Company director should have worked out when the deadline was
The High Court has refused a defendant relief from sanctions after it submitted its costs budget three weeks after the deadline.
Recorder Singer KC, sitting as a judge of the Technology and Construction Court, said the fact that the defendant was unrepresented at the time – its solicitors having stopped acting shortly before the deadline – was not a good reason.
National House-Building Council v Hodson Developments Ltd & Ors [2025] EWHC 3438 (TCC) – a ruling from September only published this week – concerned proceedings against a development company for £5m, along with a current and a former director.
On 3 March 2025, Gowlings told the first defendant that it planned to terminate the retainer and warned about the consequences of not filing a costs budget in time.
Though the date of 30 May was not explicitly mentioned in that letter or one on 14 May terminating the retainer, the judge said it “would not have been a difficult exercise by any stretch of the imagination to work out when 21 days before 20 June was; or indeed, as a responsible director of a company, to ask when it was”. It did not appear that the director actually did that.
North Star agreed to act for the first defendant on 18 June and a combined budget was filed the following day. The judge ordered a hearing to consider the application for relief. He estimated that future costs of around £260,000 were at stake.
Going through the Denton test, Recorder Singer considered the delay in serving the budget to be serious. “It was from 30 May to 19 June, and it has caused the need for another hearing, thereby depriving other litigants of the chance to use this date for their own matters.”
As for a good reason for the breach, the judge found the defendant’s witness statement “certainly not comprehensive”. There were the emails from Gowlings and “also, in my view, perfectly clear correspondence from the court making it absolutely clear what would happen insofar as cost budgets were concerned”.
Recorder Singer went on: “It seems perfectly clear that the first defendant either knew from what was sent to him or should have known, and from his knowledge of the case generally, that cost budgets were required to be served, and even if he did not fully understand the need for it to be filed by 30 May, he did know that one was required, and he had been told on a number of occasions well in advance of the 30 May that he had to do that.”
Finally, the judge concluded that it would not be unjust to maintain the sanction. Whilst the breach was not intentional, it was nonetheless “consistent with a party which does not take its obligations to comply with court orders seriously, nor to be taking this litigation terribly seriously” – in contrast to a planning inquiry with which it was involved at the same time.
He acknowledged that the company’s director said he would have acted differently had he known about the deadline, but this was outweighed by the fact that there had to be another hearing as a result.
“The case has not been dealt with efficiently because there has needed to be this hearing today. True it was that a lot of work was done at the previous hearing and that the trial is some way away but of its very nature, the fact that we are having this application today, means that the case has not been dealt with as efficiently as it should.
“It also means that this afternoon, which could have been used for other litigants in this court, has not been used for those other litigants because it could not be.
Mr S Townend KC (instructed by BP Collins) on behalf of the claimant. Mr P Letman (instructed by North Star Law) for the defendants.