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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Khan v Edgbaston Holdings Ltd [2007] EWHC 2444 (QB) (17 October 2007) URL: http://www.bailii.org/ew/cases/EWHC/QB/2007/2444.html Cite as: [2007] EWHC 2444 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		St. Dunstan's House 133-137 Fetter Lane London, EC4A 1HD
		17th October 2007

HIS HONOUR JUDGE PETER COULSON QC:

A. Introduction

1. By a claim form issued and served on 25^th September 2006, the claimant sought damages from the defendant company. The particulars of claim served on 31^st October 2006 made plain that the claim arose out of the claimant's purchase from the defendant of two properties, one in SW10 and the other in W14 ("the properties") for a total of £7.7 million. The particulars of claim alleged that the claimant purchased the properties on the basis of fraudulent and/or negligent misrepresentations by the defendant as to their value, and as to the existence of tenants in those properties whose rent would have covered the claimant's mortgage. The principal element of the claim is the difference between the purchase price (£7.7 million), and the actual value of the properties (said to be £2.6 million), making a claim for damages in excess of £5 million.
2. The defendant failed to acknowledge service or file a defence and, on 11^th December 2006, judgment in default against the defendant was entered by Master Eyre, with damages to be assessed. The hearing of that assessment was first fixed for 22^nd May 2007, but on that occasion the defendant indicated, for the first time, that it wanted to set aside the judgment. The application to set aside was eventually made on 4^th June 2007. A condition of that application imposed by Aikens J, that it could only be made if the defendant paid £1 million into court, was subsequently revoked by Underhill J. This is the long-delayed hearing of the defendant's application to set aside the judgment in default pursuant to CPR 13.3, and the claimant's application for the assessment of damages. This Judgment is concerned solely with the application to set aside judgment.
3. I propose to set out the relevant history (section B below) as shortly as possible. I then go on to address the applicable principles of law (section C below). Thereafter, in sections D, E and F of this Judgment, I address the three principal issues raised by the application, namely:

(a) whether the defendant has acted promptly in making this application;

(b) whether the defendant has a real prospect of successfully defending this claim; and

(c) whether there is some other good reason why the judgment in default should be set aside.

There is a short summary of my conclusions at section G below.

B. History

4. In April 2006 the Serious Fraud Office obtained a restraint order in respect of the assets of the defendant company and all those who are or were its directors, including Mr. Saghir Ahmed and Mr. Nisar Afzal. Following the restraint order the two men ceased to be directors of the defendant company and were replaced by their respective wives.
5. On 25^th September 2006 the claimant obtained a freezing order against the defendant in respect of the same assets. Pursuant to the terms of that freezing order the defendant was entitled to spend up to £10,000 on legal advice.
6. As noted above, the claim form was issued and served on the same day. The particulars of claim, where the specific allegations of fraudulent and negligent misrepresentation were made, were served on 31st October 2006. By this time the defendant had instructed a firm of solicitors in Birmingham, Salahan & Co. Between October and December 2006, no steps were apparently taken by the defendant in respect of either the freezing order or these proceedings. On 11^th December 2006 judgment in default was entered, the specific default being the failure to acknowledge service of the claim form. There was, as I have said, no attempt to file a defence either.
7. By January 2007 the defendant had instructed a second firm of solicitors, the Wilkes Partnership. On 26^th January 2007, following a meeting with representatives of the defendant, they wrote to the claimant's solicitor in the following terms:

"We have been instructed by Edgbaston Holdings Ltd. in connection with the above.

In order that we may advise our client, the sum of £10,000 is to be transferred to this firm from the company's Barclays Bank account …..

As soon as we are in funds the first step will be for our client to provide evidence of assets in affidavit form.

We consider that it is likely that an application for a variation of the Freezing Order will then be sought to enable our client to pay legal fees in excess of £10,000, mortgage repayments on the properties, any insurance payments that are due, maintenance on the properties and any other routine company expenditure. We shall, of course, provide the necessary advance notification of such an application. We note that there is no provision in the Freezing Order for the parties to agree a variation.

