McDonald & Anor v D&F Contracts Ltd

Where the time for filing an acknowledgement of service or defence has expired, a late filing does not, without an extension of time, defeat an application for default judgment. The court determines the claimant’s entitlement by reference to the position when the application was made. A defendant may later seek to set aside default judgment under CPR Part 13.3, but treating a late defence as automatically defeating the application would improperly shift the procedural burden from the defaulting defendant to the claimant. The court may enter judgment while staying execution to allow an application to set aside, particularly where the claim is materially defective or overstated.

The claimants sought default judgment against a construction company arising from alleged defective, incomplete and delayed refurbishment works. Proceedings were served on 15 September 2017. No acknowledgement of service was filed, and no defence was filed by the applicable deadline of 10 October 2017. The defendant later filed a purported defence on 31 October 2017.

The central issue was whether the late defence prevented judgment in default under CPR Part 12. The court also considered the substantial defects and apparent overstatement in the particulars of claim, and the defendant’s possible prospects of applying to set aside any judgment.

1. Default judgment. The court entered judgment in default for the principal sum. The late filing of the defence did not alter the claimants’ entitlement because the conditions in Rule 12.3 had arisen before the defence was filed.
2. Effect of late filing. The relevant position is assessed at the date of the application. An acknowledgement of service or defence filed after the prescribed time requires an extension of time to become valid within the meaning of the Rules. Without such an extension, late filing does not displace Rule 12.3. Mrs Justice Jefford preferred and adopted the approach in Taylor v Giovani Developers Ltd [2015] EWHC 328 (Comm) and Billington v Davies [2016] EWHC 1919 (Ch).
3. Subsequent relief. If default judgment is entered, the defendant may apply under CPR Part 13.3 to set it aside, including on the basis of a real prospect of successfully defending the claim. The burden therefore remains on the defaulting defendant. The court was not exercising a general discretion whether to enter judgment.
4. Merits and pleading defects. Although judgment was entered, the particulars of claim were materially defective. Several heads of loss were unclear, unsupported or apparently unsustainable. The claim appeared substantially overstated, and the interest claim relied on the wrong statute and an excessive rate. The late defence, though exceptionally brief, could properly be construed as putting the claimants to proof under Part 16.5.
5. Orders. Execution of the judgment was stayed for 28 days to permit an application to set aside. The defendant was not thereby given a limit on the time for making that application. Costs were summarily assessed at £7,500, payable within 28 days without a stay.

First-instance decision. No prior appellate decision is stated in the judgment.