Knaresborough Investments Limited v Styles & Wood Group Limited (in liquidation) & Ors

The applicants (the second and third defendants) sought either a seven‑month extension of time to serve their defence or a stay of the claim until 28 days after determination of a separate Chancery Division application to set aside an assignment agreement. The court refused both forms of relief.

The judge applied the Civil Procedure Rules and the overriding objective, noting the short period for service of a defence under CPR r.15.4 and the authorities emphasising expedition in pleading. The judge held that access to a large volume of documents (some 700,000) volunteered by the liquidators did not, without more, justify an exceptional extension or a stay. The proper mechanism for addressing documentary inequalities is initial and specific disclosure and the usual disclosure regime, not an extended hiatus before pleading. The judge therefore dismissed the application and fixed a firm deadline of 4:30pm on 31 July 2024 for service of the applicants’ defence.

Background and parties: The claim arises from the 2017–2018 transaction known as Project Revie, by which Extentia Group Limited acquired the share capital of the first defendant (Styles & Wood Group Plc) pursuant to a court‑sanctioned scheme of arrangement under Part 26 of the Companies Act 2006. The claimant is assignee of Extentia and of the first defendant in relation to various claims. The claimant pursues a direct claim as assignee of Extentia and a parasitic claim as assignee of the first defendant against the applicants, former directors, for alleged misstatements and breaches of duty.

Procedural posture and relief sought: The second and third defendants applied under CPR r.3.1(2)(f) on 21 February 2024 for either (a) an extension of time of about seven months to serve their defence to permit review of documents to be provided by the liquidators, or (b) a stay of the proceedings until 28 days after the outcome of an application (issued 3 May 2024 in the Insolvency and Companies List) to set aside the assignment between the claimant and the first defendant.

Issues framed:

• Whether the applicants had established exceptional circumstances entitling them to a substantial extension of time to serve a defence where the CPR and authorities impose a short period for pleading (CPR r.15.4 and r.15.5).
• Whether a stay pending the set‑aside application was justified by duplication or risk of oppression or abuse of process.

Key facts and disclosures: The administrators and liquidators executed deeds of assignment on 29 June 2023 and required provisioning of books and records and contingent deferred consideration. The claim form and particulars were served in late 2023; the parties agreed an extension to 21 February 2024 for service of defences. The applicants requested wide categories of documents and sought time to review some 700,000 documents which the liquidators agreed to make available. The set‑aside application was issued on 3 May 2024.

Court's reasoning and decision: The court emphasised the CPR overriding objective to deal with cases justly and at proportionate cost and the policy of a tight timetable for pleadings (citing authorities including SPI North Ltd v Swiss Post International (UK) Ltd and guidance in the Commercial Court Practice Direction and Guide). Mere imbalance of access to documents does not justify an extended delay: the CPR framework contemplates initial disclosure, orders for specific disclosure and then extended disclosure as the ordinary means to address documentary asymmetry. The applicants failed to identify particular documents necessary to plead a defence which could not be obtained by specific disclosure or otherwise, and did not demonstrate exceptional circumstances. The judge also rejected the stay: any duplication with the set‑aside proceedings did not amount to oppression, vexation or abuse of process sufficient to justify putting this action into stasis, particularly given the lack of a timely timetable for the set‑aside application. The application for extension and the application for a stay were both dismissed; the court fixed a deadline of 4:30pm on 31 July 2024 for service of the applicants’ defence.

The applicants' application for a seven‑month extension of time to serve a defence, and alternatively for a stay pending a set‑aside application, is dismissed. The court held that access to a large volume of documents volunteered by the liquidators did not constitute exceptional circumstances justifying a prolonged extension or stay; the appropriate remedies for documentary inequality are initial and specific disclosure and the usual disclosure regime. The judge fixed a realistic deadline for service of the defence of 4:30pm on 31 July 2024 to ensure prompt case management.