THE IMPORTANCE DIFFERENCE BETWEEN PROSPECTIVE AND RETROSPECTIVE APPLICATIONS TO EXTEND TIME: THE IMPORTANCE OF THE DATE OF THE APPLICATION

This post is caused by a search term that arrived on this blog today “Is an application for an extension of time an application for relief from sanctions?“. The short answer to that is – it depends.  An application made after the time for compliance is likely to be found to be subject to the Denton criteria. An application made before the date for compliance is likely to be treated more benevolently. However the court’s acquiescence should never be taken for granted.  There are cases where the courts have refused a prospective application. The key point is that it is subject to a wholly different set of tests and not the CPR 3.9 or Denton criteria.

“I see no reason to import the rule 3.9(1) check lists by implication into Rule 3.1(2)(a) where an application for an extension of time is made before the expiry of the relevant time limit.”

KEY POINT

  • The law treats prospective applications for extensions of time in a different manner to retrospective applications.
  • If in doubt apply ahead of the date of breach (the key date is the date of the application and not the date of breach).
  • (Do not assume these principles apply to applications to extend service of the claim form. These are subject to much more draconian criteria).

PROSPECTIVE APPLICATIONS

In Kaneria -v- Kaneria [2014] EWHC 1165 (Ch) it was made clear that Mitchell (now Denton) principles did not apply in cases where an application was made prior to the date of breach.   The principles in    Robert -v- Momentum Services [2003] EWCA Civ 229 

THE FACTS IN KANERIA: APPLICATION FOR EXTENSION OF TIME TO FILE DEFENCES MADE PRIOR TO DATE DEFENCES WERE DUE

The action was an  unfair prejudice petition. At an earlier interlocutory hearing an order was made that the Respondents file and serve a defence by the 14th February 2014.  The Respondents made a request for an extension of time to file their defences on certain preliminary issues. No reply was received initially and then the request was refused.  On the 11th February 2014 the Respondents made an application for an extension of time.

THE APPLICANT’S OBJECTIONS AND APPLICATION TO DEBAR THE DEFENDANTS FROM DEFENDING

By way of response the Applicant made an application seeking an order debarring the Respondents from defending the preliminary issues.

THE DEFENCES SERVED LATE

The Defences were served on the 14th (and in one case the 15th) March 2014.

DID THE MITCHELL PRINCIPLES APPLY?

The first decision the judge had to make was whether the Mitchell principles applied to the application.   The judge held that:

1.  If an application has been made “out of time” (that is after the date for compliance) then he had little doubt that the Mitchell principles applied.

2. This was was “in time” application for an extension and different principles applied.

WHY DIFFERENT PRINCIPLES APPLY WHEN AN “IN TIME” APPLICATION IS MADE

  1. This case by contrast is one of an in-time application for an extension. Mr Jones submitted that once it was accepted that the Mitchell principles applied to an out-of-time application for an extension, it was illogical not to apply the same approach to an in-time application for an extension. I do not agree. Of course if time is due to expire on 14 February, there is little practical difference between an application made on 13 February (or 11 February as in this case) and one made on 15 February. Realistically it is unlikely that an application made on 11 February could be heard before 14 February, and even if the Court could in theory hear it immediately, it would no doubt usually already be too late for the applicant to comply with the original time limit: that is after all the reason why the application is made. One can see the strict logic of saying that in such a case the realistic position is that unless an extension is granted the applicant is inevitably going to fail to comply with the time limit, and should be treated in the same way as one who has already failed to do so.
  1. But this is not the approach that has been adopted as a matter of precedent, and I can see sound practical and policy reasons for not doing so. So far as precedent is concerned, in Robert v Momentum Services Ltd[2003] EWCA Civ 299 (“Robert”), the Court of Appeal expressly held that an in-time application for an extension of time (in that case for service of the particulars of claim) was not, and should not be treated as, an application for relief from sanctions.

THE ROBERT CASE

The main judgment was given by Lord Justice Dyson. The Court of Appeal was considering a case where the circuit judge had overturned the decision of a district judge who had granted an application to extend time for service of the particulars of claim. The circuit judge had allowed the appeal because the district judge had failed to consider the criteria in CPR 3.9.

CPR 3.9 CANNOT BE INTRODUCED INTO “PROSPECTIVE” APPLICATIONS TO EXTEND TIME

The clear finding in Robert was that where an application is made prospectively an extension of time is considered under  3.1.(2) and 3.9 has no relevance.There is no checklist in 3.1.(2) (as there was and is in CPR 3.9).    CPR 3.9 cannot be introduced by analogy.
“CPR 3.9 by analogy.
It is notable that Rule 3.1(2)(a) contains no list of criteria for the exercise of the discretion to grant an extension of time. In this respect it is to be contrasted with Rule 7.6, (application for extensions of time for  service  of the claim form after the end of the period specified by Rule 7.5 or court order), and Rule 3.9, (application for relief from sanctions). I have no doubt that this was quite deliberate. In Totty v Snowden[2001] EWCA Civ 1416 [2001] 4 All ER 577, this court had to consider the interrelationship between Rule 7.4(2) and Rule 3.1(2). At paragraph 46 of his judgment Chadwick LJ said:
“Third, there is no compelling reason of policy why the court should interpret r 7.4(2) and r 7.6 in order to cover a situation to which, on their terms, they are not addressed. As Kay LJ has pointed out, there is a clear rationale for the provisions of r 7.6 in relation to the  service  of the claim form itself. There is no comparable rationale in relation to the  service  of particulars of claim, in circumstances in which the claim form has itself been served. There is no reason why that situation should not be left to be dealt with, as a matter of discretion, in the exercise of the powers conferred by r 3.1(2)(a), having regard to the overriding objective. Once the claim form itself has been served, the defendant will know that there is a claim against him; and he will be in a position to invoke the assistance of the court if particulars of claim are not forthcoming within due time.”
  1. In Sayers v Clarke Walker (a firm) [2002] 1 WLR 3095, this court had to decide whether to grant an extension of time for appealing after the time allowed for appealing had expired. In giving the leading judgment, Brooke LJ said that, in a case of any complexity, the court should, in deciding whether to exercise its general discretion to extend time under rule 3.1(2)(a), take into account not only the overriding objective in rule 1.1, but also the check list in rule 3.9. That was a case involving allegations of professional negligence against a firm of accountants, and was one of some complexity.
32. Brooke LJ said this:
“19. In very many cases a judge will be able to decide whether to extend or shorten a period of time for complying with a rule, practice or direction without undue difficulty after considering the matters set out in CPR52PD, para 5.2. In more complex cases, of which this is undoubtedly one, a more sophisticated approach will be required.
…… ……..

