Lux Locations Ltd v Yida Zhang (Antigua & Barbuda)

A default judgment for a remedy other than money is a judicial decision of the High Court and may be appealed in the ordinary way, subject to any required leave. The court must first verify the procedural conditions for default judgment. It must then withhold judgment if material before it would justify setting the judgment aside, including a good explanation for the default and a real prospect of defending the claim.

Otherwise, the court considers the remedy justified by the statement of claim. Pleaded allegations are generally treated as true, but judgment must be refused where the claim discloses no reasonable ground, is manifestly ill-founded, or is an abuse of process. A late defence may be considered before judgment is entered.

Yida Zhang brought proceedings seeking to set aside a consent order made in earlier litigation between him and Lux Locations Ltd and to recover money paid under it. Lux did not file a defence within time. Robertson J nevertheless heard the application for default judgment and, on 20 March 2020, entered judgment for Zhang, declined to strike out the claim and did not consider Lux’s applications for an extension of time, strike-out or summary judgment.

The Court of Appeal of the Eastern Caribbean Supreme Court struck out Lux’s appeal on 11 January 2021. It held that a default judgment under the relevant rules was an administrative act and was not appealable as a judgment or order of the High Court. The central issues before the Board were the appealability of the judgment, the proper procedure for non-monetary default judgments, the significance of Lux’s late defence, and whether Zhang’s claim was an abuse of process.

1. Appealability and the default procedure. The Board held that a judge’s determination under rule 12.10(4) of the Eastern Caribbean Civil Procedure Rules is a judicial judgment of the High Court, not an administrative act of the court office. It was interlocutory under rule 62.1(3)(b), so leave was required, but leave had been granted. The Court of Appeal therefore had jurisdiction. The Rules provide for one default judgment, and no judgment can be entered before the court has determined its terms where the claim seeks a remedy other than money.
2. Judicial scrutiny. The court should first decide whether the conditions for default judgment are satisfied. Even where they are, it should not enter judgment if material before it would justify setting judgment aside. If no such material exists, the court ordinarily treats the statement-of-claim allegations as true and legally valid. That approach is not inflexible. Judgment must be refused where the claim discloses no reasonable ground, is manifestly ill-founded, or is an abuse of process.
3. Late defence. The Court of Appeal had wrongly treated Rolle v Lander [2014] ECSCJ No 234 as preventing consideration of Lux’s late defence and extension application. Lux had a good explanation for its default and a real prospect of successfully defending the claim. The proper course was to extend time and decline to enter default judgment.
4. Abuse of process and the substantive grounds. Zhang’s allegations that he misunderstood the consent order were manifestly incapable of belief when considered against the history of the litigation. The claim was also abusive because any challenge to the consent order should have been made in the earlier action. The doctrine of non est factum is a narrow exception to the rule that a person signing a document is bound by it. Further, a litigation lawyer ordinarily has apparent authority to settle, and a perfected consent order will not be set aside merely because the client later alleges that the lawyer lacked actual authority. The claim was therefore struck out.
5. Disposition. The Board advised that the appeal be allowed, the orders of the High Court and Court of Appeal be set aside, the statement of claim be struck out and the action dismissed.

• Privy Council: In [2023] UKPC 3, the appeal was allowed. The High Court and Court of Appeal orders were set aside, the statement of claim was struck out and the action was dismissed.
• Court of Appeal of the Eastern Caribbean Supreme Court: On 11 January 2021, the Court struck out Lux’s notice of appeal, holding that the default judgment was administrative and unappealable. It did not decide the merits.
• High Court: On 20 March 2020, Robertson J entered default judgment for Zhang, refused to strike out the statement of claim and did not determine Lux’s applications for an extension of time, strike-out or summary judgment.