Simon Bain Building Services Limited v Jenna Cardone & Anor

A defendant who acknowledges service stating an intention to contest jurisdiction must make the required application within the prescribed period. Failure to do so attracts the statutory consequence that jurisdiction is accepted. That position may be retrieved only where the defendant has not made an unequivocal common-law submission to the jurisdiction. An application to set aside default judgment on the merits may itself amount to such a submission, particularly where it seeks permission to defend and relies on a real prospect of success. A default judgment application under Civil Procedure Rules 1998 r 13.3 is an application for relief from sanctions. The court must consider the merits and promptness, then apply the Denton criteria and assess proportionality in all the circumstances.

The claimant sought payment under an alleged cost-plus construction agreement, alternatively on a quantum meruit or restitutionary basis. The defendants disputed the alleged variation and maintained that the contract was a revised lump-sum agreement.

The claim form was served at the property despite the defendants’ solicitors having notified the claimant’s former solicitors that they were instructed to accept service. The defendants acknowledged service, indicating an intention to contest jurisdiction, but made no application under CPR Part 11 within 14 days. Default judgments were then entered. The defendants applied to set them aside under CPR r 13.3 and later sought to have that application treated as a jurisdiction challenge and to extend time.

The central issues were whether the defendants had submitted to the jurisdiction, whether the procedural error could be rectified, and whether the default judgments should be set aside.

1. Jurisdiction. CPR r 6.7(1)(b) was expressed in mandatory terms, and service at the property was invalid because the defendants’ solicitors had notified the claimant that they were instructed to accept service. However, the defendants’ procedural right to challenge jurisdiction was lost. Under CPR r 11(5), a defendant who acknowledges service indicating an intention to contest jurisdiction but does not make the required application is treated as accepting jurisdiction.

2. The court distinguished the circumstances in Caine v Advertiser and Times Ltd [2019] EWHC 39 (QB) and Pitalia v NHS England [2023] EWCA Civ 657. In the present case, the defendants had first sought to set aside default judgments by relying on the merits of a proposed defence. That conduct was fundamentally inconsistent with an intention to contest jurisdiction and amounted to an unequivocal common-law submission. The subsequent Jurisdiction Application, issued after a substantial and unexplained delay, could not be treated as curing the position under CPR r 3.10. The Jurisdiction Application was dismissed.

3. Default judgment. An application under CPR r 13.3 is an application for relief from sanctions, so the court must consider the specific matters in r 13.3 and then apply the three-stage Denton test. The failure to file a defence was serious and significant, and the reasons offered were not procedurally good. Nevertheless, the defendants had a real prospect of defending the claim, including on limitation and on the disputed contractual basis, and had applied promptly. In the context of the claimant’s delay and invalid service, refusal of relief would have been disproportionate. The default judgments were set aside.

4. The acknowledgement-of-service extension application was refused because of the common-law waiver. The defendants were instead permitted, if advised, to file a further acknowledgement of service stating an intention to defend, followed by a defence substantially in the form of the draft defence. The claimant was given 21 days to reply.

Not stated in the judgment.