Newland Shipping And Forwarding Limited v Toba Trading Fzc Seyed Majed Taheri Hossein Rahbarian
2014
COMMERCIAL COURT
United Kingdom
CORAM
- THE HON. MR JUSTICE MALES
Areas of Law
- Civil Procedure
2014
COMMERCIAL COURT
United Kingdom
CORAM
AI Generated Summary
Mr. Hossein Rahbarian sought to set aside a default judgment of $7,260,382 (later adjusted to $6,605,673) under CPR 13.3, which allows for relief against sanctions if there is a real prospect of defense or another good reason. The court found that although his defense was weak, the judgment amount might be excessive. Therefore, the court set aside the default judgment, conditional upon Rahbarian paying $4.75 million into court and settling other outstanding costs.
Judgment
Mr Justice Males :
Introduction
This is an application by the third defendant Mr Hossein Rahbarian to set aside a default judgment entered by Field J on 15 November 2013. The judgment initially entered was in the sum of US $7,260,382, but that sum was subsequently varied to US $6,605,673 by an order made by Hamblen J on 7 February 2014.
This application was made pursuant to CPR 13.2 on the basis that Mr Rahbarian had not been validly served with the proceedings, and also pursuant to CPR 13.3 on the basis that he had a real prospect of successfully defending the claim and/or that there was some other good reason why the judgment should be set aside.
However, Mr Peter Ferrer (who represented Mr Rahbarian) abandoned reliance on CPR 13.2, accepting that the proceedings have been validly served on Mr Rahbarian and that this court has jurisdiction. Accordingly the first question is whether Mr Rahbarian has a real prospect of successfully defending the claim (the same test as applies on a summary judgment application) or there is some other good reason why the judgment should be set aside. If so, the court has a discretion to set the judgment aside and, in considering how to exercise that discretion, is required by CPR 13.3(2) to have regard to “whether the person seeking to set aside the judgment made an application to do so promptly.”
Further, at least at first instance, it is established (and was common ground before me) that an application to set aside a default judgment pursuant to CPR 13.3 is an application for relief against sanctions: see Samara v MBI & Partners UK Ltd [2014] EWHC 563 (QB) (Silber J); and Mid-East Sales Ltd v United Engineering & Trading Company (PVT) Ltd [2014] EWHC 1457 (Comm) (Burton J). The analysis here is that CPR 10.3 requires a defendant served with a claim form to file an acknowledgement of service within a specified period and that CPR 10.2 provides, as a sanction, that if the defendant fails to do so the claimant may enter judgment.
CPR 3.9(1) provides that:
"On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need—
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders."
As is now well known, CPR 3.9 must be ap