Court of Appeal grants permission to appeal in default judgment case

Default judgment –  Practice and Procedure

The Court of Appeal grants permission to appeal in a case of general public importance involving the practice and procedure surrounding default judgments.

The Claimant issued a claim against the Defendant for unpaid monies following the completion of construction works. The Defendant filed an Amended Defence and Counterclaim alleging that the works were defective and counterclaimed for damages. The Claimant served witness statement evidence denying the damages claimed, but not a formally pleaded defence to the counterclaim.

At trial in the Central London County Court, where the Appellant was represented by alternative Counsel, the Defendant contended that the Claimant had not filed a defence, and that the Defendant was entitled to default judgment. The Circuit Judge proceeded to grant default judgment on the basis that the Claimant had failed to file a formally pleaded defence.

The Appellant appealed to the Court of Appeal. The Appellant argued that there was a point of general public importance arising on the appeal, namely whether, in the absence of a formally pleaded defence, a witness statement denying damages claimed in the counterclaim constitutes “a defence” for the purposes of default judgment under CPR r 12. 3 2 (b). This was argued in conjunction with para 1.1 of Practice Direction 12 which states that a defence includes “any document purporting to be a defence”.

Lord Justice Christopher Clarke was persuaded to grant permission to appeal on the basis that the point was of general public importance, raising a point of practice or procedure, in respect to which the Appellant had real prospects of success. His Lordship allowed the appeal to proceed on the condition that the Appellant pay the outstanding interim costs order which the Appellant agreed to do.

Arfan Khan was instructed as lead Counsel on appeal and did not appear in the proceedings below.

The transcript of judgment will be available soon.

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