Lux Locations Ltd v Yida Zhang (Antigua & Barbuda)

This appeal raises questions about the proper approach to the grant of a default judgment for a remedy other than an award of money where the relevant procedural rule says that judgment “shall be in such form as the court considers the claimant to be entitled to on the statement of claim.” An initial question is whether such a default judgment can be appealed at all or whether, as the Court of Appeal held in this case, the only means of challenging it is to apply to the High Court to set the judgment aside.

To put the claim advanced in the statement of claim in context, it is necessary to outline the now lengthy history of litigation between the parties.

The appellant, Lux Locations Ltd (“Lux”), is an estate agency which was engaged by the respondent, Mr Yida Zhang, an international investor of Chinese nationality, to assist in buying a large parcel of land (around 6 km² in Antigua. Lux was engaged on written terms that, if Mr Yida or an affiliate acquired the land, Mr Yida would pay Lux a commission equal to 9% of the purchase price. The agency agreement also stated that Lux would be responsible for paying, out of its commission, any other commissions pre-agreed with Lux to facilitate the sale. Lux had agreed to pay such a commission, equal to 4% of the purchase price, to an architect, Johann Hesse, in return for his assistance in lobbying the Government for approvals needed for the purchase.

Mr Yida’s company, Yida International Investment Antigua Ltd (“Yida Ltd”), acquired the land in August 2014 at a price of US $60m. Mr Yida did not, however, pay Lux its commission. His associate, Mr Kenneth Kwok, wrote to Lux saying that foreign exchange was not available in China to pay the commission and proposing a new agreement under which Lux’s right to be paid commission would be replaced by an exclusive right to act as estate agent for the sale of any of the land. When Lux rejected this proposal, an alternative proposal was made to link the payment of the commission to the sale of land by Mr Yida. Lux rejected this proposal too and brought an action (“the first action”) suing Mr Yida for the commission of US $5.4m (9% of the US $60m purchase price) payable under the agency agreement.

Mr Yida defended the claim and counterclaimed for rescission of the agency agreement, alleging that he had been induced to enter into the agreement by various fraudulent misrepresentations. Some months later Mr Yida amended his defence to add a further allegation. He now claimed that, at or about the time when the written agency agreement was made, the parties had also made a separate oral agreement, which they had apparently never thought fit to record in writing, that the obligation to pay Lux the commission of 9% would only take effect if Lux negotiated a purchase price of US $30m (half the price actually agreed).

The trial of the first action was scheduled to commence on 7 March 2017 and on that day the parties attended court with their lawyers. Counsel for Mr Yida, Mr Damien Benjamin, asked the judge for time to discuss settlement, which was granted. Terms of settlement were then negotiated and embodied in a consent order. The consent order was signed by the parties themselves and by their respective counsel. The order was then made by the judge after its terms had been explained to her in open court in the presence of the parties and their counsel. The consent order provided for judgment to be entered for Lux against Mr Yida in the sum of US $3m, plus interest at the rate of 8% per annum and legal costs (including sales tax) of US $345,000. Mr Yida was ordered to pay these sums within 21 days.

Before the settlement was agreed, Mr Hesse (who was present at court) had agreed that he would forgo the share of Lux’s commission that Lux had agreed to pay to him. The principal judgment sum of US $3m represented the rest of Lux’s commission. Under the terms of the consent order Lux therefore stood to receive the full net sum that it had expected to receive after paying Mr Hesse. The agreement of Mr Hesse to forgo his commission would not, however, have relieved Mr Yida of the obligation to pay the full sum of US $5.4m to Lux if he had lost at trial. The consent order thus achieved a substantial reduction in Mr Yida’s potential liability.

Mr Yida did not pay the judgment debt within 21 days as ordered. So Lux began enforcement proceedings. On 4 April 2017 Lux obtained a provisional charging order over the shares held by Mr Yida in his company, Yida Ltd. On 23 April 2017, Mr Yida’s lawyer, Mr Benjamin, sent an email message to Lux’s attorney saying that Mr Yida was having practical difficulties, to do with banking arrangements, in remitting the necessary money to Antigua. On 12 May 2017 Mr Yida paid US $705,486.39 in part satisfaction of the judgment debt. But he did not pay anything more to Lux.

On 23 May 2017 Lux’s application for a final charging order over Mr Yida’s shares was heard. Mr Yida is recorded in the order as being “absent due to illness” but was represented by his counsel, Mr Benjamin. Mr Yida had made an affirmation dated 18 May 2017 stating that his failure to pay the judgment debt was due to practical difficulties with remitting funds to Antigua and “humbly ask[ed] the Court not to grant” a charging order. The judge was unmoved by that request and made a final charging order, to take effect unless the balance of the judgment debt was paid within 14 days.

Mr Yida still did not pay the balance of the judgment debt. Instead, he launched a counter-attack. On 3 July 2017 Mr Yida commenced an action (“the second action”) against Lux and its proprietors, Mr and Mrs Dyson, along with two other defendants claiming damages for conspiracy in a sum of US $6,350,555.89. (No explanation was given of how this sum was calculated.) The statement of claim alleged that the defendants had conspired to raise the purchase price of the land from US $30m to US $60m and that Mr and Mrs Dyson had made misrepresentations on which Mr Yida had relied, being essentially the same ones that had been alleged in the first action. Lux applied to have the statement of claim struck out as an abuse of process on the grounds that the pleaded allegations had either been made - or, in so far as they were new, ought to have been made - in the first action, which had been finally resolved by the consent order.

While this strike-out application was pending, Lux continued the process of enforcing the judgment in its favour by applying next for an order for the sale of Mr Yida’s shares in Yida Ltd. At a hearing on 19 October 2017 (at which Mr Yida was again represented by counsel) this application was adjourned to be heard on 14 December 2017 and the judge granted an interim injunction to stop Mr Yida in the meantime from taking any step to dispose either of his shares or of any of the land owned by his company.

On the return date of 14 December 2017, neither Mr Yida nor anyone representing him attended court. The judge made an order for valuation of the land and shares, sale of the shares and payment of the judgment debt out of the proceeds of sale. The injunction was continued.

