Pleadings – Particulars of claim – Service – Claimant developer seeking damages in relation to residential development – Claimant serving particulars of claim out of time and seeking extension of time – Defendant estate agents opposing application of extension – Application dismissed
The claimant was a property development and investment company registered in the Cayman Islands which obtained detailed planning permission for a residential development in Northampton (the scheme) in November 2006. The claimant alleged that, in about February 2007, it became aware that the supporting posts/pillars of in the underground car park shown on the original plans were not of the size indicated on the amended plans and would not support the building. It was said that that resulted in the loss of about 30% of the parking spaces, with the consequence that the development could not be built in accordance with the planning permission. Therefore, the claimant alleged that the value of the property with the existing planning permission was far less than the sum it had paid.
The claimant held a number of defendants responsible for its loss, including an estate agent and the firm for which he worked (the Miller defendants). However, it waited over five years before claiming damages. It was alleged that the Miller defendants had owed a duty properly to advise the claimant as to the feasibility of the scheme but had failed to ensure that the claimant took steps to ascertain that the scheme could be constructed as envisaged by the plans. Further, they had acted in bad faith and put their desire for commission above their duties to the claimant.
The claim form was issued against all the defendants but was not served until 12 March 2013, the very last day for service permitted by CPR 7.5(1). However the claimant did not serve the particulars of claim at the same time. Its solicitors thought wrongly that they had a further 14 days in which to do so. That was based on a mistaken reading of CPR 7.4(1) and (2). Therefore the claimant applied for permission to extend time for service of the particulars of claim. The Miller defendants opposed the application because a fresh action against them would now be barred and if the claimant’s application was unsuccessful, that would be the end of the claim against the Miller defendants. The other defendants agreed to a short extension of time for service of the particulars of claim.
Held: The application was dismissed.
(1) CPR 3.1(2)(a) provided that, except where the rules provided otherwise, the court might extend the time for compliance with any rule, even if the application for such extension was made after the time for compliance had expired. Solicitors acting for claimants who left service of their claim forms until the dying weeks of the limitation period had to be wary. On a careful reading of CPR 7.4(2) the long-stop deadline for service of particulars of claim was four months after the issue of the claim form.
(2) A court considering whether to exercise its general discretionary power to extend time for serving particulars of claim had to adopt the relief from sanctions framework set out in CPR 3.9. That rule had been radically amended with effect from 1 April 2013 with a shift of emphasis so that the court was now required to take a much stronger and less tolerant approach to failures to comply with matters such as time limits: Hashtroodi v Hancock [2004] 1 WLR 3206, Stolzenburg v CICB Bank Mellon Trust Co [2004] EWCA Civ 827, Hoddinott v Persimmon Homes (Wessex) Ltd [2008] 1 WLR 806 and Fred Perry (Holdings) Ltd v Brands Plaza Trading Ltd [2012] EWCA Civ 224 considered.
(3) Overall, in the present case, the CPR 3.9(1) factors were fairly evenly balanced. It was hard to see, on the basis of the particulars of claim, how the claimant could succeed against the Miller defendants and lose against all the other defendants, most of whom appeared to be covered by suitable insurance so if the claimant obtained a judgment against any one of them it should recover the money. Against that, the claimant would be deprived of the opportunity of pursuing a claim against a party that it wished to sue. If all other things had been equal, the court would have had difficulty in the circumstances in seeing how it would be either just or proportionate to visit a few days delay in the service of the particulars of claim, particularly in circumstances where the application for the extension of time had been made promptly, by the sanction of preventing the claimant from pursuing its claim against the Miller defendants for all time.
(4) However, the claimant had delayed for over five years before instructing solicitors. It had known in April 2007 that the building as designed could not be built so as to achieve planning permission and no explanation had been given for the period of delay. On the material before the court, the claimant’s claim against the Miller defendants was not strong and there was reason to believe that if the claimant had a good case against those defendants, it probably had an equally good, or better, case against some of the other defendants. Thus the consequence of not allowing the claimant to pursue the claim for the same loss against the Miller defendants might well not result in any demonstrable prejudice on the limited material before the court on the present application. The fact that the claimant was seeking to advance a claim for bad faith that was pleaded in particularly vague terms was a course that did not merit indulgence. When the circumstances were considered as a whole, particularly in the light of the stricter approach that now had to be taken by the courts towards those who failed to comply with rules following the new changes to the CPR, this was a case where the court should refuse permission to extend time.
Gordon Wignall (instructed by Shoosmiths LLP) appeared for the claimant; Lord Marks QC (instructed by Weightmans LLP) appeared for the defendants.
Eileen O’Grady, barrister