The discretion under r35.03(3) to permit withdrawal of deemed admissions requires: (1) an explanation for the failure to dispute in time; (2) evidence that the admission adversely affects the defence; and (3) consideration of prejudice to the plaintiff compensable by costs. Where admissions arise through solicitors' inadvertence rather than deliberate decision, the consequence should not be visited on the party, but the explanation must still satisfy the court.
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