Mr Yida failed to comply with terms of this order which required his cooperation. So on 26 February 2018 Lux applied to the court for further relief to enable the sale of the shares to take place. Mr Yida responded on 23 March 2018 by applying for a stay. In an affidavit sworn on the same day, Mr Yida referred to the conspiracy claim made in the second action. (By this time Lux’s application to strike out the claim had been heard but judgment was reserved.) Mr Yida also said that he had instructed his lawyer to bring a fresh action to set aside the consent order and that his lawyer was finalising the necessary papers for filing. It will be necessary to return in more detail to the grounds for Mr Yida’s claim to be entitled to have the consent order set aside, but the essence of Mr Yida’s affidavit evidence was that, when he signed the consent order, he misunderstood the nature of the document he was signing and thought it was a release of Mr Hesse’s claim for commission. He did not realise that it was in fact a settlement agreement. The reason given for seeking a stay was that, if Mr Yida were to pay the judgment sum to Lux and his claims against Lux were ultimately successful, there would be little, if any, chance of his getting his money back.

On 19 April 2018 Wilkinson J declined to entertain Mr Yida’s application for a stay and made the further orders sought by Lux to facilitate the sale of Mr Yida’s shares in Yida Ltd.

On 28 June 2018 judgment was handed down in the second action granting Lux’s application to strike out the statement of claim as an abuse of the court’s process.

On 23 November 2018 Mr Yida began the new action foreshadowed in his affidavit eight months earlier. The remedy sought was an order that the consent order be set aside and for repayment of the money that Mr Yida had paid to Lux under the terms of the consent order. It is this action which is now before the Board.

The claim form and statement of claim were served on 23 November 2018 at an address in Antigua which was the office of the attorneys who had acted for Lux in the earlier proceedings. They returned the papers on the basis that they were not instructed to accept service on behalf of Lux. This overlooked the fact, however, that the office of the attorneys was also Lux’s registered office so that service at that address was valid. The claim form and statement of claim were served again at the same address on 4 February 2019 and this time service was immediately acknowledged.

Relying on the original service of the claim form and statement of claim, Mr Yida on 12 February 2019 filed a request for a default judgment for failure to file a defence within the prescribed period of 28 days. On receipt of the request, a deputy registrar wrote to Mr Yida’s attorneys to say that a default judgment could not be entered by the court office because the remedy claimed was one other than a sum of money. The deputy registrar referred to rule 12.10(4) and (5) of the Eastern Caribbean Civil Procedure Rules (“the Rules”), which state:

On 20 February 2019 Mr Yida made an application for the court to determine the terms of the default judgment under rule 12.10(4). On 7 March 2019 Lux filed a defence to the claim and on 8 March 2019 Lux applied for an extension of time for filing the defence and an order striking out the statement of claim or, alternatively, for summary judgment. Lux’s application was supported by an affidavit of Mr Dyson who described the circumstances in which the consent order was made and also explained how it had come about that the defence had been filed late.

Both applications were heard at the same time by Robertson J and judgment was reserved. While judgment was awaited, Lux’s attorney came across on the court file an affidavit from Mr Yida’s former lawyer, Mr Benjamin, describing how he had negotiated the terms of the consent order on behalf of Mr Yida and on Mr Yida’s instructions (given through a translator). Lux applied for permission to put this affidavit in evidence. The judge refused permission on the ground that the affidavit could with reasonable diligence have been deployed at the hearing.

On 20 March 2020 Robertson J gave judgment deciding that: (1) the statement of claim disclosed a valid claim and ought not to be struck out; (2) default judgment should be entered for the remedy claimed by Mr Yida; and (3) it was unnecessary to consider Lux’s applications to extend time for filing the defence and for summary judgment.

The judge granted Lux leave to appeal from her decision to the Court of Appeal. Mr Yida applied to have the order granting leave to appeal set aside and the notice of appeal struck out on the ground that the Court of Appeal has no jurisdiction to hear an appeal from a default judgment and that the only recourse for the defendant is to apply under Part 13 of the Rules to have the judgment set aside. The merits of the appeal and of the application to strike it out were fully argued together at a hearing before the Court of Appeal on 1 October 2020. In a judgment given on 11 January 2021, Thom JA (with whom Baptise JA and Webster JA(Ag) agreed) held that Lux’s notice of appeal should be struck out. The judgment did not in these circumstances deal with the substantive merits of the appeal.

The main reason given for the Court of Appeal’s decision was that a default judgment is not a “judgment or order of the High Court” within the meaning of section 31(1)(b) of the Eastern Caribbean Supreme Court Act (“the Act”). This states:

Section 31(2) provides for certain exceptions and qualifications to this general rule, one of which is that no appeal shall lie under section 31:

The Court of Appeal held that the reference to “the High Court” in section 31(1)(b) of the Act does not include members of the court office who provide administrative support to the High Court and that the phrase “any judgment or order of the High Court” refers only to judicial decisions and not to administrative acts performed by the court office: see para 38 of the judgment. The Court of Appeal further held that the grant of a default judgment is an administrative act performed by the court office and not a judicial decision. The principal basis for this conclusion was rule 12.5 of the Rules, which states:

It is common ground that, when Mr Yida’s request for a judgment for failure to defend was filed with the court office, all the relevant conditions in rule 12.5 were satisfied. (The fourth condition was not applicable as the permission of the court to enter judgment was not necessary.)

Rule 12.5 has to be read together with rules 12.10 to 12.12, which prescribe the content of the default judgment to be entered where the conditions in rule 12.5 are satisfied. The effect of rule 12.10(1) is that, where the claim is for a sum of money or, in the case of a claim for goods, requires or would allow the defendant to pay the value of the goods as assessed by the court rather than requiring the goods themselves to be delivered, the content of the default judgment is fixed by the Rules. The judgment therefore can and must be entered by the court office without more ado. Where, however, as in this case, the claim is for “some other remedy,” an application to the court to determine the terms of the judgment is required by rule 12.10(4) and (5), quoted at para 18 above.

The Court of Appeal took the view that, even where the court determines the terms of the judgment under rule 12.10(4), the default judgment “remains an administrative order and not a judicial order”: para 32. Two reasons were given for this conclusion. First, it was said that, in determining the remedy to be granted, “the court does not in any way examine the merits of the claim.” This is because, the defendant not having filed a defence, the claimant’s allegations are treated as true and conclusive of liability for the purposes of the default judgment: para 32. Second, it was said that, where a default judgment is granted by a judge, the nature of the default judgment does not change and the judge in these circumstances is performing a function of the court office: para 33. For the power to do this, reference was made to rule 2.6, which states:

In the view of the Court of Appeal, where a default judgment is granted by a judge pursuant to rule 12.10(4), a step required to be performed by the court office (entry of judgment for failure to defend) is being taken by the judge instead of a member of the court staff.

