The question of how rigorous a test will apply to applications for time extensions has been a recurring theme in case law over recent years. In Everwarm Ltd v BN Rendering Ltd (Rev 2) [2019] EWHC 2078 (TCC), the question came up in the context of compliance with an unless order.

Here, the court made an unless order requiring the defendant to make a payment into court for security for costs in relation to its counterclaim. The defendant’s application for an extension of time to comply was issued half an hour before the deadline for compliance with the unless order and was heard after the deadline had expired. 

The claimant contended that:

• Notwithstanding the application, the defendant's counterclaim was struck out automatically following the defendant's failure to comply with the unless order. 
• The applicable test was therefore whether the court should grant relief from sanctions (CPR 3.9).

The defendant argued that it made no difference that the order in question was an unless order. As the application was made in time, the court's general power to extend time for compliance with any order (CPR 3.1(2)(a)) applied.

The court granted the extension of time. It noted that the effect of the unless order was that the counterclaim had been struck out automatically. However, as the application had succeeded, the court would retrospectively treat the counterclaim as if it had not been struck out. 

Comment

It is well established in case law – in particular, Hallam Estates v Baker [2014] EWCA Civ 661 – that, in general, “in-time” applications (i.e. those made before the relevant deadline) will be treated more favourably than those issued after the deadline, which will be subject to the stricter test in CPR 3.9 on relief from sanctions. The fact that the application may be heard after the deadline does not alter the position.

The question posed in Everwarm was whether this would still be the case where an unless order set the deadline and automatically imposed a sanction once the deadline had passed. The court was clear that this didn’t change the position, noting that CPR 3.1(2)(a) does not distinguish between routine court orders and unless orders; the court applies the overriding objective, however brief the period between the application and the expiry of the deadline.

However, a word of caution: the granting of such applications remains in the discretion of the court. Since the court is applying the overriding objective, it will expect particular compliance with unless orders, given the seriousness of such orders. Any party seeking an extension, irrespective of it being “in-time”, should therefore make it expediently and with good reasons to support it. The defendant in Everwarm was found to have made bona fide attempts to comply with the order and there was not considered to be any real prejudice caused to the claimant by permitting the extension.