Default judgement - has somebody made a mistake?

[Ryan Bristol]

Hi,
I've just received default judgement, but the outcome is not quite as suspected. Briefly (with figures rounded for clarity)

1) Claim from builder for £2,000 (claim particulars very short, just say that £X was invoiced for works and £2,000 remains unpaid)

2) Counter claim from me due to remedial works (estimated to cost £5,000) - wording of counter claim

The Claimant therefore seeks to recover:

The cost of remedial works to the building works at an estimated cost of £5,000

The Defendant seeks to offset the sum of £2,000 due to the Claimant against the balance owed to them.

AND the Defendant Claims:

The principal sum of £3,000;

3) No counter claim defence was submitted (now 3 months overdue), so my solicitor submitted a request for default judgement (I haven't seen the submission, but suspect the value entered on the form is the principal sum (£3,000).

4) I chased it with the court a couple of times (it got missed initially), and was told by court staff that if default judgement was entered then procedurally the original claim should be struck out

5) Have now received default judgement for the principal sum (£3,000 + costs) but the original claim for £2,000 is still going ahead (the court to schedule a 2 hour hearing)

As the counter claim is actually for £5,000 with £2,000 to be offset and a principal of £3,000 I would have expected judgement for the £3,000 and the original claim to be struck out/dismissed because even if it "succeeded" the amount would already have been offset by the remainder of the undefended counter claim.

I would not have been surprised if judgement was refused, and the court wanted to hear the whole matter, but this situation makes no sense to me.

It seems that the court has already offset the £2,000 but is now permitting the builder to have a go at claiming a further £2,000 - even though the facts of the original defence are exactly the same as the counterclaim (i.e. that there are £5,000 of remedial works).

If the builder is going to dispute my defence to his claim, then he is going to have to put forward argument/evidence which are exactly the same as he would have needed to put in any defence to my counterclaim. It is not a separate issue.

The default judgement has been ordered by a deputy DJ rather than just done administratively by the court staff.

I am just wondering if this is normal, or whether something has gone wrong here.

I cannot see that my solicitor should have requested judgement for the full £5,000 but there is nothing on the default judgement form to do anything other than request an amount (you can't refer to any separate offset amounts) but should they have done anything else?

Should they have submitted a different type of application to request the £3,000 plus an offset remedy?

Is there anything that my solicitor should now be doing?

Any thoughts would be much appreciated.

[Amethyst]

Your counterclaim was entered for £3000, thus the default judgment is for that sum. Your counterclaim should have been for the £5000.

And it appears that you should have made an admission of the £2000 owed to the Claimant, as that doesn't appear to be disputed - you admit you owe £2000 ( as you offered to offset it ) - but the Claimant owes you more (£5000) - therefore once judgment is passed it follows, if both sides succeed, that the £2000 is offset.

Think your solicitors done things a bit arse about face and filing for a default judgment has made it more complicated.

Hopefully the claimant asks to set aside the default judgment then both claims can be heard together as at the moment you have judgment that he owes you £3k, and are at risk of a judgment that you owe him £2k, so you'd end up with £1k.

If that makes any sense?

[Ryan Bristol]

Thanks Amethyst.

It does make sense, and I suspected that the solicitor had messed this up.

The original defence, which was submitted along with the counter claim, does specifically state that the amount of £2,000 is disputed on the basis of the remedial works. It states:

The Defendant has obtained three estimates for the repair and completion of the building works, the lowest of which for £5,000. A copy of the estimate is annexed hereto at ‘XXXXX’. The Defendant therefore denies that the Claimant is entitled to £2,000.

Does it make a difference that the defence specifically denies that the £2,000 is due? (again on the same facts that the counter claim states that an additional £3,000 is due)

Is there anything that my solicitor should be doing now?

[Amethyst]

It should get sorted out in the wash, the default judgment is a bit of a fly in the ointment now - did you chase the claimant for their defence/admission to the counterclaim at all during the 3 months ? Many unrepresented people don't know how to deal with the counterclaim element of a claim so often need a nudge, once they receive the judgment order they may well apply to set it aside.

