DEFAULT JUDGMENT ON COUNTERCLAIM NOT SET ASIDE – AN OBJECT LESSON IN STAYING AWAKE IN LITIGATION

June 30, 2016 · by · in Civil Procedure, Default judgment,, Relief from sanctions, Uncategorized, Witness statements

The decision of Master Matthews today in Goldcrest Distribution Ltd -v- McCole [2016] EWHC 1571 (Ch) provides an object lesson in the need to stay awake to procedural issues throughout litigation. The claimant had a default judgment on a counterclaim entered against them.   The judge refused to set it aside. Consequently the whole of the claimant’s case became unsustainable. There are a number of important aspects of this case (i) It is extraordinary that the claimant did not file a defence for six months and then did nothing in the face of an application for judgment in default; (ii) the Master found that the claimant may  have an arguable defence to the counterclaim, however the judgment was not set aside because of the Denton principles.

“It is ordinarily not right to serve an application notice for such an important order as this with some evidence in support at the time, and then, several weeks later, have a second bite at the cherry with an additional witness statement. And in my judgment a party is not excepted from this merely because he or she has just changed lawyers. If a party loses faith in its lawyers, it must seek alternatives without delay.”

“Every trainee solicitor in a litigation seat knows that if you turn up at the hearing with a draft of what you are supposed to have already filed you are in a much stronger position than if you do not. A more deliberate, risk-taking approach I find it therefore difficult to imagine. The rules on statements of case and when they are to be served are there for a good reason”

KEY POINTS

  • The court refused to set aside judgment on a counterclaim entered by the second defendant.
  • Although the claimant had an arguable case in relation to the points made in the counterclaim the court refused the application on consideration of the Denton criteria.
  • Judgment on the counterclaim was decisive of the issues between the parties and the court was entitled to dismiss the claimant’s action against the second defendant.
  • It is bad practice to make an application and then serve evidence in support several weeks later. This did not comply with the rules and  had an effect of the court’s consideration of whether the application was made “promptly”.
  • A party seeking to impute blame for procedural errors to their previous legal advisers was probably best advised to waive privilege on communications rather than attempt to hide behind a cloak of privilege.

THE CASE

The claimant brought an action for possession of residential property based on moneys due under a guarantee. The Second Defendant filed a defence and counterclaim. The defence argued that:

  • The charge was a regulated mortgage contract and was unenforceable because the claimant was not licensed by the Financial Conduct Authority.
  • The charge was void under the Insolvency Act as a disposition.
  • The property was subject to a trust.
  • The charge was induced by the undue influence of the first defendant on the second defendant and the claimant had notice of this.

THE COUNTERCLAIM

There was a brief counterclaim

“30. The defence herein is repeated.
31. By reason of the foregoing, the Transaction [ie the grant by the First and Second Defendants of the Charge] is unenforceable as a regulated mortgage contract and further or alternatively the Charge is void as a disposition after presentation of bankruptcy petition or voidable by reason of undue influence. As such, the Second Defendant seeks declaratory relief to that effect as appropriate and to set aside the Charge.
32. In the premises, the appointment of LPA receivers by the Claimant on or about 14 January 2015 is of no effect and declaratory relief to that effect is sought.
AND THE SECOND DEFENDANT COUNTERCLAIMS
(i) declaratory relief as aforesaid as to the Transaction being unenforceable, the Charge being void or voidable as the case may be and the appointment of the LPA receivers being ineffective;
(ii) such other relief as the Court deems fit.”

JUDGMENT ON THE COUNTERCLAIM

The way in which judgment came to be entered on the counterclaim is surprising, primarily because of the claimant’s inactivity.

  • No reply and defence to counterclaim was served.
  • The defendant made a specific application for judgment on the counterclaim.
  • The claimant did not respond to this (or file a defence to counterclaim) instead it made an application to amend the particulars of claim.
  • The claimant was represented at the hearing when judgment on the counterclaim was applied for.
  • The second defendant’s application was granted. Judgment was given on the counterclaim; the claimant’s claim as against the second defendant was dismissed; the claimant’s charge on the property was set aside and the charge was declared invalid under the Insolvency Act.

THE CLAIMANT’S APPLICATION

The claimant made an application to set aside the order some two weeks later.

