Set aside or appeal? Choose your remedy with care

10 Apr 2012


The interrelation between a party’s right to apply to set aside an order made in his absence and his right to appeal is one of recognised difficulty.  Until recently, it had received little attention: a decision at first instance in Tennero Ltd v Arnold [2007] 1 WLR 1025 and one on appeal in Attorney General of Zambia v Meer Care & Desai [2008] EWCA Civ 754 (the "Boutique Basile" case).  In 2011, however, the Court of Appeal had cause to reconsider the interplay of Civil Procedure Rules ("CPR") 39.3 and 52 in Bank of Scotland plc v Pereira [2011] EWCA Civ 241 [2011] 1 WLR 2391. 

The Civil Procedure Rules 1998

By CPR r.52, a party may appeal an order whether he was present at or absent from the hearing at which the order was made.  In the event that he was absent, however, the CPR provide him with a potential alternative: an application to set aside the order made in his absence.

The rule enabling the application depends on the hearing at which the order was made.  If a trial, CPR r.39.3 applies. Otherwise, the alternative lies in the court’s power under CPR r.3.1(2)(m) to make any order for the purposes of managing a case or furthering the overriding objective of the CPR: Forcelux v Binnie [2009] EWCA Civ 854; [2010] H.L.R. 20.  In that case, the court will apply the criteria of CPR rr.39.3(5) and 3.9: Hackney LBC v Findlay [2011] EWCA Civ 8; [2011] H.L.R. 15.

Pre-Pereira case law

In 2007, Tennero had decided, in essence, that CPR rr.39.3 and 52 were mutually exclusive.  If a party wished to challenge an order made in his absence, he had to apply to set it aside rather than appeal.  CPR r.39.3, not 52, provided the absentee with his remedy.  It was abusive for him to appeal if he hadn’t applied to set the order aside.  It was abusive for him to try both at the same time and it was certainly abusive for him to appeal after the failure of a set-aside application.

The issue was revisited, however, in Boutique Basile.  Mr Basile had not attended the trial of a claim brought against him by the Attorney General of Zambia.  He appealed the order made at trial and applied for permission to adduce evidence in the appeal, rather than being required to apply for a re-trial.  Lloyd LJ accepted that Tennero could be distinguished (here, a nod of the head to Hardwicke’s Nigel Jones QC and Paul Reed, as he then was).  Irrespective of the evidence on which he now sought to rely, the grounds of Mr Basile’s appeal extended beyond the scope of the CPR r.39.3 criteria.   In Tennero by contrast, the sole argument the appellant could have maintained on appeal was that the judge had been wrong to refuse his adjournment application.  Lloyd LJ did not disagree with anything in the Tennero judgment given the facts that Jack J had had to consider: the appellant there had had no basis for an appeal beyond the considerations of CPR r.39.3 and had taken the proper course of applying under CPR r.39.3 before improperly seeking to appeal the trial judge’s order.

Bank of Scotland plc v Pereira

The Court of Appeal sought to clarify the position some 3 years later in Pereira.  The Bank had claimed for possession of property owned by Ms Pereira and occupied by the second and third defendants, Mr and Mrs Pain. The Pains defended the claim and counterclaimed against Ms Pereira for remedies relating to the transfer of the property from them to her.  Ms Pereira did not attend the hearing at which the judge granted the remedies sought by both the Bank and the Pains.

Two years later, she applied under CPR r.39.3 to set aside part of the order.   The judge found that her application had not been made promptly and that she did not have a good reason for not attending the hearing.  Accordingly, she was unable to satisfy at least two of the criteria of CPR r.39.3(5).  He also found that she would have had difficulty with the third.  Her application was therefore refused.  Ms Pereira appealed that refusal.  She also sought permission to appeal – over two years out of time – against the original order.  Some, but not all of her grounds related to the fact that she had not attended the original hearing. 

The Court of Appeal heard her appeals together.  It explained that CPR r.39.3, “…..exists essentially to ensure that a defendant has an opportunity to present her case to a judge. If she had no good reason for not attending the trial, she has had the opportunity to appear and did not take it. If she fails to apply to set aside the order promptly, she has also lost the opportunity afforded to her by the rules to set aside the original judgment, and present her case at a rehearing. If she fails to persuade the judge at the CPR r 39.3 hearing that she would have an arguable case at a rehearing, setting aside the original judgment would be pointless and anyway she has had the opportunity to put her case to a judge, namely the judge hearing the CPR r 39.3 application.” [35]

The rules governing the court’s discretion under CPR r.39.3 were now clear [24-26].  Following Regency Rolls Ltd v Carnall (unreported) 16th October 2000 CA, the court no longer had a broad discretion to grant a set-aside application: all three pre-conditions in CPR r.39.3(5) had to be satisfied.  If one or more of them was not satisfied, the application would have to be refused.  By contrast, if each were satisfied, it would be a very exceptional and unusual case in which the court did not then set aside the order.  The strictness of the rule, though plain, was modified by three factors.