[R0b]

Hmmm, afraid I have to disagree with Amethyst here as I dont think this will get sorted out in the wash. First of all a counterclaim does not extinguish a claim so even if you obtain judgment the main claim still proceeds unless otherwise instructed.

Your solicitor has made a boo boo here and if I were in your position I would be raising the issue now and asking them what they are going to do about it. If you leave it then you might be seen as waiving any claim because you dithered and said nothing.

Your solicitor should have claimed the sum of £5000 in the counterclaim and in the defence it should have read something like, "to the extent the claimant's claim succeeds, the Defendant seeks to offset any such sums against the sums counter claimed."

However as default judgment has been obtained I dont think a judge can revise the default judgment order retrospectively in that way to then offset any sums of the claim (possible but not seen it before). It would simply be a case that the builder owes you 5k and you owe the builer 2k or whatever sum is awarded.

So in summary, I'd be putting the solicitor on notice that they have cocked up and you want them to either sort it at their own cost and expense or you will consider a claim of negligence against them for the remaining 2k.

[Ryan Bristol]

Thanks Amethyst.

I don't know if they were chased, but they are represented.

DQ was submitted by them (only in response to an unless order a few weeks ago) but no defence was forthcoming.

Could my solicitor have requested judgement for the £3,000 and a further remedy of the claim being dismissed?

The problem with requesting judgement of £5,000 (rather than £3,000 + dismissal/strike out) would seem to be that if it were granted, the other party would be fully entitled to claim the £2,000 back, with all of the additional costs of a hearing for that.

Of course, we are now in that situation anyway.

[Amethyst]

lol, that'll teach me to be nice..... I was thinking if the other side agrees to drop their claim, rather than go through applying to set aside the default judgment, then that would be a way of sorting it without having to backtrack / make more applications etc / increase costs... did both parties agree to mediation at all on the Directions Questionnaires ? But I do agree with R0b, there's been a cock up and it seems to be the solicitors error.

[Ryan Bristol]

Thanks to both of you.

Amethyst - Yes both sides agreed to mediation, so I am not sure why a 2 hour hearing has been ordered.

I've written to the solicitor to ask them to review the matter urgently and confirm whether they feel that that the defence, counter claim and request for default judgement have been drafted/submitted properly, and whether there are any steps they feel need to be taken to address the matter.

I specifically asked whether the counter claim should have been for £5,000, and whether the defence should have included wording similar to that suggested by Rob.

Your solicitor should have claimed the sum of £5000 in the counterclaim and in the defence it should have read something like, "to the extent the claimant's claim succeeds, the Defendant seeks to offset any such sums against the sums counter claimed."

and whether the request for default judgement should have been for the full £5,000 and/or included another remedy.

It remains to be seen what the other party does. They were made aware that, if they started proceedings, there would be a counter claim. Then they started proceedings and failed to defend the counter claim (only submitting the DQ in response to the unless order).

I'm not really sure what their strategy is, unless they just hoped that I would back down. Even then I don't understand why they didn't even try to submit a skeleton defence. Perhaps to save costs.

EDIT: Just had a call back from the solicitor. They said that they are of the opinion that the court has made an error and will be calling them today.

EDIT 2: The solicitor has pointed out to the court staff, that the amount was calculated by including the offset, and the court staff told the solicitor to put a request to amend the judgement in writing and that it will be passed to a judge to review.

[R0b]

The usual rule is that when you are asking a court to do something in your favour, you need to make a counterclaim but as far as I remember, that doesn't generally apply to the offsetting of sums against another (though I think the general rule is that relates to whether you are legally entitled to set off and if so it should be in the defence, if not, it goes in the counterclaim). If your solicitor wanted to make it part of the counterclaim that's fine and I don't see an issue with either putting it in the counterclaim section or in the defence just so long as it is pleaded. Being pedantic, the solicitor should have sought to plead set off extinguishing the whole claim or alternatively part set off.

