Court of Appeal overturns decision based on Mitchell by applying Denton principles (Michael Wilson v Sinclair)

Court of Appeal overturns decision based on Mitchell by applying Denton principles (Michael Wilson v Sinclair)

The Court of Appeal, in Michael Wilson & Partners (MWP) v Sinclair, has revoked a lower court’s order under the rarely invoked discretion afforded by Rule 3.1(7) and the Court of Appeal’s guidelines in Tibbles.

It justified this revocation on the ‘truly exceptional’ circumstances of this case, namely the need for the Court of Appeal in Denton to ‘provide further guidance, restating the relevant principles’ within a few months of the decision in Mitchell, the application of which had ‘led to decisions that were manifestly unjust and disproportionate’.

The outcome of that fresh consideration was to make an order under Rule 3.9 granting relief from sanctions and lifting the stay, thereby allowing the appeal to proceed.

Parties who have suffered under the draconian and disproportionate application of Mitchell should, however, not assume they would be equally successful in any application to revoke such draconian orders. The Court of Appeal stressed the appellant’s promptness in applying under Rule 3.1(7) following the decision in Denton had been an important factor.

Practical implications arising from this judgment include:

  • although this decision seemingly opens the door to similar challenges being made by other parties disgruntled by draconian decisions made under the Mitchell principles, the number of successful applications may be limited given the clear indication that an important factor in exercising its discretion under CPR 3.1(7) had been the promptness of the application following the decision in Denton [para 48]
  • if you intend to apply under CPR 3.1(7) on grounds there has been a change in the law or a change in the understanding of the law, act promptly following that change
  • where a claim has been stayed as a 'sanction' following non-compliance with a court order, consider the steps that can be taken to best protect your position. These could include seeking an extension of time in which to comply. In these circumstances the other party could request any extension be subject to an unless order striking out that party's case in the event of continued default
  • factors (a) and (b) under CPR 3.9(1) may be given 'particular weight' but are not to be treated as 'paramount considerations'

For further practical implications and detailed analysis, subscribers to LexisPSL Dispute Resolution can see: Court of Appeal overturns decision based on Mitchell by applying Denton principles (Michael Wilson v Sinclair)Click here for a free trial.

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About the author:

Virginia specialises in general domestic and international commercial litigation, arbitration and alternative dispute resolution.

Virginia trained, qualified and practiced with Pinsent Masons before moving to Marriott Harrison where she continued in practice for a further seven years.

In practice, Virginia acted in a variety of general commercial disputes covering areas including  intellectual property, fraud, defamation, misrepresentation, breach of contract, debt recovery, breach of restrictive covenants and company and shareholders’ disputes.

Virginia is Head of Dispute Resolution at Lexis®PSL and, when not focused on the strategic development and operational requirements of the Dispute Resolution module, her content work focuses on case management and evidence in civil litigation. She also regularly contributes to the LexisNexis Dispute Resolution Blog.