SA Builders And Contractors Ltd v Holm

For permission to appeal, a document may count as a defence even if it is not formally headed or pleaded as one, provided its substance and avowed purpose purport to answer the counterclaim. Under the Civil Procedure Rules 1998, rule 12.3(2)(b), read with Practice Direction 12, paragraph 1.1, a document need only purport to be a defence. A witness statement may therefore make the issue arguable. Relevant context includes litigant-in-person status, delay in seeking default judgment and whether the case is already ready for trial. Permission was granted subject to conditions.

The claimant building contractor sued for an unpaid balance arising from works at the defendant’s flat. The defendant disputed liability for the balance and counterclaimed £49,716 for the cost of remedying alleged defects. At trial, the Central London County Court entered judgment in default on the counterclaim, holding that the claimant’s witness statement was not a pleading or a proper defence. The claimant sought renewed permission to appeal, relying on rule 12.3(2)(b) of the Civil Procedure Rules 1998 and paragraph 1.1 of Practice Direction 12. The central issue was whether the statements were documents purporting to be a defence to the counterclaim.

Permission to appeal granted conditionally.

1. The court considered whether there was a realistic prospect of persuading the full court that a defence to the counterclaim had been filed. It did not finally determine the underlying procedural issue.
2. Paragraph 1.1 of Practice Direction 12 provides that a defence includes any document purporting to be a defence. The fact that the claimant’s documents were witness statements, and were not formally entitled as a defence, was arguably not fatal.
3. The 28 February 2014 statement expressly responded to the allegations in the defence and counterclaim. It disputed defective workmanship, delay, responsibility for damage and the amount claimed. The counterclaim and the defence to it were closely linked: if the work was not defective, there was no basis for the remediation claim. The documents might therefore have been defective in form without being non-existent as a defence.
4. The case raised an important practice question concerning documents filed by litigants in person, the effect of later legal representation, delay in seeking default judgment and the fact that the matter was ready for trial. It might have been wiser to proceed with the trial than to make a late application based on the alleged absence of any defence.
5. Permission was directed against the order of 18 March 2015, if such an order existed, and paragraph 1 of the judgment dated 23 March 2015. Permission was conditional on satisfaction of outstanding interim costs orders of £10,000 and £15,000. Costs of the appeal were left to the Court of Appeal.

• Court of Appeal (Civil Division) — In [2016] EWCA Civ 712, Lord Justice Christopher Clarke granted renewed permission to appeal conditionally.
• Central London County Court — Her Honour Judge Baucher gave judgment in default for £49,716 on the counterclaim, later recorded with interest of £2,237.22, holding that the claimant had not filed a proper defence.