The three-stage Denton test applies to all applications to set aside a default judgment under CPR 13.3.
Summary
The Court of Appeal considered whether the Denton test applied to an application to set aside a default judgment. The court held that it did, despite the defendant's delay applying for the set aside.
The court also confirmed that an application to set aside a default judgment is an application for relief from sanctions.
Background
The claimant, FXF, sought personal injury damages from the defendants, the Ishinryu Karate Association (IKA) and the English Karate Federation. FXF made the claim on 15 August 2019.
Due to stays and an extension of time application, the deadline for filing a defence was pushed back to 21 July 2020. The IKA failed to submit a defence and default judgment was granted on 22 September 2020.
High court set aside application
The IKA applied for a discretionary set aside under CPR 13.3 on 17 November 2020.
The High Court noted the IKA had more than 11 months between the claim and default judgment to raise a defence and the set aside application was not prompt under CPR 13.3.
FXF argued that the set aside was an application for relief from sanctions and that the Denton test must be considered. Given the circumstances FXF argued that the Denton test would not have been passed due to the delays and so the set aside application should fail.
The Denton test refers to the principles set out in Denton and other v TH White Ltd and another [2014] EWCA Civ 906. When deciding whether to grant relief from sanctions, the court must consider:
whether the breach was significant
if the breach was significant, whether there is a good reason for it
all the circumstances of the case and whether the application was made ‘promptly’
The High Court stated that although Denton “permeates every action relating to a breach of rules”, CPR 13.3 had its own rules to follow which should also be considered. This includes giving regard to the merit and reasonable prospect of defending the claim. The court granted the set aside as the unexplained delay did not outweigh the merit of the defence.
FXF appealed.
The court's decision
The Court of Appeal dismissed the appeal. It held that a set aside application under CPR 13.3 is a relief from sanctions and subject to the Denton test, and the High Court had applied the test in this case.
Set aside application subject to Denton test
The court set out the application of the Denton test in sixteen different cases, noting the slight variations in approach. In PXC v AB College [2022] the court stated the Denton test did not apply to default judgments. In two other cases, Matthews [2011] and Cunico Resources NV v Daskalakis [2018], the court held that a set aside application was not a relief from sanctions.
The Court of Appeal overruled these divergent cases and stated that a set aside application under CPR 13.3 is a relief from sanctions application and subject to the Denton test.
The court must exercise its discretion in light of all the circumstances and the overriding objective of CPR 1.1 to deal with cases justly and at proportionate cost. This includes whether the breach has prevented the court from conducting the litigation effectively.
High Court applied the Denton test
The Court of Appeal agreed that the High Court had applied the Denton test, even though they were not explicit in the judgment of applying it step-by-step. The High Court had considered the three aspects of the Denton test by:
identifying the breach (the delay in filing a defence and the subsequent set aside) and the seriousness of this breach
considering why this breach occurred
evaluating all the circumstances of the case to enable the court to make a just decision
Comments
Although this case adds little to the Denton test, it makes clear that the test does apply in set aside applications. It also confirms that a set aside application is a relief from sanctions application.
A delay on behalf of an applicant is not an automatic reason to dismiss a set aside, and the court should consider all circumstances of the case, including the reasonableness of the defence, before making a decision whether to set aside.
This judgment may be helpful where a set aside application is submitted late without good reason but where the defence is particularly compelling. To justify any delays, applicants must be prepared to demonstrate that their delay did not compromise the overriding objective (CPR 1.1), including inconveniencing other parties or the court.
The Court of Appeal suggested that first-tier judges should be more explicit in their application of the Denton test in their judgments.
Return to the case summaries index