Atrium Training Services Ltd & Connor Williams Ltd, Re

An application made before expiry of a procedural deadline is governed by the court’s discretion under the overriding objective, rather than the relief-from-sanctions regime. The court should focus on prejudice caused or likely to be caused by the requested extension, while recognising the strengthened requirement to enforce compliance with orders. Proportionality remains important, and reasonable extensions may be granted where there is no significant fresh prejudice. An unless order is generally a remedy of last or penultimate resort and requires an inexcusable failure to comply. The power to vary an order is narrowly exercised, normally where circumstances have materially changed or the facts supporting the original order were misstated.

The judgment concerned two conjoined insolvency proceedings, relating to Atrium Training Services Limited and Connor Williams Limited. The liquidators sought an extension of time to comply with disclosure directions, after a complex and delayed disclosure exercise involving substantial hard-copy records and a proposed electronic disclosure platform.

The respondents opposed the extension, sought an unless order, and asked the court to vary an earlier costs order from the standard to the indemnity basis. The central issues were whether the extension should be granted, whether non-compliance should result in strike-out of the Atrium claims, and whether the earlier costs order could properly be revisited.

1. Extension of time. The application was made before expiry of the deadline. Under Robert v Momentum Services Ltd [2003] EWCA Civ 299, the court had to exercise its discretion by reference to the overriding objective, rather than treating the application as one for relief from sanctions under CPR 3.9. The principal focus was prejudice caused or likely to be caused by the delay; pre-existing prejudice was generally not decisive.
2. The amended overriding objective required more rigorous enforcement of compliance with rules and orders, but did not justify unreasonable opposition to an extension which caused no significant fresh prejudice. Proportionality and the wider interests of justice remained relevant. Procedural dates for stages such as disclosure could, depending on the circumstances, require reasonable adjustment.
3. The extension to 4 pm on 28 June 2013 was granted. The scale of the disclosure exercise, the change of legal team, the suitability of electronic disclosure, the respondents’ involvement in selecting the provider, the absence of significant additional prejudice, and the disproportionate effect of refusing an extension supported that result.
4. Unless order. An unless order is ordinarily a remedy of last or penultimate resort. Applying Hytec Information Systems Ltd v Coventry City Council [1997] 1 WLR 1666 and Marcan Shipping (London) Ltd v Kefalas [2007] EWCA Civ 463, the court made an unless order in the Atrium proceedings because of the previous disclosure history, deficiencies in the latest attempt, and the strengthened compliance requirement. Failure to comply would lead to strike-out, subject to an application for relief. No unless order was made in the CWL proceedings, where there had been no previous disclosure order.
5. Costs order. Under CPR 3.1(7), variation is ordinarily appropriate only where there has been a material change of circumstances or the facts supporting the original decision were misstated. Applying Tibbles v SIG Plc [2012] EWCA Civ 518, the alleged shortcomings amounted to a value judgment about the usefulness of earlier work, not a material misstatement of fact. The application to revisit the standard-basis costs order was dismissed as unnecessary satellite litigation.