12. Default and Summary Judgment

Question 1

What is the difference between summary judgment, default judgment and strike out?

Answer 1

• Default judgment = C can seek this where D has failed to defend their claim (i.e. no acknowledgment of service/defence filed in time)
• Summary judgment + strike out = they’re both concerned with instances where the arguments put forward disclose no real prospect of success. Generally speaking, the claimant will apply for summary judgment if the defence is without prospects of success whereas the defendant will apply to strike out all or part of C’s claim if these are without prospect of success. But the distinction between these two routes is somewhat fluid (and summary judgment in favour of D is possible). Another distinction is that strike out is available in a wider set of circumstances (also for abuse of process by bringing the claim + failure to comply with rules, PDs or court orders). I would say that the best way to think about it is that ‘strike out’ is a tool that can be used in a variety of circumstances (i.e. the deletion of all or part of a statement of case), whereas summay judgment is the entering of a judgment without a trial in certain circumstances.

Question 2

What is the meaning of default judgment?

Answer 2

Judgment without trial where a defendant-

(a) has failed to file an acknowledgment of service; or
(b) has failed to file a defence

Question 3

In what circumstances can the court not grant judgment in default even though D has not filed a defence/an AoS?

Answer 3

If -

1. D has applied to strike out C’s case
2. D has applied for summary judgment of C’s case
3. D has satisfied the whole claim (including costs) on which C is seeking judgment

Question 4

Procedurally, how can you obtain default judgment?

Answer 4

In most cases, you can file a request in the relevant practice form. But in two cases you need to make an application in accordance with Pt 23:

1. Where you are seeking a remedy other than (a) a specified amount of money, (b) an amount of money to be decided by the court, (c) delivery of goods where the CF gives D the alternative of paying the monetary equivalent (i.e. other than payment of money or delivery of goods)
2. Where the claim is against a child/protected party or a tortious claim between spouses/civil partners

Question 5

What will the court order in the default judgment?

Answer 5

1. If C’s claim was for a specified amount of money

• Judgment for the amount claimed and costs (less any payments already made)
• C can request (in the request for default judgment) the date by which payment should be made or rates and times for payment by instalment. If C has done so the court will make the order in accordance with the request. If C has not done so, the amount becomes payable immediately.

2. If C’s claim was for an unspecified amount of money

• Judgment for a sum to be decided by the court + costs

3. If C’s claim was for delivery up of goods or payment of value of goods in the alternative

• Court will order delivery of goods or payment of money in the alternative (i.e. D can choose)

Question 6

Can default judgment be obtained in Pt 8 proceedings?

Answer 6

No

Question 7

How is the question of interest dealt with in default judgments?

Answer 7

The request may include the amount of interest accrued until the date of judgment and this interest can be awarded if:

1. the PoCs include the necessary info on interest specified in r 16.4
2. the rate claimed can’t exceed that which the court can grant under s. 35A/69
3. C’s request for DJ includes a calculation of interest from the date up to which interest was calculated in the CF up to the date of the request for judgment

Question 8

Can you obtain default judgment against one of multiple defendants only?

Answer 8

• Yes - if the claims can be dealt with separately the court will enter default judgment against D1 and allow you to continue your claim against D2.
• If they cannot be dealt with separately the question of default judgment against D1 will be dealt with at the same time as the claim against D2. (I always forget this)

Question 9

If you got a default judgment against D1 for delivery of goods or possession of land, can you enforce it against D2 (against whom you don’t (yet) have a default judgment)?

Answer 9

If you got a DJ against D1 for possession of land or delivery of goods you can’t enforce this against D2 unless you have obtained such a judgment against all Ds to the claim or the court gives permission.

Question 10

What happens if the court has entered default judgment when it should not have done so (because the conditions for entering it were not satisfied)?

Answer 10

The judgment MUST be set aside.

Question 11

When MAY the court set aside or vary a default judgment?

Answer 11

2 circumstances:

1. D has a real prospect of successfully defending the claim (this is the same test as that applied to summary judgment - i.e. you need to show more than an ‘arguable’ defence); or
2. There is some other good reason why the judgment should be set aside or varied or the defendant should be allowed to defend the claim.

N.B. in either case the court has a discretion. In determining whether it ought to exercise the discretion it MUST have regard to whether the person seeking to set the DJ aside made the application to do so promptly.

Question 12

If your application to set aside a DJ was refused what can you do now?

Answer 12

The only option left to you is to appeal. You can’t make a further application - the decision to refuse is final.

Question 13

What case law guidance do we have on what constitutes ‘some other good reason’ for the setting aside or varying of a default judgment?

