In  AMRA Leasing Ltd v DAC Aviation (EA) Ltd & Ors [2022] EWHC 1718 (Comm) Mr Justice Jacobs refused the defendants’ application to set aside a default judgment.  The defendants’ delay in making the application, and then a further delay in serving that application, was a highly relevant factor.



“I consider that the lack of promptness is, in the present case, as it was in Agrinvest, a matter of very considerable weight. This means, in practical terms, that unless I am persuaded that there was a defence which looked strong or which for some other reason should be explored at trial, the judgment regularly obtained should remain in place notwithstanding the possibility that there might be a defence which might possibly succeed a trial.”


The claimant obtained a default judgment for £8,992,980.25. Proceedings were issued in December 2019. The defendants filed acknowledgement of service stating they intended to defend. No defences were filed.  Default judgment was entered in March 2020.  An application to set aside judgment was made in August 2020, however these applications were not served on the claimant until 21st October 2020.


The judge first considered the basic principles applicable to an application to set aside a regular judgment.

    1. Under CPR 13.3(1):
“…the court may set aside or vary a [default] judgment … if –
(a) the defendant has a real prospect of successfully defending the claim; or
(b) it appears to the court that there is some other good reason why –

(i) the judgment should be set aside or varied; or

(ii) the defendant should be allowed to defend the claim.”

    1. CPR 13.3(2) provides that:
“In considering whether to set aside or vary a [default] judgment … the matters to which the court must have regard include whether the person seeking to set aside [or vary] the judgment made an application to do so promptly.”
    1. The authorities indicate that the burden is on the applicant to show a good reason why a judgment regularly obtained should be set aside (see ED&F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472 at [9] per Potter LJ).
    1. An important question on such an application, therefore, is whether the defendant has established that it has a “real prospect” of successfully defending the claim. This means more than a merely arguable case. The distinction between a real and fanciful prospect of success is that the defence sought to be argued “must carry some degree of conviction” (see ED&F Man Liquid Products Ltd v Patel at [8]). The notes to CPR 13.3 in the White Book describe the “major consideration” on an application to set aside as being whether the defendant has shown a real prospect of successfully defending the claim or some other good reason why the judgment should be set aside.
    1. A frequently cited statement of the relevant principles concerning “real” or “realistic” prospect is set out in the judgment of Lewison J in Easyair Ltd (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch) in the context of applications for summary judgment. Lewison J identified the following considerations at [15]:
“i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman [2001] 1 All ER 91;
ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8];
iii) In reaching its conclusion the court must not conduct a “mini-trial”: Swain v Hillman;
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10];
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;
vii) … If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.”
    1. It is not necessarily enough, however, to show that there are real prospects of defending the claim. The decision as to whether a judgment should remain in place remains a discretionary decision. An important factor, which is given prominence by CPR 13.3(2), is the promptness of the application. The Courts have considered delay in various cases but there is no defined outer limit and what is considered ‘prompt’ depends upon the circumstances of the case.
    1. The authorities suggest that, since the advent of the CPR, a claimant will not be lightly deprived of a default judgment: see Standard Bank Plc v Agrinvest International Inc [2010] EWCA Civ 1400. At [22] of that case, Moore-Bick LJ said:
“The Civil Procedure Rules were intended to introduce a new era in civil litigation, in which both the parties and the courts were expected to pay more attention to promoting efficiency and avoiding delay. The overriding objective expressly recognised for the first time the importance of ensuring that cases are dealt with expeditiously and fairly and it is in that context that one finds for the first time in rule 13.3(2) an explicit requirement for the court to have regard on an application of this kind to whether the application was made promptly. No other factor is specifically identified for consideration, which suggests that promptness now carries much greater weight than before. It is not a condition that must be satisfied before the court can grant relief, because other factors may carry sufficient weight to persuade the court that relief should be granted, even though the application was not made promptly. The strength of the defence may well be one. However, promptness will always be a factor of considerable significance, as the judge recognised in paragraph 27 of his judgment, and if there has been a marked failure to make the application promptly, the court may well be justified in refusing relief, notwithstanding the possibility that the defendant might succeed at trial.”
    1. Paragraph 13.3.3 of the White Book discusses delay and the authorities on that topic in detail. Those authorities include a statement to the effect that a delay of 59 days in making the application was very much at the outer limit of what could possibly be acceptable.


