Sethia London Limited v Ajay Sethi & Anor

A party cannot use CPR 40.8A to reopen issues which were, or should have been, raised when the relevant judgment or order was made. A contractual provision preserving interest after judgment may entitle the creditor to compound interest in accordance with the agreed contractual basis. Where CPR 40.8 applies and the court has made no different provision, judgment interest runs from the date judgment is given, rather than from a later payment deadline.

The claimant had obtained summary judgment on a loan and guarantee claim and subsequent orders determined the judgment sum, costs and outstanding issues. The first defendant later applied under CPR 40.8A for relief preventing further enforcement, contending that post-judgment interest was simple interest at 20 per cent per annum, that monthly compounding was unavailable, and that interest ran only from the payment deadline.

The application was heard after earlier judgments and orders had been made, including an order declaring the amount contractually due as at 22 February 2021. The central issues were whether those matters could be reopened and, if not, how the order and the contractual interest clause operated after judgment.

1. Application dismissed. The first defendant’s application under CPR 40.8A did not establish any qualifying matter occurring since the November 2021 judgment and order. The only subsequent matter was the failure to pay the judgment sum when due, which did not provide a basis for relief.
2. Properly construed, the last sentence of paragraph 1(2) of the February 2021 Order entitled the claimant to compound interest with monthly rests. That construction reflected the basis on which the judgment sum had been agreed and was consistent with clause 7.1 of the loan agreement, which preserved interest on the unpaid amount both before and after judgment.
3. The first defendant could not raise, almost a year later, arguments concerning the construction of clause 7 or the pleading of compound interest. Those points should have been taken at the hearings leading to the February and November 2021 Orders.
4. The court accepted that, under CPR 40.8, interest payable under section 17 of the Judgments Act 1838 or section 74 of the County Courts Act 1984 runs from the date judgment is given unless another rule, practice direction or court order provides otherwise. No different provision applied, so post-judgment interest accrued from the judgment date, not merely from 23 March 2021.