England and Wales High Court (Queen's Bench Division) Decisions

		Royal Courts of Justice Strand, London, WC2A 2LL
		4 March 2014

MR JUSTICE SILBER:

I. Introduction

1. By an order dated 23 July 2013, Master Fontaine declined to set aside a default judgment entered by Mr Samir Samara ("the Claimant") against MBI & Partners U.K. Limited ("the First Defendant"). The First Defendant sought to appeal. Permission to pursue its appeal was given by Bean J after it had been refused on paper by Openshaw J.
2. This appeal raises an issue as to how, if at all, the Court's attitude to applications to set aside a judgment entered in default have been altered by the proposals made by Sir Rupert Jackson and the subsequent consequential changes to the CPR. I will also consider the position under the pre-existing rules.
3. This claim has become part of a substantial dispute between the parties because the First Defendant has also made an application after the hearing in front of the Master but which is not before me to have the Claimant's claim struck out as an abuse of process. Its first ground is that the alleged contract relied upon by the Claimant is a fraudulent claim; while its second ground is that there was no such agreement between the parties for the employment of the Claimant by the First Defendant pursuant to the contract, which was the subject-matter of the claim and which led to the default judgment of Master Fontaine and the unsuccessful application to set aside that judgment from which I am hearing the appeal. On 30 January 2004, Cooke J heard this application and he gave directions so that this claim raised by the First Defendant ("the fraud claim") will be tried in due course by a High Court Judge. The First Defendant has paid into Court the amount of the judgment debt.
4. In this appeal, I am, in fact, being asked to determine whether the First Defendant should be able to rely in the fraud claim on a limitation defence, which is separate and different from the fraud claim and which was raised in the draft Defence of the First Defendant, but which cannot now be pursued because of the decision under appeal refusing to set aside the judgment.

II. The Nature and History of the Claim

5. The Claimant, who is a national of the United States, entered into two employment contracts with each of the Defendants dated 8 December 2001. In the first agreement ("the AJWA contract"), it was agreed that the Second Defendant would employ the Claimant as General Manager in Saudi Arabia.
6. The second contract ("the MBI contract") was made between the Claimant and both the Defendants under which the Second Defendant would lend the services of the Claimant to the First Defendant. The Defendants are separate companies, but Sheikh Mohammed Bin Issa Al Jaber is the Chairman of the Second Defendant as well as being the controlling agent of the MBI companies of which the First Defendant is a subsidiary.
7. The Claimant duly commenced employment with the Defendants. The contention of the Claimant is that he was not paid sums due to him by the First Defendant under the MBI contract and he claimed from the First Defendant the sterling equivalent of the sums due and which amounted to £235,376.60.
8. Although the alleged date of the Claimant's employment by the First Defendant was from January 2002 to 31 March 2005, the Claim Form was not issued until 29 March 2011, while the Particulars of Claim were only filed and served on 27 July 2011. The First Defendant did not file an Acknowledgment of Service and so the last date on which it had to serve a Defence was 11 August 2011. Neither an Acknowledgment of Service nor a Defence was filed within the time limits prescribed by the CPR or indeed at all.
9. On 24 August 2011, the solicitors acting for the Claimant requested judgment in default and on 20 September 2011, Master Fontaine gave permission to enter judgment against the First Defendant in default. The Master asked for a draft order and draft judgment to be supplied and this was provided on 27 September 2011. On 19 December 2011, the Claimant's solicitors wrote to the Court requesting a hearing for the purposes of summary assessment of their costs. The hearing was fixed for 13 February 2012 and notice of the hearing was given to the First Defendant on 20 January 2012. On 23 January 2012, Mr Salfiti, who was the First Defendant's in-house lawyer, spoke to Miss Randall, the Claimant's solicitor, and she explained that the judgment in default had not been entered and that was why the hearing had been listed for 13 February 2012. Mr. Saltifi asked if the Claimant would agree to the First Defendant filing a Defence out of time, but Miss Randall replied that she would not agree to this. Another telephone discussion took place on 10 February 2012 relating to the forthcoming hearing.
10. At the hearing on 13 February 2012, which was attended by Miss Randall and Mr Salfiti, and after hearing submissions from both sides, Master Fontaine entered judgment against the First Defendant in favour of the Claimant in the sum of £363,421.47 and this included interest in the sum of £128,044.87, together with the Claimant's costs which were assessed summarily in the sum of £12,530.20.
11. On 14 February 2012, a copy of the Order was sent to Mr Salfiti and then to the Master who sealed it. It was then sent on that day by the Claimant's solicitors to Mr Salfiti with a notice saying that if the Defendant failed to make payment within 14 days, then enforcement proceedings would follow.
12. On 1 March 2012, Mr Salfiti telephoned Miss Randall again stating that First Defendant intended to apply to aside the default judgment. In a follow-up email, Mr Salfiti invited the Claimant to agree to the First Defendant's application to set aside the default judgment, failing which he would invite the Court to consider wasted costs. Miss Randall did not respond and a further email was sent on 7 March 2012. Miss Randall has explained that she was off sick during this period and that she did not want to respond before taking her client's instructions.
13. On 27 March 2012, Miss Randall returned a telephone call from Mr Salfiti who referred to the emails and said that he did not know if they had been received. Miss Randall explained that she had seen them and that she had not got back to phone him as she wished to speak to her client first. Of that telephone call, Miss Randall says, according to her witness statement, that:-

