Binning Bros Limited (In Liquidation) v Thomas Eggar Verrall Bowles (A Firm)

Under Ord. 6 r. 8(2) of the Rules of the Supreme Court, an applicant must show good reason for extending a writ’s validity in every case, including cases where the writ and limitation period remain current. The ordinary inquiry has two stages: good reason for the extension, followed by the exercise of discretion. Good reason for failing to serve within the initial period will ordinarily be necessary. Category 1 cases may justify less stringent scrutiny, but the cost of issuing a fresh writ is not itself good reason. A desire for more time to consider whether to proceed, funding, or serving a statement of claim will not suffice where the claimant already has adequate information. Waiver is assessed objectively; a request for more time to serve a defence and an expressed intention to defend do not necessarily waive a challenge to validity.

The plaintiff company, in liquidation, issued a generally endorsed writ against its solicitors but did not serve it within the initial four-month period. A district judge granted an ex parte 56-day extension. The defendants later applied to set aside the extension and service. District Judge Gayle dismissed that application, but Astill J allowed the defendants’ appeal and set aside service.

The Court of Appeal considered whether good reason had been shown for extending the writ, whether the failure to disclose limitation facts affected the ex parte order, and whether correspondence after service waived the defendants’ right to challenge the extension.

1. Appeal dismissed unanimously. Hutchison LJ delivered the judgment, with Butler-Sloss LJ agreeing.
2. Ord. 6 r. 8(2) of the Rules of the Supreme Court contains an implied condition that the power to extend the validity of a writ may be exercised only for good reason. That requirement applies to every case, including a category 1 case where the writ remains valid and the limitation period has not expired. The possibility that refusal would require payment for a fresh writ is not, by itself, good reason. The policy of ensuring that defendants are not left unaware of proceedings, together with the shortened validity period and the courts’ case-management responsibilities, supported that conclusion. The court applied Kleinwort Benson Ltd v Barbrack Ltd [1987] AC 597 and Waddon v Whitecroft Scovell Ltd [1988] 1 WLR 309.
3. The inquiry has two stages. The applicant must first establish good or potentially good reason for the extension, after which the court exercises its discretion. In the ordinary case, showing good reason for failing to serve within the initial period is an essential step. Matters relevant to the second stage may also be relevant at the first, but the stages remain distinct. A less stringent scrutiny may be appropriate in a category 1 case.
4. No good reason was shown. By August 1994 the plaintiff had sufficient information to issue and serve proceedings. Its wish for more time to evaluate the claim, funding, creditors’ interests, or the desirability of serving a statement of claim did not justify withholding service. The Birka [1996] 1 Lloyd’s Rep. 31 was not treated as establishing any general rule that serving a statement of claim could never constitute good reason. A judge might, in an appropriate case, make an extension conditional on abandoning statute-barred claims, but that possibility did not assist this plaintiff.
5. The ex parte affidavit also failed to disclose that limitation periods had already expired for part of the claim. This was a serious breach of the duty of full and frank disclosure, although the appeal was independently resolved by the absence of good reason.
6. For waiver, the court proceeded on the basis that the inquiry was objective. A step waives an objection only where it is necessary or useful only on the footing that the objection has been waived or is not being maintained. The July letters, read as a whole, merely sought time to consider how to proceed. Neither the request for an extension of time for a defence nor the expressed intention to defend amounted to waiver. The appeal was dismissed with costs and leave to appeal to the House of Lords was refused.

1. Court of Appeal (Civil Division) [1997] EWCA Civ 2688: dismissed the appeal with costs and refused leave to appeal.
2. High Court, Queen’s Bench Division: Astill J allowed the defendants’ appeal from District Judge Gayle and set aside service of the writ on 30 October 1996.
3. District Judge Gayle: dismissed the defendants’ application to set aside the ex parte extension and service on 30 May 1996.