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Parties Consent Order Time Limits Can Be Extended By The Court - CA

27-July-2015
27-July-2015 9:26
in Procedure
by Lawrence Power

Safin (Fursecroft) Limited v The Estate of Dr Said Ahmed Said Badrid (Deceased)[2015] EWCA Civ 739 - 7 July 2015

The Chancellor of the High Court, Sir Terrence Etherton, sitting in the Court of Appeal, held that time limits contained within inter parties consent orders can be extended, including ones that resolved substantive disputes between parties rather than only ones that were of a case management nature. The Chancellor came to this conclusion by applying the test in Pannone v Aardvark Digital Ltd [2011] EWCA Civ 803 in which Lord Justice Tomlinson and Lord Justice Lloyd had held that the discretion to extend time limits was not limited to cases of special circumstances and the court should have regard to all of the facts.

The CPR

CPR Rule 3.1(2)(a) gives the court the 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);”

Background to the Appeal

Safin involved a claim for the forfeiture of the lease of a flat in central London (“the Property”), which was held on a lease with a term of around 19 years remaining (“the Lease”). The leaseholder was Dr Badrig who died in 2002; however there had been no probate or administration of the estate upon his death. C was the freeholder of the Property.

Following Dr Bagrig’s death there had been no payment of the service charges and ground rent. C had commenced proceedings on the 21st of February 2012 for possession on the basis of the debt, at the time of issue £22,770.29, and breaches of various covenants contained within the Lease, in which C was successful. D subsequently applied for relief from forfeiture of the Property and the hearing was due to take place on the 14th and 15th of January 2014.

Shortly before the hearing, on the 10 of January 2014, the parties entered into a consent order agreeing that D would pay all outstanding service charges, ground rent and interest and further to make certain repairs, supply certification of specific works and to pay ongoing damages accruing yearly. The dates for compliance of the separate terms of the order (save for the ongoing damages) were either by the 6March 2014 or 10 of April 2014.

On the 5 of March 2014, D made an application to either set aside or extend the time of the consent order.

The application in the first instance was heard on the 25July 2014 and, by that date, D had complied with his obligations under the consent order, albeit late.

Judge Mitchell, in the first instance, had held that he had discretion to extend the time limits in the consent order, applying CPR Rule 3.1(2)(a) and as D had complied with his obligations, it would be unjust not to extend the time limit as by doing so would give C an unjustified windfall of the Property worth around £1,050,000.

The Appeal

In the appeal C submitted that the court did not have the power to extend time limits in consent orders, which essentially resolved the dispute between the parties as they should be treated as a contract. Further, if the court does have a power to do so then it is only in “special circumstances”.

The Chancellor, at paras 61 and 62 of his decision, rejected C’s submissions and stated that the test in Pannone should be applied, which gives the court discretion to extend time in all circumstances, even in cases where it was expressed by the parties that time was “of the essence” and consideration should be given to all the factors. This was in line with the overriding objective CPR r1.1. The Chancellor further went on to state, however, at para 61, that whether the consent order did resolve the substantial dispute was a factor that would be always “highly important”.

In applying the facts of the present case, the Chancellor held, at para 78, that because the application to extend the time limits was made before the original time limit in the order, that C had complied with the consent order (albeit late) and that the value of the property so greatly outweighed the benefit to C from the consent order that the appeal should be dismissed.

Implications of the judgment

Parties to a consent order who, in the circumstances, shall justifiably not be able to comply with a consent order, will be heartened to know the courts have the power to extend time. As always it should be strongly noted that any such application should be made before time runs out.

It is our guidance that whenever possible all applications should be made within the period (pre-existing stipulate time limit), as they are far more difficult to progress if made after a time limit has expired. The golden procedural rule is always stick to time limits set out in orders whether by consent or not. If that cannot be achieved then always make any application to vary/extend within the period. Try never to make this type of application after time has already passed.

The full judgment can be found here Safin (Fursecroft) Limited v The Estate of Dr Said Ahmed Said Badrid (Deceased)

A link to the Pannone judgment can be found here Pannone v Aardvark Digital Ltd

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