JACKSON L.J. ON AGREEING EXTENSIONS OF TIME AND DEFAULT COSTS CERTIFICATES: IMPORTANT DEVELOPMENTS

I have already dealt with the rules to be introduced next month in relation to the parties being able to agree extensions of time in civil proceedings. Today Jackson L.J. made it clear that it was never part of his agenda to prevent the parties agreeing extensions of time.

THE CASE

In Hallam Estates -v- Baker   [2014] EWCA Civ 661 the Court of Appeal allowed an appeal against a refusal to grant extensions of time for serving points of dispute. The decision of the first instance judge was considered in an earlier post.

EXTENSIONS OF TIME

Jackson L.J. made a number of observations in relation to the original request to extend time.

1. Under the rules the claimants were required to serve their points of dispute by 14^th May 2013. By letter dated 8^th May the claimants’ solicitors asked for a 21 day extension of time. They gave sensible reasons for this request and I would have expected the defendant to agree. Given her own delays, she could hardly complain about that modest extension. Pursuant to rule 3.8 (3) the court’s approval would have been required for any such agreement, but that would have been a formality.

1. By way of digression I comment that rule 3.8 will shortly be amended so that in the ordinary way parties can, without reference to the court, agree extensions of time up to 28 days, provided that this does not put at risk any hearing date. A variety of circumstances may arise in which one or other party (however diligent) may require a modest extension of time. Under rule 1.3 the parties have a duty to help the court in furthering the overriding objective. The overriding objective includes allotting an appropriate share of the court’s resources to an individual case. Therefore legal representatives are not in breach of any duty to their client, when they agree to a reasonable extension of time which neither imperils future hearing dates nor otherwise disrupts the conduct of the litigation. On the contrary, by avoiding the need for a contested application they are furthering the overriding objective and also saving costs for the benefit of their own client.”  (emphasis added).

THE DECISION IN HALLAM ESTATES

In the Hallam case the application had been made before the date for service of the points of dispute was due.   Jackson L.J. upheld the earlier decision that an “in time” application does not involve considering relief from sanctions.

1. An application for an extension of the time allowed to take any particular step in litigation is not an application for relief from sanctions, provided that the applicant files his application notice before expiry of the permitted time period. This is the case even if the court deals with that application after the expiry of the relevant period. The Court of Appeal established this principle in Robert v Momentum Services Limited[2003] EWCA Civ 299; [2003] 1 WLR 1577: see in particular [33]. This still remains the case following the recent civil justice reforms. See Kaneria v Kaneria [2014] EWHC 1165 (Ch) at [31] to [34]. I agree with those four paragraphs in the judgment of Nugee J.

1. It therefore follows that on 16^th May 2013 the costs judge was dealing with an in-time application. This was a straightforward application to extend time under rule 3.1(2)(a). The principles concerning relief from sanctions which the Court of Appeal enunciated in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537; [2014] 1 WLR 795 are not applicable.

1. It behoved the costs judge to deal with the application in accordance with the overriding objective, as recently amended. In my view the costs judge did so. The claimants made a reasonable application for an extension of time, which did not imperil any future hearing dates or otherwise disrupt the proceedings. The costs judge granted that application.

GENERAL OBSERVATIONS ON EXTENSIONS OF TIME

Jackson L.J. went on to make a number of comments about extensions of time and his reforms.

1. Since I am the author of the report upon which the recent civil justice reforms are based, I wish to say something about extensions of time. For the reasons set out on pages 396-399 of the report, I recommended:

“The court should be less tolerant than hitherto of unjustified delays and breaches of orders. This change of emphasis should be signalled by amendment of CPR rule 3.9.”

That remains my firm view and I welcome the fact that the recommendation has been implemented, although some issues remain to be worked out in relation to the operation of the new rule 3.9. There is now a new and more disciplined approach to the conduct of civil litigation, as illustrated in many recent cases. See, for example, MA Lloyd & Sons Ltd v PPC International Ltd [2014] EWHC 41 (QB).

1. Nevertheless it was no part of my recommendations that parties should refrain from agreeing reasonable extensions of time, which neither imperil hearing dates nor otherwise disrupt the proceedings. The contrary is the case, as explained in paragraphs 11 and 12 above. Nor was it any part of my recommendations that the court should refuse to grant reasonable extensions of time in those circumstances.

1. The Rule Committee has inserted a new sub-paragraph 1.1(2)(f) into the overriding objective. In my view this new provision (which was not one of my recommendations) does not require courts to refuse reasonable extensions of time, which neither imperil hearing dates nor otherwise disrupt the proceedings.

1. Accordingly, in my view the costs judge’s decision to grant an extension of time on 16^th May 2013 was a proper exercise of his case management discretion. The defendant’s application to set aside that order was based upon the misapprehension that the costs judge had granted relief from a sanction. The defendant also alleged non-disclosure by the claimants, but she has now abandoned that allegation. The costs judge rejected the application to set aside, giving perfectly sensible reasons. In my view this too was a proper exercise of his case management powers.

A DEFAULT COSTS CERTIFICATE CANNOT BE MADE EVEN IF THE POINTS OF DISPUTE ARE SERVED LATE

The Court also decided that a default costs certificate cannot be entered even if the points of dispute are served late.    The certificate can only be applied for if no points of dispute are served at all.

“Part 4. Did the judge err in directing that a default costs certificate be issued?

1. This issue only arises if the claimants fail on their first ground of appeal. On that assumption, the costs judge incorrectly failed to set aside his order extending time. The points of dispute which the claimants served on 17 June 2013 would have become out of time, once the judge had reversed the decision of the costs judge. As a result the sanction set out in rule 47.9 (3) would have come into operation. The effect of this sanction is that the paying party “may not be heard further in the detailed assessment proceedings unless the court gives permission”. That is the only sanction provided under the rules.

1. I have set out the relevant provisions of rule 47.9 in Part 1 above. Significantly for present purposes, rule 47.9(5) prevents the issue of a default costs certificate after the paying party has served its points of dispute. This rule applies whether the points of dispute were served before or after expiry of the permitted time for service. It therefore follows that if the receiving party wishes to obtain a default costs certificate, he must file his request (a) after expiry of the time permitted for serving the points of dispute and (b) before the points of dispute actually are served. That did not happen in this case.

1. In my view, the judge did not have power on 19^th July 2013 to direct that a default costs certificate be issued. Accordingly, I would (if relevant) allow the claimants’ appeal on the second ground.”

OTHER POINTS ABOUT THE APPEAL

The judge’s decision that there had been non-disclosure was not pursued at the appeal.