Answer 13

• The discretion is broad
• Public interest considerations seem quite important, both in determining whether there are good reason to set aside/vary or to refuse to do so
• My impression is that there aren’t really any rules. Use common sense and look at all the circumstances.

Question 14

What guidance do we have on the need to act promptly in seeking to set aside/vary a default judgment?

Answer 14

• Although there are other factors the court will consider in determining whether it should exercise its discretion, promptness is the only consideration expressly mentioned in the rule in the CPR - i.e. it is very important
• But the app could (and sometimes is) still be granted where there is significant delay, if there are other compelling reasons/a good reason for the delay
• The discretion should not be exercised in such a way as to punish the defendant
• In explaining why there was delay you can’t rely on your representatives’ default (e.g. that of your insurance brokers or legal representatives). The duty to act promptly is imposed on the defendant personally. (I always forget this)
• It will be highly relevant to consider whether damages have already been assessed and a final judgment entered - if so, the burden to set aside/vary will be even greater

Question 15

Can a third party apply to set aside/vary a default judgment?

Answer 15

Yes - 2 possible ways

1. Apply to be joined and then set aside as a party (the fact that a DJ has been given is not a bar to joined)
2. Under r. 40.9 a party that is ‘directly affected’ by a judgment can apply to have it set aside - this rule would seem also to apply to default judgments

Question 16

Is an application to set aside/vary a default judgment an application for relief from sanctions?

Answer 16

Contradicting views in the case law - on balance, more cases (and more recent cases) discussed in the White Book commentary seem to suggest that such an application is NOT an application for relief from sanctions with the effect that the tests for r. 3.9 do NOT apply.

Question 17

In which 2 cases will an application to set aside/vary a DJ be sent/transferred to a different court and which court will it go to in those cases?

Answer 17

1. Claims for specified amounts of money against individuals

• If the claim was for a specified amount of money and the defendant was an individual, the application will go to the defendant’s home court, unless the claim has already been transferred to a different defendant’s home court
• Obviously if the claim is already in D’s home court it just stays there

2. Claims for specified amounts of money started in the County Court Money Claims Centre against parties that are NOT individuals

• Where a claim is for a specified amount of money and it was started in the County Court Money Claims Centre, it will be sent to the preferred hearing centre
• Obviously, if the defendant is an individual the claim will go to their home court (i.e. (1) takes precedence over (2))

Question 18

Which parties can summary judgment be granted in favour of?

Answer 18

Defendants AND claimants - unlike default judgment, summary judgment is available to either side

Question 19

What are the grounds for summary judgment?

Answer 19

1. C/D’s argument has no real prospect of success; and
2. there is no other compelling reason why the case or issue should be disposed of at trial

Question 20

Can you get summary judgment in respect of only one of the issues in the proceedings?

Answer 20

Yes

Question 21

What does “no real prospect of success” mean?

Answer 21

There must be a realistic as opposed to a fanciful prospect of success. ‘Realistic’ means that it must be more than merely arguable.

Question 22

What must the court avoid in determining an application for summary judgment?

Answer 22

• Conducting a mini-trial.
• There are lots of points on this in the White Book. But the overarching point seems to be that it’s a balancing exercise between taking as accurate a view of the prospects of success (considering also the credibility of evidence and the likelihood of further important evidence being available at trial) and the need to decide these applications without a full trial.
• The court can decide short points of law/construction in determining an application for summary judgement, if it is satisfied that it has all the relevant material before it. ‘Shortness’ refers to the length of the hearing required and the complexity of the issue, rather than the actual length of the document to be construed.

Question 23

Who bears the burden of proof of showing that there is no real prospect of success?

Answer 23

1. it rests on the applicant to establish that there are grounds to believe that the respondent has no real prospect of success
2. Once the applicant has adduced credible evidence in support of the application, the respondent comes under an evidential burden to prove some real prospect of success or other reason for having the trial

Question 24

What constitutes ‘other compelling reasons’ to let the case go to trial for the purposes of applications for summary judgment?

Answer 24

• No clear rules
• Important issues to consider (from the case law): where the context is liquidation the application may be refused where there are latent claims and cross-claim - in general important to consider claims against other parties in multi-party proceedings

Question 25

What is the effect of D raising a set-off defence or a counterclaim on C’s chances of obtaining summary judgment?

Answer 25

• Obviously D needs to get an opportunity to raise this. The court can do this in several ways.
• May either dismiss the application for summary judgment (esp. in cases where set off is raised bc if the amount of the set-off exceeds the sum claimed by C, then D obviously does have a realistic prospect of successfully defending the claim) or grant it but only up to a certain amount or stay execution of the summary judgment.
• E.g. if the set off does not exceed C’s claim then C may get summary judgment for the difference. C may also get summary judgment and the court makes execution conditional on the outcome of D’s proceedings.