"I am satisfied that it was clear to Mr Salfiti that although I endeavoured to speak to my client, it was a matter for him whether he made the application or not and, if so, when".

14. On the same day after that telephone conversation, Miss Randall sent an email to Mr Salfiti stating that:-

"I am writing to acknowledge receipt of your email below. I will be taking instructions from my client on the contents of your email".

15. Nothing further happened for over a year until 16 May 2013, when the High Court Enforcement Officers attended the offices of the First Defendant to take steps to enforce the judgment. At that point, Mr Salfiti attempted to contact Miss Randal who was out of the office. He emailed and telephoned the firm and said that he needed to speak with Miss Randall urgently about an injunction.
16. Miss Randall, who was still out of the office, arranged for a senior partner at her firm, Mr Charles Ferguson, to return the telephone calls from the High Court Enforcement Officer and Mr Salfiti. Mr Ferguson spoke to both of them on 16 May 2013 at about noon. Mr Salfiti did not refer to a pending injunction application and Mr Ferguson agreed that he would instruct the High Court Enforcement Officers to take no further steps in relation to the enforcement of the judgment against the First Defendant on the understanding that the First Defendant would make an application to set aside the default judgment and that he would serve it by 4.30pm on 21 May 2013.  Accordingly Mr Ferguson telephoned the High Court Enforcement Officer at 12.46pm and he instructed the officer to hold off enforcing the judgment until after that time in accordance with that agreement.
17. Nevertheless on that day and very surprisingly, the First Defendant made an application for a stay of enforcement and for a stay of the default judgment, Singh J then heard a without notice application by the First Defendant for an injunction preventing the Claimant form enforcing the judgment under penalty of imprisonment.  He granted the order, which was served on 17 May 2013.
18. A witness statement of Mr Salfiti was adduced before Singh J but Miss Randall disputes many of the statements made by him.  Most of the statements are not relevant to the present appeal except for the fact Miss Randall makes it very clear that she told Mr Salfiti on about 27 March 2012 that it was a matter for the First Defendants whether or not they wanted to apply to set aside the default judgment because it was not for the Claimant to agree whether it should be set aside as that was a matter for the Court.  She also says first, that there was no agreement that she would take instructions from the Claimant before the application for a default judgment to be set aside would be made or second, that in the interim no enforcement steps would be taken. Indeed the transcript of the telephone conversation, which has been provided, is in accordance with her evidence.

III. The Application to Set Aside the Judgment before the Master

19. On 21 May 2013, the solicitors then acting for the First Defendant were instructed and they duly made the application to set aside the default judgment was duly made under RSC r.13.3, which, insofar as is material, provides that:-

"(1) … the court may set aside or vary a judgment entered under Part 12 if –

(a) the defendant has a real prospect of successfully defending the claim; or

(b) it appears to the court that there is some other good reason why –

(i) the judgment should be set aside or varied; or

(ii) the defendant should be allowed to defend the claim.

