Stephen Joseph Redmond v Declan Patrick O'Hara

On an application to set aside default judgment under Civil Procedure Rules 1998, r 13.3, the court must consider whether the defendant has a real prospect of successfully defending the claim and whether the application was made promptly. Delay is important but is not necessarily determinative where the proposed defence has a real prospect of success.

A repayment issue supported by evidence may satisfy the real-prospect threshold, even where the defence remains shadowy. The court may impose conditions, including maintaining a charging order pending trial. Unpleaded and unparticularised counterclaims or allegations cannot ordinarily establish a defence or some other good reason for trial.

The defendant applied to set aside a default judgment for £221,968.48, together with interest and costs. The judgment had been followed by a charging order and an order for sale concerning property registered in the defendant’s name.

The defendant relied on alleged defects in the pleading of interest, substantial counterclaims and repayment of the sums claimed. He also relied on allegations of threats and misconduct. The central issues were whether the application was sufficiently prompt, whether there was a real prospect of successfully defending the claim, and whether there was some other good reason to set aside the judgment.

1. The court took the claimant’s late witness statement into account. There was no applicable sanction, and, applying Denton v White [2014] EWCA Civ 906, any breach was not serious and caused no prejudice. It was therefore unnecessary to consider the later stages of the Denton analysis.
2. Under CPR 13.3, the court had to consider both the merits threshold and the promptness of the application. The defendant should have applied earlier, but the delay did not justify dismissal by itself. The opaque nature of the claim, the defendant’s lack of legal representation and his attempts to engage with the proceedings were relevant.
3. The alleged failure to plead interest did not disclose a real prospect of successfully defending the claim.
4. The alleged substantial counterclaims and allegations concerning the claimant were not properly pleaded or verified by a statement of truth. They could not be relied upon as a defence to the present claim, although the defendant remained free to plead or bring a separate claim.
5. The repayment issue did disclose a real prospect of success. Evidence that £253,000 had been paid to the claimant on the defendant’s behalf was not displaced by the claimant’s evidence. The dispute concerning a further £500,000 did not undermine that conclusion.
6. The proposed defence was shadowy. Leave to defend was therefore conditional on the charging order remaining in place pending trial.
7. The unpleaded and unparticularised allegations of extortion and threats did not constitute some other good reason for setting aside the judgment.
8. The default judgment was set aside and the defendant was permitted to defend subject to the charging-order condition.