Samara v MBI & Partners UK Ltd & Anor

Applications to set aside default judgment must be made promptly. The post-April 2013 approach to compliance with the Civil Procedure Rules 1998 applies to CPR Part 13. Relief is generally granted only where the default is trivial or there is a good reason for it; inefficiency is not ordinarily a good reason. A defendant cannot justify delay by waiting for the claimant’s agreement. A real prospect of successfully defending the claim is not, by itself, sufficient. Under the former approach, lengthy and unexplained delay could likewise outweigh the merits of the proposed defence and alleged absence of prejudice. An appellate court reviewing a discretionary refusal to set aside judgment may interfere only where the lower court’s decision was wrong.

The First Defendant appealed against Master Fontaine’s refusal to set aside a default judgment entered in favour of the Claimant. The proposed defence had a real prospect of success because the claim might be statute-barred under either Saudi or English law. The application to set aside was nevertheless made about 16 months after the Defendant knew of the judgment, and only when enforcement was attempted.

The appeal concerned the effect of the post-April 2013 procedural regime on applications under CPR 13.3, the significance of delay and prejudice, and the proper approach under the former rules.

1. Appeal dismissed. The Master was entitled, and in the circumstances obliged, to refuse relief because the application was made at least 16 months after the First Defendant knew of the judgment and most of the delay was unexplained.
2. The new procedural regime applied universally to the CPR, including CPR Part 13. The amended overriding objective required the court to enforce compliance with rules, practice directions and orders. The approach in Mitchell v News Group therefore informed the application of CPR 13.3.
3. CPR 13.3(2) imposed a clear obligation to apply promptly. The Defendant could not wait to see whether the Claimant would consent to setting aside the judgment. The earlier failure to deal with the claim and the later failure to act after judgment were relevant to the exercise of discretion.
4. Under the new regime, relief was ordinarily available only where the default was trivial or there was a good reason for it. The Defendant’s delay resulted from inefficiency and was serious, sustained and inexcusable. The Claimant’s delay in bringing the claim, the payment of money into court and the alleged absence of prejudice did not justify relief.
5. Alternatively, under the old approach, the lengthy and unexplained delay outweighed the proposed limitation defence and the other countervailing considerations. The Master’s decision was not wrong under CPR 52.11(3)(a). The appellate court’s role was limited to review, and intervention was permissible only if the discretionary decision exceeded the generous ambit within which reasonable disagreement was possible.

• High Court (Queen’s Bench Division): Master Fontaine refused to set aside the default judgment by order dated 23 July 2013.
• High Court (Queen’s Bench Division) on appeal: the appeal was dismissed on 4 March 2014.