Narrow escape for defendants who failed to notice particulars of claim

Jaguar: Credit hire dispute

A judge has set aside “by the narrowest of margins, and with some hesitation” a claimant’s judgment in default after the defendant’s solicitor failed to notice that particulars of claim had been served for five months.

His Honour Judge Hodge QC, sitting as a High Court judge, found that there was “no good reason” for the defendant’s failure to serve a defence in time and there was a lack of promptness in making the set-aside application.

However, HHJ Hodge said there was a defence based on estoppel which had a “real prospect” of success.

“I have indicated that I am satisfied that the application to set aside was not made promptly; and I have to weigh that in the balance when exercising my discretion.

“I have also to bear in mind that I have found that there was a serious procedural breach of the rules in failing to serve a defence in time, and that there was no good reason for it.

“However, I do have to have regard to all the circumstances of the case; and where I consider that there is an arguable defence to a substantial part of the claim, then I should allow that defence to be asserted.”

The High Court in Manchester heard that Praetura Asset Finance claimed over £1.5m from Derek Hood under an unregulated hire purchase agreement involving a Jaguar racing car.

The claim form and particulars of claim were served on 27 January 2019. The defence served an acknowledgment of service but no defence and on 27 March 2019 the claimant entered judgment in default for £1.58m.

Delivering judgment in Praetura Asset Finance v Hood [2019] EWHC 2231 (Comm), HHJ Hodge said the fact that particulars of the claim had been served with the claim form by the court only “came to light” on 2 July. The defendants applied for the judgment in default to be set aside on 12 July.

The judge said that, under CPR 13.3(1), the court could set aside or vary a default judgment if had the defendant had a “real prospect” of successfully defending the claim.

Until 2 July, the defendant and his solicitors, City firm Fieldfisher, treated the judgment as “wrongly entered” because no particulars of claim had been served, a position which turned out to be incorrect.

“The defendant therefore accepts that he has to invoke the discretionary jurisdiction under CPR 13.3.

“The defendant also accepts that, in addition to the express requirement that the court should have regard to whether the application to set aside was made promptly, the court must also have regard to the three-stage Denton test.”

HHJ Hodge said there was “no good reason” for taking the view that no particulars of claim had been served.

He went on: “The defendant clearly had the particulars of claim. He sent them to his solicitors – to two individuals at Fieldfisher – by way of email attachment.

“Admittedly, the accompanying e-mail did not the refer to the fact that the attachment comprised the particulars of claim, and the email was sent on a Sunday, but in my judgment there is no reasonable excuse for the solicitors failing to open the attachment and seeing that it contained the particulars of claim.

“Moreover, the claim form expressly stated ‘particulars of claim attached’.”

HHJ Hodge said that according to the court file, the Court Service asked the defendant on 5 April to file an application if he wished to have the judgment in default set aside.

Since no application to set aside was issued until 12 July, the judge said he was satisfied it was not made promptly.

HHJ Hodge said counsel for the defendants had raised “a number of defences” to the hire purchase claim, but there was only one, based on promissory estoppel, that had a “real prospect” of success.

However, it amounted to an “arguable defence to a substantial part of the claim” and as a result the judgment in default should be set aside.

On costs HHJ Hodge said: “The defendant has been successful, but by the narrowest of margins, and with some hesitation on my part.”

He awarded ‘costs in the case’, so the “ultimate incidence of costs” depended on which party was successful at trial.

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