Civil procedure – Judgment on admissions – Revocation – District judge making final order in favour of claimant on basis of admissions made by defendant acting as litigant in person – Defendant applying unsuccessfully to revoke order and withdraw admission after receiving legal advice – Whether court having discretion to revoke final order – Whether exercisable – Appeal dismissed
The defendant worked for an investment bank. He borrowed £128,000 from the claimant on an unsecured bridging loan for the purpose of funding an investment, believing that the investment scheme would attract a tax rebate sufficient to repay the loan. However, the rebate did not materialise. The claimant brought proceedings against the defendant to recover £166,000 in principal and interest under the loan. The defendant, acting as a litigant in person, admitted liability for £158,000 but disputed the balance. Following intermittent negotiations between the parties, the claimant applied for judgment in the county court on the admitted amount. Rather than giving judgment against the defendant immediately, the district judge made an unless order at a case-management conference, enabling the defendant to avoid a judgment against him for the admitted amount provided that he executed a charge for that amount over his flat, which he did.
He subsequently sought legal advice, on the basis of which he applied to the county court to: (i) withdraw his admission of liability for the £158,000; (ii) revoke the unless order; (iii) amend his defence; and (iv) advance a counterclaim. He alleged misrepresentations by the claimant as to the investment scheme’s compliance with tax legislation and the certainty of a tax rebate; he further sought to claim statutory compensation from the claimant for promoting the scheme in breach of financial services legislation.
The defendant’s applications were dismissed and he appealed. He contended that the court should be prepared to revoke its own final order so as to correct an injustice to a litigant in person who had admitted a claim and submitted to final judgment before discovering, on receipt of subsequent legal advice, that he had an arguable defence arising out of facts of which he had been aware.
Held: The appeal was dismissed.
Although the unless order had been made at a case-management conference where directions were given in respect of the part of the claim that was in dispute, it was intended to be a final disposal of that part of the claim that related to the admitted sum. To revoke a final order in such a case would offer a person in the defendant’s position an opportunity to reopen a case that had already been decided against him in circumstances that would fail to satisfy the applicable test on an appeal and would conflict with the public interest in the finality of legislation: Ladd v Marshall [1954] 1 WLR 1489 applied.
The line of cases establishing that an order could be revoked in the event of a material change of circumstances, or where the judge had been misled as to the correct factual position, did not apply to a final order by which the court finally disposed of a claim or a part of that claim subject only to an appeal to a higher court: Lloyds Investment (Scandinavia) Ltd v Christen Ager-Hanssen [2003] EWHC 1740 (Ch) and Collier v Williams [2006] EWCA Civ 20; [2006] 1 WLR 1945 distinguished. Once the court had finally determined a case, in whole or in part, considerations of that type would generally be displaced by the more important, if not overriding, public interest in finality, subject to the dissatisfied party’s qualified right of appeal. A line had to be drawn between, on the one hand, orders for which revocation could be sought on those alternative grounds in the exercise of the court’s discretion under CPR 3.1(7) and, on the other, final orders that attracted the public interest in finality: Roult v North West Strategic Health Authority [2009] EWCA Civ 444; [2010] 1 WLR 487 applied.
A final order that was made by way of judgment on admissions was as much a final order as one made on the merits after the trial of an issue. It was not to be equated with a default judgment, as to which, regardless of its finality, there was a well-established and distinct power to set aside as set out in CPR 13. A judgment on admissions was not obtained automatically, and although the process for obtaining it might not involve a full trial, it was none the less a judgment on the merits. It was a final order that fell within the second category. Once a party had admitted a claim, and judgment had been given against it on that claim, the other party was in principle entitled to assume that, in the absence of any appeal, that was the end of the matter.
The county court judge had been entitled to conclude that there was no basis for revoking the order in the instant case.
Stuart Adair (instructed by Harcus Sinclair) appeared for the claimant; Turlough Stone (instructed by DG Solicitors, of Birmingham) appeared for the defendant.
Sally Dobson, barrister
