Black Arrow Finance Ltd v Orderdaily Co Ltd & Ors

Where an application for permission to appeal is made without notice and the papers disclose unresolved issues that may affect a default judgment, the proper course is to adjourn the application for hearing on notice. Relevant issues may include the true cause of action, whether a contingent claim could properly support default judgment, service, notice and delay. Delay should be assessed by reference to when the defendant learned of the judgment itself, rather than merely when the defendant knew of the proceedings. An order for alternative service may also require scrutiny where material facts bearing on the likelihood of documents reaching the defendant were omitted. Any appeal should follow immediately if permission is granted.

Black Arrow Finance Ltd v Orderdaily Co Ltd & Ors concerned Mr Wilkinson, the sixth defendant in proceedings alleging fraud in connection with purportedly financed refrigerating equipment. A default judgment had been entered against him on 17 November 2000. He sought to set it aside, together with a freezing order, and sought permission to appeal from the judgment of Lord Carlile of Berriew QC, sitting as a Deputy High Court Judge, dated 5 April 2001.

The application was made without notice. The Court of Appeal considered concerns about the pleaded conspiracy claim, its contingent nature, service and alternative service, notice of the judgment and damages hearing, and the calculation of delay. The central question was whether those matters should be resolved before the application for permission was determined.

Disposition. The Court of Appeal adjourned the application for permission to appeal to a hearing on notice to the claimant, with any appeal to follow immediately if permission was granted. The application to adduce fresh evidence was also adjourned. Costs of the hearing were made costs in the appeal, a stay was granted until the next hearing, and the matter was to be heard by three Lord Justices. Walker LJ agreed with that course.

1. Nature of the claim. Rix LJ considered that the court below had concentrated on an alleged representation arising from Mr Wilkinson’s signature on a cheque. The pleaded cause of action against him appeared instead to be conspiracy to defraud with the second defendant under paragraph 17A.
2. Contingent claim. Paragraph 17A was pleaded conditionally on the signatures on the lease and guarantee being forged, while the claimant did not admit that fact. When default judgment was entered, liability against the second defendant remained in issue and was later stayed. Whether default judgment could properly be requested on such a contingent claim required consideration at the adjourned hearing.
3. Service and notice. The Court identified issues concerning whether Mr Wilkinson received notice of the default judgment or of the later damages assessment. The order for alternative service had been obtained on evidence which did not disclose the parties’ estrangement and other serious allegations. Those circumstances required examination on notice.
4. Delay. The judge below appeared to have treated the delay as running from 7 September 2000. The default judgment was in fact dated 17 November, and Mr Wilkinson’s evidence was that he learned of it by email on 19 January 2001. On that chronology there was little, if any, delay requiring explanation.

• Court of Appeal (Civil Division): In [2001] EWCA Civ 1188, the application for permission to appeal and the application to adduce fresh evidence were adjourned to a hearing on notice, with any appeal to follow immediately if permission was granted.
• High Court of Justice: Lord Carlile of Berriew QC, sitting as a Deputy High Court Judge, gave judgment on 5 April 2001 on Mr Wilkinson’s application to set aside the default judgment and freezing order. No citation is stated in the judgment.