Intense Investments Ltd v Development Ventures Ltd
| Jurisdiction | England & Wales |
| Judge | HIS HONOUR JUDGE PETER COULSON QC |
| Judgment Date | 29 June 2006 |
| Neutral Citation | [2005] EWHC 1726 (TCC),[2006] EWHC 1628 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Ref. No: HT-05–142,Case No: HT 04 322 |
| Date | 29 June 2006 |
[2005] EWHC 1726 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
IN THE TECHNOLOGY AND CONSTRUCTION COURT
His Honour Judge Peter Coulson Q.c.
Ref. No: HT-05–142
APPEARANCES
For the Claimant: MR. DAVID GWILLIM of Speechly Bircham
For the Defendant: MR. THOMAS GRANT of Counsel
th July 2005
Background. This is an application by the first defendants to set aside the judgment in default of defence entered against them on 24 th June 2005. I propose to set out the background facts and then go on to consider the three broad submissions made by Mr. Grant, who appeared on behalf of the first defendants. Those were:
(a) the irregularity of the judgment that was obtained;
(b) the first defendants' conduct; and
(c) the first defendants' prospects of successfully defending the claim.
The claim form was issued on 25 th May and served on 26 th May. The claim relates to an alleged agreement by the first defendants to pay the claimants fifty per cent of the profit on the sale of some land in East London. This claim is said to arise on the basis of an agreement under seal made on 6 th April 2004. A variety of remedies, including a declaration and an account, are sought in the claim form.
The claim against the second defendants has not been served and I am told that the second defendants no longer exist. The claim against them is therefore no longer pursued and I make no further reference to them in this judgment.
The first defendants acknowledged service on 2 nd June 2005. The first defendants had twenty-eight days from the date of service of the claim form to serve their defence. Therefore, the time for service expired at 4 p.m. on 24 th June 2005.
A case management conference was fixed by the TCC Registry to take place on 5 th July 2005. Although at one point the first defendants' solicitors seemed a bit surprised at the promptness of that hearing, it is standard practice in the TCC to fix the first CMC early, leaving it to the parties, if they wish, to seek an adjournment, for instance until after the service of the defence. One of the reasons for this practice is that, because of the thorough ground work required by the TCC pre-action protocol, the parties to TCC litigation usually have a good idea of each other's position at the very outset of the proceedings.
On 22 nd June, the first defendants' solicitors sought in writing an extension of time for the service of their defence. The extension was sought until 8 th July. On the same day, there was a telephone conversation between Miss Hoath, the first defendants' solicitor, and Mr. Gwillim, the claimants' solicitor, during which an extension of time was discussed. It seems clear to me that no extension of time was agreed during that conversation. It also seems clear to me that Mr. Gwillim, as I would expect, indicated to Miss Hoath that he may well be prepared to agree to such an extension provided that he had sufficient time to consider any defence before the case management conference. Thus the length of any agreed extension may have depended upon whether or not anybody sought to adjourn the case management conference and, if so, what new date was fixed.
This view of that conversation is borne out, so it seems to me, by Mr. Gwillim's letter to Miss Hoath, dated 23 rd June, in which he said:
"We note the request set out in your letter in relation to an extension of time for filing of your client's defence in this matter. We also note that you were unaware that a CMC is currently set down for 5 th July 2005. We refer to the letter sent by the Registry clerk of the TCC, copy attached. As you will note, this letter was sent to our respective firms on 7 th June 2005. The court is to fix a CMC following the filing of an acknowledgment of service or a defence, whichever occurs earlier. We note that you filed such an acknowledgment of service on 6 th June 2005. We are prepared to consider a reasonable extension of time for the filing of your client's defence provided it still allows us sufficient time to prepare for the CMC."
The first defendants applied to the court in writing to adjourn the CMC on 23 rd June 2005. Unfortunately, that application was not copied to the claimants' solicitors, which meant that I considered the application without knowing that the claimants had instructed their solicitors to oppose any such adjournment. I regard that as a major oversight on the part of Miss Hoath, but I do not consider that, in the event, it has had any serious consequences.
