Introduction
Background
Decisions
Comment
In a couple of recent decisions, High Court judges have had to remind parties of the nature and language of peremptory "unless" orders in the context of disputes as to extensions of time. An "unless" order is a peremptory order with an inbuilt sanction. A peremptory order that does not have a sanction is not an "unless" order and, on disobedience, a supplementary order in the form of an "unless" order should be obtained. While the relevant court form (providing for directions for acknowledgement of service of a writ) is important, it is not a judgment or order and, as such, does not provide for ordered consequences.
In Young Crystal Ltd & Ors v Hang Seng Bank Ltd,(1) the plaintiffs appealed a court order granting the defendant a first extension of time to file and serve their defence. Such extensions of time are routine and appeals of orders granting non-final extensions are neither common nor an efficient use of the courts' time (for further details, please see "Appeal of order for non-final extension of time – Can "lightning strike twice"?").
The plaintiffs had served their writ and statement of claim on the defendant on 12 November 2021. Therefore, the defendant had 14 days to acknowledge service and a further 28 days to file and serve their defence. The defendant acknowledged service of the plaintiffs' writ well within time and their defence was due on or before 23 December 2021.
On 22 November 2021, the defendant applied for an extension of time to file and serve their defence and they obtained such an extension from a judicial officer on or about 29 December 2021.
The plaintiffs argued that the deadline for service of the defence expired on 17 December 2021 (approximately a week earlier than the defendant's estimate), given that the defendant had acknowledged service of the writ one week before the deadline for doing so. As a related point, the plaintiffs appear to have also argued that the defence should be served "28 days from the filing of (sic) the acknowledgement of service" – this was based on their understanding of the direction in Form No. 14 ("Acknowledgment of Service of Writ of Summons") in the appendix to the court rules.(2) In effect, the plaintiffs argued that the direction (of itself) served as a peremptory order with an inbuilt sanction and the defendant should have sought relief from such sanction before filing and serving their defence.
Therefore, the plaintiffs appealed the court order granting the defendant more time. The matter came before a judge of the High Court, as a rehearing to be heard afresh.
The judge dismissed the plaintiffs' appeal outright and gave detailed reasons for doing so. The judge described the appeal as "wholly unmeritorious" and the conduct of the appeal as "unreasonable".(3)
Deadline for service of defence
The judge noted that, as a simple matter of language, the deadline for service of a defence fell 28 days after the time "for" acknowledging service of the writ – not 28 days after the time "of" acknowledging service of the writ.(4) The judge stated:
Insofar as the Plaintiffs are arguing that . . . the only route open to [the defendant] was to apply for relief from sanctions, the calculation of time is incorrect as a matter of fact, so that the argument fails.(5)
Status of court form not "unless order"
This part of the plaintiffs' argument received short shrift from the judge. The direction in Form No. 14 was not a peremptory order as properly understood.(6) It was neither a judgment nor an order and it did not provide for an "ordered consequence" in the event of a failure to do an act.(7)
The judge's decision is consistent with another recent decision of the High Court, in which a different judge stated that:
The Plaintiffs were plainly mistaken in their interpretation of the reference notes in Form 14. There was in fact no order with an "unless" provision that specified the consequence of non-compliance.(8)
Discretion
In any event, the judge noted that the defendant's application for an extension of time had been taken out before the defence had been due and it was a first such application. Given that the appeal was a rehearing, the judge could see no reason not to grant an extension of time as a matter of discretion.
In light of the judge's findings as to the conduct of the appeal, the judge ordered that the plaintiffs pay the defendant's costs on an indemnity (higher) basis.
Had either of the plaintiffs' principal arguments (as to the deadline for service of the defence and the nature of the directions in the court form) been correct, this would have been somewhat startling.
First, a defendant does not lose time for service of their defence by acknowledging service of a writ earlier than is required – indeed, any finding to the contrary would be inconsistent with the clear words of the court rules and well-established good practice.(9) Second, the court form is not an order and, despite its directions, does not have an inbuilt sanction.
Appeals of non-final orders granting extensions of time are rare. Both decisions of the High Court are entirely consistent with another recent case (for further details, please see "Appeal of order for non-final extension of time – Can "lightning strike twice"?"). Therefore, there have been three such unmeritorious appeals of non-final orders granting extensions of time in almost as many months – lightning has struck for a third and, hopefully, last time. Going forwards, plaintiffs and their legal representatives should take note (and, perhaps, mind their prepositions).
For further information on this topic, please contact James Lee or Samuel Hung at RPC by telephone (+852 2216 7000) or email ([email protected] or [email protected]). The RPC website can be accessed at www.rpc.co.uk.
Endnotes
(1) [2022] HKCFI 1589, 30 May 2022.
(2) Supra note 1, at para 14. Also see High Court Rules, Appendix A, Form No. 14 ("Acknowledgment of Service of Writ of Summons"), para 2 – "If a Statement of Claim is indorsed on the Writ, the Defence must be filed and served within 28 days after the time for acknowledging service of the Writ".
(4) Supra note 2 and Rules of the High Court, Order 18, rule 2(1).
(6) Rules of the High Court, Order 42, Rule 2 ("Judgment, etc. requiring act to be done: time for doing it") and Practice Direction 16.5 ("Peremptory Orders").
(8) Yinggao Resources Ltd v HSBC Ltd [2022] HKCFI 1704, 6 June 2022, at para 9.