A Sigh of Relief? Court of Appeal Confirms that Denton Principles Apply to Applications to Set Aside Default Judgment

In FXF v English Karate Federation & Anor [2023] EWCA Civ 891, the Court of Appeal confirmed beyond doubt that the Denton principles must be taken into account when considering an application to set aside judgment.

The Claim

The Claimant brought proceedings in relation to alleged sexual abuse by a karate instructor. The Second Defendant, Ishinryu Karate Association (“IKA”), failed to file its defence in time. The Claimant obtained default judgment, pursuant to CPR 12.4.

IKA applied to set aside the judgment, pursuant to CPR 13.3. A Master allowed the application. The Claimant appealed on the basis that the Master had failed to “apply Denton to the exercise of his discretion.” The Claimant contended that had the Master applied Denton then he would not have set the judgment aside.

The Court of Appeal’s Decision

The Court of Appeal held that the Master had applied the Denton criteria, although he had not made this explicitly clear in his judgment, noting that:

4. The Master set aside the Judgment dealing specifically with the two factors mentioned in CPR Part 13.3, namely the merits and delay in applying to set aside. He held that (i) the IKA had a real prospect of successfully defending the claimant's case on vicarious liability: the defence was "arguable and sophisticated", and (ii) the application to set aside had not been made promptly and there was no good reason for the delay. In relation to Denton, he said in his judgment: 

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".

In addition, the Court of Appeal agreed with the Master’s decision that it was appropriate that judgment should be set aside.

General Application of the Judgment

Importantly, the Court of Appeal confirmed unequivocally that the Denton criteria do apply to applications to set aside judgment pursuant to CPR 13.3.

Sir Geoffrey Vos MR, giving the leading judgment, stated:

72. For the reasons I have given, this court is now clearly stating that the Denton tests apply in their full rigour to applications to set aside default judgments. PXC is overruled and the dicta in Cunico are no longer to be relied upon.

Comment

Although the Court of Appeal came down firmly in favour of applying Denton (and, indeed, held that this was made clear by the existing authorities), it seems fair to say that the position has not always been clear to practitioners.

While it may, on one view, have made sense to apply the Denton criteria, it would not have been obviously foolish to take the view that only the criteria set out at CPR 13.3 (which are different from the Denton criteria) should apply.

The White Book commentary accompanying CPR 13.3 (specifically 13.3.5) does not make clear that Denton should be applied, instead setting out the competing contentions as to its relevance.

The clarity now provided by the Court of Appeal is welcome.

A link to the full judgment on Bailli can be found here.