Basically this is all very flexible - the court will exercise its powers to achieve a sensible and just result.

Question 26

What is special about bills of exchange, cheques and promissory notes for summary judgment purposes?

Answer 26

You can’t raise a defence of set off to them to prevent summary judgment. They are to be treated as if they were cash and must therefore be paid. The CA has extended this rule to apply to direct debit mandates that are to be treated as equivalent to cheques.

Question 27

For what types of proceedings is summary judgment available?

Answer 27

1. against a claimant- any type of proceedings (i.e. all claims can be dismissed summarily if they have no prospect of real success)
2. against a defendant - in all proceedings except proceedings for possession of residential premises against a mortgagor or a tenant (basically you can’t summarily allow a claim to succeed if a person would - as a result of that - lose their home)

Question 28

What is the earliest point from which C can seek summary judgment?

Answer 28

If the claimant is seeking the summary judgment then they must wait for D to acknowledge service or file a defence (the idea here is presumably that D needs to be given an opportunity to defend and also if D ends up not filing a defence you should go for default rather than summary judgment), unless the court gives permission to apply earlier

Question 29

Does D have to file a defence in the proceedings if an application for summary judgment has been made?

Answer 29

If an application is made for SJ (by D or C) before D has filed a defence, D need not file a defence before the hearing

Question 30

How long before a hearing for summary judgment must the parties be given notice of the hearing?

Answer 30

The respondent/the parties (if the court fixes the hearing of its own initiative then all the parties need to be notified, otherwise just the respondent) must be given at least 14 days’ notice of the date and the issues that the court will decide at the hearing

Question 31

What do the parties need to do if they wish to rely on written evidence in a summary judgment hearing?

Answer 31

1. Where a party has made an application for SJ

• Applicant (seeking to rely on written evidence in reply): file a copy of the written evidence and serve a copy on R at least 3 days before the summary judgement hearing (n.b. there is no procedure for the applicant serving evidence that’s not in reply)
• Respondent: file a copy of the written evidence and serve a copy on every other party to the application at least 7 days before the summary judgement hearing

2. Where the court has fixed the hearing of its own motion

• Primary written evidence on which you wish to rely: file a copy of the written evidence and serve a copy on every other party to the proceedings at least 7 days before the summary judgement hearing
• Evidence in reply: file and serve copy on every other party at least 3 days before the hearing

N.B. no need to file/serve evidence that has already been filed/served

Question 32

What can the court do on a summary judgment application in which it considers that a claim or defence could succeed but is unlikely to do so?

Answer 32

Instead of granting summary judgment, it can make a conditional order: i.e. order the respondent to take a certain step or pay money in to court pending the outcome of the litigation. Failure to comply will result in the respondent’s claim being dismissed/statement of case struck out.

Question 33

Are conditional orders only available where the court considers a claim/defence to be possible but unlikely to succeed?

Answer 33

No - the court has a general power to make conditional orders on summary judgment applications. E.g. can be used to order security of costs or if a party has a history of failing to comply with court orders.

Question 34

Can the court make a conditional order where the person against whom it is made has no realistic prospect of being able to afford compliance? Who has to show that there are/aren’t sufficient funds available? What does that party need to show?

Answer 34

• No
• The burden of proving that they can’t comply rests on the party alleging this
• To discharge this burden, the party must not only show that it does not itself have the necessary funds but also that no such funds will be made available to it by its owner (in the case of a corporate defendant) or by some other closely associated person
• In the case of corporate defendants the question IS NOT whether the stakeholders can raise the money, but whether they will in fact do so. But obviously the court needs to bear in mind that they will always deny that they will do so - so needs to take a realistic view of whether they genuinely won’t provide the funds.

Question 35

Which level of judge will usually hear an application for summary judgment?

Answer 35

Usually a Master or District Judge. May be heard by:

• A HC judge if the case is in the HC
• A Circuit Judge if the case is in the CC

Question 36

Which orders can a court make on an application for summary judgment?

Answer 36

1. Judgment on the claim
2. Striking out or dismissal of the claim
3. Dismissal of the application
4. Conditional orders

Question 37

Under what circumstances can you apply to set aside an order for summary judgment against you?

Answer 37

• Only if you did not attend the hearing at which the order was made (including if you were at fault for not attending). Other than that no special rules apply - the court seems to have a wide discretion and can make any orders as it thinks just.
• Basically this just gives effect to the court’s general power to relist the hearing of an application if the court has made an order pursuant to an application at a hearing at which one of the parties did not attend (r 23.11). Any party can apply to the court to exercise this power. The power applies to orders for summary judgment.

Question 38

How are costs for summary judgment applications assessed?

Answer 38

All the normal costs rules apply