In ESR Insurance Services Ltd (In Administration) v Wendell Clemons & 6 Ors – Lawtel 2.9.08 the Commercial Court gave judgment in default of acknowledgment of service in respect of a number of Defendants, but refused it in respect of one Defendant who had served an acknowledgment of service late and applied for an extension of time.
All of the Defendants save for the second Defendant were out of the jurisdiction. The Defendants had been served but none had acknowledged service. The applicant's application for judgment in default had also been served on the Defendants out of the jurisdiction. About three weeks out of time, the second Defendant, who was within the jurisdiction, filed or purported to file an acknowledgment of service by which he indicated an intention to defend the claim. The second Defendant submitted that he had been under a misapprehension as to the necessity of filing an acknowledgment of service and applied for an extension of time for acknowledging service on the basis that he had only been able to obtain legal advice just before the hearing.
The court held that it was plain that the circumstances had arisen in which a judgment in default could be obtained so far as the other Defendants were concerned: the Defendants had been duly served; they had neither filed an acknowledgment of service nor a defence, and the relevant period for doing so had expired. The applicant was entitled to judgment in default against those defendants in respect of premiums which it was entitled to recover because the insurance had never been effected, as alleged in the claim form. The applicant was also entitled to interest on those sums.
It would be unfair to the second Defendant to allow judgment to be entered against him in default in circumstances where he had in fact filed an acknowledgment and where he had only just had the benefit of legal advice. The second Defendant had to have an opportunity to consider with his lawyers whether there was a defence to the claim, and it was in everybody's interest that he should be able to reach an informed conclusion. The court extended time to file the acknowledgment of service, but gave the applicant permission to file summary judgment proceedings on the basis of the existing evidence.