For these reasons, the Court of Appeal decided that, as the grant of a default judgment is an administrative act and not a judicial decision, the default judgment in favour of Mr Yida was not a “judgment or order of the High Court” within the meaning of section 31(1)(b) of the Act, with the result that the Court of Appeal had no jurisdiction to hear an appeal from the judgment.

This still left Lux’s appeal in relation to its applications to extend time for filing its defence, to strike out the statement of claim and for summary judgment. The Court of Appeal held that the judge was not required to consider these applications as they were made after Mr Yida had requested a default judgment. Rule 12.5 requires that, on receipt of such a request, the court office must enter judgment for failure to defend if the conditions set out in that rule are satisfied, as they were in this case. The Court of Appeal took this to mean that the judge had no power to rule on Lux’s applications, citing its earlier decision in Rolle v Lander [2014] ECSCJ No 234: see para 40.

The Board recognises that matters of procedure are often best left to be decided by the courts of the jurisdiction from which an appeal is brought, which will naturally have greater knowledge than the Board of the conditions and norms of civil litigation in which the rules of procedure have effect: Bergan v Evans [2019] UKPC 33, para 2. In this case, however, the Court of Appeal’s decision turns on questions of interpretation of the Act and the Rules which, as it appears to the Board, are matters of law that do not engage or depend on any local conditions or practice and are apt for determination on a further appeal. The Board is fortified in this view by the fact that the Court of Appeal itself (in a constitution presided over by the Chief Justice) has granted discretionary leave to appeal under section 122(2)(a) of the Constitution on the ground that “the question involved in the appeal is one that, by reason of its great general or public importance or otherwise, ought to be submitted to H[is] Majesty in Council.”

The proposition that the judgment and order of Robertson J (supported by some 14 pages of reasoning) is not a judicial decision is a startling one, which the Board is unable to accept. There is in the Board’s view no justification, as a matter of language or otherwise, for regarding a default judgment granted by a High Court judge under rule 12.10(4) as outside the scope of the phrase “any judgment or order of the High Court” in section 31(1)(b) of the Act.

The Board will consider below the nature of the determination required by rule 12.10(4) and the contention of the Court of Appeal that it involves no examination of the merits of the claim. Even if the Court of Appeal were right, however, that the sole question for the court is whether or not to grant the remedy claimed on the assumption that the allegations in the statement of claim are true, answering that question is not an administrative matter but a task that requires an exercise of judgment by a judge. That is the obvious reason for requiring the terms of the judgment to be decided by the court where the claim is for “some other remedy”. Furthermore, the task is not one which may be performed by a member of the court staff. As the decision is not one of a formal or administrative character and as the Rules do not expressly provide (as they do in relation to monetary claims) that the function may be carried out by the court office or a member of the court staff, rule 2.6 (quoted at para 27 above) does not permit a member of the court staff to determine an application to the court under rule 12.10(4) and (5). The Court of Appeal was therefore wrong to say that, when she heard Mr Yida’s application and granted a default judgment under those provisions, Robertson J was taking a step required to be performed by the court office. She was acting in her capacity as a judge of the High Court and taking a step which, on the contrary, cannot be taken by a member of the court staff.

The Board thus considers it clear that the judgment granted by Robertson J is a judgment of the High Court that falls within section 31(1)(b) of the Act. Although the expression “interlocutory” used in section 31(2)(g) is not defined in the Act, the test of whether an order or judgment is final or interlocutory specified in the Rules is whether “it would be determinative of the issues that arise on a claim, whichever way the application could have been decided”: see rule 62.1(3)(b). Applying this test, the judgment granted on Mr Yida’s application to the court under rule 12.10(4) and (5) is an interlocutory judgment because, if the application had been refused, it would not have been determinative of the issues that arise on the claim. It follows that in order to appeal from the judgment the leave of the judge or of the Court of Appeal was required by section 31(2)(g) of the Act. That condition was satisfied, however, as the judge granted leave to appeal from her order. The Court of Appeal was therefore wrong to hold that it did not have jurisdiction to hear and determine the appeal.

The primary argument made on Mr Yida’s behalf to support the Court of Appeal’s decision is that, where the claim is for “some other remedy” and the conditions in rule 12.5 are satisfied, the Rules on their proper interpretation provide for a two-step procedure. It is said that, first, the court office enters a default judgment which provides for the terms of the judgment to be determined by the court. This resolves the issue of liability. Then, at the second stage, the court determines the terms of the judgment granted by the court office (and thereby specifies the appropriate remedy).

In support of this interpretation, counsel for Mr Yida drew an analogy with a default judgment entered on a claim for an unspecified sum of money. On such a claim rule 12.10(1)(b) requires judgment to be entered for the payment of a sum of money to be decided by the court. This judgment is conclusive of liability and there is then a second stage at which the court assesses the amount of money to be paid by the defendant. In the same way, it is argued, on a claim for “some other remedy” the court office must enter a default judgment which is conclusive of liability and there is then a second stage at which the court determines the remedy to be granted to the claimant.

In further support of this interpretation of the Rules, reliance is placed on rule 12.13 (headed “Defendant’s rights following default judgment”). This states:

In this case no default judgment was entered by the court office on receipt of Mr Yida’s request for judgment. As described at para 18 above, Mr Yida’s attorneys were told by a deputy registrar that, because the claim was for “some other remedy,” it was necessary to make an application to the court under rule 12.10(4) and (5). Counsel for Mr Yida submit that this was an error by the court office and that Mr Yida ought not be disadvantaged by this error. The proceedings should therefore be approached as if the court office had entered a default judgment on receipt of Mr Yida’s request as, on Mr Yida’s case, it was required to do.

Vigorously as this theory was advanced by counsel for Mr Yida, the Board does not consider it to be a tenable interpretation of the Rules.

The Rules do not say that, on a claim for “some other remedy,” the court office must enter a default judgment before an application for the court to determine the terms of the judgment under rule 12.10(4) has been made. Reading rules 12.5 and 12.10 together, it is apparent that, whatever the nature of the claim, only one default judgment is envisaged, the content of which is provided for by rule 12.10. Where the claim is for a sum of money, the form of the default judgment is prescribed by rule 12.10(1) and the court office can and should therefore proceed to enter judgment immediately. Where, on the other hand, the claim is for a remedy other than money - either an order to deliver goods or “some other remedy” - a decision of the court is needed before judgment can be entered.

