Razzaq v Ageas Insurance Ltd

Where a party seeks to set aside a judgment entered in their absence, the appellate court may consider whether the underlying claim had any real prospect of success. A procedural complaint about refusal of an adjournment will not justify permission to appeal where the substantive claim was bound to fail. Distress, anxiety or financial pressure does not, without more, establish incapacity, economic duress or undue influence sufficient to set aside a settlement. The party seeking to avoid the agreement bears the burden of proving the relevant incapacity or vitiating factor.

The appellant had settled an insurance claim arising from flood damage to business premises for £12,800. He later sought to set aside the settlement on grounds including mental incapacity, economic duress, undue influence and lack of consideration.

He did not attend the trial of his claim. The Birmingham County Court refused an adjournment, dismissed the claim, and later dismissed his application under CPR 39(3) to set aside the judgment. He appealed against those orders and sought permission to appeal. The central issue was whether any procedural unfairness concerning the adjournment or set-aside application could warrant an appeal when the underlying claim had no reasonable prospect of success.

1. Permission to appeal refused. The court accepted that the fairness of an adjournment decision is assessed by whether the decision was unfair, rather than merely whether it fell within a broad band of judicial discretion, applying Terluk v Berezovsky [2010] EWCA Civ 1345.
2. The refusal of an adjournment was not shown to be unfair. The appellant had not attended to make the application, and the judge was entitled to regard the medical evidence as unsatisfactory. The judge's later reasoning disclosed no error of principle.
3. Even if there had been a reasonable prospect that the trial should have been adjourned, the appellant had no reasonable prospect of succeeding on the substantive claim. The appellate court could take that merits consideration into account when deciding whether permission should be granted.
4. The appellant bore the burden of proving that he lacked capacity when he entered the settlement. The expert evidence supported capacity, and the appellant had no contemporaneous medical record supporting incapacity. Distress affecting judgment was insufficient, without more, to establish incapacity, economic duress or undue influence. Commercial inequality and difficulty in litigating for financial reasons did not itself amount to economic duress.
5. The court also identified an apparently erroneous later county court order seeking £120,000 on account of costs, contrasted with the earlier £12,000 figure. The matter was to be investigated, but this did not alter the dismissal of the application.

• Court of Appeal (Civil Division): permission to appeal against the Birmingham County Court orders dated 10 October 2013 and 6 February 2014 was refused. The underlying claim had been dismissed in the appellant's absence, and his application to set aside that judgment had also been dismissed.
• Birmingham County Court: HHJ Mithani QC refused an adjournment, dismissed the claim, and subsequently refused the application to set aside the judgment under CPR 39(3).