Further, we shall be advising our client upon the merits of applying to set judgment aside..."

8. In February 2007 a full set of documents was provided by the claimant's solicitors to the Wilkes Partnership. In early March 2007 the Wilkes Partnership sought and obtained a variation of the freezing order which removed the £10,000 limit on legal advice. Also in March, according to his doctor's note dated 11^th October, Mr. Saghir Ahmed went to Spain for a holiday. On 27^th March, whilst in Spain, he had an epileptic fit and was treated for that in hospital. He then went to Pakistan in April, and was there until late May. At some point during this period, on behalf of the defendant, he instructed a new firm of solicitors: Levys, in Manchester.
9. At the hearing of the claimant's application for the assessment of damages on 22^nd May 2007, the defendant indicated, for the first time, that it wanted to have the judgment set aside. Aikens J said that any such application had to be made by 4^th June 2007 and would be conditional on the defendant bringing £1 million into court. Thereafter, on 28 May 2007, the defendant's solicitors explained in writing to the claimant's solicitors that this sum would be found, although further time was needed and further variation was required to the freezing and restraint orders in order to do so. Their time to find £1 million was extended by the court to 19^th July.
10. On 18^th July 2007, Underhill J revoked the condition. The defendant's solicitor, Mr Assim Iqbal, had provided a statement dated 20^th June 2007 which suggested that, at least at that time (and contrary to his letter of 28^th May), the defendant could not comply with the condition to pay £1 million into court. The judge apparently decided that, if Aikens J had been told that on 22^nd May, he would never have made the conditional order in the first place. The solicitor's statement also said that the defendant owned other properties with equity valued at more than £3 million. No further information as to the defendant's current financial position has been provided.
11. Also on 18^th July, the defendant's application to set aside judgment and the claimant's application for the assessment of damages were adjourned to this hearing. It appears that insufficient time had been allowed for the hearing of those applications in July.

C. The Relevant Principles

(a) CPR 13.3

12. CPR 13.3 provides as follows:

"(1) In any other case, the court may set aside or vary a judgment entered under Part 12 if –

(a) the defendant has a real prospect of successfully defending the claim; or

(b) it appears to the court that there is some other good reason why –

(i) the judgment should be set aside or varied; or

(ii) the defendant should be allowed to defend the claim.

(2) In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly."

(b) 'Promptly'

13. There are a number of authorities concerned with the proper interpretation of the obligation to act promptly, which is also to be found in CPR 39.3(5)(a) (in connection with an application to set aside a judgment entered after a trial at which the applicant did not appear). Perhaps the clearest exposition of what is required by acting 'promptly' in this context was provided by Simon Brown LJ in Regency Rolls Ltd. v. Murat Carnall [2000] EWCA (Civ) 379 at paragraph 45 when he said:

"At first blush it might be thought that any inappropriate delay whatever on the part of an applicant would require that he be found not to have acted promptly. Yet such a construction would carry with it the Draconian consequence that, even if he had a good, perhaps compelling, reason for not having attended the trial, and a reasonable - perhaps, indeed, excellent - prospect of success at trial, the court would still be bound to refuse him a fresh trial. I would accordingly construe 'promptly' here to require, not that an applicant has been guilty of no needless delay whatever, but rather that he has acted with all reasonable celerity in the circumstances. That said, I too would regard the appellant here as having failed even in that obligation. 30 days was altogether too long a delay before making this Part 39 application."

14. In that case, as Simon Brown LJ noted, a delay of 30 days was regarded as being unreasonably long in all the circumstances, and the judgment was not set aside. A different result occurred in Hart Investments Ltd. v. Fidler [2006] EWHC 2857 (TCC), where the TCC judge concluded that a delay of 59 days was "very much at the outer edge of what could possibly be acceptable". One of the factors considered by the judge in that case was that the defendant had not had the benefit of legal advice during the relevant period, although the most important reason for the setting aside of the default judgment was the real prospect that the defendant had of successfully defending the claim.