Rather than assisting Mr Yida’s argument, the comparison with a claim for an unspecified sum of money in the Board’s view shows why his argument is wrong. As already mentioned, on a claim for an unspecified sum of money where the conditions in rule 12.5 are satisfied, rule 12.10(1)(b) requires a default judgment to be entered for the payment of a sum of money to be decided by the court. Rule 16.2 set outs the procedure for assessing damages after such a judgment has been entered. This procedure is not part of the default process but in effect involves a trial of the issue of quantum. By contrast, where the claim is for some other remedy, the rules do not provide for a default judgment to be entered for relief to be determined in accordance with some further procedure. Rather, rule 12.10(4) requires default judgment to be “in such form as the court considers the claimant to be entitled to on the statement of claim”. It follows that default judgment cannot be entered before a determination by the court under rule 12.10(4) has taken place.

The Board does not in any event consider that a judgment whose terms remain to be determined by the court is a coherent concept. If the terms of the judgment are to be determined by the court, there can be no judgment until the court has decided on its terms. A judgment which as yet has no terms is as empty a concept as a book with no pages or a football or cricket team with no players.

The strongest point made on behalf of Mr Yida is that rule 12.13(b) presupposes that a default judgment may be entered before an application is made under rule 12.10(4) and (5). The explanation for this offered by counsel for Lux is that a claimant may obtain a default judgment for, say, damages to be assessed and then ask the judge also to grant some other remedy such as an injunction. The English case of Brett Wilson LLP v Person(s) Unknown [2015] EWHC 2628 (QB), [2016] 4 WLR 69, is said to be an example. In that case, however, no default judgment had been entered before the judge heard an application to award both an injunction and damages. Indeed, under the English Civil Procedure Rules it is not possible to obtain more than one default judgment against the same defendant in the same case. If a claimant wishes to obtain a default judgment for both a sum of money and some other remedy, CPR rule 12.4 expressly requires an application to be made. This situation is not expressly dealt with in the Eastern Caribbean Civil Procedure Rules, but this may be how the Rules should be interpreted. If so, then rule 12.13(b) is otiose, as a situation in which a default judgment is entered before an application under rule 12.10(4) and (5) is determined cannot arise. However, while this represents an infelicity in the drafting of the Rules, it is not a point of sufficient weight to affect the clear meaning of rules 12.5 and 12.10. The presence of rule 12.13(b) cannot wag the dog by creating a two-step procedure for which rules 12.5 and 12.10 do not provide.

It follows that the court office was right to inform Mr Yida’s attorneys that, because his claim was for “some other remedy,” a default judgment could not be entered other than under rule 12.10(4) on an application to the court. But it is still necessary to consider the argument, which the Court of Appeal accepted (see para 27 above), that, in determining the terms of the judgment under rule 12.10(4), the court should not consider the merits of the claim but should treat the allegations in the statement of claim as true and conclusive of liability and should decide on that assumption what remedy is appropriate.

Counsel for Mr Yida submit that this is the proper approach even where there is a one-step procedure, as is indisputably the case under the English Civil Procedure Rules. In support of this submission they cite Football Dataco Ltd v Smoot Enterprises Ltd [2011] EWHC 973 (Ch), [2011] 1 WLR 1978, where Briggs J considered the meaning of what was then rule 12.11(1) (now rule 12.12(1)), which states:

Briggs J said, at para 16, that when asked to give default judgment under this rule the court is not called upon to form any view about the merits of the claimant’s claim, whether as a matter of fact or law. He also made the point, at para 18, that the need for an application to the court is triggered not by reference to anything connected with the legal foundation for the cause of action, but rather by the nature of the relief sought. He concluded, at para 19:

This approach has been followed by judges at first instance in several subsequent English cases: see eg Otkritie International Investment Management Ltd v Jemai [2012] EWHC 3739 (Comm); and Chelsea Football Club Ltd v Greenwood [2019] EWHC 190 (QB). A similar interpretation of the rule was adopted by Warby J (it appears without reference to Football Dataco) in Sloutsker v Romanova [2015] EWHC 2053 (QB), para 84, and Brett Wilson LLP v Person(s) Unknown [2015] EWHC 2628 (QB), [2016] 4 WLR 69, para 18, where he said:

Sloutsker and Brett Wilson were both cases in which the remedy claimed included an injunction to restrain further publication of defamatory allegations. Warby J qualified his observations by saying that:

The Board would agree that the approach outlined in these cases is a sound general approach, subject to two qualifications. First, it is important to note that in none of these cases was the defendant actively seeking to contest the claim or the application for a default judgment. The only case among those mentioned above where the relevant defendant appeared at the hearing of the application is the Chelsea Football Club case. The defendant there appeared in person to oppose the club’s application for a default judgment granting an injunction to restrain him from illegally reselling tickets to football matches; but although he described the claim against him as a “scandal”, he had not provided a witness statement or a defence nor identified any grounds for disputing the claim. In none of these cases, therefore, was the court dealing with a situation where, as in this case, by the time the application for judgment was heard the defendant had demonstrated an intention to defend the claim and set out positive grounds for doing so. It will be necessary to consider whether the same principles apply in such a situation.

Second, even where the defendant has not put forward any positive defence to the claim, the approach of treating the allegations pleaded in the statement of claim as valid without examining their factual or legal merits cannot be regarded as an inflexible rule. Neither the cases mentioned above, nor earlier case law, suggest that it is. In particular, such an approach would not be appropriate if it appears to the court that the statement of claim does not disclose any reasonable ground for bringing the claim or is an abuse of the court’s process.

A rule which requires the court to give “such judgment as the claimant is entitled to”, or judgment “in such form as the court considers the claimant to be entitled to”, on the statement of claim leaves open the possibility that the court considers that the claimant is not entitled to any judgment on the statement of claim. The logical implication is that, where this is so, no judgment should be entered. That is also what the overriding objective of dealing with cases justly requires. Suppose, for example, that the only remedy claimed in the statement of claim is an injunction - say to stop a book from being published or to require a building to be demolished - and the court considers that, on the facts alleged, applying the relevant legal principles, it is not appropriate to grant any such injunction. It would not be right in those circumstances, nor compatible with the wording of the rule, for the court to grant a remedy which the court does not consider the claimant to be entitled to on the statement of claim. In such a situation the court should therefore decline to grant default judgment.