(2) In considering whether to set aside⁾ or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly".

20. A draft Defence was exhibited in which three grounds were put forward to show that the First Defendant had real prospects of success.  Of those, two of them are no longer pursued and I will say no more about them. The only defence, which is relied on this appeal, is that the claim on which the judgment was obtained was statute-barred.
21. The case for the First Defendant in respect of that defence is that under the alleged MBI contract, the agreement was governed by Saudi law, which has a very limited one-year imitation period for claims of this nature. It is noteworthy that the limitation period under Saudi law was considered by the Court of Appeal in Harley & ors v Smith anr [2010] EWCA 78 in which it was pointed out that the joint statement of the experts in that case noted that Article 222 of the Labour Law of Saudi Arabia provided that:-

"1.  No case shall be accepted by the commission provided for in this law involving a claim for rights provided for in this law or arising from a work contract after 12 months following termination of the work relation.

2.  No case involving a claim of the rights provided for in the previous Labour Law shall be accepted after 12 months following the effective date of this law."

22. It is true that no expert evidence on Saudi law has been adduced in this case, but in the light of my findings on other issues, I am content to accept the evidence in the Harley case on that issue. In addition, whilst it is said that Saudi law would have prevented the bringing of such a claim in 2011, which is more than six years after the end of the Claimant's relation with the Defendant, it is contended that even if the claim was governed by English law, the six-year limitation period had elapsed before the present claim was instituted. According to the Particulars of Claim the last payment under the contract was said to have been made on 10 December 2002 and the Claimant accepted the First Defendant's repudiation of the contract with effect from 31 March 2005. Not surprisingly, the Master accepted that the defence that the claim was statute-barred had a real prospect of success irrespective of whether the contract was subject to English law or Saudi law and that finding has not been challenged.
23. Having concluded that the First Defendant's limitation defence had a real prospect of success, the Master proceeded to consider the question of delay because, as I have explained, CPR r.13.3 (2) specifies that on an application to set aside a judgment, the matters to which the Court "must have regard include whether the person seeking to set aside the judgment made an application to do so promptly". She drew attention to the fact that the Court was entitled to exercise its discretion so as to refuse to set aside a judgment even in circumstances were there is a real prospect of success if that application to set aside had no been made promptly.  The Master referred to page 449 of the White Book for 2013 which states in relation to the decision in Nolan v Devonport [2006] EWHC 2025 (QB) that:-

"A debtor who did nothing until the creditor sought to enforce the judgment who then applied to set aside was refused permission to set aside, it being held that the debtor's conduct amounted to an abuse of process."

24. The Master explained that the present case was different from that case because the conduct of the First Defendant, unlike the conduct of the applicant in the Nolan case, did not amount to abuse of process. The periods of delay were then considered and I will return to consider the Master's reasoning in respect of them when I deal with the submissions.
25. Turning to application made to Singh J, the Master noted that Miss Randall contends that he was not given the correct information when the First Defendant applied for the injunction. The Master criticised the First Defendant for applying for this injunction as being "entirely the wrong approach", when instead it should have applied for a stay of execution, but that in any event, it should have been preceded by a request to the Claimant's solicitors as to whether they would hold off enforcement. She explained that when that was done, the Claimant's solicitors readily agreed to that provided that an application to set aside would then be made.
26. The Master then considered the overriding objectives and held that the First Defendant had become aware of the judgment against it when it was represented at the hearing on 13 February 2012 when judgment had been entered.
27. The Master concluded that the way in which the First Defendant had dealt with the proceedings had not been in accordance with the overriding objectives and she refused to accede to the application to set aside the judgment explaining that:-

"30…I do not consider that it would be in accordance with the overriding objective to grant an application made at least 16 months after the First Defendant became aware of the judgment against it, with the most part of that period of delay unexplained.

31 The delay in this case is so long and so unexplained, in particular where there was an attendance at the hearing in February 2012 but no action taken at all, that I do not consider it appropriate to exercise the court's discretion to set aside judgment. That is the case even where I have concluded that one ground of defence has a real prospect of success. The First Defendant had had every opportunity from at least 20 January 2012 to make the application, so there is no denial of access to justice. Accordingly, I will not set aside the default judgment."

