Is the recent decision on the set aside of Judgment a welcomed ‘relief’?

It goes without saying that the impact of a County Court Judgment (CCJ) is far reaching and extremely damaging to not only private individuals, but also to businesses. Indeed, our previous article on ‘How to remove a County Court Judgment‘ briefly highlights this impact but also how one can seek the removal, otherwise known as set aside, of a CCJ.

We previously noted that an alternative route to seeking the removal of a CCJ by way of consent order is by a formal application to the Court. This article seeks to focus on preparing an application for the set aside of a CCJ and, in particular, the recent developments of the law surrounding such applications.

The Decision

Following the filing of an application, the Judge will have a preliminary review of the same and, more often than not, list a hearing for a later date to consider the application. It is therefore vital that an application is carefully prepared and approached correctly to avoid the risk of the application being rejected from the outset by the Judge, likely for failing to demonstrate good reason for the set aside or, indeed, failing to comply with the various rules and procedures.

Earlier this year, the Court of Appeal in the case of FXF v English Karate Federation [2023] clarified that applications to set aside default Judgment are to be treated in the same way as applications for relief from sanctions (thus imposing a more stringent burden on such applications).

This newly found treatment of a set aside application is considerable as not only will the Court need to be convinced that the relevant grounds for the set aside have been established, but also that the applicant should be granted relief from its sanction, being the CCJ.

Applying the Relevant Principles

In deciding whether to grant relief from sanctions, the Court must consider the rule notoriously established in the case of Denton v TH White Ltd [2014], commonly referred to as the Denton test. Put simply, the Court must apply the following test: –

1. Is the breach serious and significant?
2. Was there some good reason as to why the breach occurred? and
3. In all the circumstances of the case, would it be fair/just to grant relief?.

Moving forwards, an application to the Court seeking the set aside of a CCJ must also address the Denton test, along with those appropriate grounds for the set aside.

Key Takeaways

With the above in mind, the recent decision in FXF is likely to be taken bittersweet from those seeking the set aside of a CCJ. Whilst FXF makes clear on what is expected from an application, that expectation and threshold has undoubtedly become a lot more demanding.

Although, with reference to the third Denton test, it is reassuring to note that the Court will consider all those facts surrounding the case, and not just those circumstances limited by the set aside grounds. In turn, this would enable the applicant the opportunity to raise even more points in support of its position. That said, this does not necessarily mean that such applications are made any easier and it is even more important that specialist legal advice is sought from the outset.

Thirdly, in its decision in FXF, the Court of Appeal took its opportunity to sound a note of caution on the utmost importance that rules and protocols are complied with by the parties on each end of a dispute. Again, this highlights the significance of a party failing to comply with Court rules and procedure as well as the reality of a CCJ.

In the round, the FXF decision emphasises the importance of ensuring that a set aside application is done right ,and conducted with care.

How can Ellis Jones help?

If you need advice regarding a CCJ, whether you are the creditor or debtor, contact our Dispute Resolution team by calling 01202 525333 or by emailing resolution@ellisjones.co.uk.