The Attorney General v Universal Projects Limited (Trinidad and Tobago)

An application to set aside a default judgment must be classified by the source of the judgment. Where judgment follows an order making it the consequence of failing to serve a defence by an extended deadline, the application is for relief from sanctions under the Civil Procedure Rules rule 26.7. Part 13.3 concerns default judgments entered under Part 12 for procedural default.

Relief requires prompt application, evidence and satisfaction of the rule’s conditions, including a good explanation. Inexcusable administrative inefficiency or oversight will not ordinarily suffice. A party aware that its chosen course may cause default must comply or seek further directions. The express rules cannot be circumvented by invoking inherent jurisdiction.

The claimant sought more than $31 million under an engineer’s certificate. The defendant obtained an extension until 13 March 2009 to serve its defence, with permission for the claimant to enter judgment in default. The defence was not served and judgment was entered for $32,811,582.31.

Gobin J treated the defendant’s amended application as one for relief from sanctions under rule 26.7 and dismissed it. The Court of Appeal of the Republic of Trinidad and Tobago dismissed the appeal. The central issue before the Board was whether the application fell under rule 13.3 or rule 26.7, and, if the latter, whether the defendant satisfied the applicable conditions.

The Board unanimously dismissed the appeal.

1. Nature of the application. The order extending time to serve the defence made entry of judgment the consequence of non-compliance. That consequence was a sanction within rule 26.7. The sanction was the judgment entered pursuant to the permission, rather than the permission itself, because the permission alone did not affect the defendant. An order debarring a defendant from defending would be materially equivalent. Rule 13.3 and rule 26.7 address different situations: Part 13 concerns judgments entered under Part 12 for failure to comply with the rules, whereas rule 26.7 concerns sanctions imposed for failure to comply with a rule, order or direction. The distinction was supported by The Attorney General v Keron Matthews [2011] UKPC 38.
2. Relief from sanctions. An application under rule 26.7 must be made promptly, be supported by evidence and satisfy the conditions in rule 26.7(3). The Board did not need to determine the challenges to every other condition because the absence of a good explanation was fatal. The Board also rejected the contention that the conditions produced disproportionate results. The assessment involves an element of judgment, the strict conditions promote efficient litigation, and a party may avoid default by seeking a further extension before the deadline, as explained in Attorney General of Trinidad and Tobago v Regis (Civ App No 79 of 2011).
3. Good explanation. Where the explanation connotes real or substantial fault, it is not a good explanation. Oversight may be excusable in some circumstances, but inexcusable oversight and administrative inefficiency will not suffice. A party cannot knowingly pursue a course which it knows or reasonably anticipates will cause default and then rely on that course to obtain relief. It must comply or promptly seek further directions. The delay in instructing outside counsel and the failure to seek a short further extension were therefore insufficient.
4. Inherent jurisdiction. Even assuming that the defendant had a strong defence, the court had no residual jurisdiction to set aside the judgment to prevent an abuse of process. The rules occupy the field. Rule 26.2 applications concerning abuse or absence of grounds are contemplated before judgment; inherent jurisdiction cannot be used to circumvent the express conditions in rule 26.7. The Board applied the approach in Texan Management v Pacific Electric Wire and Cable Co Ltd [2009] UKPC 46.
5. The Board did not permit a constitutional argument concerning sections 4(a) and 5(2)(e), because it had not been raised below. The parties were given 28 days to make submissions on costs.

1. Privy Council: Appeal dismissed.
2. Court of Appeal of the Republic of Trinidad and Tobago: Appeal dismissed.
3. Gobin J: Permission was given to amend the application, but the application to set aside the judgment was treated as one for relief from sanctions under rule 26.7 and dismissed.