IV. The Submissions

28. Mr Derrick Dale QC, counsel for the First Defendant, contends the appeal should be allowed because of a number of factors including that:-

(a)  The Master erred in finding that there was excessive delay and in holding that it was a decisive factor;

(b) Insufficient weight was attached to the Claimant's delay in bringing the claim which was extraordinary, unaccountable and also unaccounted for;

(c)  The Claimant and his solicitors knew that the First Defendant was seeking to set aside the default judgment and was seeking to obtain the Claimant's consent;

(d) There have been developments since the hearing before the Master because, as I have explained in paragraph 3 above, Cooke J has held there will have to be a trial on the fraud claim and the limitation defence could then easily have been resolved in the context of that claim;

(e)  The Claimant will not suffer any prejudice if the judgment is set aside as the amount claimed of £376,000 has been paid into court; and that

(f) The First Defendant will suffer very considerable injustice unless the appeal is allowed and the judgment is set aside.

29. Mr. Dale also points out that the Master attached considerable weight to the circumstances in which the First Defendant had obtained the injunction to prevent enforcement of the default judgment which was not the correct procedure because, as is correct, there should instead have been an application to the Practice Master for a stay of execution.  It is correct that the application in front of her to set aside the default judgment had included an application to set aside the order of Singh J, but the Master (correctly in my opinion) pointed out that she could not make such an order as it could only be made by a High Court Judge. These comments of the Master in relation to the injunction application did not form any part of the basis for her decision to refuse to set aside the judgment as her reason for so doing was, as I explained in paragraph 27 above, that the application was in the Master's words "made at least 16 months after the First Defendant became aware of the judgment against it, with the most part of that period of delay unexplained".
30. Mr Sam Neaman, counsel for the Claimant, contends that the Master was right and certainly was not wrong to refuse to set aside the judgment, but that for the appeal to be allowed, it had to be shown that the Master was wrong and this could not be established especially in the light of the delay in this case.
31. Turning to the particular complaints of Mr. Dale, Mr. Neaman contends that none of these points have any validity especially in the light of the new regime that implements the proposals of Sir Rupert Jackson. Mr. Dale countered this by contending that special considerations apply in relation to setting aside of default judgments not least because the entry of a default judgment is not subject to prior scrutiny of the Court under CPR Part 13, which governs the setting aside or varying of default judgments.
32. Mr. Neaman disputes this and contends that even if contrary to his main submission, the new regime does not apply to setting aside judgments, then in any event, the Master was correct and certainly not wrong to set aside the default judgment in this case.
33. I must first consider if and how the new regime has an impact on the approach to CPR 13.3 before considering the delay in this case in the light of the submissions of the parties.

V. Does the new regime apply to the application to set aside the judgment pursuant to CPR 13.3?

34. The new regime came into force on 1 April 2013. It is common ground that the illuminating and very comprehensive 15^th and 18^th Lectures in the Implementation Programme on the Application of the Amendments to the Civil Procedure Rules do not deal specifically with the approach to CPR r.13.3 and my attention has not been drawn to any of the other lectures in that series that deal with this issue or anything in Sir Rupert Jackson's report which does.
35. Mr. Neaman submits that the underlying philosophy and the rationale behind the consequential amendments to the CPR have changed the approach of Courts to failures to comply with all rules and orders, including CPR r. 13(3).
36. Insofar as Mr. Dale contends that the new regime does not apply to the special rules under CPR Part 13 because there had been no trial, I cannot agree because the new regime has universal application to all rules in the CPR. Indeed, it is based on and underpinned by the changes to the overriding objectives which apply to all parts of the CPR. As is widely known, the new overriding objectives in CPR r.1.1 state (with the post-April 2013 additions in bold) that:-

"1.1. (1) These rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost.

(2) Dealing with a case justly and at a proportionate cost includes, so far as is practicable …

(f) enforcing compliance with rules, practice directions and order."

