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Denton test - clarifying "the very breach"

17 March 2016

In the case of British Gas Trading Ltd v Oak Cash & Carry Ltd [2016], the Court of Appeal considered an appeal by the defendant, whose defence was struck out for filing its pre-trial checklist two days late in breach of an unless order, against the lower court's refusal to grant relief from sanctions.

The Court of Appeal applied the 3 stage Denton test of (1) identifying and assessing the seriousness or significance of the very breach; (2) considering why the failure/default occurred; and (3) considering all the circumstances of the case.

The central question that had to be answered for determining the "very breach" under stage 1 of the test was whether the court should look at the breach of the unless order in isolation or also take into account the defendant’s delays in complying with the original order.

Whilst in Denton the majority held that the court should not consider 'other unrelated failures' at stage 1, Jackson LJ clarified that an unless order was usually only made where a breach of a rule of order already existed and so should not be viewed in isolation. When applied to an unless order, "the very breach" meant "the failure to carry out the obligation which was (a) imposed by the original order or rule and (b) extended by the unless order".

The fact that the defendant had failed to comply with an unless order was serious and significant. Adding that to the fact that the defendant’s solicitors’ reasons for non-compliance were not “good reasons” and the defendant’s delay of a month in applying for relief from sanction, the appeal was dismissed.

This case provides some clarity on the meaning of the "very breach" and demonstrates the courts’ strong message to those who fail to comply, particularly where they then delay in seeking relief.

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