DENTON APPLIES TO APPLICATIONS TO SET ASIDE DEFAULT JUDGMENTS: HOCKLEY -v- NORTH EAST LINCOLNSHIRE CONSIDERED
The issue of whether the “Mitchell/Denton/CPR 3.9” criteria apply to applications by a defendant to set aside a default judgment has been discussed several times on this blog. In Hockley -v- North Lincolnshire & Goole NHS Trust (19th September 2014) Judge Jeremy Richardson Q.C., sitting as a judge of the High Court, came to the categorical decision that they did apply to applications made under the “good reasons” ground alone. The Judge allowed the default judgment to stand. (The case is reported in full on Lawtel)
The claimant had issued proceedings against the Trust without any real compliance with the pre-action protocol. The proceedings were served but the acknowledgment of service was served late and the claimant entered judgment in default. The District Judge set judgment aside. The claimant appealed.
AN IMPORTANT ELEMENT OF THIS DECISION
It is important to note that the defendant elected to proceed on the grounds of CPR 13.3(1)(b) alone – that there is “some other good reason why” judgment should be set aside. The defendant did not place a draft defence before the court or adduce any evidence at all to enable the court to conclude that there was a real prospect of defending the claim.
THE JUDGE’S DECISION ON APPEAL
The judge held that:
- Similar principles applied to CPR 13.3(b) as applied to CPR 3.9.
- The Mitchell and Denton principles have “profound importance” to applications to set aside a default judgment when the “good reason” test was being considered.
- The Denton case contained repeated emphasis on the need for a culture of compliance.
- The three stage test in Denton had considerable relevance to an application when considering the Good Reason ground in CPR 13.3.(1)(b).
- The reason for the default was the incompetence of the NHS agency prior to the handover to solicitors.
- The acknowledgement of service was 13 days late.
- The claimant was entitled to invoke the default judgment.
- When a defendant was relying on a “Good Reason” ground the court must consider this by reference to an assessment of how serious the default was and how it occurred.
- In the current case the default was serious and stemmed from incompetence.
- The default by the defendant was a serious one.
- The District Judge’s decision to set aside the judgment was overturned and the judgment remained.
The judgment relates to the second limb of CPR 13.1(1) – good reason. It is not yet fully clear how much these principles relate to the first limb – a real prospect of successfully defending the claim. It is clear that:
1. Any sensible defendant should put evidence before the court in relation to merits. It is clearly extremely dangerous to attempt to rely on “good reasons” alone.
2. The question of the relevance of Denton to applications under the first limb (real prospect of success) remains open. However other cases which have discussed on this blog appear relatively tolerant to defendants.
3. The case should, and is expressly designed, to emphasise the importance of the acknowledgment of service and the need for compliance.
(The judgment also had some interesting points on telephone applications which I will discuss separately).