37. There is no express statement that CPR Part 13 or that any part of it is excluded from these provisions and I have found nothing in the rules or in the decided cases to show expressly or impliedly that this is so. Further, there is no theoretical justification from excluding this rule from the new regime and the new underlying objectives. Indeed, most importantly, the Master of the Rolls, Lord Dyson, described the effect of the new regime in very general terms and as being of universal application when giving the judgment of the Court of Appeal in Mitchell v News Group [2013] EWCA Civ 1537 when he explained that:-

(a) "[T]he new more robust approach [which] will mean that from now on relief from sanctions should be granted more sparingly than previously" ([46]);

(b) This approach, which meant an end to the belief that the "culture of delay and non-compliance "would continue (ibid);

(c) "[T]he starting point should be that the sanction has been properly imposed and complies with the overriding objective" [45];

(d) Relief would be granted if the default is trivial "provided that an application is made promptly" (ibid [40]) or if there is a good reason for failure to comply (ibid [41]). Good reasons are likely to arise from; circumstances outside the control of the party in default (ibid [43]) and by contrast inefficiency or incompetence of a party's solicitors –for example, the fact that a deadlines is simply overlooked- is unlikely to prove a good reason (ibid [41]) (see Leggatt J in Summit Navigation Ltd and another v Generale Romania Asigurare Reasigurare SA and another [2014 EWHC 398 (Comm)[39]); and

(e)  Applications for relief must be made promptly (ibid [40] and [46]).

38. The need for promptness in making applications was also stressed by Richards LJ when giving the judgment of the Court of Appeal in Durrant v Chief Constable of Avon & Somerset Constabulary [2013] EWCA Civ 1624 when refusing to grant relief from a sanction for failing to serve witness statements in time (see especially paragraphs [40] –[56]). Similarly, in Thevarajah v Riordan [2014] EWCA Civ 14, the Court of Appeal considered that the delay in making the application for relief was an additional reason why it had to be rejected. It is very clear that in the new regime, the need for promptness has even greater significance than it had previously and that relief will be granted much more sparingly than hitherto. I will have to consider if this means that the decision of the Master cannot be faulted unless, as was explained in Mitchell, the delay was trivial or unless there was good reason for it.
39. I now turn to consider the delay in this case and I should add that the new regime means that the old arguments based on absence of prejudice to the non-delaying party as the Court's staring point is that the sanction has been properly imposed and complies with the overriding objective.

VI. The Nature and Extent of the Delay

40. The Master considered three periods of delay and I will consider them in turn.

(i) The period from 11 August 2011 when the Acknowledgment of Service was due until 20 January 2012

41. The Acknowledgement of Service was due on 11 August 2011, but the First Defendant took no steps to deal with the claim until 20 January 2002 when notice was given by the Claimant's solicitors to the First Defendant that the Claimant's solicitors had requested a hearing for the purpose of a summary assessment of the costs. Mr Dale contends that the delay which falls to be considered pursuant to CPR 13.3(2) is the delay between the entry of the judgment and the time when an application is made to set aside the judgment. Thus, he says that the Master erred first, in considering the period from August 2011 as though it were relevant to CPR r. 13.3(2) and second, in criticising the First Defendant for not making an application to set aside a judgment which had not yet been entered.
42. The Master made it quite clear in her conclusion which I have set out in paragraph 27 above, that the reason why she would not grant the application was that it was made "at least 16 months after the First Defendant became aware of the judgment against it, with the most part of that period of delay unexplained". This crucial period of 16 months was the later period from about January 2012 until the application was made to set aside the judgment on 23 May 2013. So the criticism of Mr. Dale does not relate to a period of delay which formed the basis of the Master's judgment.
43. In any event, the criticism that is being made by the Master was that there was no explanation in the witness statements as to why "no application was made to the Court to extend time for the filing of an Acknowledgement of Service and defence." (Paragraph 26). The Master was not saying that the First Defendant should have applied to set aside a judgment which had not yet then been entered. She was explaining that this was not one of those cases where there might have been a reason for extending the time for filing those documents. To my mind, the Master was quite entitled to take this period into account as it might be relevant as to how speedily the Claimant should have acted even though it is not specifically mentioned in CPR r13.3(2) as a factor which had to be considered, such as the promptness of the application to set aside the judgment.

