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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Kaneria v Kaneria & Ors [2014] EWHC 1165 (Ch) (15 April 2014) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2014/1165.html Cite as: [2014] WLR(D) 177, [2014] 1 WLR 3728, [2014] WLR 3728, [2014] 3 Costs LR 554, [2014] EWHC 1165 (Ch) |
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CHANCERY DIVISION
COMPANIES COURT
IN THE MATTER OF GUIDEZONE
LIMITED
AND IN THE MATTER OF THE COMPANIES ACT 2006
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
____________________
DILIP KANERIA |
Petitioner |
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- and - |
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(1) PRAKASH KESHAVLAL KANERIA (2) RANJAN PRAKASH KANERIA (3) KIRANCHANDRA KESHAVLAL KANERIA (4) CHAMPA KIRANCHANDRA KANERIA (5) KESERBEN KESHAVLAL PATEL (6) ![]() |
Respondents |
____________________
Patrick Harty (instructed by Charles Fussell & Co LLP) for the First to Fourth Respondents
Clive Wolman (instructed on a direct access basis) for the Fifth Respondent
Hearing date: 25 March 2014
____________________
Crown Copyright ©
Mr Justice Nugee :
Background
(1) Paragraph 2(a) provided that Dilip was to serve by 27 December 2013 a document identifying the paragraphs of the Petition on which relied.
(2) Paragraph 2(b) provided:
"The First to Fifth Respondents shall by 14 February 2014 serve and file a Defence in relation to the preliminary issues."
(3) Dilip was to serve a Reply if so advised by 28 March 2014.
(4) A CMC was to be fixed for the first convenient date after 11 April 2014 (at which further directions might be given).
(5) The trial itself, with an estimate of 10 days, was to take place in a 3 month window starting on 1 January 2015.
"Had you refused permission for an extension as soon as we had made the request, we might have been able to make other arrangements."
As it was they had had little choice but to put in an application for an extension. They again invited AR to consent to the application, which had been issued with a request for it to be dealt with without a hearing.
Do the Mitchell principles apply ?
"Except where these rules provide otherwise, the court may –
(a) extend or shorten the time for compliance with any rule practice direction or court order (even if an application for extension is made after the time for compliance is required)."
In the present case the application was issued before the time for compliance had expired. I will refer to this as an "in-time" application, and to one which is made after the time for compliance has expired as an "out-of-time" application. I think this slightly preferable to the terms "prospective" and "retrospective" as in a case such as the present even though the application was issued in time, it has come to be heard well after the time for compliance has expired and is to that extent itself retrospective.
"On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders."
"reflected a deliberate shift of emphasis. These considerations should now be regarded as of paramount importance and be given great weight. It is significant that they are the only considerations which have been singled out for specific mention in this rule."
See also at [37] where the Court of Appeal said that other circumstances should (in general) be given less weight than the two considerations which are specifically mentioned; and at [50] where they refer to the "particular importance" of these two elements.
"i) On an application for relief from a sanction under CPR 3.9, it is usually appropriate to start by considering the nature of the non-compliance. If the non-compliance can be regarded as trivial or insignificant, the court will usually grant relief provided that an application is made promptly [40].
ii) If the non-compliance cannot be so regarded, the court should consider why it occurred and will still be likely to grant relief if there is a good reason for it [41].
iii) Good reasons are likely to arise from circumstances outside the control of the party in default [43]; by contrast, inefficiency or incompetence of a party's solicitors – for example, where a deadline is simply overlooked – is unlikely to amount to a good reason [41].
iv) Where the non-compliance is not trivial and there is no good reason for it, the court is still required by CPR 3.9 to consider "all the circumstances of the case, so as to enable it to deal justly with the application" [37] + [49]. However, relief should not usually be granted in such cases because the circumstances which should generally be given greatest weight are the two factors specifically mentioned in the rules [49] + [58]."
Although of course no substitute for the full guidance given by the Court of Appeal, this seems to me an admirably succinct and accurate summary of the Mitchell principles.
"… the applicant has not complied with CPR 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…"
I therefore have no difficulty with accepting that the Mitchell principles apply to such an application; I would only caution against any assumption that the same will necessarily be true for all out-of-time applications for an extension of time. There may be cases where the analogy to an application for relief from sanctions is less close and this approach inappropriate; there is always a risk in laying down universal rules that other cases might arise, the precise circumstances of which have not been foreseen. But I do not intend to pursue this point further, as that is not this case.
"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)."
"(1) These Rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost.
(2) Dealing with a case justly and at proportionate cost includes, so far as is practicable –
(a) ensuring that the parties are on an equal footing;
(b) saving expense;
(c) dealing with the case in ways which are proportionate –
(i) to the amount of money involved;
(ii) to the importance of the case;
(iii) to the complexity of the issues; and
(iv) to the financial position of each party;
(d) ensuring that it is dealt with expeditiously and fairly;
(e) allotting to it an appropriate share of the court's resources, while taking into account the need to allot resources to other cases; and
(f) enforcing compliance with rules, practice directions and orders."