The real issue is the last part:-

AND the Defendant Claims:

The principal sum of £3,000;

It is crystal clear that your solicitor has said you are seeking £3,000, not £5,000 as claimed. If someone expressly states that they are claiming £3,000 then it doesn't mean £5,000 does it?

Still think it's a cock up by your solicitor and is trying to save his skin here. Whether a judge agrees remains to be seen but whatever the outcome you should make it clear that you don't want to be charged for this additional work, particularly any costs relating to any application for amendment of the judgment and costs relating to it.

I could understand how the solicitor might come to that conclusion if you had admitted the £2,000 and so that the £5,000 extinguishes the claimant's claim leaving £3,000 payable and should be case closed but if you filed a defence then it is contested.

[Ryan Bristol]

Hi,
My solicitor claimed that the court had clearly made a mistake and sent a letter asking them to review the decision. In their letter they said:

We note that despite judgment having been awarded in favour of the Defendant and Part 20 Claimant, it is ordered that the Claimant’s claim continues on the Small Claims Track. On reflection, the judgment does not appear to take into consideration the basis in which the Defendant’s counterclaim and defence was pleaded. The judgment includes offsetting the sums due to the Claimant. On this basis, we cannot see how the remainder of the claim can continue. The Claimant’s claim has already been offset against the sums owed to the Defendant and so his claim has been extinguished.

In light of this, we consider that the court should vary the judgment to make specific reference to the Defendant’s offset and to dispense with the Claimant’s original claim. Alternatively, should the Claimant’s claim continue, we request for the court to award judgment to the Defendant in the sum of £5,000 plus interest and costs to reflect the losses suffered by the Defendant without offsetting the sums due to the Claimant. The court can then consider the Claimant’s claim alone.

I have spoken with the court today and they have refused this and the claim is to go ahead. I have not yet received a copy of the letter/order from the court.

The claimant has not filed a defence, or set aside request, and they have also not paid the hearing fee (which is due in the next few days). They also haven't responded to a demand for payment from my solicitor.

I just wondered if anybody had any further thoughts.

Is it possible that if it does go to a hearing, that the judge may decide to set the default judgement aside and hear the whole matter?

EDIT: I must say that, even if my solicitor's drafting is not exemplary, it really doesn't seem to make sense that the claim is proceeding. The content of the counter claim do make it clear that the remedial work is £5,000 and that £2,000 of the contract amount is unpaid, and so only £3,000 is due to me. The claimant has still offered no defence, and so has not disputed that £5,000 of remedial work is outstanding.

If my solicitor had claimed £5,000, and the court had awarded it, then that would have necessitated the original claim going ahead (or being admitted) because then I would have received £2,000 that I was not entitled to. That would seem to be unnecessarily complicated.

I hear time and time again, that small claims is about informal, common sense decisions based on the facts (rather than legal or procedural technicalities) and minimising costs.

However, it looks as if this may be proceeding to a full hearing with all the associated time and costs, simply because my solicitor has drafted incorrectly.

[jaguarsuk]

On reading the first post my initial reaction was apply to vary the order for default judgement in the amount of £5K and the claim to be disposed of via the hearing.

It seems the judge is taking a rather strange view of how to dispense with this claim and where by he should have awarded you £5K to allow the original claim to be heard and dealt with, he's awarded you £3K and sort of holding the £2K as some sort of bond for if the claimant can prove his case. I'd expect if he can't that if he dismisses the claim he'd award you the further £2K in a separate judgement.

You have been awarded £3K, so no costs and that's what makes me think he's doing it this way and will order each party bear their own costs if the claimant is successful.

I am of course only guessing..

[Ryan Bristol]

It seems the judge is taking a rather strange view of how to dispense with this claim and where by he should have awarded you £5K to allow the original claim to be heard and dealt with, he's awarded you £3K and sort of holding the £2K as some sort of bond for if the claimant can prove his case. I'd expect if he can't that if he dismisses the claim he'd award you the further £2K in a separate judgement.