(ii) The period from January 2012 to 27 March 2013, which is the date of the telephone call when Miss Randall returned a telephone call from Mr Salfiti

44. Mr Dale complains that the Master applied the wrong test when she stated that:-

"27… In circumstances where there had already been over a year's delay, it was incumbent upon the First Defendant, if it stood any chance of being successful on an application, to make such application immediately without waiting further to find out whether the Claimant would agree to set aside judgment".

45. Mr Dale submits that this was an incorrect approach because CPR 13.3(2) does not require the applicant to make its application "immediately", but that instead it only required prompt action once the default judgment has been entered.
46. It is clear that the Master was well aware of the need for an application to set aside a default judgment to be made "promptly" and indeed she had stated precisely that in the sentence previous to the one on which Mr Dale relies when she had said that all solicitors were expected to know the rule which "requires an application to set aside a default judgment to be made promptly". Indeed, she uses the word "promptly" on other occasions in the judgment as, for example, in paragraph 29 of the judgment. What is important is that the Master was saying that by 27 March 2012 when the judgment in default had already been entered some six weeks earlier as was well known to the First Defendant. Therefore, it had in the light of the previous delay an obligation to act promptly which, in those circumstances required an immediate application. After all, such an application would then still have been made some six weeks after judgment had been entered and such an application would have been necessary to satisfy the requirements of "prompt action". There is no error of law in the Master's approach.
47. Another point made by the First Defendant is that the Master ignored the explanation for the delay. He attaches importance to the conclusion in paragraph 27 of the judgment that the explanations given by the First Defendant for the delay in making this application to set aside the default judgment was "not credible". It is then said that she went on to ignore altogether the explanation in the finding at paragraph 30 that "the most part of that period of delay [was] unexplained".
48. To support this point, Mr Dale relies on first the email sent by Mr Salfiti to Miss Randall on 1 March 2012 indicating its intention to apply to set aside the default judgment and seeking the consent of the Claimant to such an order, and then second a further conversation on 27 March 2012 in which Miss Randall said that she would "come back to you.. once I have spoken to my client". On the same day, Miss Randall sent an email to Mr Salfiti in which she stated that she would be taking instructions from her client on the contents of the email which was the one in relation to which consent to setting aside the judgment had been sought. The position therefore was that Miss Randall was supposed to be taking instructions from the Claimant in order to obviate the need for any further application, but no response was then provided.
49. It is therefore said by Mr Dale this was a case of reasonable people trying to conduct themselves reasonably in circumstances in which the Claimant had not given an outright refusal with the consequence that the delay of the First Defendant in making the application to set aside the default judgment had a credible explanation with the Claimant being well aware of this position.
50. In my view, the Master was entitled to accept the evidence of Miss Randall that she had made it clear to Mr Salfiti that he should not wait for a consensus because that was not the way forward. It is noteworthy that Ms Randall made it very clear when she said in the conversation "you don't need to wait for my response if you want to make the application [to set aside the default judgment] you can" and that Mr Salfiti then also said that "ok we will make the application anyway". This was a clear case of a serious, sustained and inexcusable failure by the First Defendant and its legal adviser Mr. Salfiti to comply with the well-known and important obligations to make a prompt application to set aside judgment entered in default probably as a result of inefficiency on the First Defendant's part.

VII. Should the Appeal be allowed under the New Regime?

51. I have explained why the new regime applies to this application and appeal. In my view, the Master was quite correct when she explained that "all solicitors are expected to know the terms of the rule [namely CPR r.13.3 (2)] which requires an application to set aside a default judgment to be made promptly". Indeed the Master was also correct to point out that the First Defendant only made the default application when enforcement was being attempted. In my view, the Master was entitled, if not obliged, to reach the decision to refuse to set aside the judgment for the reasons which she gave.
52. The stark fact is that a party against whom a judgment in default has been entered has a clear obligation to apply promptly for the discharge of the judgment as is made clear from the wording of CPR r.13.3(2). It is no excuse for any delay for that party to wait to see if the Claimant will agree to the discharge of judgment. I therefore reject the contention that the Master erred in holding that there was excessive delay.
53. I should add that, as I have explained in paragraph 36 above, relief is usually only to be granted under the new regime if the default is trivial and there is good reason for the failure and not because of inefficiency. In this case, the First Defendant cannot show that its case falls within either of those exceptions as I have concluded that there was no justification for its failure to make the application to set aside any earlier for the reasons given by the Master. Indeed their failure to do so was a consequence of their inefficiency.
54. I should also add that in reaching these conclusions, I have not overlooked the contentions of Mr. Dale that:-

