Seyed Mohammad Ata Shobeiry v Kalpesh Patel

A default judgment may be varied under CPR 13.3 where there is good reason, but an error in the amount or currency does not create an automatic right to variation. The application must be made promptly, and the court must apply the relief-from-sanction principles in Denton v White. The court should assess the seriousness and significance of the default, the reason for it, and all the circumstances, including prejudice, efficient litigation and proportionality. A claimant cannot ordinarily obtain default judgment in a different sterling equivalent from that pleaded without judicial consideration or notice to the defendant. Nevertheless, relief may be refused where the defendant has delayed for almost a year and the resulting prejudice, cost and disruption weigh against intervention.

The claimant obtained judgment in default for £1,449,514.34 in a debt claim arising from two AED-denominated loans. The pleaded claim stated the debt in AED and alternatively gave a sterling equivalent calculated at a specified exchange rate. The claimant’s request for default judgment used a different sterling figure based on a later exchange rate.

The defendant applied nearly a year later to vary the judgment, arguing that it should have been expressed in AED, that interest had been double-counted, or that the wrong exchange rate had been used. He also sought a stay of execution, but did not pursue that relief at the hearing. The central issues were whether the judgment was wrongly expressed and whether the defendant had acted promptly and satisfied the applicable relief-from-sanction requirements.

1. Disposition. The application to vary the default judgment was dismissed. The defendant had not applied promptly under CPR 13.3(2). In any event, he would have failed the relief-from-sanction test.
2. Currency and calculation. The discrepancy resulted from use of a later exchange rate, not double counting of interest. The court accepted that AED was the more appropriate currency because the loans and the Dubai judgment were in AED and the pleaded sterling equivalent had given notice of the amount claimed. The claimant was not entitled, as of right, to substitute a different sterling equivalent in the administrative request for judgment without judicial consideration or notice to the defendant.
3. The court did not decide the broader question whether a claimant may generally seek default judgment in a currency different from that pleaded. It recognised that judgment in another currency might be justified where the pleaded case gives notice of that currency, or where that currency best reflects the claimant’s loss, as illustrated by The Folias.
4. Promptness and relief from sanctions. The court held that almost one year’s delay was not prompt. Under CPR 13.3, CPR 3.9 and Denton v White, the court applied the three-stage test: seriousness or significance of the default, the reason for it, and all the circumstances. The failure to file a defence was serious; no satisfactory explanation was provided; and delay, inefficient conduct, enforcement prejudice and the need for proportionate litigation outweighed the potential overstatement of the judgment.
5. The judgment was not an irregular judgment requiring automatic setting aside under CPR 13.2. If promptness and relief from sanctions had been established, the judgment would have been varied to AED 5,000,000 plus appropriate fees and interest.

First instance decision. The judgment records no appeal or earlier English decision in the same proceedings.