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

The court will not ordinarily suspend pleading deadlines so that a defendant can undertake a wide review of documents which would ordinarily be addressed through disclosure. The CPR requires a tight but realistic timetable for defining issues and progressing case management. Complexity, faded recollection, lack of retained documents and possible later amendment do not, without more, justify an exceptional extension. A stay requires consideration of the interests of justice and, where concurrent proceedings are relied on, proof of duplication together with oppression, vexation or abuse, and no countervailing reason against relief. The court refused both a seven-month extension and a stay, but set a realistic deadline for service of the Defence.

The claimant brought assigned claims against former directors arising from the acquisition of a company and alleged misrepresentations, together with a parasitic claim assigned by the company against the directors. The second and third defendants applied under Rule 3.1(2)(f) of the Civil Procedure Rules 1998 for a seven-month extension to serve their Defence, or for a stay pending an application to set aside the assignment of the company’s claims.

They argued that extensive documents held by the liquidators were necessary to plead fairly and that a successful set-aside application might remove much of the claim. The issues were whether either application was justified under the overriding objective and the principles governing stays.

1. Extension of time refused. The ordinary period for a Defence is 28 days after service of particulars of claim, subject to the limited consensual extension permitted by Rules 15.4 and 15.5 of the Civil Procedure Rules 1998. The purpose is to define and narrow issues using knowledge and information readily available to the defendant, while moving the action promptly towards trial. SPI North Ltd v Swiss Post International (UK) Ltd [2019] EWCA Civ 7 was relied on for that principle.
2. The overriding objective does not require equality of access to every document before pleading. Early information exchange, Initial Disclosure and, where necessary, specific disclosure are the mechanisms for addressing inequalities. A proposed review of approximately 700,000 documents before pleading was in substance a disclosure exercise and contrary to the CPR’s ethos. Exceptional circumstances would be required, but none existed. Complexity, faded memories, absence of retained documents, anticipated amendments and possible contribution proceedings did not justify the requested extension.
3. The court accepted the principles in James Fisher Everard Ltd v European Diesel Services Ltd [2021] EWHC 978 (Comm) and Re Guidezone Ltd [2014] EWHC 1165 (Ch): absence of significant prejudice is insufficient by itself, and the reasons for an extension must be scrutinised.
4. Stay refused. Under Rule 3.1(2)(f), the question is what the interests of justice require in the particular case: Athena Capital Fund SICAV – FIS SCA v Secretariat of State for the Holy See [2022] EWCA Civ 1051. Applying the concurrent-proceedings approach in Slough Estates v Slough BC (No.1) [1968] Ch. 299, any duplication with the set-aside application did not make continuation oppressive, vexatious or abusive. Keeping the claim dormant would prejudice the parties and conflict with the overriding objective.
5. The applications therefore failed. The court set 4:30 pm on 31 July 2024 as the deadline for service of the Defence.