ACKNOWLEDGMENT OF SERVICE FILED LATE – BUT JUDGMENT IN DEFAULT WAS IRREGULAR AND SET ASIDE: A REMINDER THAT THE RULES HAVE CHANGED

The judgment of Mr Justice Choudhury in  MB v RBG [2020] EWHC 3022 (QB) is the first I have seen considering the new provisions of CPR 12.3 and the circumstances in which a default judgment can be set aside.  It serves as a reminder that the rules changed earlier this year.

“In these circumstances, pursuant to CPR 13.2, the Court has no option but to set aside the default judgment. I therefore do precisely that. The judgment in default is set aside and is of no effect.”

THE CASE

The claimant issued proceedings against the defendant.  The acknowledgment of service had to be filed by 23rd October 2019. The acknowledgement was put in the DX on the 23rd October 2019.  On the 30th October 2019 the CCMC issued judgment in favour of the claimant.  The defendant applied to set the default judgment set aside on the grounds that the acknowledgment of service had been received in time.

 

THE JUDGMENT ON THIS ISSUE

The judge rejected the defendant’s argument that the acknowledgment had been served in time.   The acknowledgement was received a day late. However the change to the rules means that judgment cannot be entered if the acknowledgement has been served.

    1. Mr Gillett contends that the AoS was filed on 23 October 2019 and submits that pursuant to CPR r.13.2, the Court must set aside the default judgment.
    2. The claimant maintains that the defendant’s AoS was filed late in that the Court would only have received the AoS the day after it was sent by DX. That is to say it was received on 24 October 2019 and there are no grounds for setting aside.
    3. CPR 10.3 and 10.4 deal with the period for filing an AoS. CPR 10.4 provides that upon receipt of an AoS the Court must notify the claimant in writing. “Filing” has a specific meaning in this context, as is made clear by the commentary in CPR 10.4.1 (which refers to the definition of “filing” under CPR 2.3 and also at 10.1.1): it means delivering by post or otherwise to the Court office. The date of filing is, accordingly, the date on which it is received by the Court Office and not when it is sent out.
    4. There are conditions to be satisfied before a default judgment may be entered because of a failure to file an AoS. These are set out in CPR 12.3
“(1) The claimant may obtain judgment in default of an acknowledgment of service only if at the date on which judgment is entered–

(a) the defendant has not filed an acknowledgment of service or a defence to the claim (or any part of the claim); and

(b) the relevant time for doing so has expired.” (Emphasis added).

  1. The words “only if” were added by amendment introduced by the Civil Procedure Amendment Rules 2020 (SI 2020/82). However, it is made clear in the commentary to the rule that the words were introduced to resolve an ambiguity that had previously been thought to exist as to whether it was open to the Court to grant default judgment as soon as the time for filing the AoS had expired irrespective of whether it was subsequently filed, or only when, as at the date of entering judgment, no AoS had been filed. The amendment makes it clear that it is the latter interpretation that is correct.
  2. CPR 13.2 and 13.3 set out the circumstances in which the Court must and may respectively set aside or vary a default judgment. The Court must set aside if a judgment was wrongly entered because, in the case of a judgment in default of an AoS, any of the conditions in CPR 12.3(1) and 12.3(3) was not satisfied. In any other case, the Court may set aside or vary a default judgment if the defendant has a real prospect of successfully defending the claim.
  3. Applying these provisions, it is clear that the defendant is wrong to say that the AoS was filed in time; it was not. As Ms H acknowledges in her evidence, by sending the AoS by DX on 23 October 2019, it would have been received by the Court Office the following day, which was one day out of time. However, that does not help the claimant because it is clear that the judgment in default was itself wrongly entered. That is because, as at the date of entering judgment, i.e. 30 October 2019, the AoS had on any view been filed. The conditions in CPR12.3(1), namely that the defendant has not filed an AoS and that the relevant time for doing so had expired, were not satisfied. The time for filing had expired but an AoS had been filed.
  4. In these circumstances, pursuant to CPR 13.2, the Court has no option but to set aside the default judgment. I therefore do precisely that. The judgment in default is set aside and is of no effect.

THE REASON FOR THE DECISION

The rules changed on the 6th April 2020, that was discussed in a post available here. 

CPR 12.3 now reads.

(1) The claimant may obtain judgment in default of an acknowledgment of service only if at the date that judgment is entered 
(a) the defendant has not filed an acknowledgment of service or a defence to the claim (or any part of the claim); and
(b) the relevant time for doing so has expired.
(2) Judgment in default of defence may be obtained only –
(a) where an acknowledgement of service has been filed but at the date on which  judgment has been entered a defence has not been filed;
(b) in a counterclaim made under rule 20.4, where at the date on which judgment is entered a defence has not been filed,
and, in either case, the relevant time limit for doing so has expired