Default judgment

Question 1

what is default judgment

Answer 1

C has a right to apply for a judgment against D if D fails to respond in time to the service of the particulars of claim (CPR Part 12) by either:
- failing to file an acknowledgement of service
- failing to file a defence

Question 2

when can C apply for a judgment in default?

Answer 2

Depends on:

• Whether or not the defendant files an acknowledgement of service; and

-Whether the claim form and particulars of claim are served together, or separately

Question 3

not filing an acknowledgement of claim, if the claim form and particulars of claim are served together

Answer 3

earliest on the 15th day after deemed service of the claim form

will need to take into account rules for deemed service of the claim form (Rule 7.5(1))

Question 4

not filing an acknowledgement of claim, if the Particulars of Claim are served separately to the claim form

Answer 4

• The earliest date that the claimant can apply for judgment is the 15th day after deemed service of the Particulars of Claim
• It will be necessary to take into account the rules for deemed service of a document other than the claim form under CPR 6.26

Question 5

if D files an acknowledgement of service, but no defence & the claim form and particulars of claim are served together

Answer 5

• The earliest date that the claimant can apply for judgment is the 29th day after deemed service of the claim form
• need to take into account the rules for deemed service of the claim form (i.e., the claim form is deemed served on the second business day after completion of the “relevant step” under Rule 7.5(1))

Question 6

if D files an acknowledgement of service, but no defence & the claim form and particulars of claim follow separately

Answer 6

• The 29th day after deemed service of the particulars of claim
• It will be necessary to take into account the rules for deemed service of a document other than the claim form under CPR 6.26

Question 7

grounds for setting aside a default judgment

Answer 7

CPR 13

1. mandatory > the court must set the judgment aside
   - if D settled the claim in full
   - judgment was wrongly entered because the deadline for filing an Acknowledgement of Service or Defence hadn’t actually passed
2. discretionary > the court has discretion to set the judgment aside but may choose not to
   - D has a real prospect of defending the cliam
   - it appears to the court there is some good reason why the judgment should be set aside, or that the defendant should be allowed to defend the claim

Question 8

how the court exercises its discretion to set aside a default judgment

Answer 8

• court must consider whether D made the application to set aside the judgment “promptly” (CPR 13.3.)

Three state test to determine if there is a “good reason” to set judgment aside (Denton v TH White Ltd [2014]):
1. what is the seriousness or significance of the failure (if the breach is not serious or significant, relief will usually be granted)
2. why did the failure or default occur (did the party at fault have a reasonable excuse?)
3. The court will evaluate “all the circumstances of the case, so as to enable [the court] to deal justly with the application

Question 9

costs of the application to set aside

Answer 9

will depend on what basis the judgment was set aside on:

• mandatory grounds > inference that default judgment was applied for incorrectly by C, C will normally have to pay D’s costs
• discretionary ground > will depend on which one, but might be at the discretion of the judge
• if the application is dismissed, D will need to pay C’s costs of the application
• condition order (where the court grants the application but on the condition that D pays into the court the amount of the claim or the amount they can afford) > court will normally order D to pay C’s costs

Question 10

what happens where no defence is filed and C doesn’t apply for default judgment?

Answer 10

CPR 15.11.

Claim will be stayed automatically where:
- D hasn’t served or filed and admission, or defence, and hasn’t applied to strike out the claim: AND
- no party applied for default judgment; AND
- at least 6 months have expired since the end of the period for filing a defence

Question 11

application for the stay of proceedings to be lifted

Answer 11

any party can apply for the stay to be lifted

the court will apply the three stage approach from Denton v TH White Ltd [2014]:
1. What is the seriousness or significance of the failure?
2. Why did the failure or default occur?
3. The court will evaluate “all the circumstances of the case, so as to enable [the court] to deal justly with the application”.