AMRA LEASING LIMITED v DAC AVIATION (EA) LIMITED & Ors

On an application to set aside a regularly obtained default judgment, the applicant must show either a real prospect of successfully defending the claim or some other good reason for relief. A real prospect is more than a merely arguable or fanciful case and must carry some degree of conviction.

The application is discretionary. Promptness is a factor of considerable significance under CPR 13.3(2), although it is not an absolute condition. Where the applicant has delayed substantially, relief may properly be refused despite a possible defence, particularly where the defence was not previously articulated, lacks detail, or is speculative.

AMRA Leasing Limited obtained a default judgment against DAC Aviation (EA) Limited, DAC International Aviation Limited and Emmanuel Anassis for sums allegedly due under aircraft lease agreements and guarantees.

The defendants applied to set aside the judgment under CPR 13.3. They relied principally on alleged pre-existing corrosion, mitigation arguments concerning future rent, and the alleged excessiveness of repair costs. The application was made several months after the judgment and was served after a further delay. The central issues were whether the defendants had a real prospect of successfully defending the claim or another good reason for relief, and how the delay affected the court’s discretion.

1. Application dismissed. The Default Judgment was regularly obtained and remained in place.
2. Under CPR 13.3(1), the burden lay on the defendants to show a real prospect of successfully defending the claim or some other good reason for setting aside or varying the judgment. A real prospect required more than a merely arguable or fanciful case and had to carry some degree of conviction.
3. The discretion under CPR 13.3 was informed by promptness under CPR 13.3(2). Promptness included bringing the application properly to the claimant’s attention by service. The delay from notification of the judgment in March 2020 until issuing the application in August 2020, together with the further delay in service until October 2020, was well outside what would ordinarily be acceptable and carried very considerable weight.
4. The defendants’ financial difficulties and the effects of the pandemic did not provide a good reason. They had been legally represented, knew of the claim, had agreed an extension for service of a defence, and had never articulated a substantive defence before applying to set aside. Choosing to prioritise other matters did not excuse allowing the proceedings to go by default.
5. The corrosion defence was unsustainable. Signed acceptance certificates, in circumstances governed by Olympic Airlines SA v ACG Acquisition XX LLC [2013] EWCA Civ 369, precluded reliance on alleged defects existing at delivery. The leases also provided for delivery on an “as is” basis, subject to matters in Schedule 6, which did not include the alleged corrosion.
6. The mitigation arguments concerning re-leasing the Second Aircraft and the costs charged by Flybe were, at most, partial and speculative. Although fuller evidence might have justified exploration of the re-leasing issue in a prompt application, the defendants’ delay, lack of detail and the contemporaneous evidence justified leaving the judgment undisturbed.