(c) 'Real Prospect'

15. As to the requirement to show a real prospect of successfully defending the claim, and how that marries up with the test for summary judgment under CPR Part 24, the clearest statement of the position is that provided by Potter LJ in ED&F Man Liquid Products Ltd. v. Patel [2003] EWCA (Civ) 472. In that case he said:

"….. the only significant difference between the provisions of CPR 24.2 and 30.3(1) is that under the former the overall burden of proof rests upon the claimant to establish that there are grounds for his belief that the respondent has no real prospect of success whereas, under the latter, the burden rests upon the defendant to satisfy the court that there is good reason why a judgment regularly obtained should be set aside. That being so, although generally the burden of proof is in practice of only marginal importance in relation to the assessment of evidence, it seems almost inevitable that, in particular cases, a defendant applying under CPR 13.3(1) may encounter a court less receptive to applying the test in his favour than if he were a defendant advancing a timely round of resistence to summary judgment under CPR 24.2."

It has been repeatedly said by the Court of Appeal that a real prospect of successfully defending a claim is to be contrasted with a defence that could properly be described as 'fanciful'.

(d) The Relationship Between Delay and a Real Prospect of Success

16. The relationship between considerations of delay by the defendant (i.e. where he has failed to act promptly), and the same defendant's real prospect of successfully defending the claim, was dealt with by the Court of Appeal in Thorn PLC v. Macdonald [1990] CPLR 660. In that case the court outlined the following principles:

(a) While the length of any delay by the defendant must be taken into account, any pre-action delay is irrelevant;

(b) Any failure by the defendant to provide a good explanation for the delay is a factor to be taken into account in deciding whether or not to set aside the judgment, but such delay is not always a reason to refuse to set aside;

(c) The primary considerations are whether there is a defence with a real prospect of success, and that justice should be done; and

(d) Prejudice (or the absence of it) to the claimant also has to be taken into account.

I take that decision to mean that, in the round, the existence of a real prospect of success may often, but will not always, be sufficient to set aside judgment, even if the defendant has not acted promptly in seeking to have the judgment set aside.

17. In Hussain v. Birmingham City Council & Others [2005] EWCH (Civ) 1570, the Court of Appeal was also concerned with the relationship between delay and the wider considerations of justice. As Miss Cox rightly pointed out, in that case there was a delay of six and a half months in making the application, which did not prevent the court from setting aside judgment. However, it was a delay by only one out of three defendants, and the default judgment did not relieve the other parties of the need to go to trial, and did not relieve the court from investigating the various issues with which the recalcitrant defendant was directly concerned. The delay was therefore described by Chadwick LJ as carrying less weight "than it would in a case where the effect of the default judgment if left undisturbed is that there would be finality".
18. In Hussain the Court of Appeal stressed that CPR 3.9 (relief from sanctions) was also relevant to the court's consideration of an application to set aside judgment. The matters identified in CPR 3.9 as being relevant to an application for any relief from sanctions include the following useful checklist:

"(a) the interests of the administration of justice;

(b) whether the application for relief has been made promptly;

(c) whether the failure to comply was intentional;

(d) whether there is a good explanation for the failure;

(e) the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant pre-action protocol;

(f) whether the failure to comply was caused by the party or his legal representative;

(g) whether the trial date or the likely date can still be met if relief is granted;

(h) the effect which the failure to comply had on each party; and

(i) the effect which the granting of relief would have on each party."

D. Has The Defendant Acted Promptly?

19. Following the discussion of the principles at paragraphs 13 and 14 above, I ask myself whether the defendant has acted with all reasonable celerity in the circumstances. Miss Cox submitted that it had, although she very properly accepted that the defendant was responsible for at least some of the delays and could not be said to have acted promptly at each stage. Mr. Davey, on the other hand, pointed to the delay of almost six months between 11^th December 2006, when judgment was entered, and 4^th June 2007, when the application to set aside that judgment was first made. He submitted that on any view the defendant had not acted promptly.
20. I have concluded that the defendant cannot be said to have acted promptly, that is to say, with all reasonable celerity in the circumstances. My reasons for that conclusion are set out below, by reference to the relevant periods of delay.

