MBS Recovery Limited v Kenneth George Quinney

A default judgment must be set aside where the conditions for entering judgment in default were not satisfied. For foreign service, there is no deemed service under CPR rule 6.14. Whether service was valid is a factual issue determined on the balance of probabilities. A certificate of service is evidence, but is not conclusive. Where service is not proved, or the defendant’s time to acknowledge service had not expired, CPR rule 13.2 requires the judgment to be set aside. The court may then give the defendant leave to defend.

The claimant sought equitable relief concerning approximately £3.5 million allegedly misappropriated by the defendant. Permission had been granted to serve the proceedings in Spain. The claimant relied on documents posted to the defendant’s Spanish address and on later delivery of documents to a neighbour while the defendant was in Argentina. A default judgment for £4,789,568.70 was entered. The defendant applied to set it aside, asserting invalid service and, alternatively, a real prospect of defending the claim or other good reason under CPR rule 13.3.

1. The default judgment was set aside. The court was not satisfied on the balance of probabilities that the proceedings had been delivered following their posting on 4 May 2023. The certificates of service established that the documents had been posted, but did not conclusively establish delivery. There was no supporting tracing or tracking evidence, and no evidence from the solicitor explaining the steps taken to verify delivery.
2. CPR rule 6.14, concerning deemed service on the second business day, did not apply to proceedings served outside the United Kingdom. The question whether foreign service had occurred was a factual issue determined on the balance of probabilities.
3. Even if service on 24 May 2023 by leaving documents with a neighbour were valid, it was not the method expressly authorised by the order permitting service out of the jurisdiction. In any event, the defendant filed an acknowledgment of service on 9 June 2023, within the 21-day period specified by the order. The condition in CPR rule 12.3(1)(b) was therefore not satisfied when the default judgment was entered.
4. The court did not need to determine the defendant’s alternative case under CPR rule 13.3, including the alleged real prospect of successfully defending the claim. The draft defence raised substantial factual and legal issues, but the court made no final assessment of its merits.
5. The default judgment was set aside and the defendant was given leave to defend. Consequential directions were to be considered after hearing counsel.