The recent High Court judgment in C. v Richmond Borough Council (2022) raised relevant considerations in relation to applications to set aside default judgments:
- In addition to the criteria set out in Civil Procedure Rule 13.3, should the Court also consider the three-part Denton test for relief from sanctions?
- What approach should the Court take when faced with the Defendant’s possibly irrefutable defence weighed against its procedural errors?
The underlying allegation related to a personal injury claim brought against Richmond Borough Council in excess of £6 million following a diagnosis of mesothelioma and arising out of the Claimant’s employment at Richmond Ice Rink. Mesothelioma is a cancer caused by asbestos exposure. The council failed to engage with the claim and as a result the Claimant obtained default judgment against the council.
The Defendant subsequently made an application to set aside the default judgment. CPR 13.3(1)(a) provides that the Court may set aside a default judgment where the defendant has a real prospect of successfully defending the claim. CPR 13.3(2) provides that in deciding whether to set aside a default judgment, the Court must consider whether the application was made promptly.
The Defendant’s application was made 9 months after the judgment had been obtained. The Defendant argued that, although the application was not made promptly, it had a real prospect of successfully defending the claim. The Defendant provided evidence as far back as the First World War to demonstrate it had never owned, occupied or managed the ice rink, and therefore had not employed the Claimant.
The Claimant argued that the application was made too late and the evidence of ownership was not conclusive. The Claimant also argued that the Defendant was required to satisfy the Denton three-stage relief from sanctions test in which the court should have consideration of the following:
- The seriousness and significance of the procedural failure;
- The reasons for the failure; and
- The circumstances of the case so as to deal with the case justly.
The Defendant’s application was upheld and the judgment was set aside on the basis that the Defendant had reasonable prospects of successfully defending the claim. It was also held that an application under CPR 13.3 to set aside a default judgment did not involve the three-stage Denton test for relief from sanctions.
While the Defendant had not made a prompt application and the delay was described as ‘inexcusable’ and ‘unexplained’, the Court ultimately considered the significant evidence demonstrating that the Defendant was not at the relevant time the owner, occupier or manager of the ice rink where the Claimant was employed, whereas the Claimant failed to provide any such evidence to support his claim. The Court therefore concluded that the Defendant had a real prospect of successfully defending the claim on the basis that it was the wrong defendant to the proceedings, and no duty of care was owed to the Claimant in respect of his employment at the ice rink.
Further, the Court considered the substantial value of the claim and that its decision would greatly affect not only both parties, but also the residents and taxpayers in Richmond.
In relation to its decision regarding the irrelevance of the Denton test, the Court followed the reasonings in the cases of Cunico Resources NV v Daskalakis (2019) and Attorney General of Trinidad and Tobago v Matthews (2011). A default judgment obtained under Part 12 carried its own procedure for setting aside such a judgment under Part 13. Essentially, if the requirements of CPR 13.3 are satisfied, the application cannot subsequently be refused on other grounds such as the Denton test.
This decision conflicts with recent case law. The Court’s decision in Ince Gordon Dadds LLP v Mellitah Oil and Gas BV (2022) held that an application to set aside a default judgment under CPR 13.3 is essentially an application requesting relief from sanction. The Court in C v Richmond Borough Council determined this decision was not binding but persuasive, and the Court was ultimately not convinced of its reasoning.
This case highlights the Court’s varied approach to applications to set aside and whether the test for relief from sanctions can play a part. Ultimately, the Court has the power to consider a wide variety of factors and there is certainly no one size fits all approach. A defendant considering making an application to set aside a default judgment, or a claimant who has received an application, should seek robust legal advice.
Written by: Jovana Radulovic (Trainee Solicitor)
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