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Samara v MBI & Partners (UK) Ltd and Anor, High Court, 4 March 2014

4 April 2014

The issues
Mitchell – Jackson – setting judgment aside.

The facts
The claimant brought a claim alleging he was owed monies under a contract. The claim form was issued on the 29 March 2011, but the particulars of claim only filed and served on the 27 July 2011. The first defendant failed to file an acknowledgment of service and so the last date on which it had to serve a defence was the 11 August 2011. It failed to serve a defence either.

On the 24 August 2011 the claimant’s solicitors requested judgment in default and on the 20 September 2011 permission to enter judgment was granted by Master Fontaine. On the 19 December 2011, the claimant’s solicitors requested a hearing for the purposes of summary assessment of their costs. That hearing was fixed for the 13 February 2012 and notice was given to the first defendant on the 20 January 2012. In fact, the judgment in default had not been entered. The defendant asked if the claimant would agree to the first defendant filing a defence out of time, but the claimant’s solicitor refused. At the hearing on the 13 February 2012 Master Fontaine entered judgment against the first defendant in the sum of £363,421.47, together with claimant’s costs, assessed summarily in the sum of £12,530. A copy of the order was sent on the 14 February 2012 to the Master, who sealed it and on the same day to the defendant’s solicitor.On the 1st March 2012, the Defendant’s solicitor telephoned to say the First Defendant would apply to set aside the Default Judgment. A further email was sent on the 7th March 2012. In fact, nothing further happened until the 16th May 2013, when the High Court Enforcement Officers attended the offices of the First Defendant to take steps to enforce. The Defendant’s solicitor contacted the Claimant’s solicitor with talk about an injunction. The Claimant’s solicitor agreed to instruct the High Court Enforcement Officers to take no further steps on the understanding that the First Defendant would make an Application to set aside the Judgment and that it would be served by 4.30pm on the 21st May 2013. On the same day, the First Defendant surprisingly made an Application for a stay of enforcement and for a stay of the Default Judgment. The Order was made by Mr Justice Singh on a without notice basis.

On the 21st May 2013, the solicitors acting for the First Defendant made the Application to set aside the Default Judgment. It came before the Master who refused to set aside the Judgment. The Defendant Appealed.

The Decision

The Master had been correct when she had explained that all solicitors were expected to know the terms of the Rule (CPR 13.3(2)) requiring an Application to set aside a Default Judgment to be made promptly. It was no excuse for any delay for a party to wait to see if the Claimant would agree to the discharge of the Judgment.

Under the new regime, relief was usually only to be granted if the default was trivial and there was good reason for the failure and not because of inefficiency. The new regime came into force on the 1st April 2013. The new overriding objective stated that the rules were a new procedural code enabling Courts to deal with cases justly and at proportionate cost and enforcing compliance with Rules, Practice Directions and Orders. There was no express statement that CPR Part 13 or any part of it was excluded from these provisions. There was no theoretical justification for excluding this Rule from the new regime and the new underlying objectives.

The Defendant had said that insufficient weight was attached to the Claimant’s delay in bringing the claim. The Court could not see how that could or would have justified the delay of the First Defendant in seeking to set aside Judgment, whether under the old regime or the new regime.

Secondly, the Defendant said that the Claimant and his solicitors knew that the First Defendant was seeking to set aside the Judgment. The fact was that the First Defendant did not do so and that failure was the important factor under both old and new Rules.

Thirdly, the Defendant said that the Claimant would not suffer any prejudice as the amount claimed had been paid into Court. This ignored, not merely the fact that issues of prejudice were no longer relevant in cases where there had been a delay of the kind and of the nature that had occurred in this case, but also the Claimant was prejudiced as he was being delayed receiving the money due to him under the Judgment.

Finally, the First Defendant said that it would suffer an injustice if the Appeal was not allowed. That ignored the fact that they had acted in flagrant breach of the Rules and, in particular, of the need to make the Application to set aside promptly.

There was no good reason for the delay of the First Defendant applying for the Judgment to be set aside and the decision of the Master could not be regarded as wrong under either old or new regime.

Appeal dismissed.

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