The thing is, I'm not entitled to that £2K so should never actually be awarded it. I think I'm just entitled to have the original claim dismissed.

That's why I can't see how the request for default judgement should have been for more than £3K, except that it should have been for £3K plus dismissal of the original claim (which is what the solicitor belatedly requested in the letter).

I don't know if there is a way to request that when filing an application for a default judgement.

As it stands the claimant has not paid the default judgement and seems to have no intention of doing so. So if I had been given judgement for the £5K, then he would no doubt have failed to pay that, but been awarded judgement for £2K under the original claim, which I would have then had to pay.

That would have been the very worst case scenario.

At least if the claim goes to a hearing, I can still defend the £2K on the same facts.

[Amethyst]

You only claimed for £3k in your counterclaim - no one has looked at it, the other side didn't defend so you got a default judgment, that is all.

If you try to enforce that default judgment it is likely the other side will apply to set it aside, otherwise the original claim will just proceed to a hearing... if you win that's that, you don't pay him anything and then enforce the default judgment of £3k ( and again they might try to set it aside) which works out right....

If he applies to set aside, or you lose the original claim, it'll get a bit more complicated, and tbh when you go to the hearing for the original claim you'll probably deal with the counterclaim and get directions accordingly to sort it out.

Anyway might be moot if he hasn't paid the hearing fee... usually they do get another 7 days, but if still not paid the claim should be struck out, then it's just down to you to enforce your default £3k judgment.

[Ryan Bristol]

You only claimed for £3k in your counterclaim - no one has looked at it, the other side didn't defend so you got a default judgment, that is all.

Hi. When you say that no one has looked at it, do you mean that it was just issued without the counter claim being read? Would that be the case, even though the request was transferred by CCMCC to my local court, before being reviewed by a judge, and that same judge has reviewed the matter again, following the letter from my solicitor?

If you try to enforce that default judgment it is likely the other side will apply to set it aside

So far my solicitor has written demanding payment, but nothing else. I suspect that the claimant won't spend the money to apply to have it set aside before the hearing.

He has given his parent's address, which I know he doesn't live at, has submitted a very simple claim and then sent in the DQ, but has done nothing else.

I suspect that he hoped that the claim would pressurise me, is happy to have the CCJ against him, thinks I won't be able to enforce it, and doesn't want to spend any more money than he has to.

If he applies to set aside, or you lose the original claim, it'll get a bit more complicated, and tbh when you go to the hearing for the original claim you'll probably deal with the counterclaim and get directions accordingly to sort it out.

Thanks. That is what I thought might happen if it goes to the hearing.

Anyway might be moot if he hasn't paid the hearing fee... usually they do get another 7 days, but if still not paid the claim should be struck out, then it's just down to you to enforce your default £3k judgment.

I guess I will just have to wait and see what happens.

It's disappointing the hear that they give another 7 days grace, especially when the hearing is only 4 weeks after the fee is due, and I don't want to spend more solicitor's fees with preparation, if it isn't going ahead.

Once the fee deadline passes, do I have to request a strike out, or do they just do it automatically? Does it go back to a judge, or do the court staff just do it themselves?

[jaguarsuk]

He has given his parent's address, which I know he doesn't live at, has submitted a very simple claim and then sent in the DQ, but has done nothing else.

I suspect that he hoped that the claim would pressurise me, is happy to have the CCJ against him, thinks I won't be able to enforce it, and doesn't want to spend any more money than he has to.

When enforcing you want to transfer it to the high court for enforcement, which will cost you £66. If you know his real address you can give it to the high court enforcement officers and they will attend there to recover the debt. Judgement doesn't have to be enforced at the address written on the judgement, although turning up at their house threatening ti seize goods to the value of £3K might make him be forth coming to the HCEO about his real address or pay up to avoid distress/grief to his parents.