Summary

A statement of claim was struck out as it did not disclose any claim, or any vestige of a claim, and it was totally without merit.

Facts

The court was required to consider whether default judgments obtained by the respondent (M) ought to be set aside. Specific applicant defendants (D) also applied to strike out M's instant statement of claim.

M had been a fellow of the Institute of Chartered Accountants who until 2005, had been the CEO of a company (T), when she left after revealing perceived wrong doing. In 2006, she instructed the first applicant defendant (W) in relation to an employment related claim against T; the claim was ultimately settled. In 2007, the W successfully obtained a judgment debt against M for unpaid fees, the debt in relation to which was later discharged through an arrangement M entered with a Canadian bank. M was also involved in several other pieces of litigation, including another solicitor's firm successfully obtaining judgment for unpaid fees, in relation to which contested charging orders were ultimately made final, proceedings against T's auditors alleging negligence which were dismissed on the ground that they owed M no relevant duty of care, and proceedings against a law firm that had represented one of M's adversaries, alleging it had been responsible for loss and destruction of documents, an allegation which was judicially described as totally devoid of merit. M was additionally involved in litigation arising out of a claim for arrears in rent. In two actions, M had been successful in obtaining default judgments against an auditor (K), and another solicitors' firm (S), on the basis that both had failed to file an acknowledgement of service of the claim form.

Held

(1) The court enjoyed a discretion to set aside a default judgment under CPR r.13.3 where a defendant was likely to have a defence to a claim. Although it was accepted that default judgment had not been wrongly entered against K, it nonetheless had a defence and enjoyed a real prospect of success in defending the claim; the administration of justice, procedure and management of the case would not be significantly affected if the default judgment were set aside. K's failure to serve an acknowledgement of service had been accidental; its post room failed to forward the claim form to the appropriate person to deal with. K was not in breach of any court rules, and its failure to comply did not affect M in any significant way. If K were not granted relief, K would have a judgment entered against it in respect of which it bore no liability. Similar considerations arose in relation to S's application to set aside; S was likely to have a defence to the claim and its application for relief was made not long after it had learned that default judgment had been obtained. S explained that its failure to serve an acknowledgement of service had been in error; even if the explanation was not a good one, S had not been in breach of the rules, the error had not been caused by its legal representative, and its failure to comply with the relevant requirement had not affected M in any significant way. In all of the circumstances, the overiding objective required the default judgments to be set aside. (2) Even if a claim form was deficient, a court would not ordinarily strike out a claim form on a first application if it appeared that a party had a defence which could be properly presented. In the instant case, the court could reach a decision as to whether the claim form and its riders disclosed reasonable grounds and whether it was an abuse of the court's process. Many of the instant applicants had acted for M's adversaries in litigation; there was no duty of care owed by one litigant to another, Business Computers International Ltd v Registrar of Companies [1988] Ch. 229 and Jain v Trent SHA [2009] UKHL 4, [2009] 1 A.C. 853 applied. A solicitor engaged in hostile litigation owed a duty to the court but not to the other litigant, Al-Kandari v JR Brown & Co [1988] Q.B. 665 applied. M did not have any possible claim for breach of contract against W in relation to an alleged failure to obtain an injunction; that claim was difficult to reconcile with M's disavowal of a professional negligence claim; the claim was nothing more than an attempt to relitigate a claim that had already been settled. Additionally, in relation to the rent arrears claim, M did not have any reasonable grounds for complaint against W, nor any other party that was referred to in M's riders. M's complaint in relation to abuse of court process did not give rise to any cause of action; there were safeguards against improprieties found in the rules and procedures which controlled litigation: there was no general tort of abuse of process. Additionally, there was no claim known to law of instituting malicious proceedings in relation to another group of applicants; even if there had been some malice, there was no suggestion that the procedure to which M was put was not reasonable. In sum, there were no reasonable grounds for any actions against the applicants, including against K who as an auditor, owed no duty of care to M. M's claims against an applicant solicitors' firm giving order to the Canadian bank was incomprehensible as was a claim against an insurer who had provided legal protection insurance, and there was no coherent case identified against any barrister applicant as there was no general tort of malicious prosecution in a civil claim, Business Computer. Finally, the rent arrears claim had not been brought maliciously or vexatiously as M contended. M's claim form did not disclose any claim, or any vestige of a claim, and any alleged claim was totally without merit, and it was struck out under CPR r.3.4(2).

Applications granted