First, what constituted promptness and good reason for not attending was fact-sensitive.  The court should, in many cases, not be very rigorous when considering the applicant’s conduct nor pre-judge his case when considering the third condition, particularly if it involved issues of fact.  Second, CPR r.39.3 had to be applied in light of the overriding objective.  Third, the fact that an application under CPR r.39.3 had failed did not prevent an applicant seeking permission to appeal.   The applicant might be well advised to issue both a CPR r 39.3 application and an application for permission to appeal at the same time, or to get an agreement from the other party for an extension of time for an appeal.

However, while the purpose of CPR r.39.3 was readily apparent, the relationship between a set-aside application and the right to appeal was more difficult.  Though Lord Neuberger considered it impossible to lay down rules applicable to every case, 6 guidelines would apply in the great majority.

  • If a party seeks a new trial because he did not attend the first then, even though he may have other grounds of appeal, he should normally use CPR r.39.3, provided he reasonably believes he can meet its three conditions.  If he appeals without first applying to set aside, when he could have made a set-aside application, the appeal court could still entertain his appeal, though following Pereira, it would normally require unusual facts before it would do so.
  • If he does not have a good reason for not attending trial and/or has not acted promptly, a set-aside application would be pointless. In that case, he can appeal in the same way as any other party.
  • If he makes a set-aside application, which fails because he had no good reason for not attending trial and/or because he did not apply promptly, his right to appeal should, in principle, be no different from what it would have been if he had not made the application.  Unless he appeals the application’s dismissal, however, he cannot argue on appeal that the order should be set aside because it was made in his absence.
  • If his set-aside application fails because his arguments would have no prospect of succeeding at trial, then he should not normally be entitled to raise the same arguments in any appeal against the judge’s original decision.  The proper course would usually be to challenge the refusal of the set-aside application on this ground. However, there would be exceptional cases, e.g. where the application was also dismissed because he had not acted promptly, or had no good reason for not attending trial.
  • If his set-aside application fails, he will normally be in severe difficulty contending, on appeal, that he should be entitled to rely on evidence, which was not before the judge, or that he should have a retrial.  In such cases, the appeal court’s approach would depend to an extent on the facts.  In general, the court would consider the requirements of CPR r.39.3 and also the post-CPR application of the Ladd v Marshall [1954] 1 WLR 1489 principles.
  • If he makes no set-aside application, such that the court has never determined whether the requirements of CPR r.39.3(5) have been met, but appeals the judge’s order and seeks to adduce new evidence or an order for a retrial, then the appellate court may have to determine that issue for itself, unless it decides he should first have applied to set aside the judge’s order, in which case it may decide the issue itself, remit the issue to the court below as a set-aside application, or make some other appropriate order.

Agreeing with Lord Neuberger MR, Lloyd LJ summarised the position: “The existence of the remedy under rule 39.3(3) does not affect the party’s right to appeal directly against the order. But if and to the extent that the grounds relied on in support of the appeal are matters within the scope of rule 39.3(3), and in particular within rule 39.3(5)(a)(b), then the same approach should be adopted on an appeal as would be applied on an application under the rule.” [77]

In view of the above, the court dismissed Ms Pereira’s applications for permission.  The only arguable grounds of her appeal against the original order were grounds related to her absence from the trial but, problematically for her, the court had upheld the refusal of her set-aside application.  Secondly, even if the court had had an unfettered discretion, the considerations of CPR r.3.9, the lateness of the appeal, the importance of finality, and the fact that the prejudice to Ms Pereira was not as great as had first appeared, weighed against permitting her an extension of time to appeal.


Following Pereira, it is now clear, contrary to early dicta in Tennero, that the remedies of set-aside and appeal are not mutually exclusive.  Nevertheless, an absentee party, who reasonably believes he can meet the criteria of CPR r.39.3(5), will be expected – ordinarily – to apply in the first instance to set aside the order made in his absence rather than appealing under CPR r.52.  Failure to do so in future is likely to expose the applicant to costs.  He is unlikely to find assistance in the benevolent approach taken by the Court of Appeal in recent post-Pereira cases such as Williams v Hinton [2011] EWCA Civ 1123, Howard v Stanton [2011] EWCA Civ 1481 and Hardy v Haselden [2011] EWCA Civ 1387 [2011] NPC 122.  In both Williams and Howard, appeals had been issued post-Pereira, a factor that weighed heavily in the court’s decision to hear the appeals on their merits.  And Hardy, in which the original order was clearly wrong, appears to have been treated – albeit not expressly – as an exception to the norm within the meaning of Pereira guideline 4.  There remains scope for argument about the circumstances – such as those in Boutique Basile – in which an absentee party might justifiably appeal directly against an order made in his absence or follow an unsuccessful set-aside application with an appeal.  Following Pereira, however, he would be well advised to choose his remedy with care.


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