The same applies, in the Board’s view, where it appears to the court that the statement of claim is one that ought to be struck out, for example because it is incoherent, does not disclose a legally recognisable claim or is obviously ill-founded. The aim of the default judgment procedure is to provide a speedy, inexpensive and efficient way of dealing with claims which are uncontested and to prevent a defendant from frustrating the grant of a remedy by not responding to a claim. Those objectives, however, do not justify a court in giving judgment on a claim which is manifestly bad or an abuse of the court’s process, even if the defendant has failed to take the requisite procedural steps to defend it. The public interest in the effective administration of justice is not advanced, and on the contrary would be injured, by granting the claimant a remedy to which the court considers that the claimant is not entitled.

It is true, as Briggs J pointed out in the Football Dataco case (see para 45 above), that the need for an application to the court is triggered not by anything connected with the legal foundation of the claim, but by the nature of the relief sought. Where the remedy sought is an award of money only, a default judgment can be obtained automatically by an administrative process without any judicial scrutiny. But it does not follow that, where an application to the court is required, the court should only ever consider what remedy is appropriate given the allegations made and have no regard to whether those allegations have any legitimate basis. The underlying policy reason for requiring the safeguard of judicial scrutiny where a remedy other than money is claimed must be that granting such a remedy potentially involves greater interference with rights and freedoms of the defendant (and perhaps others) than entering a money judgment which the defendant can apply to set aside. If the safeguard is to be meaningful, it should operate as a filter for manifestly ill-founded or improper claims.

In the Football Dataco case Briggs J did not suggest otherwise. The question which concerned him was whether a default judgment should be given when a reference had been made to the Court of Justice of the European Union in another case raising the same legal issue. The fact that the legal basis of the claim was the subject of uncertainty was held not to be a sufficient reason to decline to grant default judgment. The decision was expressly limited, however, to cases “where the particulars of claim disclose a cause of action which is not obviously bad” (para 24). Likewise, in the defamation cases referred to at para 46 above, Warby J made it expressly clear that the general approach which he outlined would not be suitable where, for example, the claim could be seen to be unsustainable.

This is also consistent with how earlier versions of the rule in England and Wales have been interpreted for well over a century. What is now rule 12.12(1) of the English CPR has a pedigree which dates back to the first rules of court made after the Judicature Acts of 1873 and 1875. The Rules of Court of 1875 made specific provision for default judgment in relation to certain claims such as those for a debt or liquidated sum. For all other actions, Order XXIX, rule 10, provided that:

From its inception the rule has been interpreted as giving the court a discretion whether to grant the relief sought or indeed any relief. In Charles v Shepherd [1892] 2 QB 622 the claimant appealed to the Court of Appeal from a decision refusing to enter a final judgment under what had by then become Order XXVII, rule 11 of the Rules of the Supreme Court 1883. In dismissing the appeal, Lord Esher MR said, at pp 623-4:

The same view was taken in more modern times by the Court of Appeal in Phonographic Performance Ltd v Maitra [1998] 1 WLR 870. In that case the claimant applied in default of defence for a permanent injunction to restrain breaches of copyright in certain sound recordings. The defendants did not appear at the hearing but the judge granted an injunction limited to six months only, taking the view that to grant an injunction of unlimited duration would, in the circumstances, be an abuse of process. The Court of Appeal disagreed with the judge on that point and allowed the claimant’s appeal. Lord Woolf MR, giving the judgment of the court, nevertheless (at p 876E) endorsed the judge’s view that the court had a discretion to refuse to grant an injunction or to grant it on such terms and conditions as are just. (The Board notes in passing that it was not suggested - and, so far as the Board is aware, has never been suggested - that the Court of Appeal of England and Wales lacked jurisdiction to hear the appeal as it was not from a “judgment or order of the High Court” within the meaning of section 16(1) of the Senior Courts Act 1981.)

Rule 12.10(4) of the Rules has clearly been modelled on the corresponding English rule. It is therefore reasonable to infer that it was intended to have the same established legal meaning. As discussed, the rule has consistently been interpreted as affording the court a discretion to decline to grant any default judgment if the court considers that it would be unjust to do so. Even if the defendant has done nothing to show that it has a defence to the claim, it would be wrong to enter judgment on the statement of claim if it appears to the court that the statement of claim is one that ought to be struck out.

As already observed, this case differs from the authorities so far discussed in that Mr Yida’s application for a default judgment was actively opposed by Lux which, by the time of the hearing, had (i) filed a defence and (ii) applied for an extension of time for doing so. Two issues arise. The first is whether in such circumstances the court should proceed to hear the claimant’s application at all. The second is whether, if it should, the court in dealing with the application should take into account the pleaded defence or any evidence filed by the defendant to show that it has a good defence to the claim.

On a plain reading of rule 12.5, it might be thought that the time at which all the conditions set out in that rule must be satisfied is when judgment is entered. That interpretation also fits naturally with the terms of rule 13.2(1), which states:

Another possible interpretation is that the condition in rule 12.5(c)(i) that the defendant has not filed a defence should be construed as referring to a timely defence, so that filing a defence late will not prevent the entry of a default judgment unless the defendant obtains an extension of time until the date when the defence was filed.

There are also two intermediate possibilities. One is that the time when the conditions in rule 12.5 must be satisfied is when the claimant makes a request to the court office to enter judgment. A variant of this approach would be, where the claim is for “some other remedy,” to treat the critical time as the time when an application under rule 12.10(5) is made.

In England and Wales where, until recently, the corresponding rules were similarly ambiguous, there were conflicting authorities on this question, all at first instance. Some took the reference to a defence to mean a timely defence: see eg Coll v Tattum (2002) 99(3) LSG 26. At least one case took the critical date in circumstances where an application to the court is required to be the date of the application: Taylor v Giovani Developers Ltd [2015] EWHC 328 (Comm), para 37. Other decisions favoured the view that the filing of a defence, however late, precluded the entry of default judgment: see eg CunicoMarketing FZE v Daskalakis [2018] EWHC 3382 (Comm), [2019] 1 WLR 2881; Smith v Berrymans Lace Mawer Service Co [2019] EWHC 1904 (QB). On 6 April 2020, CPR 12.3 was amended so as to give legislative effect to the latter interpretation by providing that judgment in default of defence may be obtained only where a defence has not been filed (and the relevant period for doing so has expired) “at the date on which judgment is entered.”

