[2025] EWHC 2107 (Comm)

Given that I have decided that the First and Second Defendants have a real prospect of successfully defending the claim, the Court has a discretion whether or not to set aside the default judgments.

CPR rule 13.3(2) provides that “In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly”.

It is obvious therefore that whether or not the application was made promptly is a significant consideration to be taken into account in exercising the discretion made available under CPR rule 13.3.

In Standard Bank plc v Agrinvest International Inc [2010] EWCA Civ 1400; [2010] CLC 886, Moore-Bick LJ compared CPR rule 13.3 with the position in the pre-CPR era and said at para. 22:

“The Civil Procedure Rules were intended to introduce a new era in civil litigation, in which both the parties and the courts were expected to pay more attention to promoting efficiency and avoiding delay. The overriding objective expressly recognised for the first time the importance of ensuring that cases are dealt with expeditiously and fairly and it is in that context that one finds for the first time in r. 13.3(2) an explicit requirement for the court to have regard on an application of this kind to whether the application was made promptly. No other factor is specifically identified for consideration, which suggests that promptness now carries much greater weight than before. It is not a condition that must be satisfied before the court can grant relief, because other factors may carry sufficient weight to persuade the court that relief should be granted, even though the application was not made promptly. The strength of the defence may well be one. However, promptness will always be a factor of considerable significance, as the judge recognised in paragraph 27 of his judgment, and if there has been a marked failure to make the application promptly, the court may well be justified in refusing relief, notwithstanding the possibility that the defendant might succeed at trial.”

Mr Atrill KC referred me to the commentary in the White Book, at para. 13.3.3, and the decision in Khan v Edgbaston Holdings Ltd [2007] EWHC 2444 (QB), where it was indicated that a delay of several months is likely to mean that the application was not made promptly. At para. 13-14, HH Judge Peter Coulson QC said that, as Simon Brown LJ noted in Regency Rolls Ltd v Murat Carnall [2000] EWCA Civ 379,

“… a delay of 30 days was regarded as being unreasonably long in all the circumstances, and the judgment was not set aside. A different result occurred in Hart Investments Ltd. v. Fidler [2006] EWHC 2857 (TCC), where the TCC judge concluded that a delay of 59 days was “very much at the outer edge of what could possibly be acceptable”. One of the factors considered by the judge in that case was that the defendant had not had the benefit of legal advice during the relevant period, although the most important reason for the setting aside of the default judgment was the real prospect that the defendant had of successfully defending the claim.”

In Regency Rolls Ltd v Murat Carnall, Simon Brown LJ said at para. 45:

“At first blush it might be thought that any inappropriate delay whatever on the part of an applicant would require that he be found not to have acted promptly. Yet such a construction would carry with it the Draconian consequence that, even if he had a good, perhaps compelling, reason for not having attended the trial, and a reasonable - perhaps, indeed, excellent - prospect of success at trial, the court would still be bound to refuse him a fresh trial. I would accordingly construe ‘promptly’ here to require, not that an applicant has been guilty of no needless delay whatever, but rather that he has acted with all reasonable celerity in the circumstances …”

I also note that in Gentry v Miller (Practice Note) [2016] EWCA Civ 141; [2016] 1 WLR 2696, referred to by the Court of Appeal in FXF v English Karate Federation Ltd, the Court of Appeal held that the application was not made promptly after a two month delay, albeit in circumstances where the applicant had not explained the reasons for the delay. At para. 28, 34-35, Vos LJ said:

In the present case, a short chronology of the events leading to the application to set aside the default judgments is as follows:

Accordingly, there was a period of 2 months (or 61 days) between the First and Second Defendants becoming aware of the entry of default judgments and the application to set aside those default judgments being issued.

The Claimant submitted that it is also relevant to consider that TKP were well apprised of the matter having acted for the Borrower from April 2023 until February-March 2024 and had been in contact with the First and Second Defendants from at least May 2023. I regard such matters as being of limited relevance in circumstances where it is the entry of default judgments to which the application is to respond so that any prior history, although it might inform the applicant of what needs to be done, the promptness of the applicant’s response must be assessed principally by reference to the default judgments being brought to the applicant’s attention.

The starting point for considering the promptness of the applicant’s response must be the date on which the applicant became aware that the default judgments had been entered or could have been made so aware had the applicant acted with reasonable diligence (Gentry v Miller (Practice Note) [2016] EWCA Civ 141; [2016] 1 WLR 2696, para. 33). In the present case, I do not consider that there was any reason why the First and Second Defendants should have been made aware of the default judgments - which were entered on 2nd September 2024 - prior to 13th September 2024, when they became aware of the default judgments.

In the present case, the following considerations speak in favour of the application having been made promptly:

The major consideration against the application being treated as having been made promptly is the reasons for the difficulty in instructing leading counsel to prepare the application. As I understand it, Mr Sims KC was not instructed until 25th October 2024. I do not doubt that there were difficulties, but I do not know precisely what they were. The Claimant submitted that the availability of counsel is not a relevant consideration. I do not agree. The making of an application to set aside a default judgment requires an analysis of the circumstances leading to the filing of the default judgment and the basis on which any application is to be presented, which involves a consideration of the evidence and the legal grounds for the application. As counsel is very likely to present the application ultimately in court, it seems to me whether TKP could instruct counsel is a consideration to be taken into account.

In any event, I do not regard this consideration as one which militates against concluding that the application was made promptly or with reasonable celerity. If the application was not made promptly, the delay beyond what a prompt application required was not substantial.

In these circumstances, I consider that the application was made promptly and, if it was not, the degree of delay was not sufficient to cause me to exercise the discretion available under CPR rule 13.3 against granting the relief sought, which I now consider.