Appeal dismissed: helpful guidance on the issue of impecuniosity as well as service

Diriye v Bojaj [04.11.2020]

The outcome of this Court of Appeal case clearly highlights the need for claimants to properly set out and prove an assertion of impecuniosity where credit hire charges are pleaded.


On 30 May 2014 the claimant/appellant, Mr Diriye, a minicab driver, was involved in a road traffic accident with Ms Bojaj. Mr Diriye issued proceedings in October 2017 for personal injuries and special damages which included a credit hire claim in the sum of £12,048.29. In his particulars of claim, Mr Diriye confirmed his impecuniosity position however no further information was provided. It subsequently became apparent that the impecuniosity position was the most important issue between the parties.

On 7 March 2018, at first instance Deputy District Judge Walder provided directions which included an Unless Order. One of the terms of that Order (as set out at paragraph 6 of the judgment) required the claimant (by 4pm on 4 April 2018) to file and serve “a reply to the defence setting out all facts in support of any assertion that the claimant was impecunious at the commencement of and during the hire of the vehicle in question.”

The Reply was posted at 17:36 on 4 April 2018, the appellant used the Royal Mail’s “Signed For 1st Class” service. The respondent’s solicitors did not sign for the Reply until 9 April 2018.

The appellant’s solicitors filed an application for relief from sanctions on 31 May 2018 which was heard on 21 August 2018 by Deputy District Judge Goodman who held that service of the Reply was effected on 9 April 2018 at the point at which the respondent’s solicitors signed for the document.

Upon considering the application for relief DDJ Goodman found that there was no explanation for the breach, the application had not been made promptly and when considering all other circumstances of the case, in accordance with the Denton criteria, he held that was no evidence of the appellant’s income and no reasonable reason as to why the impecuniosity information had not been collated. In the circumstances DDJ Goodman refused the application for relief which meant that the appellant would only be able to recover a maximum of basic hire charges at the trial as opposed to credit hire charges.

The first appeal was heard by His Honour Judge Lethem who upheld DDJ Goodman’s decision. The case then went to a second appeal which was heard on 15 October 2020.

Court of Appeal decision

It was during this appeal that Lord Justice Coulson firstly, respectfully disagreed with DDJ Goodman and HHJ Lethem about the status of the “Signed for 1st Class” mail and considered that service by this method was caught by rule 6.26 of the Civil Procedure Rules (CPR):

[42]“either because it is included within the rubric "First class service" or because it is "another service which provides for delivery on the next business day"”.

Therefore it was held that service of the Reply was achieved on 6 April 2018 as opposed to 9 April 2018.

Secondly, Coulson LJ held that the Unless Order had been breached, not only because the Reply had been served late but also because the Unless Order had not been fully complied with. At paragraph 48 of the judgment, Coulson LJ pointed to the requirement in the Order for the Reply to “set out “all the facts” relied upon in support of the assertion of impecuniosity”, observing that the Reply did not set out what the claimant’s income and expenditure was, “and how those figures meant he could not afford to hire a replacement vehicle.”

The application for relief therefore failed and the appeal was dismissed.


The judgment provides helpful guidance for credit hire practitioners on the issue of impecuniosity, with the ruling highlighting that careful scrutiny will be given to information provided by a claimant in support of impecuniosity. All relevant information should be disclosed, including an explanation as to why that meant the claimant could not have afforded to hire a replacement vehicle. This highlights the importance of putting the claimant to proof in respect of impecuniosity at an early stage.

The decision emphasises the importance of Practice Direction 16, and the facts which must be set out in the particulars of claim in respect of a claim for hire charges. Where the claimant has failed to plead accordingly, it is only right and proper that the directions order ought to include debarral provisions where the claimant continues to fail in setting out their claim fully.

The judgment also provided clarification that “Signed for 1st Class” mail would fall into the provisions of rule 6.26 of the CPR even if the mail had not been signed for two business days after being sent in the post.