NV Procter & Gamble International & Ors v Gartner KG & Ors

When deciding whether to extend time for serving a claim form, the court must exercise its discretion in accordance with the overriding objective. The reason for failing to serve within the prescribed period remains an important consideration, although the claimant need not establish a “good reason” as a rule-based precondition. A strong reason will usually justify an extension; the weaker the reason, the more likely refusal becomes. The court must assess delay, compliance with evidential requirements, prejudice, proportionality and the consequences of depriving the claimant of the claim. Procedural failures and delay may be insufficient to justify refusal where the defendant knew of the claim, suffered no material prejudice, and setting aside the extension would be disproportionate.

The claimants sought to serve proceedings in Austria against Gartner KG concerning cargo allegedly lost during carriage from Spain to England. Proceedings were issued within an agreed extension of time, but the claim form was not served within the ordinary period. Orders made without notice extended time for service first to 30 January 2005 and then to 31 May 2005.

Gartner applied to set aside those orders. The application was reheard, requiring the court to decide afresh whether the extensions should be granted in light of the claimants’ delay, the inadequacy of the supporting evidence, Gartner’s knowledge of the claim, prejudice and proportionality.

1. Application refused. The court declined to set aside the two extensions of time for service.
2. Under the CPR, a claimant need not establish a good reason as a formal rule-based condition of obtaining an extension. However, the reason for the failure to serve remains an important factor. The approach is calibrated: a very good reason will usually justify an extension, while a weak or inadvertent reason weighs strongly against it. The court accepted the guidance in Hashtroodi v Hancock [2004] EWCA Civ 652.
3. The claimants’ evidence did not comply fully with paragraph 8.2 of the Practice Direction to Part 7 because it failed to provide a sufficiently full explanation of the delay. There had also been periods of inadequate urgency, errors in preparing translations and an omission of the first extension order from the documents sent for service.
4. Those criticisms were weighed against the continuing negotiations, Gartner’s knowledge that the claim was being pursued, Gartner’s own stated investigations, the absence of evidence that delay prejudiced its defence, and the potential consequence of depriving the claimants of their claim in these proceedings.
5. Applying the overriding objective, including the need to deal with cases justly and expeditiously, refusal would have been disproportionate. The extensions therefore remained in force.

This was a first-instance rehearing of an application to set aside extensions of time previously granted without notice by Mr Justice Tomlinson and Mr Justice Moore-Bick. The application was refused.