Diamond Services South East Ltd v Ogedengbe (t/a As Praise Embassy - Bright Steps Nursery)

Default judgment may be set aside under CPR 13.3 where the defendant has a real prospect of successfully defending the claim or there is another good reason to permit a defence. The court should apply an approach analogous to the summary-judgment test, while avoiding a mini-trial. Credible factual disputes, witness credibility issues and an expert report supporting the proposed defence may establish a real prospect of success. Promptness is assessed in the circumstances, including when the defendant first became aware of the claim and the reasons for the failure to acknowledge service. The Denton principles apply to the default that led to judgment, together with the requirement to consider all the circumstances.

The claimant sought payment under a driveway-installation contract and damages and injunctive relief for allegedly defamatory Facebook and Checkatrade publications. Default judgment was entered after the defendant failed to acknowledge service within the prescribed period. The defendant applied under CPR 13.2 and 13.3, relying on delayed receipt of the proceedings, a proposed defence based on defective work and truth, supporting witness evidence and an expert report.

The central issues were whether the mandatory conditions for default judgment had been satisfied, whether the defendant had a real prospect of successfully defending the claim, whether she had acted promptly, and whether there was some other good reason to set aside the judgment.

1. Mandatory relief. The conditions in CPR 12.3(1) were satisfied because the defendant had not filed an acknowledgment of service by the deemed deadline. CPR 12.3(3) did not apply. The defendant had not satisfied the claim merely because she considered that she had a defence. The application therefore failed under CPR 13.2.
2. Real prospect of success. The test under CPR 13.3(1)(a) is analogous to the no-real-prospect test under CPR 24.2. The court applied the approach in Redbourn Group Ltd v Fairgate Development Ltd and Easyair Ltd v Opal Telecom Ltd. The court should test whether the proposed defence has real substance, but should not conduct a mini-trial.
3. The contractual claim involved uncertainty about the agreed terms and evidence capable of supporting the defendant’s assertion that the work was sub-standard. The defamation claims raised issues of truth, witness credibility, the quality of the work, alleged conduct by the claimant’s employees and whether the Facebook post had been removed. Those issues could not properly be determined summarily. The defendant therefore had a real prospect of successfully defending the claim.
4. Promptness and relief from sanctions. Under CPR 13.3(2), promptness was assessed by reference to when the defendant first received notice of the claim. Her subsequent correspondence, Response Pack and application to set aside were prompt in the circumstances. Applying Gentry v Miller and the Denton v TH White Ltd principles, the failure to acknowledge service was explained by non-receipt of the claim, was not serious or significant in context, and the overall circumstances favoured relief.
5. There was also some other good reason under CPR 13.3(1)(b). The proposed counterclaim was factually interlinked with the claimant’s claim, and the underlying issues would in any event require consideration. The default judgment was set aside and the defendant was permitted to defend.