Geoffrey Galley v Royal Forex Ltd
[2023] EWHC 3245 (Comm)
Thiscompany Limited & Ors v David John Welsh & Ors
19 August 2024
[2024] EWHC 2159 (Comm)
High Court
A company sued another, winning a default judgment because the other company missed a deadline to respond. The losing company argued it was a mistake due to a misunderstanding of court rules. The judge agreed and cancelled the default judgment, giving the losing company a second chance to defend itself.
Key Facts
- •The Claimants (ThisCompany Limited, The Beautiful Mind Series Limited, Kinski Limited) brought a Part 7 claim against the Defendants (David John Welsh, Gales Holdings Ltd, Nicola Dennis, Garden Cottage Facilities Ltd) for breach of directors' duties, breach of contract, unjust enrichment, and negligence.
- •The claim involved allegedly improper payments and grey market sales.
- •The Claimants served the amended claim form on 15 March 2024.
- •The Welsh Defendants (First, Second and Fourth Defendants) failed to file acknowledgements of service by the deadline (2 April 2024), and subsequently failed to file a defence by 21 May 2024.
- •The Claimants obtained default judgment against the Welsh Defendants on 22 May 2024 without notice.
- •The Welsh Defendants applied to set aside the judgment and for permission to file their defence and Part 20 claim.
- •The Welsh Defendants' delay was due to a misunderstanding of the time limits for serving particulars of claim in the Circuit Commercial Court.
Legal Principles
An application to set aside default judgment is an application for relief from sanctions.
FXF v English Karate Federation Ltd [2023] EWCA Civ 891 at [63]
The Denton test applies to applications for relief from sanctions, considering the seriousness of the breach, the reason for the default, and all circumstances of the case.
Denton v T H White Ltd [2014] EWCA Civ 906
CPR 13.3 allows the court to set aside a judgment if the defendant has a real prospect of successfully defending the claim or there is some other good reason.
CPR 13.3
A party is under no duty to advise the other party about service of a claim form.
Barton v Wright Hassall LLP [2018] UKSC 12
In Circuit Commercial Court claims, CPR 59.4(1)(c) and (d) determine the time limit for serving particulars of claim.
CPR 59.4(1)(c) and (d)
CPR 12.4(3)(a) dictates the procedure for applications for default judgment in cases involving multiple remedies; it generally requires notice to the defendant.
CPR 12.4(3)(a)
CPR 59.7(3) modifies CPR 12.4 regarding default judgment applications in the Circuit Commercial Court; its interpretation is debated in the case.
CPR 59.7(3)
Outcomes
The default judgment was set aside.
The Welsh Defendants had a real prospect of successfully defending the claim, the application to set aside the judgment was made promptly, and the court considered that setting aside the judgment was necessary to serve the interests of justice and the overriding objective.