Clements Smith v Berrymans Lace Mawer Service Co. & Anor

Where a defence has been filed before the court enters default judgment, the conditions for a regular judgment in default are not satisfied, even if the defence was filed late. A late procedural step is not invalid merely because of lateness where the CPR imposes no automatic sanction. The court must therefore set aside the judgment under CPR 13.2. The Denton v TH White approach does not require a separate application for relief from sanctions where no sanction arises under the relevant rule or order. Its principles may nevertheless inform the discretionary assessment under CPR 13.3. Applications to set aside default judgment are governed principally by CPR Part 13, including its provisions on supporting evidence. Conditions should be imposed only where proportionate.

The defendants applied to set aside a judgment in default entered in a substantial personal injury claim. They had applied for an extension of time to serve a defence, and a defence was filed before the Master acted on the claimant’s request for default judgment, although the court file did not then record it.

The claimant argued that the judgment was regular, or alternatively that discretion should not be exercised in the defendants’ favour. The central issues were whether CPR 12.3 permitted entry of judgment when a defence had been filed before entry, whether CPR 3.10 affected the validity of the late defence, and whether CPR 13.3 required a separate relief-from-sanctions application applying the Denton v TH White principles.

1. Default judgment set aside as of right. CPR 12.3 imposes conjunctive conditions. The claimant may obtain judgment only if the defendant has not filed a defence and the relevant time limit has expired. The natural meaning of the rule is assessed when the court enters judgment. A defence filed before entry therefore prevents a regular judgment in default, even where it was filed after the prescribed time. Judgment was required to be set aside under CPR 13.2.
2. The court adopted and applied the analysis of Andrew Baker J in Cunico Marketing v Daskalakis, including the conclusion that a late procedural step is not treated as invalid merely because it was late. CPR 3.10 provides that procedural error does not invalidate a step unless the court so orders. The claimant’s alleged failure to disclose the pending extension application or filed defence did not alter the result absent positive deception. There was no general duty to monitor the court’s administrative records.
3. Denton and discretionary applications. The Master’s observations on CPR 13.3 were expressly obiter. The Denton v TH White line does not require an application for relief under CPR 3.9 where no rule or order imposes a sanction. The Denton principles may nevertheless be relevant to the discretionary assessment under CPR 13.3, without converting the application into a separate relief-from-sanctions application. Regione Piemonte v Dexia Crediop SpA was read in that way, consistently with AG-Trinidad and Tobago v Matthews.
4. CPR Part 13 is the governing code for applications to set aside default judgment. The requirement that an application be supported by evidence does not necessarily require the evidence to be filed simultaneously with the application notice. Treating the application as ineffective for a technical breach would be disproportionate.
5. The judgment was set aside and time for filing the defence was retrospectively extended to the date of actual filing. No conditions were imposed because that would have been disproportionate. Permission to appeal was granted.

This was a first-instance procedural decision. The Master granted permission to appeal to the Court of Appeal because of the absence of binding authority and conflicting first-instance decisions.