Pirtek (UK) Limited v Jackson [2018] EWHC 2030 (QB)

Case date: 31/07/2018
Court: High Court
Area/s of law: Contempt of court
Barrister/s: Caroline Addy

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1. This was an application for a re-hearing pursuant to CPR 23.11(2) in respect of two applications: a default judgment application; and a committal application (‘Re-hearing Application’). The background to the Re-hearing Application is lengthy and is set out in the judgment at [4] – [74]. For present purposes, it is sufficient to note the following facts:

1.1. The applications arose in respect of libel proceedings brought by the Claimant against the Defendant for the posting of allegedly defamatory material on a website.

1.2. Upon being served with the Claimant’s Particulars of Claim, the Defendant failed to serve an Acknowledgement of Service. The Claimant applied for judgment in default and, following a hearing, which was not attended by the Defendant, the Claimant was granted judgment on its claim. An Order was subsequently made prohibiting the Defendant from further publishing, or causing the publication of, any of the defamatory material.

1.3. Despite being notified of the Order, the Defendant continued to publish the defamatory material on the website in breach of the Order, leading to the Claimant issuing an application to commit the Defendant for contempt. Following a hearing, which was not attended by the Defendant, the Court found the Defendant to be in contempt of court. The hearing was adjourned for a short period before deciding on the appropriate sanction in order to allow a further opportunity for the Defendant to attend.

1.4. After the adjournment, the Defendant did attend the hearing. Following submissions, the Court considered the Defendant to be making an application under CPR 23.11(2) to re-hear the default judgment and committal applications. The Court made a number of directions and the hearing was later listed before Nicklin J.

2. In approaching the Re-hearing Application, the Judge recognised that the discretionary power under CPR 23.11(2) to re-hear an application should be exercised sparingly having regard to the overriding objective and the merits of the application (Yeganeh v Freese [2015] EWHC 2032 (Ch)): [76] – [77]. Factors which the Judge considered to be important to the exercise of the discretion, included: whether the applicant had been validly served with the proceedings; and whether the applicant had made a deliberate choice to ignore the proceedings when s/he had notice of them: [82] – [83].

3. The Judge considered the Court of Appeal decision of Shocked v Goldschmidt [1998] 1 All ER 372, where it was noted that the authorities on setting aside judgments fell into two main categories:

3.1. Those in which judgment had been given in default of appearance, or pleadings or compliance with a court order (‘First Category’).

3.2. Those in which judgment had been given after trial, albeit one that took place in the absence of the party seeking to set aside the resulting order (‘Second Category’): [87].

The First Category primarily concerns whether there is a defence on the merits; whereas, the Second Category is predominantly concerned with the reasons why a party against whom judgment was given had absented himself: [91].
4. In relation to the Second Category, the Judge considered the eight principles that had been distilled from the authorities by the Court of Appeal in Shocked:

(1) Where a party with notice of proceedings has disregarded the opportunity of appearing at and participating in the trial, he will normally be bound by the decision.

(2) Where judgment has been given after a trial it is the explanation for the absence of the absent party that is most important: unless the absence was not deliberate but was due to accident or mistake, the court will be unlikely to allow a rehearing.

(3) Where the setting aside of judgment would entail a complete retrial on matters of fact which have already been investigated by the court the application will not be granted unless there are very strong reasons for doing so.

(4) The court will not consider setting aside judgment regularly obtained unless the party applying enjoys real prospects of success.

(5) Delay in applying to set aside is relevant, particularly if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it.

(6) In considering justice between parties, the conduct of the person applying to set aside the judgment has to be considered: where he has failed to comply with orders of the court, the court will be less ready to exercise its discretion in his favour.

(7) A material consideration is whether the successful party would be prejudiced by the judgment being set aside, especially if he cannot be protected against the financial consequences.

(8) There is a public interest in there being an end to litigation and in not having the time of the court occupied by two trials, particularly if neither is short (‘Shocked Principles’).

5. The Judge noted that the decision in Shocked pre-dated the CPR; however, held that the Shocked Principles are still of general application and bear an even greater resonance when seen through the prism of the overriding objective: [92]

6. Where contempt proceedings proceed in the absence of a respondent, it was recognised that there is no question of the applicant winning by ‘default’ as the charge must be proved, by evidence, to the criminal standard. Accordingly, where a respondent seeks to set aside a finding of contempt, or asks for a re-hearing of the application, the position is more akin to the Second Category: [94]. In such an application, the Judge considered that the focus should be centred on Shocked Principles (1) – (2) and that Shocked Principles (3) – (8) should not carry as much weight. It was, however, recognised that the merits of such an application may still be important in certain limited cases e.g. where the respondent could produce evidence that they had not done the acts alleged: [94].

7. In relation to the Defendant’s application to re-hear the default judgment application, the Judge held that the Defendant possessed all the necessary information about, knowledge of, and documents relating to, the claim brought against him. Accordingly, his decision not to file an Acknowledgement of Service, or attend the hearing of the application was a deliberate one: [110].

8. It was for the Defendant to satisfy the Judge, on the balance of probabilities, that the Court should re-hear the default judgment and committal applications. The Judge considered that the relevant principles to be applied to each of the applications could be summarised as follows:

8.1. In relation to the default judgment application, the dominant feature is whether the Defendant has a defence on the merits to the claim, weighed against the Defendant’s explanation for how judgment in default came to be entered against him: [126].

8.2. In relation to the committal application, the focus is upon whether the Defendant chose deliberately not to attend the hearing of the application, but the Court must not ignore the issue of whether the Defendant appears to have a defence: [126].

9. The Defendant was unable to satisfy the Judge that he had a good defence on the merits to either of the applications, nor that he had any good explanation for failing to attend the hearing of the applications: [128]. In respect of the committal application, the Judge was sure (to the criminal standard) that the Defendant knew about the proceedings, made a deliberate decision not to engage with them, and that he was the person responsible for publishing the material in breach of the Order: [129]. The applications were accordingly dismissed: [130].

10. This judgment serves as a useful reminder of the relevant principles that apply when the Court is asked to exercise its discretion under CPR 23.11(2) to re-hear an application, and provides particularly helpful guidance as to how to approach re-hearing applications relating to contempt proceedings.

Caroline Addy, instructed by Irwin Mitchell, represented the Claimant.

The judgment is available here.