Summary

A claimant may be able to obtain judgment in default of a defence, even where the defence is served late. A defendant who served a late defence could not, in Billington v Davies [2016] EWHC 1919 (CH) rely on the pre-condition in CPR 12.3 (2) (a), which states that judgment in default may only be obtained where "a defence has not been filed".

The decision is a warning to a defendant who attempts to file a late defence.

Facts

The defendant filed an acknowledgment of service to the claim, but no defence. The claimant applied for judgment in default.

The defendant filed and served defence, the day before the hearing, some months after the defence was due. It also applied for an extension of time to file the defence.

Key points

• The defendant sought to rely on CPR 12.3 (2) (a) (see above).
• In Master Pickering's view, the Rule referred to a defence served within time or where an extension had been granted.
• The note at 15.4.2 of the White Book was, in the Master's view, wrong: filing a defence late will not prevent a claimant obtaining default judgment.
• The defendant also applied for an extension of time which was refused. The defendant's shortage of funds was not considered to be a good enough reason for the delay.

Comment

The defendant's delay in serving his defence, albeit due largely to concerns as to funding, left the claimant free to obtain judgment in default despite a CPR Rule which had been thought to prevent default judgment in these circumstances.

This is only a master's decision. Note, though, the recent case Coral Reef v Silverbond Enterprises which considered the significance of masters' decisions and suggests that, given their breadth of experience, their decisions should be afforded greater weight.

Contact Sofia Avena

Section 1(1) of the Civil Liability (Contribution) Act 1978 (the Act) provides that any person liable in respect of damage suffered by another may recover a contribution from any other person liable in respect of the same damage.

Section 1 (4) of the Act provides that if a person has settled or compromised a claim in good faith, that person is entitled to recover a contribution without regard to whether or not he "is or ever was liable in respect of the damage, provided however that he would have been liable assuming the factual basis of the claim against him could be established".

In this case IMI had settled the original claim against them which had been based on European Commission findings that a cartel had operated in the market for copper and copper alloy fittings between 1998 and 2004. IMI had argued that the claim, issued in 2012, was time barrred. The claimants in turn had argued that IMI had deliberately concealed the cartel. IMI settled the claim in 2014, leaving only its contribution claim against another defendant, D2.

Overruling High Court authority to the effect that there could be an investigation into the first defendant's collateral defence, not denying the factual basis, such as a limitation defence, (Arab Monetary Fund v Hashim and others (judgment of 28 May 1993, unreported)), the Court of Appeal held that the second defendant could not defend the claim by the first defendant on the basis of a collateral limitation defence that could have been taken by the first defendant (here IMI).

WH Newson Holding Ltd and others v IMI plc and another [2016] EWCA Civ 773

Contact Kate Menin

The High Court has granted a stay of proceedings to claimants, in order to allow a complaint to the Financial Ombudsman Service (FOS) to be pursued in Templars Estates Ltd and Others v National Westminster Bank and Royal Bank of Scotland.

The claimants had issued proceedings in the Mercantile court against NatWest and RBS, alleging that they had been negligently advised by the banks. After those proceedings had been issued, they sent a complaint to FOS. FOS will not allow a complaint to be brought while there are active proceedings in court.

The claimants sought a stay of proceedings, to allow them to pursue the FOS complaint. The banks resisted, on the grounds that there should be no delay in proceedings and that granting a stay would prejudice them and their employees.

The stay was granted. The court considered that the claimants would suffer prejudice without a stay, as they would not be able to pursue their FOS complaint. The FOS route was stated to be a more 'informal and much more economical' route for them to pursue. Furthermore, the court considered that their conduct in the proceedings had been good and that they had been diligent in pursuing the claim. The banks and their employees would not suffer prejudice if the matter was stayed for a year.

However, the court noted that the banks did have a legitimate concern that the claimants could succeed with regard to their FOS complaint but then continue with court proceedings against them. The claimants therefore had to undertake that, if they were successful in obtaining an award from the FOS, they would discontinue the court proceedings. If unsuccessful they would be able to return to the High Court.

In Clark and another v In Focus Asset Management & Tax Solutions Ltd, in 2014, the Court of Appeal confirmed that where a FOS decision and compensation award has been accepted, claimants would then be unable to bring a claim in any subsequent court proceedings.

Templars Estates Ltd and Others v National Westminster Bank and Royal Bank of Scotland [2016] EWHC 2020 (Comm)

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Adjournment and costs penalties for poor bundle preparation

In PM Project Services v Dairy Crest Ltd [2016] EWHC 1235 (TCC), the High Court adjourned significant parts of the claimant's application for summary judgement and ordered that it pay the ensuing costs on the basis that the claimant had failed to provide an accurately paginated bundle.

The claimant sought a summary judgment against the defendant in relation to three separate claims over unpaid invoices, all three of which were opposed by the defendant, Dairy Crest Ltd. In support of the second and third limbs of the application, the claimant submitted a witness statement which appended an exhibit containing over 750 pages.

Furthermore, the page references in the witness statement were different to those prepared for the hearing and unfortunately the original page numbers had not been retained. As a result, the references within the witness statement did not correspond to the pagination within the bundle, which served to create significant confusion and delay.

Mr Justice Edwards – Stuart held that as a result of the inaccuracy, 'any sensible pre-reading was de- railed' and refused to hear the second and third limbs of the application. He concluded that 'the handicap presented by the pagination would prevent the necessary amount of reading to take place before the hearing' and directed that the bundles be returned to the claimant's solicitors for the correct references to be inserted. He ordered that all resulting costs arising from correcting the inaccuracies and adjourning the second and third limbs were the responsibility of the claimant.

The case highlights the importance of careful indexing and organisation when preparing court bundles as failure to do so could incur embarrassing consequences and costly penalties.

Contact Sophie Taylor