Geoffrey Galley v Royal Forex Ltd

An application to set aside a regular default judgment under CPR 13.3 requires the court first to consider the express requirements of that rule, including promptness, and then to apply the three-stage Denton test. A strong merits-based defence does not by itself overcome serious procedural default and prolonged delay.

The mandatory jurisdiction under CPR 13.2 is narrower. It is engaged only where a condition for entering default judgment was absent. Defects such as failure to provide a translation or response pack do not necessarily invalidate the judgment if service was otherwise effective and the defects did not cause material prejudice. Procedural errors may be rectified under CPR 3.10 where doing so does not bypass a specific dispensing power.

Royal Forex Ltd applied to set aside a default judgment entered after it failed to acknowledge service of Geoffrey Galley’s claim. The judgment had been entered on 10 August 2022, followed by an order assessing damages at £363,120 plus interest.

The defendant contended that it had a real prospect of defending the claim, that there was other good reason to set aside judgment, and that service in Cyprus was invalid. It also relied on the absence of translations and a response pack, and raised a possible exclusive jurisdiction clause in favour of Cyprus.

The central issues were whether relief was available under CPR 13.3, whether judgment was irregular under CPR 13.2, and whether procedural defects could be rectified.

1. CPR 13.3 application dismissed. The defendant had a real prospect of successfully defending the substantive claim and had raised triable issues concerning its regulatory duties, the claimant’s status, the governing law, jurisdiction and an exclusive jurisdiction clause. It also had some other good reason potentially supporting relief. The application was nevertheless not made promptly, contrary to CPR 13.3(2).
2. Applying the guidance in FXF v English Karate Federation Ltd and Gentry v Miller, the court applied the three-stage Denton test. The failure to acknowledge service within the prescribed period was serious and significant. No satisfactory explanation was given for the default or the delay. At the third stage, the merits did not outweigh the need for efficient litigation, proportionate costs and compliance with the rules. The defendant had deliberately chosen not to engage with the proceedings despite having lawyers and knowing that default judgment had been sought.
3. CPR 13.2 application dismissed. The rule confers a mandatory jurisdiction only where a condition for entering default judgment was absent. Service had been effected in Cyprus by a licensed process server at the defendant’s registered office and was permitted by article 10(c) of the Hague Service Convention and the law of Cyprus. The evidence supported the conclusion that the person receiving the documents was authorised to accept service.
4. The absence of a translation or response pack, and the absence of evidence under CPR 12.12(7), did not defeat a statutory precondition for default judgment. The critical question was whether the period for acknowledging service had expired. It had.
5. Any procedural errors could be rectified under CPR 3.10. Rectification did not dispense with service altogether and caused no material prejudice. The defendant knew the nature of the claim and could have acknowledged service and challenged jurisdiction under CPR Part 11. The application was dismissed.