Priestley v Dunbar & Co (a firm)

When deciding whether to set aside a regular default judgment under CPR 13.3, the court must consider promptness together with all the circumstances of the case. Promptness is important, but it is not an absolute condition. The strength of the proposed defence, the seriousness of the judgment, the effect of delay, wasted costs, proportionality and the possibility of imposing conditions must all be evaluated.

An appellate court may interfere with a discretionary refusal where the first-instance judge failed to evaluate material circumstances or assessed the consequences of delay incorrectly. A realistic defence and disproportionate prejudice may justify setting aside the judgment despite significant delay.

Dunbar & Co appealed against a decision of District Judge Giles dated 29 April 2014 refusing to set aside a regular default judgment on liability in Dr Priestley’s professional negligence claim.

The district judge accepted that Dunbar had a realistically arguable defence but refused relief because the application had not been made promptly and preparation for the quantum hearing had proceeded. The appeal concerned the proper approach to promptness under CPR 13.3, the application of CPR 3.9, the assessment of prejudice and the extent to which the appellate court could review the exercise of discretion.

1. The appeal was allowed. The district judge was entitled to find that Dunbar’s application, made 11 weeks after an order requiring it to be issued as soon as possible, was not prompt. The delay was significant and engaged the court’s duty to consider all the circumstances under CPR 13.3 and CPR 3.9.
2. However, the district judge had not properly evaluated all relevant circumstances. He had not considered the seriousness of allowing a substantial liability judgment to stand against a small accountancy firm, the realistic defence, or whether a conditional order would be a proportionate response.
3. The assessment of prejudice was flawed. The district judge did not identify the work said to have been wasted. Much of the quantum work would have been required in any event. Continuing directions without fixing a specific date for the set-aside application made some wasted work foreseeable, rather than demonstrating that it resulted from lack of promptness.
4. The district judge also failed to identify any significant delay to the trial. The proper comparison was between the actual progress of the proceedings and the progress that would have occurred had Dunbar acted promptly. On the evidence, any delay was unlikely to exceed about five weeks.
5. Balancing the significant delay against the realistic defence, the sums at stake, the size of the defendant, the costs and the limited prejudice, it would be disproportionate and unjust to leave the default judgment in place. The judgment was therefore to be set aside. The question of conditions, including payment of limited costs, was left for further consideration. Dunbar was provisionally ordered to pay the costs of the application before the district judge.

High Court (Chancery Division): Allowed Dunbar’s appeal against District Judge Giles’s refusal to set aside the default judgment. The default judgment on liability was to be set aside, subject to further consideration of conditions and costs.