Read the full judgment text of CACV 000147/2000 on BabelCite. This Court of Appeal judgment was delivered on 12 July 2000 before Ribeiro JA, Rogers JA.
Civil procedure – setting aside default judgment – O 13 r 9 Rules of the High Court – construction dispute – Trenchless Method pipe-laying – slurry shield stuck on underground concrete obstruction – whether defence has real prospect of success – whether payment into court of full claim amount appropriate term. The defendant contractor and the plaintiff specialist sub-contractor entered into a written agreement in August 1997 for pipe-laying works on the Yuen Long-Tuen Mun Corridor Trunk Sewer. In March 1998 the plaintiff's slurry shield became stuck on an unanticipated underground concrete obstruction. The plaintiff issued a writ on 19 January 2000 claiming $2,152,208. After the defendant obtained a consent extension to 29 February 2000 to file its Defence and Counterclaim and then took out a summons for a further 14-day extension, it supplied the plaintiff with the finalised draft pleading on 8 March 2000. The same day, the plaintiff entered interlocutory judgment in default of defence. Burrell J set aside the default judgment, but on the stringent term that the defendant pay the entire claim amount plus interest at prime plus 1% into court. On appeal, the Court of Appeal held that the procedural default was minor, that the defence (alleging that the loss was caused by the plaintiff's own mismanagement of its specialist equipment and that the defendant's liability was in any event limited by the contract) had real prospects of success and ought to go to trial, and that the requirement to pay the full claim into court was not justified. While the court has jurisdiction under O 13 r 9 to impose such a term, payment into court is rarely appropriate where the defence has real prospects of success; it is more appropriate where the defence is shadowy or in conditional leave to defend territory, or to encourage proper future conduct of the litigation and provide security for the plaintiff. The appeal was allowed and the condition of payment into court was set aside. Ratnam v Cumarasamy [1965] 1 WLR 8; City Construction Contracts (London) Ltd v Adam; Richardson v Howell (1892) 8 TLR 445 considered.
Legal issues: Whether the court should have refused leave to rely on the defendant's fourth affirmation · Whether the default judgment should be set aside · Whether payment into court of the full claim amount was an appropriate term for setting aside the default judgment
Outcome: Appeal allowed; the condition requiring payment into court of the full claim amount plus interest as a term for setting aside the default judgment was set aside. The default judgment itself stood set aside as previously ordered by Burrell J.
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