High Court finds Mitchell guidelines do not apply to an in-time application to extend time

In yet another decision exploring the boundaries of the Court of Appeal’s decision in Mitchell (see post), the High Court has held that the Mitchell guidelines do not apply to an in-time application to extend time, as opposed to an application for relief from sanctions after the event: Kaneria v Kaneria [2014] EWHC 1165 (Ch).

The proper approach was to consider the application by reference to the overriding objective. That includes new sub-paragraph (f), which was added as part of the Jackson reforms and makes it clear that dealing with a case justly and at proportionate cost includes “enforcing compliance with rules, practice directions and orders”. Unlike in an application for relief from sanctions, however, that consideration was not to be given paramount status.

The decision gives some comfort to those who need more time to comply with procedural deadlines: the addition of new sub-paragraph (f), the court said, is about respect for rules and orders, and making an in-time application for an extension where necessary is respecting the rules. It is not the same as indifference to compliance, or non-compliance.

However, the decision equally makes it clear that “parties cannot expect to get an extension simply by asking for it”. They have to explain why they need it, and the court will scrutinise the reasons put forward. Those reasons will be weighed in the balance of factors in determining the application in accordance with the overriding objective.

Background

The underlying claim is an unfair prejudice petition under section 994 of the Companies Act 2006. The respondents were ordered to serve their defences in relation to certain preliminary issues by 14 February 2014. Some two weeks before the deadline expired, the respondents requested a 28 day extension. The petitioner refused that request on 10 February, just four days before the deadline expired. The respondents issued an application the next day, 11 February. The petitioner also issued an application for an order debarring the respondents from defending the preliminary issues. The applications were not heard until 25 March.

Decision

The court (Mr Justice Nugee) granted the extension sought. This was an “in-time” application as it was issued before the time for compliance had expired, even though it was not heard until some time later. Following the approach in Robert v Momentum Services Ltd [2003] EWCA Civ 299, such an application was not to be treated as an application for relief from sanctions, nor as closely analogous to one. The Mitchell guidelines therefore did not apply. The judge commented:

“to apply the Mitchell guidelines to an in-time application such as in the present case would in effect erode the distinction between an ordinary order directing a timetable and an unless order, and turn every order specifying a time for taking a step into an unless order. I do not see any reason to suppose – and as I read Mitchell, there is nothing there to suggest – that this was the intention of the changes to the rules brought about by the Jackson reforms. It would run the risk that ordinary orders setting out timetables would indeed become “trip wires”, which is not the intention of the Jackson reforms…”

He went on to say that if the Mitchell guidelines applied, even in a slightly watered down version, it would be likely to lead to more cases where an extension was refused between the parties and a “culture of aggressive non-cooperation”.

The proper approach was to determine the application by reference to the overriding objective. That includes new sub-paragraph (f) which refers to “enforcing compliance with rules, practice directions and orders” but, unlike in a case of relief from sanctions under CPR 3.9, that consideration is not to be given paramount status.

Applying that approach in this case, it was appropriate to grant the extension. Although the absence of prejudice to an opponent was not to be regarded as sufficient reason by itself to grant an extension, regardless of other considerations, it had not ceased to be of any relevance. Here it was very material that granting the extension would lead to no readily discernible disadvantage to the petitioner whereas refusing it would cause potentially overwhelming prejudice to the respondents. The court also noted that granting the extension would have no impact on other court users.

So far as sub-paragraph (f) was concerned, the judge stated that the new culture exemplified by Mitchell means that parties cannot expect to get an extension simply by asking for it. The court will scrutinise a party’s reasons for requesting the extension. Here the respondents’ approach had some shortcomings and suggested a “failure to appreciate the respect for orders that is now required”. However, as sub-paragraph (f) was not to be given paramount status, the court had to weigh up the desirability of reinforcing the new culture with the substantial prejudice to the respondents in not being able to serve their defences. The balance came out in favour of granting the extension.

2 Comments

Filed under Interim applications

2 Responses to High Court finds Mitchell guidelines do not apply to an in-time application to extend time

  1. Pingback: CIVIL PROCEDURE, COSTS & SANCTIONS: LINKS TO RECENT ARTICLES AND POSTS | Civil Litigation Brief

  2. Litigation team

    This decision has been cited with approval by Lord Justice Jackson, giving the lead judgment for the Court of Appeal in Hallam Estates Ltd v Baker [2014] EWCA Civ 661.

Leave a Reply

Your email address will not be published. Required fields are marked *