TPE v Franks

On an application to set aside default judgment, the court must first decide whether the defendant has a real prospect of successfully defending the claim. It must then exercise its discretion under CPR r 13.3, having regard to promptness and all relevant circumstances.

A limitation defence cannot be treated as viable merely because the primary limitation period has expired. Equally, the court must not assume that an application under s 33 of the Limitation Act 1980 will inevitably succeed. The claimant bears the burden of establishing that it would be equitable to disapply the limitation period. The s 33 factors must be considered individually and across the whole period of delay. Where the available evidence does not establish that the claimant would inevitably succeed, the defendant has a real prospect of defending the claim.

TPE claimed damages for personal injury and loss arising from sexual offences committed by Harvey Franks in 1997 or 1998. Franks was convicted of rape and later became subject to a substantial term of imprisonment. TPE obtained judgment in default after Franks failed to acknowledge service or file a defence.

Franks applied under CPR r 13.3 to set aside the judgment. The claim was concededly outside the three-year period in s 11 of the Limitation Act 1980, but TPE relied on s 33 to disapply that period. The Master refused the application, concluding that TPE’s application under s 33 would inevitably succeed. The issues on appeal were whether s 33 could be considered, whether the hearing should have been adjourned, and whether Franks had a real prospect of defending the claim on limitation grounds.

1. Appeal allowed. The default judgment was set aside. Relief from sanctions was granted and Franks was given permission to file and serve a defence. The claim was remitted to the Master for further case management.

2. The Master was entitled in principle to consider s 33 on the application under CPR r 13.3. The expiry of the s 11 period did not, by itself, require judgment in default to be set aside. Section 33 has no prescribed procedural mechanism and may be considered at an interlocutory stage, provided the defendant receives due notice.

3. The hearing should have been adjourned once TPE relied on s 33 for the first time in a skeleton argument served shortly before the hearing. Fair civil litigation requires parties to give proper notice of their cases, evidence and authorities. The Master’s reasons for refusing an adjournment did not address the prejudice caused by the late ambush.

4. The correct CPR r 13.3 approach was first to determine whether there was a real prospect of a successful defence. If that threshold was met, the court should then exercise its discretion having regard to promptness and the other relevant circumstances. The Master had considered promptness first, which was the wrong sequence.

5. For the limitation issue, the question was whether there was a real prospect that TPE would fail to establish that it was equitable under s 33 to disapply the s 11 period. The burden lay on TPE, and it was a heavy burden. The s 33(3) factors had to be considered individually and then assessed in the round. The whole period from majority to issue had to be considered, rather than dividing it into separate periods.

6. The Master had not analysed the medical report against the statutory factors. There was no cogent evidence from TPE explaining the 17-year delay, no evidence concerning substantial periods, no evidence of obstructive conduct by Franks, and no evidence about legal or medical advice. Although TPE’s mental health was relevant and the conviction reduced prejudice on liability, the material did not establish that a s 33 application would definitely succeed.

7. The appellate court therefore exercised the s 33-related discretion for itself and concluded that Franks had a real prospect of defending the claim on limitation grounds. Since the Master had found that his application was prompt, the discretion under CPR r 13.3(1) was exercised in his favour.

• High Court (Queen’s Bench Division): On appeal from the Master’s decision dated 13 November 2017, the court allowed the appeal, set aside the default judgment, granted relief from sanctions and gave leave to defend.