Northern Rock (Asset Management) Plc v Chancellors Associates Ltd

A judgment entered administratively on an admission in an acknowledgment of service is irregular where the admission does not fall within specific procedural rules permitting judgment on request. The claimant must make an application under CPR Part 14 so that a judge can consider the admission, service and directions. A first-instance court has jurisdiction under CPR rule 3.1(2)(m), read with the overriding objective, to set aside an irregular judgment. Setting aside will normally be appropriate where the admission was plainly mistaken, there is a properly arguable defence, the application was prompt and no prejudice is caused.

The claimant brought a professional negligence claim concerning valuation reports prepared for proposed remortgage lending. The defendant, acting without solicitors, filed an acknowledgment of service and mistakenly ticked the box admitting the claim. The claimant then sent the court office a request for judgment using Form N225, and the Registry entered judgment for damages to be assessed without judicial consideration.

The defendant applied to set aside the judgment and sought permission to withdraw the admission. The parties agreed that the judgment should be set aside if the court had jurisdiction. The central issues were whether judgment could properly be entered administratively on this admission and whether the first-instance court could set aside the resulting judgment.

1. Judgment set aside. The judgment was irregularly obtained. Under CPR Part 14, an admission outside the specified formal admission procedures requires an application for judgment. The application must be filed, the fee paid and, unless otherwise ordered, served on the defendant. It must be considered by a judge. The claimant therefore had no right to obtain judgment merely by lodging a request with the TCC Registry, and the Registry had no right to enter judgment administratively on that basis.
2. Form N225 was inappropriate because it concerned an admission of a specified amount, whereas the claimant sought judgment with damages to be assessed.
3. The court of first instance had jurisdiction under CPR rule 3.1(2)(m) to set aside an irregularly obtained judgment, unless another express CPR provision governed the situation. That power was informed by the overriding objective and was exercised according to what was fair and just.
4. Justice will normally require setting aside where the admission is obviously mistaken, there is a properly arguable defence, the application is made reasonably promptly and setting aside causes no prejudice. Those considerations were satisfied. The defendant was permitted to withdraw the admission.
5. The parties were to proceed to a defence and a further case management conference before trial.