A question of conduct: a warning for defendants
ADVA Optical Networking Ltd and Anor v Optron Holding Ltd [21.07.17]
ADVA Optical Networking Ltd and Anor v Optron Holding Ltd sends out further warnings to defendants in respect of their approach to claims brought against them.
The nature of the main action was a dispute over liability, in respect of an alleged defect to in-line socket electrical cables. However, this decision addresses a defendant’s conduct, not the merits of the actual claim, and therefore it is relevant to defendants in claims in all areas.
The defendant was served with particulars of claim on 10 March 2017, therefore an acknowledgement of service or a defence should have been filed within 14 days of service.
The defendant did not take prompt action in respect of the proceedings and it was not until 16 June 2017 that they had their own solicitors acknowledge the existence of the proceedings by way of a letter. The defendant had also been contacted at various times by way of letter before proceedings were issued.
Despite the fact no defence had been filed, a default judgment was never entered into, in favour of the claimant. Therefore, the defendant submitted an application to the court for what they believed was simply a request for an extension of time to serve a defence.
The defendant’s counsel did not pursue the application on that basis. Mr Justice Coulson agreed that was the correct approach. The reason being, stated Coulson J, was that the defendant’s application was actually one for relief from sanctions (reference made to R (Hysaj) v Secretary of State for the Home Department . He went on to mention that the defendant had not presented a draft defence until three months after service had been effected.
Having found that the defendant’s application was one for relief from sanctions, Coulson J proceeded to assess the same by addressing the three stages set out in the leading case of Denton, being to:
- Identify and assess the seriousness and significance of the failure to comply with any rule
- Consider why the default occurred
- Evaluate all the circumstances of the case
…to enable the court to deal justly with the application, including the factors in sub-paragraphs (a) and (b) of the Civil Procedure Rules, r.3.9(1).
The view Coulson J took of the defendant’s failure to comply with the rules was that it was a serious default.
Coulson J highlighted the defendant’s lack of engagement with the claim brought against them, both prior to proceedings being issued and after. He stated the defendant prevented the efficient and proportionate conduct of the claim against them.
On this particular claim, having set out such view, Coulson J did consider, based on all the circumstances of the case, that despite a serious breach and no good reason for said breach, the defendant’s conduct did not have a significant effect on the course of the proceedings. The court had only just consolidated the claims, trial had been listed to take place in April 2018, and disclosure had not yet taken place. Overall, the claim was still at a relatively early stage.
The warning to defendants comes when Coulson J alerts this is one of the rare cases where, despite a serious default, it was appropriate to grant relief from sanctions. It is not uncommon for a case to be at a much later stage when the defendant, having failed to file an acknowledgement of service and/or a defence, submits an application. The principles set out in this particular case are likely to apply, to an extent, to claims where a default judgment has indeed been entered.
The recommendation to defendants, therefore, is that they own the claim brought against them and properly engage with the other side before and after proceedings are issued.
It is not sufficient to instruct solicitors to address the issues that have arisen because the courts will be looking at the actual defendant’s conduct when making a decision.