Extensions of time—beware of making assumptions

Dispute Resolution analysis: Will a strict breach of court deadlines mean the full force of restrictive relief provisions will now apply? Anthony Jones of 4 New Square Chambers says lawyers need to be especially vigilant with regard to deadlines and make interim applications in good time, and Lucy McCormick of Henderson Chambers says what remains unclear is the position when an application for an extension of time is made after the expiry of a deadline.

Original news

Kaneria v Kaneria [2014] EWHC 1165 (Ch), [2014] All ER (D) 30 (May)

The Chancery Division, in granting the first to the fifth respondents an extension of time for service of their defences, held that an in-time application for an extension of time should not be treated as if it were an application for relief from sanctions, but should be judged against the overriding objective.

What issues did the case raise?

Anthony Jones (AJ): The substantive proceedings to which this decision relates involve an unfair prejudice petition under the Companies Act 2006, s 994. At an interim hearing, directions were made requiring that the respondents’ defences be filed and served by 14 February 2014, with sanctions for non-compliance. A request made for the parties to agree an extension of time for filing and serving the defences was refused, and an application for such extension was made by the respondents on 11 February 2014. That application had not been heard by the time (some of) the respondents’ defences were served on 15 February 2014.

The applicant then made a cross-application arguing that as the 14 February 2014 deadline had not been complied with, the respondents were in essence seeking relief from sanction and that, following the decision in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, [2013] All ER (D) 314 (Nov), the applicant would need to satisfy the new more stringent CPR, 3.9. The case therefore raised the issue of whether, in the post-Jackson reform era, a strict breach of court deadlines means that the full force of restrictive relief provisions apply, even where the application to extend the deadline had been made (but not heard) in time.

Lucy McCormick (LM): The key question in this matter was whether the Mitchell principles apply to a prospective application for an extension of time under CPR 3.1(2)(a).

To what extent is the judgment helpful in clarifying the law in this area?

AJ: Mr Justice Nugee helpfully clarified that where an application for an extension of time is made prior to the expiry of a deadline, the application will not be treated as a relief from sanctions application under CPR, 3.9, even if the deadline has expired and sanctions are potentially applicable by the time the application is heard. This is the case even though, as the judge acknowledged, when the application was made on 11 February 2014 there was no way it would ever have been heard prior to the expiry of the 14 February 2014 deadline.

LM: What remains unclear is the position when an application for an extension of time is made after the expiry of a deadline. It appeared to be common ground between the counsel in this particular litigation that had this application for an extension of time been made out of time, the Mitchell principles would apply. The judge commented that there ‘there is certainly authority to that effect’. However, he cautioned ‘against any assumption that the same will necessarily be true for all out-of-time applications for an extension of time’.

Does the decision in Robert dealing with applications for an extension of time made prior to the expiry of time, but heard after expiry, still apply after Mitchell?

AJ: Accordingly, the decision in Robert v Momentum Services Limited [2003] EWCA Civ 299, [2003] All ER (D) 125 (Feb) remains good law. As the judge noted, while Robert was cited in argument in Mitchell, the Court of Appeal in that case did not mention it in their decision and ‘cannot sensibly be regarded as having departed from it’. As a result, Robert stands, and the prior case of Sayers v Clarke Walker (a firm) [2002] EWCA Civ 645, [2002] 3 All ER 490, [2002] All ER (D) 189 (May), in which the Court of Appeal had suggested that regard should be had to factors relevant to relief from sanctions when considering time extensions (but which Robert distinguished) seems to have been side-lined for good.

LM: Kaneria is not the only post-Mitchell matter in which Robert has been held to remain good law. It is also useful to consider the comments of Turner J in Kagalovsky v Balmore Invest Ltd [2014] EWHC 108 (QB), [2013] All ER (D) 185 (Dec) who confirms the continuing applicability of Robert, but notes that the emphasis placed in Robert on the ingredient of prejudice must now be seen in the light of the Jackson reforms.

What other decisions pre-Jackson might still be good law?

AJ: While Kaneria deals with a specific issue, it is interesting in demonstrating that the strict formalism that many predicted to dominate the post-Jackson reform era may have been over-hyped. Where the courts are asked to deal with relief from consequences outside the strict confines of CPR, 3.9, they will not feel bound by the strict approach taken in Mitchell. In the realm of security for costs, for example, an argument that Mitchell should apply by analogy for non-compliance with a security order has been specifically rejected in the case of Summit Navigation Ltd and another v Generali Romania and another [2014] EWHC 398 (Comm), [2014] All ER (D) 202 (Feb). In a recently successful application for relief from a default costs certificate under CPR, 47.12 in which I appeared, the judge accepted my submissions that the Mitchell approach should not be imported into the principles already established in relation to setting aside such a certificate.

LM: In my view, Tombstone Ltd v Raja [2008] EWCA Civ 1444, [2008] All ER (D) 180 (Dec) is likely to remain a useful part of the litigator’s toolkit post-Mitchell. Tombstone concerns the exercise of discretion where an order is made without notice to the party affected. The discretion must be exercised in accordance with the overriding objective, but ‘where the order is one which affects the rights of the affected party in an important respect (a judgment is the most obvious example), it will only be in the most exceptional circumstances that the discretion will not be exercised to set aside the order’. With many ‘Mitchell-type’ orders being made without notice, it may be preferable to try to displace such orders by means of an application to review an order made without a hearing rather than an application for relief from sanctions. An argument along these lines was made successfully in Haley v Siddique [2014] EWHC 835 (Ch), a post-Mitchell case in which the judge found that an application to review an order made without a hearing was not subject to the Mitchell criteria.

What are the implications for lawyers?

AJ: What this case and others over the last year indicate is that while lawyers, in the post-Jackson reform era, need to be especially vigilant with regard to deadlines and make interim applications in good time, they cannot afford to assume success just because the other side has breached a court order or other deadline.

LM: The Kaneria decision may bring into sharp focus the question of precisely when an application is ‘made’, since there is now such a dramatic difference between treatment of applications before and after the date of compliance. Litigators would be well advised to acquaint themselves with the criteria at CPR 23, to ensure applications are made in the correct form, served correctly and so on.

Interviewed by Nicola Laver. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

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