(a) 11^th December 2006 to Mid-January 2007

21. There is no credible explanation for why an application to set aside the judgment was not made immediately. It was submitted that the evidence of Mr. Saghir Ahmed (an ex-director of the defendant, but the only person involved who has chosen to provide any evidence at all in support of the application to set aside) was that Mr. Salahan advised him that he did not need to be concerned about the claim or the default judgment. However, I do not accept that that is what Mr. Ahmed is saying at paragraphs 7 and 8 of his written statement dated 1^st June 2007. What he actually says is this:

"7. …. I was therefore somewhat confused as to how and why the claimant had obtained a freezing order over assets which the SFO had already obtained a restraining order. To me this seemed an unnecessary exercise on the claimant's part. Allied to the fact that I considered and indeed still consider the claimant's claim to be baseless and riddled with untruths, I unfortunately did not give the matter the urgency which I now accept that I should have. I would point out, however, that both I and my family were all already under a great deal of strain due to the actions of the SFO and their ongoing investigation.

8. Messrs. Salahan & Co. Solicitors were already acting on mine and the defendant's behalf in relation to the restraining order obtained by the SFO. It seemed logical, therefore, to consult them and take their advice as to the claimant's claim. I accordingly approached them with the documentation which I had received from the claimant and sought their advice upon the same. Regrettably Mr. Salahan, who was the solicitor acting on my behalf, was of a similar opinion to myself in that he considered the claimant's attainment of a freezing order to be pointless due to the restraining order already in place. Unfortunately, Mr. Salahan's advice led me to believe that the claimant's claim was not particularly pressing and that it was not necessary to worry unduly about the same as nothing would be happening until the SFO had completed their investigation. This advice, which I now consider was misconceived, took away any sense of urgency I had in dealing with the claim."

22. On Mr. Ahmed's own evidence, therefore, there was no advice from Mr. Salhan about the absence of any need to acknowledge service, or to respond in detail to the particulars of claim. The only legal advice from Mr Salahan to which Mr. Ahmed refers is the possible overlap between the restraint order and the freezing order, which is an entirely separate point and irrelevant for present purposes. Mr. Ahmed does not say that Mr. Salahan advised him that he could safely ignore the claim or the default judgment. Thus, on analysis, Mr Ahmed's statement provides no justification for that first period of delay.

(b) Mid-January 2007 to Early March 2007

23. By mid-January 2007, the defendant had changed solicitors, apparently because, as Mr. Ahmed says in his statement, he was growing increasingly concerned that Mr. Salahan was not giving him proper advice. By 26^th January 2007 (see the letter of that date referred to in paragraph 7 above) the Wilkes Partnership were making the necessary arguments in respect of funding and were actively considering whether or not to apply to set aside the judgment.
24. And yet there is no explanation for why nothing happened on that aspect of the case from mid-January to early March 2007. The Wilkes Partnership were in funds at least to the tune of £5,000 (see their letter of 14^th February). They had said that setting aside was a matter on which they would advise the defendant. Either they did advise, and the defendant ignored their advice, or they failed to advise and, despite his concerns about his previous solicitors, Mr. Ahmed did not prompt them to do so. Either way, therefore, this was a delay for which there can be no justifiable excuse.

(c) Early March to 22^nd May 2007

25. The only reason put forward by the defendant for the delay during this period was Mr. Ahmed's illness, but:

(1) His doctor makes clear that he went to Spain for a holiday in March. That suggests that this claim was not at the forefront of his mind and that the freezing and restraint orders did not impinge too far on his domestic arrangements.

(2) The epileptic fit occurred at the end of March, on the 27^th. There is no evidence that it had any long-term effect.

