Law v St Margarets Insurances Ltd

The overriding objective requires procedural rules to be applied so that cases are dealt with justly, expeditiously and proportionately. Relatively minor procedural errors should not permanently shut out an apparently meritorious substantive defence, particularly where the error is capable of immediate correction and judgment has been entered against the wrong party. The court may permit a properly completed fresh application or reconsider the matter under Order 37 rule 1 of the County Court Rules. The overriding objective may require relief even at a late stage where that is the quickest, cheapest and fairest means of securing a hearing on the merits.

The claimant obtained judgment in default for the cost of replacing a vandalised marine engine against the defendant, which maintained that it had acted only as insurance broker and that any claim should have been brought against the underwriters.

The defendant’s first application to set aside the judgment was dismissed because the statement of truth had been signed defectively. A second application in proper form was dismissed on the basis that the district judge lacked jurisdiction to reconsider the matter. The circuit judge dismissed the resulting appeal, applying the approach in Tanfern Ltd v Cameron-MacDonald [2000] 2 All ER 801. The central issue was whether the overriding objective permitted the judgment to be set aside and the merits considered.

1. Appeal allowed. The default judgment entered on 11 April 2000 was set aside. The defendant was permitted to file a defence within seven days, and permission to amend was granted if required.
2. The Court of Appeal held that Judge Carter QC had taken an impermissible view of the overriding objective in CPR 1.1. The objective required the court to deal with the case justly, including proportionately, expeditiously and fairly, while making appropriate use of court resources.
3. The defendant’s errors were limited to failing initially to acknowledge service and filing a defective statement of truth. Those errors were relatively minor and capable of immediate correction. They did not justify allowing an apparently inappropriate judgment against the wrong defendant to stand permanently.
4. On the first application, the district judge could have permitted a corrected application to be filed immediately. Alternatively, once a proper second application was before him, he could under Order 37 rule 1 reconsider the matter forthwith. Justice required the judgment to be set aside so that the claim could be properly heard on its merits, including the identity of the liable party and the soundness of the insurance claim.
5. Lord Justice Longmore agreed with Lord Justice Simon Brown and added nothing.

The respondent was ordered to repay any sum received to the appellants’ solicitors within 28 days. There was no order for costs in the Court of Appeal or below.

• Court of Appeal (Civil Division): Appeal from the Tameside County Court allowed. The default judgment was set aside, with directions for a defence to be filed within seven days.
• Oldham County Court: Judge Carter QC dismissed the appeal from the district judge’s decisions.
• Tameside County Court: District Judge Osborne dismissed the first setting-aside application as defective and dismissed the second application on jurisdictional grounds.