The Good and the Bad in an Application to set aside a Judgment
Our most recent article ‘Is the recent decision on the set aside of judgment a welcome relief?’ concerning County Court Judgments (CCJ) and, in particular, the Court’s recent clarification for the need to apply the three-stage test established in Denton within such applications, emphasised the importance of seeking legal advice from the outset.
The High Court’s recent decision in Tradin Organic Agriculture BV v Gold Grain Gida Tarim Urunleri Sanayi Ve Ticaret Anonim Sirketi [2024] EWHC 1562 (KB) suggests no different.
Whilst Tradin concerned a number of other issues, ranging from arguably defective service of the claim, through to whether the claim had been issued in the correct jurisdiction in the first place, the purpose of this article is to consider Tradin and, in particular, the Defendant’s application to set aside the CCJ.
For the impatient few, the Defendant’s application in this respect was wholly unsuccessful.
Tradin
By way of background, the Claimant had served its claim upon the Defendant outside of the jurisdiction, in Turkey. The Defendant did not respond to the claim and therefore, in the absence of a Defence, the Claimant proceeded to enter CCJ against the Defendant in default.
It is also worth noting that proceedings deriving from similar facts had also already been initiated by the Claimant against the Defendant in the Netherlands.
However, subsequent to CCJ being entered, and in its application for the CCJ to be set aside, the Defendant denied being served with such claim papers. In particular, in its application, the Defendant argued, amongst others, that aside from defective service of the claim, it, in any event, had a real prospect of defending the claim. In turn, the CCJ should be set aside, and the Defendant be afforded the opportunity to defend the claim (together the “Application”).
Real Prospect of Defending the Claim
As highlighted above, the issues in dispute in Tradin were manifold, one of which being whether the English Courts had any jurisdiction whatsoever. The Defendant argued on forum non conveniens grounds and, in particular, that the Dutch Courts should be the correct forum. The Court did not agree, however, with the Defendant’s submissions in this respect.
In the alternative, the Defendant argued that it had a real prospect of defending the claim, if only on the amount claimed by the Claimant.
Indeed, the Court observed that there might, just, be a defence on quantum. However, the Court recognised that it was incumbent on them to take the Application as a whole and, in turn, would also need to consider the Defendant’s promptness, along with applying the Denton test for the Defendant’s relief from sanction.
Promptness
In its short judgment on ‘promptness’, the Court was satisfied that the Defendant had acted ‘promptly’ in filing the Application a month or so after the CCJ was entered.
Denton
As considered in more detail in our article ‘Is the recent decision on the set aside of judgment a welcome relief?’ , upon deciding whether to set aside a CCJ entered in default, the Court must also apply the Denton test.
In the Court’s application of the Denton test in Tradin, the Court noted that the Defendant had failed to forward any pleadings whatsoever as to the Denton test in its Application.
Nonetheless, the Court exercised its discretion to consider the Denton test, and the Defendant’s inherent request for relief from sanction, at the hearing, however such considerations were limited to those arguments and facts already pleaded by the Defendant.
In its judgment, the Court tackled the three-stage Denton test methodically.
In applying the first stage of the Denton test, the Court considered the seriousness and significance of the Defendant’s delay to act in response to the CCJ, and the claim generally, to be ‘significant’.
Secondly, the Court considered why the Defendant delayed in acting. The Court observed that the Defendant disputed the English Court’s jurisdiction and that this may have been the reason for delay. However, the Court held that this amounted to no good reason for the Defendant’s delay in responding to the claim, and went as far as to observe that “In fact, all the indications are that the claim was deliberately ignored.”
Thirdly, upon considering all the circumstances, the Court then tested whether it would be just to grant the Defendant relief. In doing so, the Court acknowledged the Defendant’s argument that the prejudice suffered would be much more severe as opposed to the prejudice the Claimant would suffer, as this would only be the loss of the time it has taken for the Application. However, the Court held that no such prejudice would be suffered by the Defendant, and, in any event, any such prejudice would be outweighed by the other manifold matters dealt with in the case (thus, considering all the circumstances of the case).
Decision
To round off its judgment in Tradin, the Court observed that:
“It appears to have been an active choice for Gold Grain [the Defendant] not to respond to the claim. There are rightly consequences to such an approach and in this case I see no reason to grant Gold Grain relief from them.”
Overall, although the Court could see some merit in other aspects of the Defendant’s Application to set aside the CCJ, on the round, it was ultimately dismissed, and the Court held that the Claimant was entitled to the default CCJ.
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