The judge went on to consider the issue of delay in the current case and its practical consequences.

    1. I start with the question of delay or lack of promptness because that, in my judgment, is clearly a very significant factor in this case.
    1. There is no dispute in this case that this application was not made promptly. The Default Judgment was entered on 11 March 2020 and notified to the Defendants on 19 March 2020. It is clear that they were aware of it but no steps were taken at all until August 2020. In the meantime, in May 2020, the Claimant started the Kenyan proceedings and this led on 9 July 2020 to the Defendants’ application for a stay of proceedings supported by a witness statement. That witness statement of Ms Potapova reserved the right to apply to set aside but no steps were taken for a further period of around six weeks when the application was made to the Commercial Court on 21 August 2020. In the meantime, the Kenyan court had ordered payment of the Default Judgment in instalments.
    1. Even after the application had been issued, steps were not promptly taken to serve it. As I have said, the application was only served on the Claimant on 21 October 2020. The court had promptly sealed the application on the same day that it was made. The Defendants’ solicitors say that the reason that there was a delay in service was that they did not receive notification by email from the Commercial Court that the application had been sealed. I am prepared to accept that that may be factually correct, but I cannot see that it is a good answer in the context of the present case or, indeed, any case. There is always a need when there is an application to set aside a Default Judgment to act promptly and it seems to me that the Defendants’ solicitors should have been taking steps to ensure that the application was monitored so as to see when the court seal had been attached. Had they done so, they would have seen, as is indeed usually the case, that it had been attached very promptly at the time that the application was issued.
    1. CPR 13.3(2) speaks in terms of promptness relating to the making of the application and it seems to me that that should include and does naturally include bringing the application to the attention of the Claimant by proper service. However, that is not a critical point in the present case because the delay between March and August 2020, even leaving aside the delay between August and October 2020, was itself very long. It was well outside the limit of what would ordinarily be considered acceptable.
    1. The Defendants’ reasons for failing to file and serve a defence in time and then for failing to apply to set aside a Default Judgment any sooner were as follows. As far as filing a defence is concerned, in summary, the Defendants have said in their witness evidence as follows:
(i) Due to serious difficulties in the Defendants’ business, the Defendants were unable to fund the preparation of a substantive defence to the claim and were forced instead to concentrate on saving their business which had been adversely affected by various factors. Saving their business included saving the livelihoods of more than 250 people who were employed by the First and Second Defendants in Kenya, Canada, and the Democratic Republic of Congo;
(ii) The business of DAC Kenya is capital intensive and can be severely affected by disruptions to its revenue streams, and it was affected by various issues which had a cumulative negative effect; and
(iii) The First Defendant had previously been a successful revenue-generating business but by the end of 2019, when the claim was issued, it was in severe financial difficulties: DAC Kenya was forced to restructure its banking facilities with the Kenya Commercial Bank and all of DAC Kenya’s assets in Kenya were now charged to the bank as security for the sums advanced.
    1. As far as failing to file the application to set aside the Default Judgment sooner than August 2020 is concerned, the Defendants’ reason for not doing that were, in summary, as follows. The Defendants, after notification of the Default Judgment in mid-March 2020, faced the twin difficulties of the existing business issues facing DAC Kenya which I have already described, and the effects of the global pandemic which had a profoundly negative effect on the aviation business worldwide.
    1. The Defendants in their evidence also point out that they have themselves been negatively affected by the pandemic in the sense that many customers have delayed in making payments, and that DAC Kenya is owed approximately US$200,000 in outstanding invoices for its servicing business. Ultimately, the evidence was that it sought to prioritise the settlement of payroll arrears to its employees.
    1. Having set out those reasons, I am bound to say that none of these points impress me and I note that in the Agrinvest case, the defendant’s inability to obtain sufficient funds to instruct solicitors did not impress the trial judge or Moore-Bick LJ.
