Everwarm Ltd v BN Rendering Ltd (Rev 2)

An application made before expiry of the permitted period to extend time for complying with a court order is governed by Civil Procedure Rules 1998, rule 3.1(2)(a), and the overriding objective. It is not an application for relief from sanctions under rule 3.9, nor is it treated as analogous to one, even where the order is an unless order and the hearing occurs after the original deadline.

The court may give considerable weight to the importance of compliance with unless orders and to efficient, proportionate litigation. The relevant factors remain matters within the overriding objective, rather than imported requirements of rule 3.9. Where security has ultimately been provided, there is no material prejudice, and the applicant acted bona fide, an extension may be granted retrospectively.

BN was ordered to provide security for Everwarm’s costs in respect of its counterclaim. An unless order required payment of £145,000 by 4pm on 11 July 2019, failing which the counterclaim would be struck out and judgment entered for Everwarm.

At 3.30pm on the deadline day, BN applied under the general power to extend time, seeking a further seven days. The application was heard on 19 July, after the deadline, but BN paid the security into court on 18 July. Everwarm argued that the application had to be determined under the relief-from-sanctions principles in rule 3.9. BN relied on rule 3.1(2)(a) and the overriding objective. The central issue was whether an in-time application concerning an unless order should be treated as a relief-from-sanctions application.

1. Applicable rule. An application to extend time is an in-time application if the application notice is filed before expiry of the permitted period. Under Civil Procedure Rules 1998, rule 3.1(2)(a), it is determined by applying the overriding objective. This remains so even if the court hears the application after the deadline has passed.
2. Unless orders. An unless order is an order of last resort and compliance with it is important. Nevertheless, rule 3.1(2)(a) does not distinguish between ordinary orders and unless orders. An in-time application concerning an unless order is not transformed into an application under rule 3.9 merely because the sanction would otherwise have taken effect.
3. Relevant considerations. The court may give considerable weight to enforcing compliance with orders, conducting litigation efficiently and at proportionate cost, and allocating court resources appropriately. Those considerations arise from the overriding objective, not because rule 3.9 applies. The lateness of the application may be relevant, although its significance depends on the length of the original compliance period and the circumstances.
4. Application. BN had made bona fide attempts to raise the security and had ultimately paid it into court. The original and unless-order periods were short, there was no history of disobedience, the trial was not delayed, and Everwarm suffered no material prejudice. Refusing the extension would have prevented determination of a substantial counterclaim despite the security ordered by the court being available.
5. The extension was therefore granted until 4pm on 18 July 2019. In consequence, the counterclaim was treated retrospectively as never having been struck out. The judge added that, if rule 3.9 had applied, relief would also have been granted, but that alternative reasoning was not the basis of the decision.