Disrepair, default judgments and debarring orders

Freeholders failing to provide a timely response to a particulars of claim face an order for default judgment and a listing to determine quantum (if the claim is for an unspecified amount) and for an order for specific performance.

Tenants and leaseholders are also now more likely to apply to strike out the defence or seek a debarring order where court deadlines are missed. The question then is whether to
apply to set aside the orders or
to challenge quantum.

Clients should apply to set aside the judgment if they can show that they acted promptly and have prospects of success or some other good reason. Attempts to settle or complete repairs are not a good excuse
for delay in responding to the default judgment.

Relief from sanction is unlikely to be granted to those who miss deadlines because they have been too busy or short staffed.

The client must be able to make an informed choice about the benefit of applying to set aside a default judgment or debarring order over challenging the assessment of quantum. Whether the client can challenge failure to provide access will depend on how the claim has been pleaded.

If the leaseholder has not pleaded that access has always been provided, the client will not be prevented from seeking to limit damages by reducing the period of liability in this way. Does the client need to rely on the Limitation Act 1980 defence, whether sections 2, 5 or 11? If so, an application to set aside default judgment must be made so that the statutory defence is pleaded.

Debarring orders

What is the impact of debarring orders? Do they extend further than judgment in default so that a client who has failed to participate in proceedings at all is better placed to challenge the assessment of quantum than one who has missed the deadline
for disclosure?

In Lunnun v Singh (Hajar), the court held that a judgment in default is conclusive on liability but damages still have to be proved and a defendant can
raise any issue which is not inconsistent with the judgment.

In Lunnun, the Court of Appeal held the defendant could argue that any damage to the plaintiff’s cellar caused by water leakage came from an alternative source to that pleaded.

Just as a defendant in a personal injury action could challenge particular heads of damage; it was open to the defendant to challenge particular heads of damage as caused by water from its cracked sewer pipe.

Further, in Maes Finance Ltd
and Anr v A L Phillips & Co, the Chancery Division held that where liability had been determined but damages were still to be assessed, a defendant could plead contributory negligence at the assessment of damages stage. The defendant can, therefore, raise issues of contributory negligence in tort or failure to mitigate in contract. The fact that it operated as a partial defence on quantum is no bar.

The disposal hearing listed following default judgment
is unlikely to hear evidence
from witnesses, the decision being based on written evidence. This factor may affect the suitability of challenging the default judgment.

In Earle v Charalambous [2006] EWCA Civ 1090, the court set out the relevant measure of damages under a long lease. Distress and inconvenience caused by disrepair are symptomatic of interference with the tenant’s enjoyment of their lease.

A notional judgment of the resulting reduction in rental value is likely to be the most appropriate starting point for assessing damages. Expert valuations are not necessary. The court is entitled to accept the defendant’s evidence
of value.

SJ

Morayo Fagborun Bennett is a barrister practising from Hardwicke chambers