[2024] UKUT 33 (LC)

Mr Rainey KC submitted that where a party misleads the Tribunal in its application, a procedural irregularity will have occurred for the purposes of rule 54(2)(d), particularly in circumstances where the Tribunal proceeded on the papers and therefore relied entirely on what the applicant has lodged in support of the application without an opportunity for correction or argument from an opposing party.

Three features of the application were relied on as “misleading” in Southwark’s application to set aside. They were: the assertion in the application form that the applicant was not in breach of the restrictions which it sought to have modified; failure to quote clauses 3(i) and (p) in full in the schedule identifying the clauses of the lease of which modification was sought; and, the assertion in the statement of case that the restrictions secured no practical benefit for Southwark.

In support of the proposition that misleading the Tribunal is a ground for setting aside an order which finally disposes of proceedings, Mr Rainey KC relied on an analogy with the Civil Procedure Rules, and in particular CPR 3.1(7), and on the decision of the Court of Appeal in Tibbles v SIG [2012] 1 WLR 2591.

CPR 3.1(7) states: “A power of the court under these Rules to make an order includes a power to vary or revoke the order.” Mr Rainey suggested that this court rule bears some similarity to the Tribunal’s rules 54. It was also common ground decisions in relation to the CPR may provide guidance on the application of Tribunal procedure rules.

Tibbles was a case under CPR 3.1(7) which concerned the circumstances in which a court could vary or revoke a previous interim decision giving directions. Having referred to earlier decisions on the rule, Rix LJ summarised the position (so far as material to this application) as follows, in para [39]:

“(i)

…. The rule is apparently broad and unfettered, but considerations of finality, the undesirability of allowing litigants to have two bites at the cherry, and the need to avoid undermining the concept of appeal, all push towards a principled curtailment of an otherwise apparently open discretion. Whether that curtailment goes even further in the case of a final order does not arise on this appeal.

(ii)

The cases all warn against an attempt at an exclusive definition of the circumstances in which a principled exercise of the discretion may arise. Subject to that, however, the jurisprudence has laid down firm guidance as to the primary circumstances in which the discretion may, as a matter of principle, be appropriately exercised, namely normally only (a) where there has been a material change of circumstances since the order was made, or (b) where the facts on which the original decision was made were (innocently or otherwise) misstated.

(iii)

It would be dangerous to treat the statement of these primary circumstances, originating with Patten J. and approved in this court, as though it were a statute. That is not how jurisprudence operates, especially where there is a warning against the attempt at exhaustive definition. …………..

(vii)

The cases considered above suggest that the successful invocation of the rule is rare. Exceptional is a dangerous and sometimes misleading word: however, such is the interest of justice in the finality of a court’s orders that it ought normally to take something out of the ordinary to lead to variation or revocation of an order, especially in the absence of a change of circumstances in an interlocutory situation.”

Tibbles therefore indicates that, at least in cases involving an attempt to set aside an interim order of a court, such as an injunction or procedural direction, a misstatement of facts on the basis of which the decision was made, may provide grounds for the court to exercise its discretion. But it also demonstrates that, where there is no material change of circumstances and no prior misleading of the court, the discretion will rarely be successfully invoked. Something unusual is likely to be required to persuade a court to overlook the importance of finality and the undesirability of displacing the proper use of the appeals procedure, and to persuade it to set aside its own order.

However informative this guidance may be when the Tribunal exercises its power to amend, vary or set aside its own case management orders (rule 5(2)), I do not accept that Tibbles provides useful guidance to the Tribunal on the exercise of its discretion under rule 54, which is concerned only with decisions which finally dispose of proceedings. That is for two principal reasons.

First, Tibbles was a case about varying or setting aside procedural directions and specifically did not consider whether an even stricter approach was required in the case of final orders (as the final sentence of sub-paragraph (i) above confirms). The White Book Commentary at 3.1.17.1 and 3.1.17.2 distinguishes between varying or revoking “interim” and “final” orders and in Terry v BCS Corporate Acceptances Ltd & Ors [2018] EWCA Civ 2422, at [75], having referred to Tibbles and cases involving attempts to set aside final orders, Hamblen LJ approved that distinction:

“In summary, the circumstances in which CPR 3.1(7) can be relied upon to vary or revoke an interim order are limited.  Normally, it will require a material change of circumstances since the order was made, or the facts on which the original decision was made being misstated.  General considerations such as these will not, however, justify varying or revoking a final order.  The circumstances in which that will be done are likely to be very rare given the importance of finality.”

If assistance on the application of rule 54 is to be sought by analogy with the CPR, Terry may therefore provide a more reliable comparator than Tibbles, and Terry indicates that “general considerations”, including a misstatement of the facts, will not justify revoking a final order.