In the Eastern Caribbean, where no such change to the Rules has been made, the leading case is Rolle v Lander, cited by the Court of Appeal and by the judge in the present case. The claim there was for a specified sum of money. A defence was filed after the time for doing so had expired and after the claimant had made a request for judgment but before judgment in default was entered (following a hearing before a master). On an appeal to the Court of Appeal (there being no suggestion that the Court of Appeal lacked jurisdiction to hear the appeal) the defendant argued that judgment had been wrongly entered because by the time the judgment was entered a defence had been filed so that condition 12.5(c) was not satisfied. The defendant’s counsel cited Attorney General v Matthews [2011] UKPC 38, para 16, where the Board pointed out that:

The Court of Appeal dismissed the appeal, holding that the critical question was whether a defence had been filed before the request for judgment was made and that nothing said in Attorney General v Matthews was inconsistent with that interpretation. As no defence had been filed at that time, the subsequent filing of a defence could not avail the defendant.

Counsel for Lux have not sought to argue that Rolle v Lander was wrongly decided and the Board proceeds on the basis that the conditions in rule 12.5(b) and (c)(i) are satisfied if a defence has not been filed and the period for filing a defence has expired at the time when the claimant’s request or application for judgment is made. (It is unnecessary in this case to choose between these alternatives.) It does not automatically follow, however, as the judge and the Court of Appeal in this case seem to have assumed, that if where an application to the court is required under rule 12.10(4) and (5) the defendant files a defence after the application has been issued and applies for an extension of time for doing so, the court should ignore the defence and the cross-application. All that was decided in Rolle v Lander was that the late filing of a defence, between the date of a request for default judgment and the date on which the court considers the request, does not by itself disentitle the claimant from obtaining default judgment. There was in that case no application made for an extension of time for filing the defence. The Court of Appeal did not decide that, where such an application is made after the claimant has filed a request or application for judgment, the court may not consider it.

Rule 13.3(1) gives the court power to set aside a default judgment which has been properly entered under Part 12 only if the defendant –

If at the hearing of an application for the court to determine the terms of a default judgment under rule 12.10(4) it can be seen on the material before the court that the conditions in rule 13.3(1)(b) and (c) are satisfied, it is a waste of resources, and in the Board’s view wrong in principle, for the court to enter a judgment which proper grounds have already been shown for setting aside. The just and expedient course in such a case is to exercise the court’s discretion to decline to enter judgment in the first place.

This is also how historically the matter has been approached. In Gibbings v Strong (1884) 26 Ch D 66 a defence was delivered late but before the hearing of a motion for judgment under Order XXIX, rule 10 (quoted at para 53 above). The judge refused to look at the defence and gave judgment for the relief claimed in the statement of claim. The Court of Appeal held that this was a wrong approach. The Earl of Selborne LC said, at p 69, that:

Gibbings v Strong was cited with approval and a similar approach adopted in Wallersteiner v Moir (No 1) [1974] 1 WLR 991. The applicable English rule was then RSC Order 19, rule 7(1), which provided that “on the hearing of the application the court shall give such judgment as the plaintiff appears entitled to on his statement of claim.” The judge had given judgment on such an application for declarations that Dr Wallersteiner had been guilty of fraud, misfeasance and breach of trust. The application was opposed by Dr Wallersteiner who also appeared in the Court of Appeal arguing that he had a good defence to the claim against him. In relation to the claim for declarations, the Court of Appeal was persuaded that, particularly given the nature of the relief sought and the irremediable damage that a judgment declaring him to be guilty of fraud would do to Dr Wallersteiner’s reputation, such a judgment should not be given against him on the pleading. Lord Denning MR, after quoting the wording of the rule, said, at p 1007B-C:

The test under the Eastern Caribbean Civil Procedure Rules for setting aside a judgment in default differs from that under the English CPR in one significant respect. Rule 13.3(1)(b) makes it a condition for setting aside a judgment which has been properly entered under Part 12 for failure to defend that the defendant gives a good explanation for the failure to file a defence. (There is no equivalent provision in the English CPR.) Where at the hearing of an application under rule 12.10(4) and (5) the court considers that such an explanation has been given and that the defendant has a real prospect of successfully defending the claim, the court should, for the reasons given, decline to enter judgment and grant an appropriate extension of time for filing a defence.

It is a further question, not explored in argument on this appeal, whether if an application for an extension of time for filing the defence is made before judgment has been entered, but only after an application for a default judgment has been made, the court has a broader discretion to grant an extension of time even without a good explanation for the failure to file a defence. On the one hand, it can be said that, as no judgment has yet been entered, the conditions which must be satisfied on an application to set aside a default judgment do not apply. Moreover, if an extension of time is granted, the conditions for entering a default judgment will (retrospectively) cease to have been met. On the other hand, the logic of treating the critical time as the time at which a request or application for judgment is made is that a claimant should not be disadvantaged or a defendant advantaged by the adventitious factor of how long it takes before the request is considered or an application heard. This logic might suggest that the court should not treat a defendant as better off by reason of any development which occurs after the request or application is made. On this approach, the court should only grant an application to extend time for filing a defence made after the claimant has applied for a default judgment under rule 12.10(4) and (5) to which it was entitled when the application was made if the grounds would justify setting such a judgment aside.

Although the Board does not think it necessary to decide the question, there is force in the latter view. It may also, however, be noted that, even after a default judgment has been entered, the requirement to give a good explanation for the failure to file a defence is not inflexible. Under rule 13.3(2) the court retains a broad discretion to set aside a default judgment if satisfied that there are exceptional circumstances. The same must, at the least, apply where an application to extend time for filing a defence is made before a default judgment has been entered.

Before proceeding further, it may be useful to summarise the Board’s key conclusions on the proper approach to an application for default judgment where the claim is for some other remedy. In summary:

Applying these principles to the procedure followed in the present case leads to the following conclusions:

Where the Board concludes - as it has here - that the Court of Appeal wrongly acceded to a preliminary objection with the result that it failed to determine the merits of the appeal, the Board will often think it right to remit the case to the Court of Appeal to make such a determination: see eg Manderson-Jones v Société Internationale de Télécommunications Aéronautiques [1998] 1 WLR 1486. Reasons for ordinarily following this course include the fact that it is normally appropriate that the courts of the jurisdiction concerned should address issues before the Board does so and that any decision of the Board will be better informed if the Board has the benefit of the reasoning of both lower courts. In this case, however, the Board considers that it should, exceptionally, exercise the power that it undoubtedly has to deal with matter itself rather than remit it: cf Stubbs v Gonzales (Practice Note) [2005] UKPC 22, [2005] 1 WLR 2730.

