Pannone LLP v Aardvark Digital Ltd

A court retains its powers to extend time and grant relief from sanctions where the relevant order was made by consent. Consent is a relevant circumstance, but it creates no implied exception to CPR 3.1 or CPR 3.8.

Under CPR 3.9, the weight given to consent depends on the nature of the agreement. A settlement of substantive rights usually carries very great weight. A procedural case-management accommodation ordinarily carries less weight and is rarely decisive. Relief does not require a preliminary finding of unusual circumstances. The court must assess all the circumstances.

The claimant solicitors sought payment of unpaid fees. The defendant company denied liability and counterclaimed for substantial damages for professional negligence.

By consent, the claimant was required to file and serve its Reply and Defence to Counterclaim by 1 pm on 26 October 2009. The order provided that, on default, the claim would be struck out and the defendant could enter judgment on its counterclaim. The claimant initiated filing and service before the deadline, but completion occurred a few minutes late.

District Judge Obodai extended time. His Honour Judge David Hodge QC, sitting in the Chancery Division, dismissed the defendant’s appeal. The second appeal concerned whether relief was available from a sanction in a consent order and, if so, whether it was properly granted.

1. Appeal dismissed. The court had power under CPR 3.1(2)(a) to extend time for compliance with a consent order and under CPR 3.8(1) to grant relief from its sanction. Neither provision distinguishes orders made by consent. An implied exception would conflict with the court’s general case-management powers and the overriding objective.

2. The expression by consent can describe either a genuine contractual settlement or an order to which the parties did not object. That distinction did not remove the court’s jurisdiction here, but it remained important to the exercise of discretion. A concluded compromise of substantive rights normally carries very great, and often decisive, weight: see [2006] EWCA Civ 1165. A procedural agreement about case management carries real and substantial, but ordinarily less, weight.

3. The court rejected any prescriptive requirement to identify unusual circumstances before granting relief from a consent order. CPR 3.9 requires an assessment of all the circumstances. Consent is one relevant factor, not a factor which displaces the remaining matters in the rule.

4. The lower courts had properly applied that approach. The claimant had genuinely attempted to comply; the delay was only minutes; the failure was inadvertent; and the defendant suffered no corresponding prejudice. Refusing relief would have deprived the claimant of a merits trial and given the defendant an unjustified windfall. The judge’s exercise of discretion was well within the proper ambit of decision-making.

1. Court of Appeal (Civil Division): dismissed Aardvark’s second appeal and upheld the extension of time and relief from the sanction: [2011] EWCA Civ 803 .

2. High Court, Chancery Division, Manchester District Registry: His Honour Judge David Hodge QC dismissed Aardvark’s appeal from the District Judge on 19 August 2010.

3. Manchester County Court: District Judge Obodai extended the claimant’s time for filing and service at the case management conference on 26 February 2010.