The Argument
I recently had a case which caused me to ask myself the question - can parties lawfully agree to extend time for service of points of dispute?
I recently had a case which caused me to ask myself the question - can parties lawfully agree to extend time for service of points of dispute?
The answer appears obvious, but
it is not. In fact, far from it.
The case concerned a dispute over
whether or not the parties had agreed
to extend time for service, but in the course of argument the point developed
into that posited above. The case in which
I argued this point concerned DA proceedings which commenced before 1st
April 2013, but little turns on this, as the law appears to be the same for
proceedings commenced after that date.
Here’s how it goes.
CPR 47.9(2) states the
period for service of Points of Dispute is 21 days after the date of service of
the notice of commencement. In default
of service, CPR 47.9(3) prescribes
that a party “may not be heard further in
the detailed assessment proceedings unless the Court gives permission”.
Let’s assume you’re late with
service of the Points, but you’ve agreed an extension with the other side. You do so on the basis that you’re allowed to
under CPD 35.1 :
“The
parties may agree under rule 2.11 (Time limits may be varied by the parties) to
extend or shorten the time specified by rule 47.9 for service of the points of
dispute. A party may apply to the
appropriate office for an order under rule 3.1(2)(a) to extend or shorten that
time.”
So CPR 47.9 doesn’t kick in.
Right?
Wrong.
CPD 35.1 expressly (and, insofar as variation by the parties is concerned, only) refers to the power contained in
CPR 2.11. CPR
2.11 entitles the parties to vary, by written agreement, “the time specified by a rule or by the court
for a person to do any act” unless the Rules or a practice direction provide
otherwise or a court orders otherwise.
The problem is this - the Rules do provide otherwise.
CPR 3.8 (3) confirms that:
“(3) Where a rule, practice direction or court
order –
(a)
requires a party to do something within a specified time, and
(b)
specifies the consequence of failure to comply,
the time for doing the act in question may
not be extended by agreement between the parties.
The fact that CPR 2.11 is subject to CPR 3.8 is obvious from a reading of
the provisions set out above. That this
is correct is made clear by that parenthesised reference to CPR 3.8 after the body of CPR 2.11
The remaining question, then, is
whether CPR 3.8(3) applies to CPR 47.9.
In my view, that is
unarguable. The paying party is required
to do something (i.e. – at the risk of stating the obvious - serve Points of
Dispute) within a specified time, and the Rule specifies the consequences of
the failure to comply (i.e. not being heard further).
Given the wording of CPR 47.9, it might have been open to
argue that as the consequence was qualified (by “unless the Court gives permission”), it was not, in fact, a
sanction it all (as it is a discretionary, as opposed to automatic, consequence). That argument, however, appears to be
foreclosed by the judgment in Primus Telecommunications Netherlands BV
v Pan European Ltd [2005] EWCA Civ
273 (at paras 58 and 59). Primus
concerned CPR 32.10 (consequences of failing to serve a witness statement or summary), but the
relevant wording is identical to CPR 47.9.
Primus was subsequently applied in Papa Johns (GB) Ltd v Doyley [2011] EWHC 2621(QB).
Very recently, Turner J. has reiterated this point in terms - see MA Lloyd & Sons Ltd v PPC International Limited [2014] EWHC 41 (QB) at [18] and [19].
Very recently, Turner J. has reiterated this point in terms - see MA Lloyd & Sons Ltd v PPC International Limited [2014] EWHC 41 (QB) at [18] and [19].
Accordingly, there is a clear conflict
between the power in CPD 35.1 (now,
with minor but inconsequential amendment, CPD
8.1) and the Rules themselves.
As Practice Directions are not
able to override the CPR (See May L.J. in Godwin v Swindon Borough Council [2001] EWCA Civ 1478 at [11]), the
provisions referred to above which purport to permit the parties to agree to extend time for service of the
points of dispute must be of no effect.
This means that the sanction in CPR 47.9 applies, irrespective of
whether there has been a purported agreement to extend time, unless the paying
party applies for relief from sanctions under CPR 3.9.
Until recently, one could have approached such an application with an air of confidence. However, after Mitchell v NGN Ltd [2013] EWCA Civ 1537 (and the stream of litigation applying it), it would be a brave Solicitor that did. Indeed, in MA Lloyd, Turner J. appeared to indicate that even if parties agreed to an extension, a Court would not necessarily "rubber stamp their reciprocal procedural indulgences" (para 27). Whether the situation would be the same where the parties have (quite understandably) been led to believe that the indulgence was permitted in the first place remains to be seen.
So, what is the nature of the sanction?
Until recently, one could have approached such an application with an air of confidence. However, after Mitchell v NGN Ltd [2013] EWCA Civ 1537 (and the stream of litigation applying it), it would be a brave Solicitor that did. Indeed, in MA Lloyd, Turner J. appeared to indicate that even if parties agreed to an extension, a Court would not necessarily "rubber stamp their reciprocal procedural indulgences" (para 27). Whether the situation would be the same where the parties have (quite understandably) been led to believe that the indulgence was permitted in the first place remains to be seen.
So, what is the nature of the sanction?
The sanction to which the paying
party is automatically subject is not being “heard further in the detailed assessment proceedings.” One assumes that this means that the paying
party can no longer participate, by contributing to a joint statement or being
represented at the hearing.
What, then, of the Points of
Dispute that are filed late? It appears
that a paying party may rely upon them (as they predate – indeed prompt – the
debarral of further participation),
but only in the sense that a Costs Judge may take them into account in
assessing the Bill.
The result is unfortunate, as it
appears that, until the Rules are changed, as in my view they need to be, the
paying party is required to make a prospective application to Court for an extension of
time to avoid the automatic sanction in CPR
47.9.
Of course, in many cases, that application should be a mere formality, but it is regrettable that, given the words in the Practice Direction, it needs to be made in the first place.
The views here are my own. If anybody has an answer to this conundrum, I would be grateful to hear it!
Of course, in many cases, that application should be a mere formality, but it is regrettable that, given the words in the Practice Direction, it needs to be made in the first place.
The views here are my own. If anybody has an answer to this conundrum, I would be grateful to hear it!
Paul Hughes
@phugheskings
Kings Chambers
10th September 2013
Updated 22nd January 2014
www.kingschambers.com
@phugheskings
Kings Chambers
10th September 2013
Updated 22nd January 2014
www.kingschambers.com
