Gahir v Bansal

When deciding whether to set aside a regularly obtained default judgment, the court must assess whether the defendant has a real prospect of successfully defending the claim and must weigh that prospect against promptness, the nature and justification of any delay, wasted costs, and the justice of the case. A real prospect of success does not automatically secure relief. Marked and unjustified delay may itself outweigh the merits, particularly under the modern approach to compliance with procedural rules. Nevertheless, the discretion remains fact-sensitive. Where the merits cannot properly be evaluated without a trial, relief may be granted on strict conditions designed to compensate the claimant and secure efficient future conduct.

This was a libel action concerning two handwritten letters allegedly sent to members of the Sikh community and containing serious allegations about the claimant. The defendant denied writing or publishing them and failed to engage with the pre-action correspondence, proceedings, default judgment, or subsequent directions. He applied late to set aside the default judgment entered on 5 April 2016.

The court considered whether the defendant had a real prospect of successfully defending the claim under CPR 13.3(1)(a), the significance of promptness under CPR 13.3(2), the weakness of the claimant’s handwriting evidence, and the competing interests in vindication, costs, and justice.

1. Application granted. The default judgment was set aside, by the narrowest of margins, so that the defendant’s denial of responsibility could be evaluated at trial.
2. Under CPR 13.3(1)(a), the defendant had to show a real prospect of successfully defending the claim. That standard was materially higher than merely showing an arguable case and was similar to the summary-judgment test under CPR Part 24. The claimant’s handwriting report was inadequate: it was unclear whether both letters had been examined, it attributed only one letter to the defendant, contained little analysis, and did not clearly address the significance of Punjabi handwriting. The report therefore did not establish that the defence had no real prospect of success.
3. Promptness under CPR 13.3(2) was a factor of considerable significance. The defendant’s delay was inordinate and unjustified. The court nevertheless had to exercise a broad discretion by weighing the extent and explanation of the delay, the strength of the proposed defence, and the justice of the case. Modern procedural standards make delay and wasted expenditure more potent considerations, but they do not create an inflexible rule requiring refusal.
4. The issue was confined to whether the defendant wrote or published the letters and could be resolved without disproportionate expenditure. The consequences of enforcing the default judgment could be severe, including substantial damages and costs, while the defendant’s credibility could only properly be assessed at trial. The claimant’s interest in vindication was relevant but carried reduced weight because the defendant had not advanced a truth defence and a default judgment would still provide some vindication.
5. Relief was granted subject to strict case-management terms. The defendant was required to serve a properly pleaded defence promptly, proceed to an early and proportionate trial, provide any necessary financial evidence, and address further expert evidence. The claimant was to be compensated, so far as possible, for wasted costs.

Not an appeal. The judgment determined the defendant’s application to set aside a default judgment entered on 5 April 2016.