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Pannone LLP v Aardvark Digital Ltd, Court of Appeal, 12 July 2011

25 July 2011
The issues

Consent Orders – extensions of time – relief from sanctions – whether Court had jurisdiction to extend time for compliance where Order had been made by consent.

The facts

An Order by consent was made that the Claimant should file and served a reply and Defence to Counterclaim no later than 1pm on the 26th October 2009. The Order provided that if the Claimant did not comply, the Claimant’s claim would be struck out and the Defendant would have permission to enter Judgment in full for the Counterclaim. The Claimant was 6 minutes late in filing and 2 minutes late in serving, although the process of filing by fax and email had been initiated in each case before the deadline.

CPR 3.1(2)(a) gives the Court power to extend the time for compliance with any Court Order. CPR 3.8 provides that sanctions for failure to comply imposed by a Court Order will take effect unless the party in default applies for and obtains relief from the sanctions. CPR 3.9 sets out the circumstances which the Court will consider on such Applications.

The District Judge on Application made an Order extending the time for filing and service of the reply and Defence to Counterclaim and giving Pannone LLP relief from sanctions in respect of its failure to file and serve in time. The Judge upheld the decision.

A second Appeal was made to the Court of Appeal.

The decision

There was no doubt that the Court had the requisite power. CPR 3.1(2)(a) allowed the Court to extend or shorten the time for compliance with any Rule or Court Order, even if the Application for extension was made after the time for compliance had expired. Rule 3.8 provided that a party could apply for relief from sanction. Neither Rule contained any derogation in respect of an Order made by consent.

The Court had difficulty with the concept of an agreement embodying in an Order the clause which expressly or impliedly ousted the jurisdiction of the Court to extend time for compliance. As to express ouster the Court doubted whether a Judge would be prepared to make an Order in that form, save in very limited circumstances and certainly it rarely, if ever, be appropriate in relation to a case management Order since the Court would be abandoning thereby its own case management powers and its duty to manage cases.

As to implied ouster, Lord Justice Tuckey had said in Ferrotex v Banque Francaise de L’Orient that unless the parties had clearly spelt out their intention that in such circumstances the Court would not be invited to exercise its jurisdiction to extend time, no such term should be implied. If an Order had been made by agreement, weight ought to be given to that consideration. The appropriate weight would depend on the nature of the Order and therefore the agreement. Where the agreement was the compromise of a dispute or the settlement of proceedings, that factor would have very great and perhaps decisive weight. Where however the agreement was no more than a procedural accommodation in relation to case management, the weight to be accorded to the fact of the party’s agreement as to the consequences of non-compliance, whilst still real and substantial, would nonetheless be correspondingly less and rarely decisive. Everything had to depend on the circumstances. In this case the Judge had carefully considered and weighed all the circumstances, including the respect which should be given the agreement of the parties and of the particular circumstances set out in the 3.9 checklist. His decision was well within the ambit of reasonable decision making and it would be inappropriate to revisit the exercise of the decision.

Appeal dismissed.

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