21. In my judgment, it is equally appropriate to have regard to the check-list in CPR r 3.9 when a court is considering an application for an extension of time for appealing in a case of any complexity. The reason for this is that the applicant has not complied with CPR r 52.4(2), and if the court is unwilling to grant him relief from his failure to comply through the extension of time he is seeking, the consequence will be that the order of the lower court will stand and he cannot appeal it. Even though this may not be a sanction expressly “imposed” by the rule, the consequence will be exactly the same as if it had been, and it would be far better for courts to follow the check-list for cases where sanctions are implied and not expressly imposed.”

  1. It is clear that Brooke LJ treated Sayers as a relief from sanctions case, or at least closely analogous to such a case. That is because the time for appealing had already expired when the application for an extension of time was made. I see no reason to import the rule 3.9(1) check lists by implication into Rule 3.1(2)(a) where an application for an extension of time is made before the expiry of the relevant time limit. There is a difference in principle between on the one hand seeking relief from a sanction imposed for failure to comply with a rule, practice direction or court order, where such failure has already occurred, and on the other hand seeking an extension of time for doing something required by a rule, practice direction or court order before the time for doing it has arrived. The latter cannot sensibly be regarded as, or even closely analogous to, a relief from sanctions case. If the draftsman of the rule had intended that the check list set out in rule 3.9(1) should be applied when the court is exercising its discretion under CPR 3.1(2)(a) in such a case, then he could and, in my judgment, would have said so. By not spelling out a check list in rule 3.1(2)(a), it seems to me that the draftsman was intending that the discretion should be exercised by simply having regard to the overriding objective of enabling the court to deal with cases justly including, so far as practicable, the matters set out in Rule 1.1(2).”

ANY PREJUDICE TO BE CONSIDERED IS THAT CAUSED BY THE EXTENSION NOT “GENERAL” PREJUDICE

“It seems to me that the correct approach is to concentrate on prejudice that has been and/or will be caused to the defendant by the failure to serve the particulars of claim in time. Most applications under rule 3.2(1)(a) are for relatively short extensions of time for taking some step in the proceedings. The present case is a good example. It would be very surprising if, when dealing with such applications, district judges were required to embark on what could be the quite complex exercise of investigating what prejudice the defendant has suffered at earlier stages in the proceedings, or before proceedings have been issued at all. I accept that there may be circumstances in which the prejudice suffered as a result of the failure to act in time will be qualitatively affected by earlier prejudice. But as a general rule, I would hold that the focus of attention should be on the prejudice occasioned by the failure itself, and not on pre-existing prejudice. In my view, the judge was wrong to say that the fact that the defendant could point to no prejudice that would result from the grant of an extension of time itself was “beside the point.”

THE COURT SHOULD NOT CONSIDER THE MERITS OF THE CASE AS A WHOLE

Further the court should not, on a prospective application for an extension of time, embark upon a consideration of the merits of  the case as a whole.

  1. First, it seems to me that it will rarely be appropriate to dismiss an application for an extension of time on the grounds that the claim is weak unless the court is able to conclude that an application to strike out the claim under rule 3.4(2)(a) or (b), or an application for summary judgment by the defendant under rule 24.2 would succeed. To refuse a prospective application for an extension of time on the grounds that the claim is weak, where neither the rule 3.4(2)(a) or (b) nor the rule 24.2 threshold is met would be a truly draconian step to take, and might well infringe a claimant’s rights under Article 6 of the European Convention on Human Rights. In my judgment, if a defendant wishes to seek to persuade a court not to grant an extension of time for  service  of particulars of claim on the grounds that the claim is weak, then it would be desirable for him or her to issue an application to strike out under rule 3.4(2)(a) or (b) or for summary judgment under rule 24.2 to be heard at the same time as the application for an extension of time.
43.            This brings me to the second point. If a defendant does wish to pray in aid the overall merits of a claim as a reason for refusing an extension of time, notice should be given to the claimant. This will enable the claimant to submit evidence directed to the point. In the present case, no notice was given beyond a passing reference in the grounds of appeal to the                      defendant being faced with a “stale claim which has prima facie significant weaknesses.” In my view, this was not sufficient  to put the claimant on notice that the weakness of her claim would be relied on as an independent reason why the decision  of the district judge was wrong. In the result, there was no evidence on behalf of the claimant dealing with the merits of the claim.

THESE CRITERIA ARE IMPORTANT IMPORTANT

In the Kaneria case the court rejected the argument that the amendments to the Overriding Objective meant that compliance with the rules was the dominant factor when considering an application made prospectively.  Every prudent litigator should be familiar with the principles set out in the Robert and Kaneria cases.