Bell v Brown

A default judgment may be set aside where the defendant has a real prospect of successfully defending the claim or there is another good reason to permit a defence. A limitation period is not postponed under section 32 of the Limitation Act 1980 where the alleged breach was openly reported to the police and was likely to come to the claimant’s attention. The court may strike out a claim with no real prospect of success, particularly where it is inadequately pleaded, duplicative and supported by fanciful damages claims. A district judge lacks jurisdiction to grant an unsought freezing order outside the circumstances authorised by the relevant practice direction.

The claimant sued a former business partner for trespass to land, interference with documents and breach of confidence arising from information and documents supplied to the police in the 1990s. Judgment in default was entered after the defendant did not respond to proceedings served at addresses where he no longer lived. The defendant applied to set aside the judgment, restrict use of the disclosed documents, and address an order requiring money due to him to be paid into court. The claimant also sought amendments and final judgment. The central issues were promptness, limitation, title to sue, the prospects of the pleaded causes of action, and the validity of the payment order.

1. The default judgment was set aside. The defendant acted promptly once he learned of the proceedings. Under CPR Part 13.3, he had a real prospect of defending the claim, and there was in any event good reason to allow a defence.

2. The claimant relied on section 32(1) and (2) of the Limitation Act 1980. The causes of action were not based on fraud within section 32(1)(a). Nor was there deliberate concealment within section 32. The defendant’s disclosures to the police were made so that the claimant would be investigated and questioned. It was therefore likely that the claimant would discover the relevant facts at the time. The defendant had a real prospect of succeeding on limitation, while the claimant had no real prospect of defeating that defence.

3. The court expressed further, non-essential conclusions. The claimant’s title to sue was doubtful because the causes of action appeared to vest in the trustee in bankruptcy. The trespass and document claims were weakly pleaded and could not support the damages claimed. The breach of confidence claim had no real prospect of success in circumstances involving disclosure to the police of information reasonably believed to evidence an offence, having regard to Taylor v Serious Fraud Office [1999] 2 AC 177.

4. The claim was struck out under CPR Part 24 because it had no real prospect of success and was frivolous and vexatious. The court also made an extended civil restraint order under CPR Part 3.4(6).

5. The order requiring money to be paid into court was discharged. It was, in substance, a freezing order, but the district judge had no jurisdiction to make it. The money in court and accrued interest were to be paid to the defendant. No order restricting use of the documents was necessary in light of the other orders, although the judge indicated that such an order would have been made if required to protect the defendant.