High Court sets aside default judgment in £3m PI claim

McCloud: Court system should know the state of its own files

The High Court has set aside judgment in default of defence in a £3m personal injury claim because, although the court was “unaware” of it, a defence had been served before the judgment.

Master McCloud said the court system should “know the state of its own files”, but if in this case the court had known a defence had been filed, it was “very doubtful” that judgment in default would have been entered.

“It does not seem to me that there is a duty on a claimant constantly to monitor the court’s own files so as to ensure that when a request for judgment in default eventually reaches the master, on some unknown date depending on the state of delays in the court administration, the court has the most up-to-date filing information.

“The court system ought to be taken to know the state of its own files, albeit that until the very recent advent of electronic filling in the Queen’s Bench Division thanks to the sterling work of the senior judiciary, such was seldom in fact the case in reality. One hopes that will now be a thing of the past.”

Leaving aside the administrative confusion, Master McCloud said the case involved a procedural decision of “some significance”, given that both sides agreed that issues of interpretation arose regarding parts 12 and 13 of the CPR.

She said her judgment in Clements Smith v Berryman Lace Mawer [2019] EWHC 1904 (QB) was “virtually bound to be appealed” and so granted the claimant permission to appeal to “pre-empt” this.

Although the facts of the case appeared to be “unique and arguably not directly covered by binding authority”, the situation had been “carefully considered” by a previous court on an obiter basis.

She said Andrew Baker J had set out three possible interpretations of CPR 12.3, 13.2 and 13.3 in Cunico Marketing v Daskalakis, applying them to acknowledgments of service rather than the filing of defences.

The first was that CPR 12.3(1) only allowed the court to grant default judgment “where, at the time of judgment, there is no acknowledgment of service and the time for acknowledging service has expired”.

The second was that courts could only grant default judgments so long as “at the time the request or application for default judgment is filed”, there was no acknowledgment of service and the time for acknowledging service had expired.

The third interpretation allowed the court to grant judgment in default where a “timely acknowledgment of service was not filed, irrespective of any acknowledgment of service later filed”.

In the case before her, Master McCloud said the question was how the CPR applied where the defence had been filed after expiry of the time limit but before the default judgment was entered.

She ruled, following Andrew Baker J, that the first interpretation should prevail, meaning that in this case the court did not have jurisdiction to enter a default judgment, which must now be set aside.

The master ruled on an additional point, that if she had set aside the judgment on discretionary grounds, an application for relief from sanctions would not be required from the defendant and the Denton criteria and rule 3.9 would not have to be considered.

Master McCloud added that, after supplying a draft of her judgment to counsel, she was informed by a Queens Bench master who sits on the Civil Procedure Rule Committee (CPRC), that changes to rule 12 had been approved and would come into effect in October 2019, which would have the same effect as her judgment.

“However on further research and after contacting the CPRC, I understand that no statutory instrument has been passed containing such a rule change and that the proper approach in the view of the CPRC is that one should in those circumstances proceed without any assumption that such a rule change will take place at all.”

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