Setting Aside Default Judgment in UK Law

In our opinion, therefore, to arrive at a reasoned assessment of the justice of the case the court must form a provisional view of the probable outcome if the judgment were to be set aside and the defence developed. The "arguable" defence must carry some degree of conviction.

One is that where the judgment was obtained regularly there must be an affidavit of merits, meaning that the applicant must produce to the Court evidence that he has a prima facie defence. The principle obviously is that unless and until the Court has pronounced a judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has only been obtained by a failure to follow any of the rules of procedure.

The contention no doubt contains this element of truth, that from the nature of the case, no Judge could in exercising the discretion conferred on him by the rule, fail to consider both ( a) whether any useful purpose could be served by setting aside the judgment, and obviously no useful purpose would be served if there were no possible defence to the action; and ( b) how it came about that the applicant found himself bound by a judgment regularly obtained, to which he could have set up some serious defence.

The court is engaged in an exercise of weighing delay against merits, which will include considering the nature and extent of the delay, the reason and any justification for it, the strength of the supposed defence and the justice of the case. That is not to say that a real or even a good case on the merits will usually lead to the judgment being set aside despite significant delay since delay is now a much more potent factor than heretofore.

There is no rule which states that, if the defendant fails to file a defence within the period specified by the CPR, no defence may be filed unless the court permits. At most, it can be said that, if the defendant fails to file a defence within the prescribed period and does not apply for an extension of time, he is at risk of a request by the claimant that judgment in default should be entered in his favour.

These two arguments advanced by Mr Irvin did not, it appears, greatly impress David Steel J, who saw "great force" in the claimant's submissions on these points. He said that it was understandable that an application for an injunction was not immediately pursued, given Mr Tsavliris' expressed intention to petition for leave to appeal: in the absence of a successful appeal, it might reasonably have been inferred, the Greek proceedings would be abandoned.

What state of mind in the server is connoted by the words "last known"? As we have said, there is an important distinction between belief and knowledge. It is a distinction particularly well understood in the criminal law, but elsewhere too. The draftsman of the rules deliberately chose the word "known".