WHEN APPLYING FOR RELIEF FROM SANCTIONS MAKE SURE THAT YOU APPLY FOR ALL OTHER RELEVANT FORMS OF RELIEF AS WELL

It is easy to overlook one aspect of the decision in British Gas Trading -v- Oak Cash & Carry [2014] EWHC 4058 (QB). In that case the judge overturned a decision granting relief from sanctions.  However she also indicated that she would have allowed the appeal on the basis that, although the defendant had applied for relief from sanctions, it had not applied to set aside the default judgment properly obtained as a result of defendant’s breach.

THE FACTS

The facts are set out in an earlier post on this case.  The defendant failed to comply with a peremptory order. The claimant entered judgment. The circuit judge granted relief from sanctions. That order was appealed and the appeal against granting relief from sanctions allowed.

THE SECOND GROUND OF APPEAL

As a result of the decision in relation to sanctions the second ground of the appeal was not set out in detail.

(1) The Defendant had sought relief from sanctions but not, specifically, made an application to set the judgment aside.

(2) When granting relief the judge, at first instance, regarded the relief application as sufficient and set aside the judgment.

(3) The second ground of the defendant’s appeal was that the judge erred in making an order setting aside the judgment when there was no specific application to do so and no evidence in support.

THE FINDING ON APPEAL

“ii) Ground two, insofar as it is necessary for me to determine, is also made out. In the absence of an application to set aside the default judgment, a matter seemingly not thought of by those acting on behalf of the Defendant at the time it applied to the Judge for relief from sanction, the court should not simply take the view that the application ought to have been brought and therefore would be treated as though it had been brought. In any event there was, as was pointed out by the Appellant no evidence in support of such an application. Accordingly, ground two is also made out.”

TWO IMPORTANT ISSUES THAT FLOW FROM THIS

(1) When an application for relief from sanctions is made then any other associated application, such as an application to have judgment set aside, must be made as well.

(2) The Court will not readily assume that, because an application should have been made, a party will be treated as having made it.

THE CRITERIA FOR SETTING ASIDE A JUDGMENT

One matter that was not considered in the British Gas case (because it did not need to be considered) was the criteria upon which a, properly obtained, default judgment should be set aside.

1. Should this be solely on the basis on the Mitchell/Denton test?

2. Or should the court consider the merits of the case that is the overall merits of the defence?

3. Does a defendant in these circumstances have to satisfy (a) the Denton test; (b) the test on the merits of the potential defence  sufficient to have a regular judgment set aside?

The judge’s indication that there was no evidence directed to the judgment being set aside give some support to the latter view.