i) Insufficient weight was attached to the Claimant's delay in bringing the claim. I cannot see how that could or would have justified the delay of the First Defendant in seeking to set aside the judgment whether under the old regime or the new regime;

ii) The Claimant and his solicitors knew that the First Defendant was seeking to set aside the judgment, but the stark fact is that the First Defendant did not do so; that failure is the important factor under the old and the new rules as justifying a decision to refuse to set aside the judgment;

iii) The decision of Cooke J that the fraud claim will go ahead means that the limitation defence could easily be heard in the context of that action. This overlooks the fact that issues of prejudice are no longer relevant on applications where there has been what I consider to have been a serious, sustained and inexcusable failure by the First Defendant and its legal adviser Mr. Salfiti to comply with the well-known and important obligations to make a prompt application to set aside judgment entered in default probably as a result of inefficiency on their part;

iv) The Claimant will not suffer any prejudice as the amount claimed has been paid into Court. This ignores not merely the fact that issues of prejudice are no longer relevant in case where there has been a delay of the kind and of the nature that occurred in this case, but also that the Claimant is prejudiced as he is being delayed receiving the money due to him under the judgment; and

v) The First Defendant will not suffer an injustice if the appeal is not allowed but that ignores the fact that they have acted in flagrant breach of the Rules and in particular of the need to make the application to set aside promptly.

VIII. Should the Appeal be allowed under the Old Regime?

55. I have considered this appeal on the assumption that I am wrong and the new regime does not apply to it. The totally unexplained and lengthy delay would trump by a substantial margin the countervailing factors relied on by the Mr. Dale and in particular the alleged absence of prejudice which would be suffered by the Claimant if the appeal was allowed. To allow the appeal would be to fail to give adequate weight to the need for the application to set aside the judgment to be made promptly.
56. If, which is not the case, I was in any doubt about these conclusions, I would have dismissed the appeal for another reason which is that to succeed on this appeal it would have to be shown that the decision of the Master was in the wording of CPR., r 52.11 (3) (a), "wrong" as this is the basis on which it is contended that the decision of the Master should be set aside. There is a high threshold for such a finding because, as was explained by Brooke LJ giving the judgment of the Court of Appeal in Tanfern v Cameron- MacDonald [2000] 1 WLR 1311 [32]:-

"...Under the pre-CPR regime an appeal was a "rehearing in the fullest sense of the word, and, and the judge exercised his/her discretion afresh while giving appropriate weight to the way the lower court had exercised its discretion in the matter. Under the new regime, the decision of the lower court will attract much greater significance. The appeal court's duty is limited to a review of that decision, and it may only interfere in quite limited circumstances set out in CPR. r 52.11 (3)".

57. Brooke LJ proceeded to state that:-

"32…The epithet "wrong" is to be applied to the substance of the decision made by the lower court. If the appeal is against the exercise of a discretion by the lower court, the decision of the House of Lords in G v G [1985] 1 WLR 647 warrants attention. In that case Lord Fraser of Tullybelton said at p 652C:

"Certainly it would not be useful to inquire whether different shades of meaning are intended to be conveyed by words such as "blatant error" used by the President in the present case, and words such as "clearly wrong", "plainly wrong", or simply "wrong" used by other judges in other cases. All these various expressions were used in order to emphasise the point that the appellate court should only interfere when they consider that the judge of the first instance has not merely preferred an imperfect solution which is different from an alternative imperfect solution which the Court of Appeal might or would have adopted, but has exceeded the generous ambit within which a reasonable disagreement is possible."

58. In my view, there was no good reason for the delay of the First Defendant in applying for the judgment to be set aside and so the decision of the Master cannot be regarded as wrong under either the old or under the new regime.

IX. Conclusion

59. For the reasons I have explained, the appeal must be dismissed.