Maitham Shamma v Ameer Mohammed Jawad & Ors

Relief from sanctions is governed by the structured approach in Denton: assess the seriousness and significance of the breach, identify why it occurred, and then consider all the circumstances, giving particular weight to efficient and proportionate litigation and compliance with rules and orders.

A real prospect of success does not by itself justify relief. The court may impose stringent conditions, including security and costs conditions, particularly where an unless order has been seriously breached.

In enforcement proceedings, voluntary submission to a foreign jurisdiction does not remove the requirement that the foreign process satisfy the English concept of substantial justice. The court must consider whether any later opportunity to challenge the foreign judgment cured the alleged procedural injustice.

The claimant sought to enforce in England an Iraqi judgment obtained against the first and second defendants. The defendants had previously obtained conditional permission to set aside English default judgments, subject to compliance with an order requiring financial disclosure, properly pleaded defences, evidence concerning the Iraqi proceedings and security.

They failed to comply within the specified periods and applied for extensions of time and relief from sanctions. They relied principally on an alleged lack of natural justice in the Iraqi proceedings, including disputed service and the treatment of their appeal. The claimant opposed relief, relying on delay, non-compliance and deficiencies in the proposed defences.

The issues were whether relief should be granted, whether the default judgments should be set aside, and what conditions should govern any permission to defend.

1. Relief granted provisionally. The defendants obtained relief from sanctions and provisional setting aside of the default judgments, subject to stringent conditions. The defences were confined to the natural-justice issue.

2. The breaches of the November 2020 unless order were serious and significant. There was no good reason for the prolonged non-compliance. The court nevertheless had to consider all the circumstances under CPR 3.9, including delay, the importance of compliance, the effect on the litigation, the apparent merits, prejudice and the justice of allowing the defendants to defend.

3. The defendants had a real prospect of establishing that enforcement of the Iraqi judgment would cause substantial injustice. A foreign judgment may be refused enforcement notwithstanding jurisdiction or voluntary submission where the foreign process failed to give proper notice or a genuine opportunity to present the case. Foreign procedures need not mirror English procedure, but they must satisfy essential English requirements of substantial justice.

4. Whether an appeal or other remedy in the foreign jurisdiction cured the alleged defect was fact-specific. Relevant matters included the nature of the defect, when it arose, the defendants’ knowledge, the availability of the remedy and the reasonableness of requiring them to use it. The defendants had not yet adequately explained the Iraqi appeal, its timing or the applicable Iraqi law.

5. The proposed defences concerning settlement, fraud, voluntary submission and judicial impropriety were not properly pleaded or were not being advanced. The settlement issue had already been decided and could not properly be re-litigated. A possible fraud allegation could not be reserved without pleading the precise fraud and supporting facts. On the defendants’ own evidence, advancing the substantive merits in the Iraqi appeal would amount to voluntary submission.

6. Further conditions required factual and Iraqi-law evidence concerning the Karada address, knowledge of the default judgment, the time limits and basis of the Iraqi appeal, and why any foreign remedy did not cure the alleged natural-justice defect. The second defendant had to execute a legal charge over her flat. The first defendant had to provide an equivalent equitable charge over his property interest.

7. Costs were imposed as conditions. The second defendant’s costs to date were costs in the case, subject to any later order. The first defendant was required to pay the claimant’s costs of the proceedings and applications in any event, with further consideration of interim payment and assessment adjourned.