The claimant was found liable for the defendant’s costs following an application to set aside a default judgment.

The claimant had obtained default judgment due to the defendant’s failure to respond to the claim form. The defendant promptly requested the claimant’s consent to set the judgement aside on the basis that it had not received the judicial papers to respond to the claim form and because it had a counterclaim that would extinguish the claim. In the absence of agreement  the defendant issued an application. Shortly before the hearing, after receiving evidence of the defendant’s counterclaim, the claimant agreed that the judgment should be set aside.

The defendant argued that it was the successful party and that there was no reason for departing from the usual rule that the unsuccessful party should be ordered to pay costs. The claimant argued that it should have its costs until the date that the evidence was provided, and that costs thereafter should be reserved. The claimant argued that it had been reasonable for it not to agree to judgment being set aside until it had seen the evidence, as large sums were owed and there was a background of money laundering allegations.

Judgment was given for the defendant. The court held that whilst it might not have been  the claimant’s fault the response papers were not received by the defendant with the claim form, the claimant had to take responsibility. This was not however the basis that entitled the defendant to have judgment set aside. The defendant had made the claimant aware that a defence was being put forward that would extinguish its claim. The claimant had not been entitled to wait until it saw the evidence to consent to judgment being set aside and the court found no reason to depart from the usual cost rule.