PXC v AB College & Ors

On an application under CPR 13.3 to set aside a regularly entered default judgment, the applicant must show a real prospect of successfully defending the claim, or another good reason for setting aside. The court must then exercise its discretion in accordance with the overriding objective, giving substantial weight to promptness, but promptness is not a separate condition precedent. The court must weigh all the circumstances, including the apparent strength of the defence, delay, prejudice, procedural compliance, efficient use of resources and the risk of substantive injustice. The approach under [2014] EWCA Civ 1298 treating Denton principles as applicable was obiter. A viable defence should not be shut out merely to punish procedural default.

The claimant brought a high-value mesothelioma claim arising from alleged asbestos exposure while working at Richmond Ice Rink. Default judgment was entered against the Third Defendant, the London Borough of Richmond upon Thames, after it failed to acknowledge service or file a defence. The claim was listed for assessment of damages.

The local authority applied under CPR 13.3 to set aside the default judgment and to adjourn the quantum assessment. It relied on evidence suggesting that it did not own, occupy, operate or control the ice rink and therefore owed no relevant duty of care. The claimant opposed the applications, relying principally on the strength of the existing judgment, the nine-to-ten-month delay and the severe prejudice caused by reopening the claim.

The central issues were whether the local authority had a real prospect of defending the claim, how its lack of promptness should be treated, and whether the overall balance favoured setting aside.

1. Disposition. The default judgment was set aside. The application to adjourn the quantum trial became redundant, and an anonymity order was granted.
2. Applicable approach. CPR 13.3 confers a discretion. The applicant must first establish a real prospect of successfully defending the claim or another good reason for setting aside. The court must then consider all relevant circumstances under the overriding objective. The discretion is intended to avoid injustice and is not exercised to punish incompetence or lassitude.
3. Denton. The judge preferred the reasoning in Cunico and Attorney-General of Trinidad and Tobago v Matthews. An application under CPR 13.3 is not an application for relief from sanctions under CPR 3.9. The Court of Appeal’s contrary observations in Regione Piemonte were obiter because the appeal was disposed of on the real-prospect issue. The judge nevertheless concluded that the result would be the same if Denton were applied, since its third stage also requires consideration of all the circumstances and the avoidance of injustice.
4. Promptness. Promptness is a mandatory and important consideration, but it is not a separate test or condition precedent. A lack of promptness may be fatal, but its effect depends on the facts and its interaction with the other factors.
5. Real prospect. The court must assess the apparent strength of the defence without conducting a mini-trial and without accepting assertions uncritically. Contemporaneous documents may materially inform that assessment. The evidence strongly indicated that private entities, rather than the local authority, owned, occupied or controlled the rink. The local authority therefore had a real and non-fanciful prospect of defending the liability claim.
6. Overall discretion. Although the delay was substantial and inexcusable, it had to be weighed against the viable defence, the risk of imposing multi-million-pound liability on a party that may be the wrong defendant, and the wider interests of justice. Refusing to set aside would have excluded a plausibly viable defence and would have operated as punishment for procedural default.

First-instance decision. The judgment itself records no prior appellate decision in this litigation.