In this briefing, we look at the issues raised by Venulum Property Investments Ltd v Space Architecture Ltd. These include the court’s approach to applications for relief from sanctions made before 1 April 2013 but heard after that date, and extensions of time for service of particulars of claim.
Applications for relief made before 1 April 2013
The new CPR 3.9 applies where the application for relief from sanctions is made on or after 1 April 2013. CPR 23.5 states that an application is made when the court receives the application notice. In Venulum Property Investments Ltd v Space Architecture Ltd, the application for an extension of time for service of the particulars of claim was made before 1 April, but it was heard on 11 April.
Initially both counsel agreed that the new version of CPR 3.9 could be ignored but, in what was described as a late change of mind, counsel for the defendants submitted that this was not an application for relief from sanctions but an application for an extension of time under CPR 3.1(2)(a). This gives the court power to "extend or shorten the time for compliance with any rule, practice direction or court order (even if an application for extension is made after the time for compliance has expired)".
The defendants argued that the amendments to CPR 3.9 were relevant to this application, but in reality the better point, upon which both sides and the judge agreed, was that the amendment to the overriding objective was applicable to the application even though it was made before April 2013. CPR 1.1(2) includes a new sub-paragraph (f) with the effect that "dealing with a case justly and at proportionate cost includes, so far as is practicable … enforcing compliance with rules, practice directions and orders".
The practical effect of applying the new version of the overriding objective to the nine factors set out in the pre-April version of CPR 3.9 was to require the court to take a more robust approach than it would have done pre-April. This is the same view expressed by HHJ Pelling QC in Berg v Blackburn Rovers Football Club & Athletic Plc in the context of applications to withdraw admissions under CPR 14.1(5), which is discussed in the linked briefing, For this relief, no thanks.
Deadline for serving particulars of claim
Before looking at the judge’s decision in Venulum, it is worth revisiting the time limit for service of particulars of claim, since it is by no means as straightforward as it might appear and proved to be the claimant’s solicitors’ undoing in this case.
Particulars of claim must be served in accordance with CPR 7.4. If they are not contained in or served with the claim form, they must be served within 14 days after service of the claim form. The trap here, which the claimant’s solicitors fell into, is that although there appears to be a further 14 days in which to serve the particulars, this is subject to the same longstop as that for service of the claim form in CPR 7.5: they must be served before midnight on the calendar day four months after the date of issue of the claim form.
This means that, if the claimant serves the claim form right at the end of the four month period under CPR 7.5, the particulars will need to be contained in the claim form if they are not to be out of time. This is because different service rules apply to claim forms and to other documents. So, while a claim form despatched by a method in CPR 7.5 before midnight on the last day for service (even if that day is a non-business day) will be served on time, particulars despatched by the same method on the same day could be deemed to be served several days later under CPR 6.26.
Service deadline brain teaser
The last day for service of the claim form under CPR 7.5 is Thursday 23 May 2013, before the bank holiday weekend just past. The claim form is despatched on Wednesday 22 May by first class post. The particulars are not quite ready that day and are sent by first class post on Thursday 23 May.
Question: Are both the claim form and the particulars served in time?
Answer: No. The claim form has been despatched in accordance with CPR 7.5 and has therefore been served within the four month time limit. (Note that the deemed service date will be Friday 24 May, the second business day after completion of the relevant step under CPR 7.5, in accordance with CPR 6.14, but this is irrelevant to compliance with CPR 7.5).
The particulars, on the other hand, are not protected by the despatch rule in CPR 7.5. They are served on Tuesday 27 May in accordance with the deemed service rules in CPR 6.26 (the second day after posting, provided that day is a business day, or if not, the next business day after that day) and are out of time.
Edwards-Stuart J concluded that the CPR 3.9 factors were fairly finely balanced: against the claimant was the fact that there was no good reason for failure to serve the particulars in time that resulted from its solicitors’ oversight and against the defendants was the absence of prejudice since they were aware of the claim.
The particulars were served only a few days late and the application for an extension was made promptly, factors which could suggest that the sanction of preventing the claimant from pursuing its claim against the relevant defendants (the two of the ten defendants who had a time bar defence) for all time would not be just or proportionate. However, the fact that the claimant had left issuing proceedings until the last minute without good reason, plus the weakness of the claim and unacceptably vague allegations of bad faith against the defendants, resulted in the judge saying ‘enough is now enough’. The new stricter approach in CPR 1.1(2)(f) required him to refuse the claimant’s application.
Why does this matter?
It used to be the case that although draconian rules applied to the deadline for serving the claim form, the courts were much more relaxed about extending time for service of particulars (see cases such as Totty v Snowden and Steele v Mooney). As a result, defendants would agree to extend time for serving the particulars, often for several months (see the recent example of UK Highways A55 Ltd v Hyder Consulting (UK) Ltd).
Under the new regime, with the amended overriding objective affecting all applications for an extension of time for service of particulars, whether made before or after 1 April 2013, defendants can afford to take a stand over a delay of a few days. This is undoubtedly the case where the claimant has left issuing proceedings until the end of the limitation period, and service of claim form and particulars until the end of the CPR 7.5 period. Calculating those deemed service dates under CPR 6.26 could become all important in this harsh new world.
Even where the limitation period has not yet expired, the court may refuse the claimant an extension of time for serving the claim form. The recent case of Euro-Asian Oil SA v Abilo (UK) Ltd shows that the court will take a robust line, as it did in Venulum, where a solicitor’s ‘oversight’ is the effective reason for a failure to comply with a time limit. What used to be called an oversight has now become negligence.
This is the second of two linked briefings reviewing the initial round of judgments concerning relief from sanctions handed down since1 April 2013 when the new CPR 3.9 and the amended overriding objective came into force. For details of these new rules and a checklist of practical tips, see the related briefing For this relief, no thanks.