Background

 

In the recent case of FXF v English Karate Federation Ltd & Anor [2023] EWCA Civ 891, the Court of Appeal has confirmed that the Denton principles do apply to applications to set aside default judgments.

 

The claim concerned alleged sexual abuse by the First Defendant, a karate coach, in which it was alleged that the Second Defendant, an association through which the coach worked, was vicariously liable. After the Claimant served the Claim on the two Defendants and in spite of an agreed extension of time for the service of Defences, the Second Defendant failed to file a Defence and the Claimant was granted default judgment on 22.09.20. The Second Defendant subsequently issued an application to set aside the default judgment on 17.11.20 which was heard by Master Thornett on 02.12.21, resulting in the default judgment being set aside. Master Thornett’s Order was appealed and “leap-frogged” directly to the Court of Appeal where the appeal was heard by Sir Geoffrey Vos, Master of the Rolls, Lady Justice Nicola Davies and Lord Justice Birss.

 

The appeal centred around Master Thornett’s application of the Denton 3 stage test, where he said: 

 

“However, I turn to the express primary requirements of 13.3(1). Mr Tahzib [counsel for the Claimant] refers appropriately to Denton and its criteria. But the familiar criteria of Denton are qualified because of necessary incorporation into the context and the express criteria under CPR 13.3: in particular, the criterion of "real prospect of successfully defending the claim".

 

The Claimant/Appellant asserted that had the Master properly applied the Denton tests, he would have concluded that the Judgment should stand. The Defendant/Respondent argued that what the Court of Appeal said in Gentry was not binding authority because the parties in that case agreed that the Denton tests were applicable and other similar cases were obiter. The Defendant also argued that an application to set aside a default judgment is in a unique procedural category, not an application for relief from sanctions at all, and that the discretion under CPR Part 13.3 was broad and unconstrained, including the ethos and aim of Denton even if the specific test was not applicable.

 

Judgment

 

Sir Geoffrey Vos, Master of the Rolls, in his leading judgment found that the Denton tests apply to applications to set aside default judgment but that Master Thornett understood that and exercised his discretion appropriately. Sir Geoffrey Vos then detailed the five reasons why he considered that the Denton tests applied to applications to set aside:

 

1. It was too late to depart from the position that the Denton test does apply to set aside applications set out clearly by the Court of Appeal in Hussain, Piemonte, Gentry, and Family Channel;
   
   
2. Matthews (a case concerning the Trinidad and Tobago CPR in which the Court found that the court may “grant relief only if it is satisfied” that the failure was not intentional, there was a good explanation for it and there was general compliance with other rules, practice directions and directions) was not a case about setting aside a default judgment;
   
   
3. The Denton tests are peculiarly appropriate to the exercise of discretion required once the two specific matters mentioned in CPR Part 13.3 have been considered;
   
   
4. Gentry provides an example of how to the exercise of CPR Part 13.3 and application of the Denton tests ought to be undertaken. This is a four stage test:
1. Consider the merits
2. Consider any delay in making the application to set aside
3. Consider the Denton tests;
4. Consider any additional factors which may be germane
5. The Judges in the cases if Cunic and PXC, two cases which appeared to contradict the position that the Denton tests apply to applications for setting aside judgment, adopted an unduly academic approach when reaching their judgments.

 

Sir Geoffrey Vos unequivocally found that that the Denton test applies to applications to set aside default judgment and overruled PXC and the dicta in Cunico in his closing.

 

There will be some relief that the Court of Appeal has now brought clarity to the position of the Denton tests in applications for setting aside default judgments, where there was previously a lack of certainty given the competing Court of Appeal authorities prior to FXF.

 

Full citations of cases mentioned:

 

• Denton v. TH White Ltd [2014] EWCA Civ 906 (Denton)
• Hussain v. Birmingham City Council [2005] EWCA Civ 1570 (Hussain)
• Regione Piemonte v. Dexia Crediop SpA [2014] EWCA Civ 1298 (Piemonte)
• Gentry v. Miller [2016] EWCA Civ 141 (Gentry)
• Family Channel Ltd v. Fatima [2020] EWCA Civ 824 (Family Channel)
• The Attorney General for Trinidad and Tobago v. Matthews [2011] UKPC 38 (Matthews)
• Redbourn Group Ltd v. Fairgate Development Ltd [2017] EWHC 1223 (TCC) (Redbourn)
• Cunico Resources NV v. Daskalakis [2018] EWHC 3382 (Comm) (Cunico)
• PXC v. AB College [2022] EWHC 3571 (KB) (PXC)