Applications For Extensions Of Time To Be Scrutinised More Heavily
The facts
Applicant liquidators (L) applied for an extension of time to comply with a disclosure order made by consent in the linked proceedings of two companies (Atrium and Connor).
There had been four disclosure orders in the Atrium proceedings but the first and second respondents (X) were unhappy with the level of disclosure provided and applied for an unless order in respect of further disclosure.
Pending the hearing, L's solicitors investigated over 300 boxes of documents. However L instructed new solicitors shortly before the hearing.
The parties agreed in the consent order to allow a further six months for the disclosure exercise. L was ordered to pay X's costs.
Five days before the disclosure deadline, L applied for a variation to the disclosure order to allow another three months for disclosure.
The main issues were whether:
- an extension of time should be granted;
- any extension should be made on "unless" terms; and
- the disclosure order should be varied to provide for indemnity costs.
Decision
Application granted.
The court must exercise its discretion to extend time by having regard to the overriding objective of the Civil Procedure Rules (which had been amended in April 2013 to refer to the enforcement of compliance with orders).
The court must scrutinise an extension application more closely than it might have done before the April 2013 amendment, and it must discourage the assumption that an extension of time would be granted if there was no clear prejudice to the other side.
Even if made by consent, Court orders are to be complied with. However there may be some exceptions and everything depends on the circumstances.
In the Atrium proceedings, it was appropriate to make an unless order because of a long and unsatisfactory history of disclosure, L's poor attempts to comply with the disclosure order and the increased emphasis which the court must now place on compliance with court orders under the overriding objective.
However, it was held that an unless order should not be made in the Connor proceedings. There had been no previous disclosure order and it was the first extension to be sought. Also, the parties had agreed to combined disclosure in both proceedings; and it would not have been just for L to be punished in the Connor proceedings for their default in the Atrium proceedings.
It was held that to revisit the basis of assessment of the costs order would be wrong in principle. The unsatisfactory nature of L's conduct of disclosure had been reflected in the order that they pay the costs of X's disclosure application.
Comment
Applications under the Civil Procedure Rules for extensions of time will be scrutinised more rigorously by the court following the amendment to the overriding objective in April 2013.
However, unreasonable opposition to extensions that were applied for in time and which involved no significant fresh prejudice, should not be encouraged.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
