Mohun -Smith v TBO Investments Ltd

Under CPR Part 39.3(5), an application to set aside judgment entered in a party’s absence requires all three conditions to be satisfied: prompt action, a good reason for non-attendance, and a reasonable prospect of success.

Medical evidence relied upon to establish inability to attend must be sufficiently detailed and independent. A bare sick note or general assertion of litigation-related stress will ordinarily be inadequate. A company may attend through an available director or representative where the absent individual is an important witness but is not the company’s only possible representative.

The defendant applied under Part 39.3(5) of the Civil Procedure Rules 1998 to set aside an order made on 30 June 2014. On that date, in the defendant’s absence, the defence had been struck out and judgment had been entered for the claimant.

The defendant relied on the illness and stress of Mr Robinson, its principal witness and one of its directors. The claimant accepted that the defendant had a reasonable prospect of success at trial, but disputed promptness and the existence of a good reason for non-attendance. The central issue was whether all three conditions in Part 39.3(5) were satisfied.

1. Application dismissed. The defendant failed to satisfy the requirements of Part 39.3(5) of the Civil Procedure Rules 1998.
2. The three conditions in Part 39.3(5) are cumulative. The applicant must have acted promptly after learning of the order, must have had a good reason for failing to attend, and must have a reasonable prospect of success at trial. The guidance in Bank of Scotland plc v Pereira [2011] 1 WLR 2391 was applied.
3. Promptness is assessed by reference to when the applicant learned that the court had exercised its power, rather than simply by measuring the length of the delay. The defendant was likely aware of the outcome by 3 July, and Mr Robinson knew of it no later than a date between 3 and 8 July. The application was not sealed until 23 July. The defendant therefore failed the promptness requirement.
4. A good reason for non-attendance requires adequate evidence. Applying Levy v Ellis-Carr [2012] EWHC 63 (Ch), the evidence should identify the medical attendant, explain familiarity with the patient’s condition and recent consultations, identify the condition and the features preventing participation, provide a reasoned prognosis, and give confidence that the opinion followed proper examination and was independent. The evidence here was limited, lacked the necessary detail, and did not establish that Mr Robinson could not attend.
5. The approach in Ketley v Brent [2012] EWCA Civ 324 was also applied. Litigation-related stress alone will ordinarily be insufficient, particularly where an adjournment is unlikely to remove the source of the stress. In any event, TBO Investments Ltd could have been represented by Mr McLaughlin, another director.
6. Although the defendant had a reasonable prospect of success, failure on the promptness and good-reason requirements meant that the court could not set aside the judgment and order.

The judgment concerned a first-instance application to set aside the order made by the same court on 30 June 2014. No appellate decision is stated.