The new sub-paragraph (f) of course reflects the change to the wording in the new CPR r 3.9.
"There is no reason to doubt that the ratio of this decision [ie Robert] remains good law but the emphasis which Dyson LJ (as he then was) placed in that case upon the importance of the ingredient of prejudice occasioned by the delay in the exercise of the court's discretion must now be seen in the light of the Jackson reforms. Furthermore the overriding objective applied in Robert has now been reformulated to include considerations calculated to achieve the enforcement of compliance with rules, practice directions and orders."
"But the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner. If departures are tolerated, then the relaxed approach to civil litigation which the Jackson reforms were intended to change will continue. We should add that applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event."
Both Mr Harty and Mr Jones sought to extract support for their submissions from the final sentence. Mr Harty suggested that the Court of Appeal were there reflecting and endorsing the approach in Robert which had been cited to them; Mr Jones that the message was that the Mitchell approach should be applied but in a slightly less strict way, so that if there were a reason which was not quite a good reason under Mitchell it might be a good reason for an in-time extension – a sort of Mitchell light.
Practical and policy considerations
"53. On the other hand I think it is important not to go to the other extreme, and not to encourage unreasonable opposition to extensions which are applied for in time and which involve no significant fresh prejudice to the other parties. In cases of that nature, considerations of cost and proportionality are highly relevant, and the wider interests of justice are likely to be better served by a sensible agreement, or a short unopposed hearing, than by the adoption of entrenched positions and the expenditure of much money and court time in preparing for and dealing with an application that could have been avoided.
54. I would also observe that, although all court orders mean what they say, and must be complied with even if made by consent, there are some orders relating to the completion of specified stages in preparation for trial (such as disclosure, the exchange of witness statements or a timetable for expert evidence) where there may still be so many imponderables when the order is made that the date for compliance cannot sensibly be regarded as written in stone. Everything will always depend on the circumstances of the particular case, and the stage in the proceedings when the order is made, but in many such cases it should be understood that there may be a need for reasonable extensions of time or other adjustments as the matter develops. It would, I think, be unfortunate if the new and salutary emphasis on compliance with orders were to lead to a situation where, in cases of the general type I have described, a reasonable request for an extension were to be rejected in the hope that the court might be persuaded to refuse any extension at all."
"…they could easily have asked Pinsent Masons for an extension of time long enough before 29 October 2013 (for example, in reply to the emails of 18 and 25 October 2013) so as to allow them to apply to the court before 29 October 2013 if necessary. The application would have been decided without a hearing and, as Mr Benzie realistically acknowledged, almost certainly have been granted, assuming that it was supported by a sufficient explanation of the need for an extension. However, by the time that Clyde & Co asked Pinsent Masons for an extension late on 29 October 2013, any application would have had to have been made retrospectively. Clyde & Co must have known this, and there is no explanation why the request was made so late. I do not debate whether this amounts to intentional non-compliance with the CPR: on any view it displays indifference to compliance."
He reverted to the point at [31] where he said:
"If difficulties in investigating the claim do justify the particulars being late, a timely request for an extension should have been sought from Alstom and if necessary a timely application to the court should have been made."
"the defendants' stance disregarded the duty of the parties and their representatives to cooperate with each other in the conduct of proceedings and the need for litigation to be conducted efficiently and at proportionate cost. It stood Mitchell on its head."
Application of the Overriding Objective
"We wish to highlight the fact that there was no evidence to show what prejudice (if any) the claimant would suffer as a result of a refusal to grant relief."
Mitchell was not a case where Mr Mitchell stood to lose his entire case as a result of the application being refused: he did stand to lose the ability to recover costs from the Defendant, but whether he would in fact do so or not depended on the terms of his CFA, which the Master had not seen and was not prepared to make assumptions about (see the citation from para 56 of her judgment at [16]). The fact that the Court of Appeal chose to highlight the lack of evidence of prejudice would tend to suggest that where there is evidence of prejudice to the applicant, this remains a material consideration even where the application is for relief from sanctions and the Mitchell guidelines apply; and it must in my judgment be highly relevant when applying the overriding objective of dealing with cases justly.
"It seems to us that, in making this observation, the judge was focusing exclusively on doing justice between the parties in the individual case and not applying the new approach which seeks to have regard to a wide range of interests."
"enforcing compliance with rules, practice directions and orders."
I have already said that the message I discern from the cases is that parties should respect the rules and orders of the Court and if they get into time difficulties should ask the other party for consent to an extension, and failing that make an in-time application for an extension. This is what the Respondents have done, and they are not to be treated as if they were in default and applying for relief from sanctions.