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Legal case

A First Class decision on impecuniosity from the Court of Appeal

We discuss an appeal against a decision not to grant relief from sanctions in a taxi credit hire claim.

Abdirahim Ali Diriye v (1) Kaltrina Bojaj (2) Quick-Sure Insurance Ltd (2020) Ewca Civ 1400

Executive summary

Credit hire, impecuniosity, pleadings, rules of service, relief from sanctions. This update discusses the decision in the Court of Appeal in Diriye v Bojaj & Quick-Sure Insurance Ltd, an appeal against a decision not to grant relief from sanctions in a taxi credit hire claim.


The claimant appealed against a district judge's refusal to grant relief from sanctions following his failure to comply with an Unless Order. The claimant was a taxi driver who had brought a claim for personal injury and credit hire for replacement of his accident-damaged taxi in the sum of £12,048.29. Impecuniosity was alleged within the Particulars of Claim. At first instance the court ordered the claimant to file a Reply to the Defence by 4pm on 4 April 2018 setting out all facts in support of any assertion of impecuniosity.

The reply was recorded as having been posted at 17.46 on 4 April 2018 using Royal Mail’s ‘Signed For 1st Class’ service, which aims to deliver items the next working day after posting. The Reply was delivered and signed for on 9 April 2018. The Reply repeated the claimant's allegation of impecuniosity but did not include any supporting evidence. Two months later the claimant applied for relief from sanctions. The application for relief was dismissed, the judge finding that CPR 6.26 did not apply because service effected by “Signed For 1st Class” post was not the equivalent of first-class post because of the requirement that the document be signed for. Applying the three stage ‘Denton’ test, it was found that the application had not been made promptly, the Reply provided no details of the claimant’s income and there was no reason why information relating to impecuniosity could not have been collated.

On first appeal, HHJ Latham upheld the decision to dismiss the application for relief, and the claimant appealed to the Court of Appeal.

In unanimously dismissing the appeal, the court found that Royal Mail’s Signed For 1st Class service did fall within deemed service under CPR 6.26, but that this did not alter the court’s finding that it was correct to refuse relief from sanctions because the claimant’s breach was serious and significant. Even if the Reply had been served on time, the document itself failed to comply with the substance of the Unless Order, the application for relief had not been made promptly, being made two months after the breach had occurred and there was no good reason for the breach, the excuses offered being of ‘the dog ate my homework’ variety.


What appears on the face of it to have been an appeal on a procedural point relating to deemed service of a document under CPR 6.26, needs to be viewed in the context in which the court was asked to consider granting relief from sanctions. Coulson LJ, held [para 48] that there was a more fundamental breach of the Unless Order made at first instance than the delay in service: the fact that the Reply provided by the claimant simply did not comply with the substance of the Unless Order. This position was not improved by the claimant’s witness statement which failed to elaborate on the Reply.

It was argued by counsel for the claimant that there was a distinction between a pleading and the evidence required to support it. In essence a claimant in a credit hire claim was entitled to simply state they were impecunious, and then seek to adduce evidence later on to support it.

Coulson LJ rejected this approach stating that there were a number of fundamental errors in that submission: it seeks to get around the clear wording of the Unless Order, which required the pleading of “all facts in support of any assertion” of impecuniosity. Therefore, there was no room for any gap between the pleading and the claimant’s witness statement. It was based on the incorrect notion that a claimant was entitled to advance a “rubbishy case in stages”. It ignored the defendants’ position that they were entitled to know the case they have to meet and the claimant’s argument was not supported on the facts as the Reply did not herald a witness statement with more detailed evidence in support of the allegation of impecuniosity.

When these factors were taken into consideration, it was correct not to grant relief from sanctions. Even though the court found the method of service did fall under CPR 6.26, the Unless Order had still been breached, that breach was serious and significant and the reply itself did not comply with the Unless Order.

The application of this decision is not restricted to taxi claims only, and is a significant reminder of the importance of pleading relevant facts, and the provision of financial disclosure in support of any assertion of impecuniosity.

The impact this case may have on claims for replacement taxis is significant, as often claimants’ evidence does not set out expenditure against income. The decision is another warning from the upper courts that the lower courts should not tolerate a poorly-prepared case and non-compliance with directions. Coulson LJ even states that well run litigation should not result in a trial as a claimant should provide to a defendant all the information needed in order for an informed offer of settlement to be made.

The decision is a useful follow-up for defendant practitioners to advance the argument from the High Court decision in Hussain v EUI. If a claimant is pecunious or has not proved an allegation of impecuniosity, the courts should consider whether a claim for loss of profit is a more appropriate assessment of a claimant’s losses than credit hire charges.

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