Property – Valuation — Negligence – Defendant mistakenly admitting claim – Claimant obtaining judgment by default — Court registry stamping “judgment for claimant” form – Defendant applying to set aside judgment – Whether court of first instance having jurisdiction to set aside judgment – Application granted
In July 2005, the claimant engaged the defendant to provide valuations with a view to the claimant advancing loans to two individuals by way of remortgage in relation to a number of apartments. There was no issue that the defendant provided reports and valuations. By March 2011, the claimant’s solicitors notified the defendant that their client was considering proceedings against it for negligence in respect of those valuations.
The claimant subsequently issued proceedings in the Technology and Construction Court (TCC) and served the particulars of claim on the defendant’s registered office identifying claims in respect of seven of the apartments and claiming around £600,000 in damages. The defendant filed its acknowledgement of service at the court office and served a copy on the claimant’s solicitors. The acknowledgement was unsigned but it had been prepared by a legal assistant. Unfortunately by mistake, the person who filled in the acknowledgement ticked the box which stated: “The defendant admits this claim”.
The claimant’s solicitors wrote to the court enclosing the acknowledgement of service and a request for judgment stating: “As this is a claim for an unspecified amount, we would be grateful if judgment could be entered for the claimant with damages to be assessed”. Without reference to any judge, the court registry produced and stamped a “Judgment for Claimant” which on the form stated to the defendant: “You have submitted an admission to the above claim. It is therefore ordered that you must pay the claimant an amount to be decided by the court”. The defendant applied to set aside that judgment. The parties agreed that, subject to the court having jurisdiction, the judgment would be set aside.
Held: The application was granted.
The wording of the CPR rules made it clear that, where an admission was made by a defendant (other than under and pursuant to specific sub-rules), the proper course for a claimant to take was to issue an application which then had to be considered by the court. It was not something to be dealt with as an administrative act by the relevant court office or registry. The application had to be issued (and the appropriate fee paid) and, unless the court ordered otherwise, the application was to be served on the defendant who could then respond or not as the case might be. The fact that there had to be an application meant that it would be looked at and considered by a judge. That provided a safety net which was simply not present if there was an irregular request for a judgment made to the office or registry in question.
The practice judicially in the TCC in London was usually, where there was an admission other than by way of formal admissions on set forms, that the judge in charge would consider the application and decide whether it should be served; if there was the slightest risk that the admission might be mistaken, uninformed or unclear in extent or scope, the judge would order that it be served and call for a response by way of witness statement or otherwise from the defendant, with the claimant being entitled to respond.
Where a judgment had been irregularly obtained, a court had a jurisdiction under CPR, part 3.1(2)(m) to set it aside, unless there was another express provision in the CPR which permitted the court to do so. That jurisdiction gave the court discretion to set aside the judgment if it was fair and just so to do. Justice would normally demand that a judgment, obtained irregularly on the basis of an obviously mistaken admission in circumstances where there was a properly arguable defence, where the application to set aside was brought reasonably promptly and where there was no prejudice caused by the setting aside, should be set aside: Nelson v Clearsprings (Management) Ltd [2006] EWCA Civ 1252; [2006] PLSCS 201 applied.
It followed that, on the facts of this case, the claimant’s solicitors had adopted the wrong course by submitting a request for judgment to the court registry and it was wrong of the registry to respond to the request by entering judgment. Accordingly, the judgment obtained was irregular and the court, at first instance, had a jurisdiction and discretion to set aside such an irregularly obtained judgment. In those circumstances, the defendant had to have permission to withdraw what was clearly a mistaken admission on the face of the acknowledgement of service. The claimant had no legal right simply to request judgment on the admission contained in the acknowledgement of service. The court registry had no legal right to enter a judgment on the basis of that request. The judgment would be set aside and the matter would proceed through a timetable to trial.
Angharad Start (instructed by Rosling King LLP) appeared for the claimant; Luke Wygas (instructed by Chancellors Associates Ltd) appeared for the defendant.
Eileen O’Grady, barrister