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Commercial & Employment

The importance of delay on applications to set aside judgment

Posted on 14th January 2022

By Kimberley Clifton

 

Is delay sufficient to defeat an application to set aside default judgment?

 

Unsuccessful applications

There has been a flurry of recent cases from the last three years dealing with the significance of delay in applications to set aside a default judgment. The following cases are some interesting examples of applications failing as a result of delay of less than 30 days.

 

Core-Export Spa v Yang Ming Marine Transportation Corp [2020] EWHC 425 (Comm): There was a 23-day delay in making the application and the reason given was due to the need to investigate. The court refused the application, despite the defendant having an arguable defence. HHJ Pelling QC noted that promptness needed to be considered in the context of what had previously happened and that the ‘history of delay, inaction and non-engagement’ prior to the issue of the proceedings outweighed the defence.

Gama Aviation (UK) Ltd v MWWMMWM LTD [2021] EWHC 2229 (Comm): Despite a realistic defence the application was refused as there was no explanation for the delay. In this matter a 27-day delay was fatal in light of the deliberate policy of inaction and non-engagement with the claimant by the defendant prior to judgment being entered; this included a failure to set out why they were not liable prior to proceedings. Further HHJ Pelling QC stated it was a ‘serious and significant delay for which there is no good or any explanation’.

Points of View v Erre DB Group SA [2021] 2 WLUK 70:  There was a 26-day delay and the defendant had established a defence which had a real prospect of success when making the application. The defendant only took action when it became clear that the judgment may be enforced in Switzerland. The court did not set aside the judgment, deciding that it had been a deliberate decision not to engage with the English proceedings by failing to provide its defence in accordance with the procedural rules, despite knowing they had relevant arguments.

 

Successful applications

On the other side of the table, where there is no other conduct argument against a defendant, a key factor when considering the setting aside of a default judgment is whether the defence has a reasonable prospect of success and can overcome a significant delay in order to achieve justice between the parties:

Praetura Asset Finance Limited v Hood [2019] EWHC 2231 (Comm): The defendant’s solicitor wrongly thought there was an irregular judgment and that judgment would be set aide pursuant to 13.3(1). When it was discovered that the particulars of claim had been properly served an application was made within 10 days, however that was over three months from the date they knew of a default judgment. The claim was substantial, at £1.5m. HHJ Hodge QC allowed the application on the basis that the estoppel defence being advanced by the defendant had a reasonable prospect of success. The costs order, unusually, was costs in the case.

Lombard North Central Plc v European Skyjets Ltd [2020] EWHC 679 (QB): The court considered an extensive delay of five years before bringing an application to set aside. Freedman J commented on the substantial merits of the defence and the reasonable explanation for a large part of the delay. The defendant had spent considerable time attempting to restore themselves on the companies register which the court described as ‘tortuous and protracted’. Freedman J balanced the merits of the defence and the explanation for the delays, to conclude that his discretion should be exercised and judgment set aside.

Mountain Ash Portfolio Ltd v Vasilvev [2021] EWHC 1853 (Comm): There was a delay of 72 business days in making the necessary application. The court considered that this delay fell outside the realms of promptness. However, the default judgment was set aside on the basis that it was ‘just and appropriate in all the circumstances’. The key factors were that the defendant was unaware of the proceedings, it was a sum of over £100m due against the defendant personally, and the claim had been issued out of the blue, 11 years after the demand for payment and no prejudice to the claimant had been caused by the delay.

 

Points to take away

  • All cases are decided on their own facts but careful use of similar cases can be persuasive to the courts.
  • Promptness is a significant factor to be considered by the courts when exercising the discretion as to whether to set aside a default judgment.
  • Explanation is key! Applications should address what caused any delay and whether it has caused any prejudice to the claimant, including how any prejudice can be mitigated.
  • Parties should not delay in bringing an application to set aside, even if the full investigation has not been achieved.
  • There is strong focus on the overriding objective and justice being achieved. As such the value of the claim and he consequences of a judgment are important.
  • There is an unpredictability as to how a Judge may exercise their discretionary power. This can lead to it being difficult to establish a ground for appeal in the event that the client is unhappy with the outcome.

 

If you require advice, or representation, you can instruct Chambers by contacting the clerks on 01483 539131 or emailing them at clerks@guildfordchambers.com

 

Disclaimer

This article has been provided free of charge for information purposes only. Although care is taken to ensure the information is accurate no responsibility is assumed by the author or any member of Guildford Chambers for reliance on the content or the accuracy of such content. The information, and/or commentary, does not constitute legal advice and if you have a legal dispute you should seek advice from a solicitor or barrister about your case. Accordingly, no member of Chambers shall be responsible for any action you take or refrain from taking in reliance of anything in this article or case summary.