The Board’s reasons for adopting this course are a combination of three factors. First, remitting the appeal would inevitably cause significant further cost and delay in what has already been a protracted proceeding. Although the Court of Appeal heard argument on the merits of the appeal on 1 October 2020, so much time has now passed since then (added to which one of the members of the court has since retired) that it would in practice be necessary for the case to be reargued if it were remitted. Second, the merits of the appeal have been fully argued before the Board and the Board is able to decide the outstanding issues now without the need for any further hearing. Third, the Board considers that, having identified the approach which the judge ought to have followed, the remaining issues do not raise any point of difficulty. In these circumstances it is convenient for the Board to decide the remaining issues and achieve much needed finality.

The Board has held that the judge and the Court of Appeal ought to have considered Lux’s application for an extension of time for filing a defence. Had they done so, the Board thinks it clear that the proper course would have been to grant the extension sought. Although Lux’s former attorneys were mistaken in believing that the service of the claim form and statement of claim at their office on 23 November 2018 was invalid and therefore in returning the documents, that mistake, while plainly not an excuse, is a good explanation for Lux’s failure to acknowledge service and file a defence at that time. After the documents were served again on 4 February 2019, Lux acted with reasonable promptness, taking account of matters explained in the affidavit of Mr Dyson sworn on 8 March 2019 including the retainer of a new firm of attorneys on 27 February 2019. The defence filed on 7 March 2019 clearly demonstrated that Lux had a real prospect of successfully defending the claim. Even if, therefore, judgment in default had already been entered, the material before the court at the hearing of the application under rule 12.10(4) and (5) would have justified setting the judgment aside. In these circumstances the court ought not to have entered judgment and should instead have extended the time for filing the defence to 7 March 2019.

There is another, separate reason why in the Board’s opinion the judge was wrong to grant a default judgment. This is that she accepted the statement of claim as valid and thought that it ought not to be struck out. Having considered the allegations made in the statement of claim against the background of the previous history of the litigation, the Board is satisfied that the statement of claim is an abuse of the process of the court on which Mr Yida is therefore not entitled to a judgment.

In the statement of claim Mr Yida admits that at the commencement of the trial of the first action on 7 March 2017 he signed the consent order, as did his lawyer, settling the action and consenting to judgment for Lux in the sum of US$ 3m plus interest and costs. His claim to have the consent order set aside is based on two purported legal grounds. The first (although the phrase is not used in the statement of claim) is the legal doctrine known as non est factum (“it is not my deed”). The second is that Mr Yida’s lawyer allegedly had no authority to settle the action or sign the consent order on his behalf. The Board will consider these grounds in turn.

It a basic rule of the common law that a person who signs a contractual document is bound by its terms whether he or she has read or understood the document or not. That is so even if the person concerned is a foreigner who cannot read English: The Luna [1920] P 22. The justification for the rule is the fundamental importance for the orderly conduct of business of being able to treat a person’s signature as proof of their consent without having to inquire into the person’s state of mind or other circumstances at the time when the document was signed.

The doctrine of non est factum affords a very limited exception to this rule. Under this doctrine, as established by the decision of the House of Lords in Saunders v Anglia Building Society (sub nom Gallie v Lee) [1971] AC 1004, a person is not bound by his or her signature of a contractual document if (a) the person mistakenly signed the document, (b) the document was fundamentally different from what that person thought it to be, and (c) the person took “all reasonable precautions in the circumstances” to understand the nature of the document before signing it. Mr Yida asserts that this doctrine applies in the present case such that he is not bound by his signature of the consent order.

The factual allegations pleaded in the statement of claim on which Mr Yida relies for this purpose are: that he speaks no English and does not understand English; that he signed a document which he believed to be a release document involving Mr Johann Hesse in respect of part of Lux’s claim for commission when in fact it was a consent order consenting to judgment in favour of Lux in the sum of US$ 3 million plus interest and costs; that Mr Yida’s translator never explained to him that the document he was signing was a consent order settling both Lux’s claim and his counterclaim in the first action; and that he signed the consent order in “a total misapprehension and misunderstanding of what he was signing and agreeing to.”

Although there is no specific plea that Mr Yida took reasonable precautions to ensure that he understood what he was signing, the Board would not be prepared to treat the statement of claim as invalid merely on that account. The Board is content to accept that the allegations pleaded in the statement of claim, if taken purely at face value, at least arguably support a plea of non est factum.

There are, however, cases where, exceptionally, allegations pleaded in a statement of case need not be taken at face value even at the stage of considering whether the claim is one that the defendant should be called on to answer. These include cases where the statement of case makes factual allegations which are so incredible that they cannot possibly be true. In judging whether a case falls into this category, the court is not confined merely to looking at the statement of case itself but is entitled to take account of other matters, including the history of the proceedings and the degree of implausibility of the allegations. Allegations will not be struck out if the court considers that there is any realistic possibility that, after investigation through the ordinary process of litigation, they might be proved at a trial to be true. It is, however, an abuse of the court’s process to require a defendant to answer, or the court to deal with, allegations which the court is satisfied are manifestly ill-founded and incapable of proof.

An example of such a case is Lawrance v Lord Norreys (1890) 15 App Cas 210, where the House of Lords affirmed the decision of the Court of Appeal to strike out the statement of claim and dismiss the action as an abuse of process on the ground that “the story told in the pleadings is a myth, which … has no substantial foundation” (p 220, per Lord Herschell). Lord Watson, concurring, said, at p 222, that it was “legitimate to examine not only the pleadings in this suit, but the whole probabilities of the case, and the judicial history of the claim.” His conclusion, having done so, was that “the statement of claim presents to my mind a tissue of improbabilities which ought not to be sent to proof.”

In the Board’s opinion, the same can be said of Mr Yida’s allegation that he signed the consent order settling the first action without understanding what he was signing. The judge took the view that, even though this allegation might be regarded as implausible, it raises an issue of fact which could only be resolved by evidence given at trial. The Board considers this to be too charitable a conclusion. When viewed against the background of the previous history of the litigation between the parties, the allegation made by Mr Yida is so obviously incapable of proof that it cannot justify using the court’s process. The Board is influenced by the following points:

These are sufficient reasons to conclude that Mr Yida’s claim to have the consent order set aside is an abuse of the court’s process. But they are not the only reasons. There are two more.

Another reason is that, even if Mr Yida’s signature of the consent order was not binding, there would still be no justification for setting the order aside. This is because the consent order was also signed by Mr Yida’s lawyer, Mr Benjamin, on his behalf and it is not alleged that Mr Benjamin did not know what he was signing. One valid signature is enough.