(3) Mr. Ahmed was in Pakistan for most of April and May. Being abroad did not prevent him from changing solicitors again to Levys. It seems clear that it would not have prevented him from seeking to set judgment aside if he had been minded or advised so to do. The only evidence of any illness during this period was a three-day rest period in late May following an attack of gastro-enteritis.

26. I therefore reject the defendant's case that the delays during this period were attributable to Mr. Ahmed's ill health. They palpably were not.

(d) Other Personnel

27. Furthermore, as I have noted, Mr. Ahmed was simply an ex-director of the defendant company. I have no evidence as to the delays that occurred, or any explanations for those delays, from either of the present directors, or from Mr. Afzal who (for reasons which we will come to) was much more involved than Mr. Ahmed in the events referred to in the claimant's particulars of claim.

(e) Summary

28. For the reasons set out above, I conclude that the defendant did not seek to set aside judgment promptly and that, on the contrary, the defendant was responsible for considerable delay for which no credible justification has been offered.

E. Does The Defendant Have A Real Prospect Of Success?

E1: The Pleaded Defence

29. The particulars of claim were put forward on the basis that the fraudulent/negligent misrepresentations as to the value of the properties, and as to the fact that they were tenanted, were made by Mr. Ahmed and Mr. Wasim on behalf of the defendant company. It is common ground that Mr. Wasim was involved in the sale of the properties as the defendant's agent. Mr. Ahmed confirms in his statement that Mr Wasim dealt with the sale of the properties to the claimant.
30. Mr. Ahmed's purported defence to the claim is simplicity itself. He says in his statement, and it is pleaded in the draft defence, that he was not at any of the relevant meetings with the claimant, and therefore did not make, and could not have made, the alleged misrepresentations. As I pointed out to Miss Cox during argument, on that basis his defence was so simple that it was surprising that it had not been outlined at any time until the belated application to set aside judgment in June 2007.

E2 The Actual Defence

(a) The Representations as to Value

31. However, this alleged defence is, even on a brief analysis, no such thing. Let us assume that Mr. Ahmed was right and that he was not at any of the meetings. Whilst that would have given him a defence against any claim brought against him personally, this claim is not brought against him personally. It is brought against the defendant company and, so it seems to me, the defendant company is in a very different position.
32. As I have noted, it is agreed that Mr. Wasim was acting as an agent for the defendant in respect of the sale of the properties to the claimant. Furthermore, as paragraph 5(v) of the defence expressly pleads:

"It is averred that all negotiations with the claimant were conducted by Mr. Wasim. Mr. Wasim, in turn, dealt principally with Nisar Afzal of the defendant."

It is also to be noted that there is no evidence of any sort which seeks to challenge the representations which are alleged to have been made by Mr. Wasim in the particulars of claim.

33. Thus, on the defendant's own case, the instructions that it gave to Mr. Wasim to act as agent came from Mr. Afzal (from whom I have no evidence). It was Mr. Wasim (from whom I also have no evidence) who conducted the negotiations with the claimant in respect of the sale of the properties, and it is not challenged that Mr. Wasim made the relevant representations which form the basis of the claimant's claim. What then is the defendant's defence to a claim based on those representations?
34. In order even to try and get round the fact that it was Mr. Wasim's representations which play such a key role in the claim, the defendant has to say that Mr. Wasim acted beyond his authority as agent in making the relevant representations. I immediately note that this is not a defence that is pleaded, or even suggested, in the draft defence; nor do I find any suggestion of it in Mr. Ahmed's statement, the only evidence relied on to set aside the judgment. That is a very significant omission. Thus this 'want of authority' argument is a point which, as far as I am aware, first found expression in Miss Cox's helpfully detailed skeleton argument prepared for the purposes of this hearing. It is therefore unsupported by any evidence at all, despite the fact that it is the slender thread on which the defendant's chances of success must now hang. This is not, of course, a criticism of Miss Cox. On the contrary, it simply serves to demonstrate that she, at least, is aware that what is in the statement of Mr. Ahmed cannot, without more, amount to any sort of defence to this claim on the part of the defendant company.
35. I have concluded that, on the evidence before me, the defendant does not have a real prospect of successfully defending this claim. That is because:

(a) The representations made by Mr. Wasim, on which the claimant's claim relies, are not challenged as a matter of fact.

