ROY HARRY COLE v ANDREW HOWARTH

On an application to set aside summary judgment made in the respondent’s absence, the court has a wide discretion under Practice Direction 24. That discretion should ordinarily be exercised by analogy with an application to set aside a regularly entered default judgment. The applicant must act promptly and show a real prospect of successfully defending the claim.

Where an application is made so late that admitting the proposed defence would require adjournment of an otherwise trial-ready case and fresh disclosure and evidence, the court may refuse it without deciding whether the proposed defence is factually sound.

The second defendant applied on the second day of trial to set aside summary judgment entered against him on 26 February 2020 in respect of a personal guarantee of a £200,000 loan. He accepted that he knew of the judgment by about the end of March 2020.

He contended that the loan had been repaid through cash payments and transfers of a car and property. The claimant had not prepared to meet those allegations because the second defendant had ceased to participate actively after judgment. The issue was whether the summary judgment should be set aside under paragraph 8 of Practice Direction 24.

1. Application refused. Paragraph 8 of Practice Direction 24 gave the court a wide discretion to set aside or vary summary judgment entered against an absent respondent. Fancourt J held that the discretion should be exercised by analogy with an application to set aside a regularly entered default judgment.
2. Accordingly, the applicant had to show promptness and a real prospect of successfully defending the claim. The second defendant had known of the judgment shortly after it was entered, but did not issue his application until the trial had begun, almost two years later. He gave no good explanation for that delay.
3. The proposed repayment defence raised substantial new factual issues concerning alleged cash payments and transfers of valuable property. If those issues became live, fairness required disclosure and further witness evidence. The trial would therefore have had to be adjourned despite the other parties being ready to proceed.
4. It was far too late to permit the second defendant to re-enter the proceedings as an active defendant. The court did not decide whether his proposed defence was true or would otherwise be valid.

not stated in the judgment.