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‘Serene Construction’ case on Adjournments

The Court of Appeal has handed down judgment in Serene Construction Ltd v Barclays Bank plc (CA, unrep, 3rd November 2016). The bank had agreed a second loan facility to refinance a prior facility, but the company had not met the conditions precedent for the second facility to be drawn down. The bank repossessed and sold the property on which the prior facility was secured. The company issued proceedings against the bank, claiming breach of contract in failing to advance funds under the second facility and sale of the property at an undervalue. The bank filed a defence and counterclaimed for the shortfall due under the prior facility. The company failed to file a defence to the counterclaim.

At the hearing of the bank’s application for summary judgment the company, represented by its director, applied for an adjournment. The company had not received the 14 days’ notice of the hearing required by CPR r24.4(3), although it had been aware of the application for a couple of months. The company was not legally represented and the Bar Pro Bono Unit (BPBU) had agreed to give it advice if given three weeks’ notice. The first instance judge offered a brief conditional adjournment, predicated on the company providing security for costs. This was declined by the company; the hearing proceeded and summary judgment was granted.

The Court of Appeal dismissed the appeal, holding that although there were reasonable grounds for seeking an adjournment (non-compliance with the notice requirements, exacerbated by the fact the company was unrepresented), the judge’s case management decision was within the ambit of his discretion. The judge had the case management power to abridge the notice requirements. Even if 14 days’ notice had been given, the BPBU would still not have provided representation, due to the BPBU’s own requirements for three weeks’ notice. The judge’s offer of a conditional adjournment could have been accepted, as the conditions were reasonable. In any event, the company’s pleaded case was bound to fail and summary judgment was appropriate.