Secondly, and more generally, there are significant differences between the procedural rules of courts and tribunals, especially in the context of varying and setting aside decisions. Unlike the CPR, the Tribunal’s Rules distinguish between varying and setting aside case management decisions (rule 5(2)), on the one hand, and setting aside decisions which finally dispose of proceedings (rule 54). Unlike CPR 3.1(7) the latter power is not “broad and unfettered”, and it is not necessary to refer to the CPR jurisprudence to identify the conditions in which it may be exercised. Those conditions are listed in rule 54(2). Only after one of those conditions has been satisfied will the Tribunal consider whether it is in the interests of justice to set aside a final order.

The Tribunal’s rule 54 covers a variety of situations for which the CPR makes specific and quite different provisions. All decisions of the Tribunal which finally dispose of proceedings are judicial decisions, and unlike the CPR the Tribunal’s Rules do not provide for a party to be able to obtain a decision in their favour administratively, in default of some step being taken by another party (as in CPR Pt 12). Nor are separate conditions laid down by the Tribunal’s Rules for setting aside a decision made where a party failed to attend a trial, as are found in CPR 39.3(5); instead rule 54(2)(c) does that job. Thus, rule 54 is intended to have a much wider field of application than CPR 3.1(7) and statements about how rarely an application under the court’s rule may be expected to succeed cannot simply be read across and applied to the Tribunals’ rule.

The Tribunal is also empowered by section 10, Tribunals, Courts and Enforcement Act 2007 to review its own decisions and, where it concludes that a particular error was made, to set them aside without the need for a full onward appeal and to re-decide the matter.

Considerable care should therefore be taken when looking to decisions about the CPR rules on varying or setting aside judgments and orders for assistance on the application of rule 54. But saying that does not diminish the general importance of achieving finality in the resolution of disputes, which is of equal significance to courts and tribunals.

Terry might provide some assistance in identifying cases of “some other procedural irregularity in the proceedings” falling within the residual category in rule 54(2)(d) in which the discretion to set aside may arise. Alternatively, it may shed light on the circumstances in which it will be in the interests of justice to set aside a final decision on the basis of some other procedural irregularity. It is not necessary to consider those refinements in any detail because, on consideration of the facts relied on by Southwark in support of its suggestion that the Tribunal was “misled” into making the order, it is quite clear that they come nowhere near providing a justification for setting it aside.

The Tribunal’s standard form T379 for applications under section 84 asks the applicant whether they are in breach of the restrictions which are the subject of the application. In this case the applicant ticked the box marked “no” in response to that question.

Mr Rainey KC criticised that answer as misleading, but the claimant made no attempt to conceal from the Tribunal either that clause 3(n) required the Lessee to keep the premises open as a “licensed victualling house”, or that the premises were currently closed and had ceased trading. On the contrary, the applicant specifically pleaded in its statement of case (now said to have been settled by leading counsel) that the Black Horse had not been used as a public house since October 2018 and that the failure to use it for that purpose was not a breach of the Lease. The statement of case was supported by a statement of truth confirming that the applicant believed the facts stated in the pleading were true.

I refrain from speculating about how the applicant might have intended to substantiate its pleaded case. It is not necessary to do so, because it is simply impossible to accept Mr Rainey’s proposition that it is a procedural irregularity accurately to plead a set of facts supported by a statement of truth and then to assert a conclusion of mixed fact and law which Southwark would have had the opportunity to refute if its administrative arrangements had not been so chaotic. The statement in form T379 was consistent with the applicant’s pleaded case and there is no reason to consider that the Tribunal overlooked or was misled by it.

The applicant’s statement of case also asserted that the restrictions in the Lease for which modification was sought secured no practical benefit for Southwark or, if they did, that an award of money would provide adequate compensation for the disadvantage it would sustain as a result of the proposed modifications. It is now suggested that that too was a misleading statement which amounted to a procedural irregularity, but it was plainly nothing of the kind. The applicant pleaded the case which it intended to deploy before the Tribunal. It was not an implausible or incomplete case, and it is quite credible that a covenant restricting premises to a use which is no longer commercially viable will be of no value or advantage to a landlord. The suggestion that the Tribunal was misled by it is fanciful.

Finally, Southwark suggests that the Tribunal was misled because clauses 3(i) and (p) were not quoted in full in the schedule identifying the clauses of the lease of which modification was sought. The effect of this selective quotation is said to have been that the Tribunal was persuaded to delete the consent provision from the alienation covenant, when there was no suggestion that Southwark were unreasonably withholding consent, and to delete the whole of the stipulations regarding the manner in which the licensed premises were to be operated. These propositions are completely untenable. The applicant identified specific portions of the covenants which it wished to have modified; it did not ask that any other parts of the Lease be modified. It supplied, from the relevant Land Registry entries, a full copy of the Lease, parts of which were difficult, but not impossible, to read because of the poor quality of the Land Registry document. I have been able to read the text more or less completely, but at the very least it is clear from the copy that each of the relevant covenants includes substantial text which had not been recited in the application and which was therefore not the subject of the proposed modification. The suggestion that the Tribunal was asked to modify parts of the covenant which were not reproduced in the schedule, or that its order had the effect of doing so, is based on a misreading of the application and the order and is wrong.