Judgment in default of defence set aside where relevant materials were not included in motion

By: Lawrence Morris BL

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High Court, in an application to set aside summary judgment granted in favour of the plaintiffs where the defendants had failed to appear at the hearing of the motion, accedes to the defendants application and sets aside the order granting summary judgment, on the grounds, inter alia, that: it would be unjust to deprive the defendants of the opportunity of defending the proceedings where there were special circumstances at the time of the judgment to justify the default, namely: (1) the inadvertence and mistake of the defendant's solicitors in failing to appear in order to defend the motion; (2) the failure of the plaintiffs' to put relevant material before the court at the hearing of the motion; and (3) the failure to  mark the existence of the Court of Appeal judgment surrounding these proceedings whereby the court had assessed that the plaintiffs did not have a strong case in relation to their case as a whole.

Defendants seeking to set aside judgment - judgment delivered in default of defence - defendants failed to appear at hearing of motion - court considers whether there were special circumstances to set aside judgment - and if special circumstances existed, whether the balance of justice justified setting aside judgment - 1st plaintiff designated activity company - 2nd & 3rd plaintiff's chartered accountants - claimed to be lawfully appointed receivers - property owned by the 1st & 2nd Defendants who are married - but now estranged - 1st Plaintiff claims possession of the property - on the basis that it acquired loan facilities and mortgage securities which it says were originally agreed between the defendants and bank - issue raised was whether receivers appointed validly - Court of Appeal raised issues about case being a strong case - CoA not satisfied plaintiffs had strong case - plaintiffs lost in CoA - at motion for summary judgment - grounding affidavit failed to mention interlocutory injunction motions - nor that the High Court order granting possession on an interlocutory basis had been set aside - also made no mention of the Court of Appeal decision - motion served - no appearance by defendants on first and second call - four letters exhibited only - court notes HC judge dealing with the matter at second call entitled to assume that the four letters exhibited were the only relevant letters - accordingly judgment in default of defence granted - failure to attend oversight on behalf of defendant solicitors - thought listed April instead of February - application to set aside brought pursuant O. 27, r. 15(2) of the RSC - legal principles - court notes special circumstances arise where important letters were omitted - court notes CoA's judgment should also have been referred to - particularly in reference to its position on receivers - court further takes into account inadvertence on behalf of defendants' former solicitors - defence and counterclaim were delivered before solicitors thought motion took place - court notes its correct to say legal advisors inadvertence does not amount to special circumstances - court finds here it wasn't just this - court concludes on balance of justice favours setting aside order for judgment - significant risk of injustice - court notes prospect professional negligence - court satisfied there are special circumstances - judgment set aside.

Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.

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