UK Highways A55 Ltd & others v Hyder Consulting (UK) Ltd & another [06.12.12]

Technology and Construction Court clarifies effect of stay of proceedings and rules out possibility of de facto stays.

The Claimants issued a claim form on 6 May 2010; they were required to serve their particulars of claim within 14 days of this date. A series of three-month stays were agreed, the last of which expressly stated that it would expire on 23 June 2011. The Claimants did not serve their particulars of claim until late 2012, well over a year after the final stay expired.

Although this was brought to the Claimants’ attention they refused to apply to the court for relief, contesting that the timetable did not automatically recommence once the stay expired and that, in fact, there had been a de facto stay in place, i.e. one without the court’s sanction or other parties’ consent.

When the Defendants brought the case before the court, the Claimants argued that the definition of a stay in the Civil Procedure Rule’s glossary stated that, "Proceedings can be continued if a stay is lifted", meaning the litigation timetable does not automatically resume unless one of the parties applies to the court.

The Claimants further argued that if an action was stayed for longer than a relevant time limit then, strictly speaking, it would be impossible to comply with it, i.e. as there had been stays of proceedings, it would now be impossible to serve the particulars of claim within 14 days of service of the claim form. Accordingly, they submitted that the effect of a stay must be to cancel that time limit.

Decision

The Technology and Construction Court favoured the Defendants' position that there was an obvious distinction between a general stay of proceedings and one that ceased at a specified date. In relation to the latter, proceedings would automatically resume where they left off once the stay expired on the specified date. Any outstanding time limits would simply be pushed back by the length of the stay, avoiding the "impossibility" problem and removing the need to incur the expense of applying to the court.

The Claimants also suggested that, as the Defendants had not brought the issue to light earlier and were engaging in without prejudice correspondence, there must be a de facto stay in place.

The court rejected this argument outright, holding that only the court has the power to impose a stay; if the parties do not have such a power by express agreement, one party cannot impose a stay by implication.

Comment

Although stays are a common and valuable tool in litigation, there is surprisingly little authority on the mechanics of their operation. This decision demonstrates that it is always important to both comply with the formalities of stays and to carefully consider any effect on the court timetable. Although the mechanics of stays may not be spelt out in great detail, the case suggests the courts will take a common sense view in relation to this useful and important tool.