Adva Optical Networking Ltd & Anor v Optron Holding Ltd

A retrospective application for an extension of time to serve a document is governed by the same principles as an application for relief from sanctions. The court must apply the three-stage approach in Denton and Others v T H White Limited: assess the seriousness and significance of the default, identify why it occurred, and evaluate all the circumstances under CPR r.3.9. A serious breach and absence of good reason do not automatically defeat the application. Relief may be appropriate where the default has had little effect on the proceedings and refusing relief would create an artificial or contingent default judgment inconsistent with the structure of the litigation.

The proceedings concerned an allegedly defective product supplied through a chain of businesses. Rotronic brought a contingent claim against A One, which failed to acknowledge service or serve a defence within the required time. A One later applied for an extension of time and relief from sanctions. The application arose in related proceedings which were at an early stage, with pleadings only recently closing and the claims being case managed together. The central issue was whether relief should be granted despite a serious default, no good reason for it, and prolonged failure to engage with the proceedings.

1. Applicable approach. A retrospective application for an extension of time to serve or file a document must be dealt with on the same principles as an application for relief from sanctions, following R (Hysaj) v Secretary of State for the Home Department. The application was therefore governed by CPR r.3.9.
2. Three-stage test. Following Denton and Others v T H White Limited, the court had to assess the seriousness and significance of the breach, consider why it occurred, and then evaluate all the circumstances so as to deal justly with the application. The principles also apply to setting aside default judgment, following Gentry v Miller.
3. Application. A One’s failure was serious and there was no good reason for it. Its conduct showed a sustained failure to engage with the proceedings. Those matters weighed strongly against relief.
4. However, the three-month delay had not materially affected the proceedings. The actions remained at an early stage, disclosure had not occurred, and the proceedings had been consolidated and case managed together. Consistently with Salford Estates (No.2) Limited v Altomart Limited, a non-trivial breach does not make relief impossible where the default has had little practical effect.
5. Rotronic’s claim against A One was contingent on Rotronic losing its primary position elsewhere in the supply chain. A default judgment would therefore have been unnecessary on the present case and potentially inconsistent with Rotronic’s primary position. It would also have been artificial to leave A One able to address quantum while preventing it from advancing substantive points in its draft defence. The judge distinguished John Page v Champion Financial Management Limited and Others on that basis.
6. Relief from sanctions was granted. A One received an extension of time until 21 July 2017 to serve its defence and was ordered to pay the costs of the abortive case management conference.

First-instance decision. No appellate history is stated in the judgment.