On the same day—that is, 23 rd June 2005—the first defendants made a written application pursuant to which they formally sought an extension of time for the service of their defence. The extension sought was fourteen days, which would have taken the date for the defence to 8 th July. On 24 th June, the hearing of the application to extend time for the service of the defence was fixed by the TCC Registry to take place on 5 th July. I was unaware of that application when, also on 24 th June, I adjourned the CMC to today's date.
Despite a number of attempts to telephone Mr. Gwillim on 24 th June, Miss Hoath was unable to speak to him to finalize the extension of time which she sought. Eventually, Miss Hoath faxed Mr. Gwillim on that day to say:
"As we explained in our previous letter, our client will not be in a position to serve its defence before Friday, 8 th July. We understand your client's difficulties in granting extensions in circumstances where the court have of their volition listed the matter for a case management conference on 5 th July 2005. Consequently, we wrote to the court yesterday explaining our difficulty with service of the defence and requesting that the case management conference be adjourned until the first available date after 8 th July. We understand that the court have agreed to do this and the CMC has been re-listed for 19 th July. In the interim, we had issued an application for an extension of time for service of the defence until 8 th July to be heard on 5 th July. This was on the assumption that the court would not move the case management conference. In light of the above, we would now invite you to grant us the requested extension until 8 th July. If this is acceptable, we will of course vacate the hearing on 5 th July. If the extension is not granted and your client is minded to attempt to enter judgment, we reserve the right to bring all the relevant correspondence to the court's attention at any hearing. We await your urgent response."
After 4 p.m. on 24 th June, the claimants entered judgment in default of defence. They informed the first defendants' solicitors of this in a letter written on the same day, although the letter was not received by the first defendants' solicitors until 27 th June. On 28 th June, Miss Hoath sent Mr. Gwillim a detailed letter setting out the first defendants' case. The defence and counterclaim were served on 30 th June and, on the same day, the first defendants issued an application to set aside the default judgment.
Miss Hoath's statement in support of the application was served on Wednesday, 13 th July. Mr. Grant, who as I have mentioned appeared on behalf of the first defendants today, filed a helpful skeleton argument at lunchtime yesterday. The claimants indicated their position by way of a statement from Mr. Gwillim and certain other documents which were provided yesterday afternoon. From a perusal of those documents, it was plain that the claimants opposed the setting aside of the default judgment.
The judgment in default. Mr. Grant's first point is that the judgment should be set aside as of right, because it was irregular. There were four separate points that he relied on in support of this contention:
(a) Because of the nature of the claimants' pleaded claims, they could only have sought judgment under CPR Part 23, which would have necessitated a notice to the first defendants, and that consequently the application for judgment in default under CPR Rule 12.4(i)(a) was invalid;
(b) The absence of a certificate of service at the time that the default judgment was entered made it irregular;
(c) Under CPR 12.8 the court is prevented from entering judgment against one defendant and not the other; and
(d) Alleged deficiencies in the Particulars of Claim.
The first of these points is, in my judgment, the most important. CPR 12.4 provides:
"(1) Subject to paragraph 2 a claimant may obtain a default judgment by filing a request in the relevant practice form where the claim is for:
"(a) a specified amount of money;
(b) an amount of money to be decided by the court;
(c) delivery of goods where the claim form gives the defendant the alternative of paying their value; or
(d) any combination of these remedies.
(2) The claimant must make an application in accordance with Part 23 if he wishes to obtain a default judgment:
(a) on a claim which consists of or includes a claim for any other remedy; or
(b) where Rule 12.9 or Rule 12.10 so provides.
(3) Where a claimant:
(a) claims any other remedy in his claim form in addition to those specified in paragraph 1; but
(b) abandons that claim in his request for judgment,
he may still obtain the default judgment by filing a request under paragraph (1)."
It is plain that the philosophy behind Rule 12.4 is to ensure that default judgments are confined to relatively straightforward cases where the claim is for a specified sum of money or an amount of damages. As I have indicated, in the present case the claim form seeks a declaration; an account of all profits that have come into the...
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