The statement of claim alleges that Mr Yida did not give any instructions to his attorney to compromise or settle the action and that his attorney had no authority from Mr Yida (“though he may have thought that he had such authority in the circumstances”) to sign the consent order on behalf of Mr Yida. The notion that Mr Benjamin agreed terms of settlement purportedly on behalf of Mr Yida and signed the consent order without obtaining Mr Yida’s express authority to do so is as fanciful and incapable of belief as the allegation that Mr Yida himself did not understand what he was signing. Even if it were true, however, this would not enable Mr Yida to avoid legal liability. Leaving aside the question of implied authority which the Board considers open to argument, a lawyer who has been appointed to represent a client in litigation has apparent authority (or, as it is also sometimes called, ostensible authority) to agree terms of settlement of the action on the client’s behalf unless the settlement extends to collateral matters or the lawyer is exceeding an express limitation on his or her authority which is known to the other party to the litigation: see eg Waugh v HB Clifford & Sons Ltd [1982] Ch 374.

It is not alleged that Mr Yida placed any limitation on Mr Benjamin’s authority to agree terms of settlement of the action nor that any such limitation was communicated to Lux. It follows that Mr Yida is on any view bound, as regards Lux, by Mr Benjamin’s agreement and signature of the consent order.

The judge’s reason for not accepting this reasoning was that “there may well be additional information or particulars as they relate to ostensible authority which could have been pleaded. However, their absence does not invalidate the cause of action”: see para 14 of her judgment. The Board is unable to envisage, however, what such additional particulars might be, and none have been suggested on Mr Yida’s behalf. To displace the ostensible authority deriving from his appointment of Mr Benjamin to act as his attorney, Mr Yida would have to show that he had instructed Mr Benjamin not to settle the action on the terms embodied in the consent order and that Lux was aware of this. Any such suggestion would need to be pleaded and would be inconsistent with the averment that Mr Benjamin “may have thought that he had such authority” (ie to sign the consent order on behalf of Mr Yida). It would in any case be incapable of belief.

Counsel for Mr Yida submitted that the court has a discretion to set aside a consent order agreed by a lawyer without actual authority, even if the lawyer had apparent authority to compromise the action on the client’s behalf. Reliance was placed on Neale v Gordon Lennox [1902] AC 465. In Neale v Gordon Lennox, however, the facts were that counsel agreed terms of settlement contrary to the client’s express instructions and the lack of consent of the client was brought to the court’s attention before the order was drawn up. That on any view of the matter did not happen here. The position is different where a compromise has been embodied in an order of the court which has been perfected before any limitation on counsel’s authority is known to the other party or the court. It is well settled law that in such a case the court will not interfere after perfection of the order: see eg Marsden v Marsden [1972] Fam 280. This is consistent with the general law that the court has a limited discretion to reconsider an order before, but not after, the order has been sealed: see eg AIC Ltd v Federal Airports Authority of Nigeria [2022] UKSC 16, [2022] 1 WLR 3223.

The distinction between the two lines of cases was clearly explained by Bankes LJ in Shepherd v Robinson [1919] 1 KB 474, 477-478. Although it is true, as counsel for Mr Yida pointed out, that in Neale v Gordon Lennox the order had been drawn up before it was set aside, this came about (as Lord Lindley explained at p 473) only because the plaintiff drew up the order solely for the purpose of applying to have it set aside. On these special facts the drawing up of the order was held not to constitute a bar. But it is clear that the court has no discretion to set aside a consent order where, as in the present case, the order has been perfected before any doubt is cast on the authority of counsel to agree the terms of the order.

It was also suggested in argument that Mr Benjamin did not (contrary to what appears to be accepted in the statement of claim) sign the consent order purportedly on behalf of Mr Yida, but only signed it in addition to Mr Yida because rule 42.7(1)(c) of the Rules requires a consent order to be “signed by the legal practitioner acting for each party to whom the order relates.” This is a hopeless contention. The obvious purpose of requiring a consent order to be signed by each party’s legal representative is to ensure that the terms of the order are agreed by both parties. That purpose is only achieved if the legal representative does indeed sign on the client’s behalf. For Mr Benjamin to sign the consent order when it was also signed by Mr Yida may or may not have been a legal requirement. But it was certainly a wise precaution, as Mr Yida’s subsequent denial that he agreed to the terms of the order has shown.

There is a further reason why the claim pleaded in the statement of claim is an abuse of the process of the court. If Mr Yida wished to allege that he was not bound by the consent order, he could and should have done so in the second action which he brought in July 2017, not least because claims made in that action relating to the agency agreement and Lux’s claim for commission were only capable of succeeding if the consent order could be impugned. On Mr Yida’s own case he was aware when the second action was brought that he had signed the consent order in error. Yet no reason has been given for the failure to challenge the consent order in that action and for seeking to do so instead in a fresh action, brought after the claim in the second action had been struck out.

The judge suggested that it was possible for there to be a legitimate reason for a claimant to opt to file a separate claim to set aside the consent order and on this basis concluded that Mr Yida “ought not to be fixed with an abuse of the process of the court without further evidence of such abuse”: see para 23(4) of the judgment. It cannot be enough, however, to raise the abstract possibility of a legitimate reason to bring a separate claim when there is no indication of what that reason is or might be. In this case the point is in a sense artificial, as it is plain that the reason why Mr Yida did not include a claim to set aside the consent order in the second action was that he had no basis for making such a claim and had not yet fabricated the allegation that he had not understood what he was signing. This leaves him, however, with an inescapable dilemma. The Board agrees with the submission made by counsel for Lux that, if the allegations made in the statement of claim in this action were indeed true, this would be a textbook example of an abuse of process, applying the principles set out in Johnson v Gore Wood & Co [2002] 2 AC 1.

The judge recognised correctly that, in order to decide what judgment Mr Yida was entitled to on the statement of claim, it was necessary to consider Lux’s argument that the statement of claim should be struck out because it did not disclose any reasonable ground for bringing the claim and/or was an abuse of the process of the court. For the reasons given, however, the judge ought to have concluded that the statement of claim is an abuse of the court’s process. It follows, first, that Mr Yida was not entitled to any default judgment on the statement of claim under rule 12.10(4) and, second, that the statement of claim should be struck out.

The Board adds, for completeness, that it cannot be said that the judge improperly exercised her discretion in declining to admit the affidavit of Mr Benjamin in evidence after the hearing had been completed and while judgment was reserved. But that evidence was not necessary to show that the pleaded claim was groundless.

The Board will humbly advise His Majesty that the appeal should be allowed, the orders of the High Court and the Court of Appeal set aside, the statement of claim struck out and the action dismissed.