Lloyds Developments Limited (in administration) v Accor HotelServices UK Limited

An application made before expiry of the time specified in an unless order is an in-time application to extend time under CPR Part 3.1(2)(a), rather than an application for relief from sanctions. The court may remedy a procedural error in the application notice under CPR Part 3.10, including a failure to state briefly the reasons for the application. The application remains governed by the overriding objective. The importance of compliance with unless orders and the efficient, proportionate conduct of litigation must be given considerable weight, but they are balanced against all the circumstances, including whether non-compliance affected the proceedings and whether refusal would produce an unjust result. A short extension was granted where payment was made seven days late and the default had no effect on the progress of the action.

The claimant, a company in administration, brought claims concerning the proposed conversion and operation of a hotel under agreements with the defendant. Earlier orders required the claimant to pay £120,000 in costs. An unless order required payment by 4pm on 8 March 2024, failing which the claim would be struck out and judgment entered.

The claimant filed an application for an extension of time three minutes before the deadline, but the application notice did not state reasons and the supporting witness statement followed later. Payment was made on 15 March 2024. The issues were whether the application was valid and in time, whether the unless order had set a new payment date, and whether the claimant should receive an extension. The defendant also applied for judgment.

1. Validity of application. The failure to state even brief reasons in the application notice was a procedural error under CPR Part 23.6. CPR Part 3.10 applied to the application itself. The word error was not confined to accidental omissions, and the court had power to remedy the defect. The omission did not invalidate the application because the claimant had a settled intention to seek an extension, reasons had been prepared, and the witness statement followed shortly afterwards.
2. Nature of the application. The unless order varied the earlier costs order by providing for interest, set 8 March 2024 as the date for payment, and specified the consequences of non-payment. The claimant’s application was therefore made under CPR Part 3.1(2)(a) before expiry of the relevant period. It was not an application for relief from sanctions under Part 3.9. The approach in Everwarm Ltd v BN Rendering Ltd was adopted.
3. Applicable considerations. An in-time application to extend time for compliance with an unless order is determined under the overriding objective. The court must attach considerable weight to the public interest in compliance with unless orders, the need to enforce prior orders, and the efficient and proportionate conduct of litigation. The lateness of the application, the history of non-compliance, the seriousness of the breach, the effect on the proceedings, and all explanations and consequences remain relevant.
4. Application of those principles. The claimant’s deliberate decision not to pay, despite having funds available, strongly militated against an extension. However, the sums were paid seven days late, the default had no impact on the trial or progress of the action, and the administrators’ evidence provided some amelioration. On balance, justice and fairness favoured allowing the claim to proceed. A seven-day extension was granted. A further last-minute application of the same nature would be unlikely to receive the same treatment.
5. Alternative analysis. The court would have reached the same result under the three-stage test in Denton v T H White if the application had been out of time and treated as one for relief from sanctions.
6. The defendant’s application for judgment and consequential orders was not determined.