Samara v MBI & Partners UK Ltd (t/a M.B.I. International & Partners Co) & Ors

A party cannot make a second application under CPR 13.3 to set aside a default judgment where the issue has already been finally determined on appeal. Finality requires the party to use the appeal or reopening procedures provided by CPR Part 52.

CPR 3.1(7) cannot be used to circumvent that rule. A later application will not be justified merely because further evidence is said to reveal a material change of circumstances, particularly where the evidence was available, or could have been obtained, earlier. In any event, substantial and unexplained delay remains a powerful reason to refuse relief. Repeated attempts to revive issues already determined may also amount to an abuse of process.

The claimant obtained default judgment for unpaid remuneration under an alleged employment contract against MBI & Partners UK Ltd. MBI’s first application under CPR 13.3 was refused because, although a limitation defence had real prospects of success, the application had not been made promptly. The refusal was affirmed on appeal by Silber J, and no further appeal was brought.

MBI subsequently pursued and lost a fraud and forgery claim concerning the contract. Permission to appeal that judgment was refused. MBI then made a second application under CPR 13.3, relying on evidence given at the fraud trial and observations made when permission to appeal was refused. The central issues were whether the court had jurisdiction to entertain the second application, whether there had been a material change of circumstances, and whether the application was abusive.

1. Application dismissed. The order of Silber J was a final order determining whether the default judgment should be set aside. The court was therefore functus officio in relation to that issue. A second application under CPR 13.3 was not available merely because the applicant relied on later events or evidence.
2. Any challenge to the final appellate order had to proceed, if at all, under CPR 52.13 or CPR 52.17. Allowing a fresh CPR 13.3 application would circumvent the safeguards in Part 52 and undermine finality.
3. CPR 3.1(7) did not provide an alternative route. The authorities concerning material change of circumstances or misstated facts concerned discretionary case-management powers, principally in relation to interlocutory orders. They did not permit a judge to reopen a final order or hear an appeal from himself.
4. In any event, the alleged new material did not satisfy the relevant tests. MBI already knew the circumstances of the alleged contractual relationship and could have advanced evidence concerning the identity of the defendant earlier. The evidence given at the fraud trial, read as a whole, did not contradict the findings that the claimant honestly believed MBI was the contracting entity. Observations made when refusing permission to appeal were confined to the arguability of a timely application and did not address delay or the previous judgments.
5. The application would also have failed for delay. Time ran at the latest from the handing down of the fraud judgment, when MBI possessed the material on which it relied. Pursuing a misconceived appeal did not justify postponing the application.
6. The application was plainly an abuse of process. It sought to revive issues already litigated, after MBI had lost both the appeal concerning the default judgment and the fraud trial, contrary to the public interest in finality and the avoidance of repeated vexation.

High Court: Master Fontaine refused MBI’s first application to set aside the default judgment because of substantial and unexplained delay, despite finding a limitation defence with real prospects of success.

High Court on appeal: Silber J dismissed MBI’s appeal on 4 March 2014, holding that the delay justified refusal of relief.

Present judgment: The High Court dismissed MBI’s second application under CPR 13.3 and refused to permit the default judgment to be reopened.