were. In many cases there will be alternatives which enable a case to be dealt with justly without taking the draconian step of striking the case out.    Under the court's duty to manage cases, delays such as have occurred in this case, should, it is hoped, no longer happen. The court's management powers should ensure that this does not occur. But if the court exercises those powers with circumspection, it is also essential that parties do not disregard timetables laid down. If they do so, then the court must make sure that the default does not go unmarked. If the court were to ignore delays which occur, then undoubtedly there will be a return to the previous the culture of regarding time limits as being unimportant."
17.	Referring to the judge's approach and the CPR regime Lord Woolf later on added:
	"Under that approach judges have to be trusted to exercise the wide discretions which they have fairly and justly in all the circumstances, while recognising their responsibility to litigants in general not to allow the same defaults to occur in the future as have occurred in the past. When judges seek to do that, it is important that this court should not interfere unless judges can be shown to have exercised their powers in some way which contravenes the relevant principles."
18.	The other case to which I should make brief reference is Bansal (Hardial Singh) v Cheema (Darbara Singh) an unreported decision of the Court of Appeal on 2nd March this year in which Brooke LJ, having referred to the facts of that case and to the terms of CPR rule 3.9(1) and the discretion conferred on the judge said , at paragraph 27:
	"I am always very reluctant for this court to interfere with a decision made by a judge in the exercise of his case management powers under CPR Part 3. The responsibility for managing these actions is given fairly and squarely to the judge. The role of the Court of Appeal should only be seen as a longstop, to be called in aid when things appear to have gone seriously wrong. If the judge had systematically gone through the list of matters he had to take into account under CPR 3.9(1), and come to the conclusion that the order he was making was a just order, it would be very difficult for this court to interfere with it, because he would manifestly have taken into account, all the matters he was obliged to take into account. A circuit judge in a busy court like the Central County Court will have much greater experience of the problems and difficulties of controlling litigation in that court than this court necessarily has.    I am of the clear view, however, that on this occasion the judge did not do what the rules required of him, and that a substantial injustice was done to him as a result. Accordingly this court should interfere."
19.	Mr Cank who has appeared in person has suggested to us that the delay in the service of the witness statement on him was deliberate in that Mr Borrell wished to see what he, Mr Cank, had said in his witness statement before finalising his own. All I can say with regard to that assertion is that it did not appear to find favour with the judge because he did not accept that as a true view of the facts. It seems, therefore, that that is not a basis on which we should approach this appeal.
20.	It seems to me that the original order of Judge Hall was wrong in principle. The breach relied on was technical in the extreme given that Mr Cank already had the witness statement of Mr Borrell in connection with the interim application. The witness statement which was required to be served on or before 23rd August was in fact delivered to Mr Cank's house on 25th or 26th August. Therefore he had what the order required him to have, albeit only two or three days late. It is true that it had not been filed with the court until 1st October but it had been filed with the court before Judge Hall struck out the defence and subsequently confirmed the strike out of the counterclaim a week later on the 7th October. There had been no suggestion that the hearing date for the trial might go off because of the late service or filing of the witness statement. It appear to be a case where there was absolutely no merit in striking out a defence which was adequately particularised and had been fully supported by the witness statement which had been in possession of Mr Cank for some time.
21.	I am puzzled, therefore, as to why it was that Judge Hall thought it appropriate to take the action he did on the footing of a letter from Mr Cank and no appearance from the defendants to the action. But the appeal we are concerned with is an appeal from the order of Judge O'Rorke, not an appeal from the order of Judge Hall. But it appears to me likewise that Judge O'Rorke erred in principle. He did not appear to have regard to the circumstances in which Judge Hall made his original order. He did not go through the checklist of matters in Rule 3.9, in particular those referred to in paragraphs (g) (h) and (i) which I quoted earlier. Had he done so, he must (I should have thought) have realised that the original sanction was unjustified when it was made but was certainly unjustified by the time the matter came before him. The trial was due to proceed on 25th and 26th November and there had been no suggestion that any late delivery or filing of the witness statement would prejudice that date.
22.	But more than that, it appears to me that Judge O'Rorke misunderstand the nature of the claim that was proceeding and the nature of the defence which Broadyard Associates had submitted. The claim which was proceeding, Mr Cank having been put to his election, was proceeding on the basis that there had been no lawful forfeiture of the lease. The acceptance that Mr Cank should have relief from forfeiture was irrelevant to that because relief from forfeiture would only become germane if the forfeiture had lawfully taken place. Therefore the judge misunderstood the nature of the defence which was put forward, it was a substantive defence to the claim for damages on the footing that the forfeiture had been unlawful.
23.	The admission of relief against forfeiture was on the footing that the forfeiture was lawful. It seems to me, therefore, that the combination of the failure to consider the position as to the justification of the original striking out and the failure to understand the nature of the defence to the claim that was being pursued was such as to make judge O'Rorke's judgment wrong in principle and to produce, in my view, an unjust result.
24.	For my part, therefore, I would allow the appeal and restore the defence in counterclaim as originally served.
25.	LORD JUSTICE MAY: I agree.
26.	MR JUSTICE FORBES: I agree.
	(Appeal allowed; defendants to pay costs of hearing in lower court; costs of both parties to be costs in the action).