    1. What happened in 2019 was that proceedings were properly commenced in the Commercial Court by the Claimant seeking to use the dispute resolution mechanism under the two commercial contracts which it had concluded with the Defendants. Those proceedings were commenced against a background which I will describe. They were not commenced in a vacuum and did not come as any surprise to the Defendants. The background was that there had been demands for payment including demands in the pre-action protocol where the Claimant’s claims had been explained and set out.
    1. In the course of the correspondence which preceded the commencement of the proceedings, no substantive defence to any of the claims had ever been intimated. This was a point made by Mr Langley on behalf of the Claimant in his written argument and Mr Stewart Coats has fairly accepted that he could not point me to any document, prior to the time when the application to set aside was made, where any substantive defence had been intimated, whether in correspondence, formal or informal, or otherwise.
    1. A further feature of the present case is that the Defendants had, in fact, instructed London solicitors who had acknowledged service and agreed an extension of time. So, unlike many cases of default judgment where the defendant allows a judgment to go by default at a time when it has no legal representation, this is a case where the Defendants had very well-known, and if I might say so, high class solicitors who were acting for them already.
    1. The effect of the evidence of the Defendants is, as Mr Langley rightly submitted, that the Defendants chose to give priority to other matters such as paying staff rather than to defending the litigation. If the Defendants choose to do that, rather than facing up to their potential legal obligations to creditors and also honouring the dispute resolution mechanism in the contracts which they had concluded, that is a matter of choice. It does not, in my judgment, provide an excuse or a good reason for allowing proceedings to go by default in the first instance or for failing to apply to do anything about the judgment with any real speed. If the position was that there were real financial constraints, such that it was not practicable for the Defendants to put in a defence explaining their position, then that could have been explained to the court by way of an application to extend time. That would not have been an enormously expensive exercise and it was one which could, in my judgment, have been done.
    1. Furthermore, if there was, in fact, a genuine defence to the claim and this was known to the Defendants, it does not seem to me that it would have been an enormously expensive exercise for that defence to have been articulated and served in accordance with the CPR, or for that defence to have been articulated, had there been a Default Judgment, in a prompt application to set aside. In fact, none of that happened. The real problem, as it seems to me, is that the Defendants at that time did not know what their defence was. They had, as I have said, never articulated any defence in correspondence despite having known of the claim for some time. The fact that they did not know what their defence was is also borne out by the delay of approximately six weeks between the witness statement in Kenya, which intimated reservation of rights to apply to set aside the English judgment, and the application which was actually then made towards the end of August 2020. The likely reason for the further delay between those two times is that an application to set aside would have required some articulation of the Defendants’ defence and nothing had hitherto been articulated or identified.
    1. I accept that, as a matter of law, this delay was not fatal. Ultimately, as Moore-Bick LJ said in Agrinvest at [24], one must look at all the circumstances of the case. However, I bear in mind that I am considering a case of Defendants allowing a judgment in default to be entered for unimpressive reasons, against a background where the Claimant’s case had been known for some time and there had never been a response by the Defendants. There was then a clear lack of promptness in making the application, whether one is looking at August or October 2020. In the meantime, steps had been taken to enforce the judgment in Kenya on a regular judgment properly obtained.
  1. Against this background, I consider that the lack of promptness is, in the present case, as it was in Agrinvest, a matter of very considerable weight. This means, in practical terms, that unless I am persuaded that there was a defence which looked strong or which for some other reason should be explored at trial, the judgment regularly obtained should remain in place notwithstanding the possibility that there might be a defence which might possibly succeed a trial.