(b) Mr. Ahmed does not allege (or even suggest) that Mr. Wasim exceeded his authority as agent when making those representations.

(c) Mr. Ahmed does not even know whether or not Mr. Wasim exceeded his authority as agent in making the representations, because he does not know what instructions were given to him in the first place to act as the defendant's agent. Those instructions all came from Mr. Afzal.

(d) Mr. Afzal would know if Mr. Wazim exceeded his authority as agent because he was the person who gave Mr. Afzal the necessary instructions. Mr. Afzal has chosen not to put in any evidence at all, let alone evidence on this critical point. I am told that he is in Pakistan, from which country a statement could easily have been provided to this court if the defendant had chosen to obtain such evidence.

(e) Mr. Wasim would also know if he had exceeded the authority given to him by Mr Afzal, but again, he has not put in any evidence at all. I am not told his whereabouts. I do not accept, without any evidence on the point at all, that he was or might be reluctant to provide such a statement.

(f) As previously noted, the 'want of authority' point (the only purported defence now raised) was not in the draft defence and was not in Mr. Ahmed's statement. It found its first expression in the skeleton argument for this hearing. There is no evidence of any kind to support it.

36. Furthermore, I should add that, even if the defendant had been in a position to establish some evidence as to an alleged want of authority, there would doubtless have been a further dispute about whether that authority was actual or ostensible; in other words, the assertion in Miss Cox's skeleton does not necessarily give rise to a real prospect of defending the claim in any event. But, for the reasons which I have given, it is unnecessary to explore the outer reaches of agency law on the basis of the evidence presently before me.

(b) The Representations as to Tenancies

37. All of the above points also apply to the complete inadequacy of any purported defence to the claim for misrepresentation in respect of the alleged tenancies. On this point, in addition, as Mr. Davey correctly points out, there is a further reason why any defence has no real prospect of success. That is because there is evidence from the solicitor who acted for the claimant during the conveyancing, Mr. Ferrigan, to the effect that the defendant's solicitors represented to him that there were tenancy agreements in existence and even supplied copies during that process. There is no evidence to contradict that; therefore there is nothing to indicate that there is any answer to the second element of the claimant's claim.
38. Thus, the defendant's alleged defence:

(a) relies on assertion by Mr. Ahmed that he did not attend meetings which, even if it were right, would not give rise to a defence on the part of the defendant;

(b) relies on an assertion in counsel's skeleton as to the limits of Mr. Wasim's authority which is simply unsupported by any evidence whatsoever;

(c) contains no answer at all to the only independent evidence before me, namely, Mr. Ferrigan's evidence about the tenancy agreements.

In such circumstances, on all the evidence, I reject the submission that the defendant has a real prospect of successfully defending the claim.

F. 'Other Good Reasons' and CPR 3.9

F1: The Three Reasons Relied on by the Defendant

(a) Size of Claim

39. Miss Cox said that the claim was for a large sum of money and therefore that ought, in itself, to amount to 'some other good reason' to set aside judgment pursuant to CPR 13.3(1)(b). I do not accept that submission. The quantum of the claim is not a relevant matter under CPR 13.3. Indeed, it might be said that, since the quantum of the claim is indeed large, that was a further incentive for the defendant to act promptly, and to do a good deal more than the defendant in this case has done, to suggest that it has a real prospect of successfully defending the claim.

