DENTON APPLIES TO APPLICATIONS TO SET ASIDE DEFAULT JUDGMENTS: HOCKLEY -v- NORTH EAST LINCOLNSHIRE CONSIDERED

The issue of whether the “Mitchell/Denton/CPR 3.9” criteria apply to applications by a defendant to set aside a default judgment has been discussed several times on this blog. In Hockley -v- North Lincolnshire &  Goole NHS Trust (19th September 2014)  Judge Jeremy Richardson Q.C., sitting as a judge of the High Court,   came to the categorical decision that they did apply  to applications made under the “good reasons” ground alone. The Judge allowed the default judgment to stand. (The case is reported in full on Lawtel)

THE FACTS

The claimant had issued proceedings against the Trust without any real compliance with the pre-action protocol. The proceedings were served but the acknowledgment of service was served late and the claimant entered judgment in default.  The District Judge set judgment aside. The claimant appealed.

AN IMPORTANT ELEMENT OF THIS DECISION

It is important to note that the defendant elected to proceed on the grounds of CPR 13.3(1)(b) alone – that there is “some other good reason why” judgment should be set aside. The defendant did not place a draft defence before the court or adduce any evidence at all to enable the court to conclude that there was a real prospect of defending the claim.

THE JUDGE’S DECISION ON APPEAL

The judge held that:

  • Similar principles applied to  CPR 13.3(b) as applied to CPR 3.9.
  • The Mitchell and Denton principles have “profound importance” to applications to set aside a default judgment when the “good reason” test was being considered.
  • The Denton case contained repeated emphasis on the need for a culture of compliance.
  • The three stage test in Denton had considerable relevance to an application when considering the Good Reason ground in CPR 13.3.(1)(b).
  • The reason for the default was the incompetence of the NHS agency prior to the handover to solicitors.
  • The acknowledgement of service was 13 days late.
  • The claimant was entitled to invoke the default judgment.
  • When a defendant was relying on a “Good Reason” ground the court must consider this by reference to an assessment of how serious the default was and how it occurred.
  • In the current case the default was serious and stemmed from incompetence.
  • The default by the defendant was a serious one.
  • The District Judge’s decision to set aside the judgment was overturned and the judgment remained.

IMPORTANT POINTS

The judgment relates to the second limb of CPR 13.1(1) – good reason. It is not yet fully clear how much these principles relate to the first limb – a real prospect of successfully defending the claim. It is clear that:

1. Any sensible defendant should put evidence before the court in relation to merits. It is clearly extremely dangerous to attempt to rely on “good reasons” alone.

2. The question of the relevance of Denton to applications under the first limb (real prospect of success) remains open.  However other cases which have discussed on this blog appear relatively tolerant to defendants.

3. The case should, and is expressly designed, to emphasise the importance of the acknowledgment of service and the need for compliance.

(The judgment also had some interesting points on telephone applications which I will discuss separately).

RELATED POSTS

2 comments

  1. Not an entirely satisfactory judgment: there is no mention of Coll v Tattum and a lack of clarity about the default judgment. The AOS seems to have been filed before the default judgment was entered. D should have lodged the AOS and (with it) an application for a retrospective extension of time for doing so.

    The judgment talks about permission to enter default judgment. Why would C need any permission to enter default judgment in a case of this kind? It would be a request for judgment, not an application for judgment under Part 23.

    It was surely a major tactical error by D not to produce a draft Defence, even though the DJ had (ludicrously) given it a six-month extension of time for doing so.

  2. Stephen Cottrell · · Reply

    Wow – where to begin. To state that the completely different wording and structure of CPR 3.9 and CPR 13.3 amounts to no more than ‘semantic’ differences is atsonishing. The 3-stage test in Mitchell was bad enough on 3.9 and just doesn’t fit into CPR 13.3. Granted, judges might want to take a more hardline stance post April 2013 and the new overriding objective (nothing to do with Mitchell/Denton) but the rules specify that the judge hearing the application only needs to find ‘some good reason’ why the judgment shoudl be set aside or varied, or why the defendant should be allowed to defend the claim – only ONE reason is needed and as once one such reason is identified (such as C’s failure to follow the protocol) the court moves on to consider all the circumstances in its exercise of its discretion. There seems to have been a conflation of the ‘good reason for breach’ test in Mitchell/Denton and the ‘good reasosn for setting aside’ in CPR 13.3 – wholly different concepts.

    The Defendant in this case seems to have been penalised for ‘acquiescing’ in the claimant’s failure to follow the protocol – i.e. for cooperating. Given that there can only be two possible breaches causing judgment to be entered – failure to file AOS or to file a defence – the ‘triviality’ analysis is particulary unhelpful and inappropriate. Worst of all, having set out the correct tests from Denton, the judge then went on to say (paragraphs 61, 62) that relief would only be granted if there was a good reason for the breach – the opposite of the conclusion of the Court in Denton!

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