(b) Nature of Claim

40. Miss Cox submits that, because the allegations involve, at least in the alternative, the suggestion of fraud, there is a risk that it will remain a stain on the character of Mr. Ahmed if he is not allowed to defend such a claim. Again, I am bound to reject that submission. It seems to me that, if Mr. Ahmed had been so concerned about the nature of the allegations, and believed that he was in a position to challenge them, he would have ensured that the application to set aside was not delayed for almost six months and was supported by credible evidence as to why the claim was incorrect. For the reasons that I have given, he has chosen to do neither. He is not now entitled to have the judgment set aside on this ground.

(c) Basis of Assessment of Damage

41. Finally, Miss Cox rightly points out that the assessment of damages might be made more difficult, or at least potentially more difficult, because the measure of loss would vary, depending on whether the representations were made fraudulently or negligently. She says that that is a final reason why judgment should be set aside, in order to allow such a finding to be made.
42. I reject that submission because, so it seems to me, questions as to the precise basis for the assessment of damages could never justify setting aside the original judgment. That would be the tail wagging the dog to an unacceptable degree. However, I do accept that the parties require certainty as to how the damages are to be assessed. As outlined during argument, I propose to rule that the damages will fall to be assessed in this case on the tortious basis only.

(d) Summary

43. For the reasons set out above, there are no 'other good reasons' under CPR 13.3 which would justify setting aside the judgment of Master Eyre.

F2 CPR 3.9 Checklist

44. It is also helpful to use the list of factors relied on by Miss Cox under CPR 3.9 as a checklist of the points that I should consider on this application. I do so in brief below.

(a) The Interests of the Administration of Justice

45. The interests of the administration of justice clearly favour maintaining the regular judgment that was obtained 10 months ago. If the judgment is not set aside, I will then go immediately to consider the claimant's application for the assessment of damages. If it is, the trial on liability (let alone quantum) will not take place until well into next year. There will have been a delay of one year or more. That will be grossly prejudicial to the claimant, and it would be wrong to allow such a delay in all the circumstances.

(b) Delay, Intention and Explanation

46. The defendant did not act promptly for the reasons that I have given. I am unable to reach a conclusion as to whether or not that delay was intentional, although in circumstances where Mr. Ahmed went on holiday rather than addressing the detail of the claim, it might at least be argued that it was intentional. There is certainly no good explanation for the delay, for the reasons that I have given. I cannot find that the delay was caused by the defendant's legal representatives for the reasons which I have explained.

(c) Compliance With Other Orders

47. Although the defendant did not comply with the order in respect of the payment of £1 million, I note that that order was subsequently revoked. All other orders have been complied with.

(d) Trial Date

48. As I pointed out to Miss Cox, since the only remaining issue in this trial is the assessment of damages, which will be dealt with immediately after the handing down of this Judgment, the defendant's application to set aside, if granted, would lead to an adjournment of the trial. That would not be appropriate for the reasons which I have explained.

(e) Effect on the Parties

49. The effect on the defendant of failing to endeavour to set aside the judgment any earlier has in truth been negligible, since the evidence on which the application was and is based does not set out any real prospect of successfully defending the claim. The prejudice to the claimant if I set aside judgment would be extensive, given the time and costs that have been incurred so far, and the delay that would follow any such adjournment.

(f) Summary

50. For the reasons which I have set out, having been through the checklist at CPR 3.9 I am confirmed in my view that, in all the circumstances, I should not set aside the judgment of 11^th December 2006.

G. Summary

51. For the reasons set out above I have concluded that:

(a) The defendant did not act promptly in making this application and was in fact responsible for unjustifiable delay (paragraphs 19 to 28 above).

(b) On the material put before me, the defendant has no real prospect of successfully defending the claim (paragraphs 29 to 38 above).

(c) There are no other good reasons for setting aside judgment (paragraphs 39 to 43 above).

(d) The wider considerations of justice and the real prejudice to the claimant if judgment was set aside mean that, in all the circumstances, the judgment in default should not be set aside (paragraphs 44 to 50 above).

52. I will therefore now turn to consider the claimant's application for the assessment of damages. I make it plain that I do so on the basis that the correct approach to the assessment of those damages is by reference to the tortious measure of loss.