THE APPLICATION TO SET ASIDE ON THE MERITS

  1. CPR rule 13.2 deals with cases where the court must set aside judgment given under CPR Part 12, ie in default. It is common ground that it does not apply here. Rule 13.3 reads as follows:
“(1) In any other case, the court may set aside or vary a judgment entered under Part 12 if –
(a) the Defendant has a real prospect of successfully defending the claim; or
(b) it appears to the court that there is some other good reason why –
(i) the judgment should be set aside or varied; or
(ii) the Defendant should be allowed to defend the claim.
(2) In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly.”
In addition, rule 13.3(4) requires that an application under rule 13.3 must be supported by evidence.
  1. It is clear that the court should deal first with the application to set aside under this rule before considering any question of relief from sanctions:Mitchell at [45]-[45]. It is also clear (and I think common ground) that if there are any triable issues (in the summary judgment sense) then the Claimant (as defendant to counterclaim) has a “real prospect of successfully defending the claim” within rule 13.3(1)(a) in relation to them. As to “some other good reason” (on the footing that the Claimant does not have such a “real prospect”) there was no such agreement between the parties. Two points in particular are raised which may have to be considered under this head. One is whether a declaration ought to be made at all in relation to the Second Defendant’s counterclaim on a default judgment. The other is whether, if the answer is Yes in relation to the counterclaim, the consequence ought nonetheless to be the striking out of the claim itself in relation to the Second Defendant. I will return to these questions later.
  2. Lastly, at the final hearing of the application the question was raised by me as to how far a default judgment of the kind that Deputy Master Rhys was giving in relation to the counterclaim might operate as an estoppel for the purposes of the Claimant’s claim. As neither party had prepared to argue this point, I gave permission for written submissions on it to be made to me serially. I duly received submissions from both the Claimant and the Second Defendant to which I shall refer in due course.
  3. In this application the burden lay on the Claimant to establish the necessary conditions for the order sought. No application was made for cross-examination of any witness whose statement was put in evidence. As to the four heads of defence to the Claimant’s claim put forward by the Second Defendant, the Claimant said this. The first head was that the Charge was a regulated mortgage contract and the Claimant was unlicensed. The Claimant denied that it was a regulated mortgage contract because the person to whom the credit was provided, Ascot, was a corporate rather than an individual borrower. The First Defendant was merely the guarantor. The second head was the s 284 point. The Claimant accepted that this section prevented the First Defendant from mortgaging his own property interests, and therefore the Charge was not effective as a legal charge, but argued that s 284 could not prevent the Second Defendant from charging her own beneficial interest. Third, the Second Defendant said the Property was acquired by the First Defendant and Second Defendant, not as beneficial owners, but as trustees for their daughter. The Claimant accepted there were triable issues in relation to the questions of (i) whether there was a trust at all, (ii) whether the Claimant had notice of the trust, and (iii) the trustees’ powers or authority. Fourth, as to undue influence, the Defendant said that the focus was on actual rather than presumed undue influence. This was denied, and therefore there was a triable issue here as well.
  4. However, I remind myself that, in this application, I am not (so far) considering the Claimant’s claim against the Second Defendant. I am considering the default judgment obtained by the Second Defendant against the Claimant on the counterclaim. The counterclaim was described by Mr Collins QC, somewhat pejoratively I think, as a “mirror” of the defence. The same points were raised by the counterclaim as had already been raised by the defence. Yet it does sometimes happen that the same points in issue, if decided one way, can give raise to a claim, but if decided the other way can both knock out the claim and give rise to a counterclaim. It is particularly likely where what the counterclaim seeks is a declaration,eg of non-liability. I was taken to no authority or rule on this point, but in my judgment there is nothing to require me for the purposes of rule 13.3 to treat a default judgment obtained on a counterclaim in any different way from a default judgment obtained on a claim, merely because the counterclaim is a mirror of the defence.
  5. In the order of 17 February, the court awarded judgment in default to the Second Defendant. It set aside the Charge as against the Second Defendant, and declared that it was void under s 284. The Claimant argued that, in order to satisfy rule 13.3, all that it had to show was a triable issue (a “real prospect of successfully defending”) on a given point in the counterclaim. It was not necessary to show that it would win, even though on the first and second points it argued that its chances of success were much higher than merely triable. I deal with each of the four points in turn.

THE MERITS

The Master considered the claimant’s arguments in detail and came to the conclusion that  “the Claimant has real prospects of success of successfully defending the points raised by the Second Defendant in her counterclaim”.   However this was not the end of the matter.

THE COURT’S DISCRETION AND THE DENTON TEST

Was the application made promptly?

The Master considered whether the application was made promptly. It was made two weeks after the judgment, however the witness evidence in support was served later.

  1. Rule 13.3 and the cases cited enjoin the court to take into account whether the application (which by rule 13.4(3) must be supported by evidence) was made “promptly“. In the present case the Second Defendant argues that the Claimant has not made its application promptly. As to what must be done in making such an application, para 12.6 of the Chancery Guide, February 2016 edition, provides that:
“An application to set aside a default judgment must be filed and served on the claimant and should include a witness statement in support and if possible include a draft defence.”
Here the application notice (containing in box 10 a statement of the grounds of the application) was issued on 3 March 2016, just over two weeks after the order of 17 February, and sent to the Second Defendant’s solicitors that evening. However, no witness statement was provided in support until 22 March 2016, nearly three weeks later. A draft defence to counterclaim was supplied only the day before, on 21 March 2016. Hence, the Second Defendant says, what was served on 3 March was a “bare” application. The “full” application was not served until 22 March 2016, some five weeks after the order concerned. Of course the statement in box 10 of the application notice did supply some evidence in support. It was not a completely bare application.
  1. Nevertheless, there is some force in this criticism. It is ordinarily not right to serve an application notice for such an important order as this with some evidence in support at the time, and then, several weeks later, have a second bite at the cherry with an additional witness statement. And in my judgment a party is not excepted from this merely because he or she has just changed lawyers. If a party loses faith in its lawyers, it must seek alternatives without delay. And a bare application could have been made the day after new lawyers were instructed. A full witness statement might take a few days, say up to a week, longer. Here the Claimant took over a week after the hearing to decide to contact another law firm. It was instructed on the next business day, but it was another three business days before the bare application was issued. Then it took nearly three weeks to produce a (not very long) witness statement. In my judgment, although the case is nearer the borderline than in the Gentry case, taking all the events together, the Claimant did not apply promptly within rule 13.3(2). That is not fatal to the application. But it is an important matter to take into account.

Denton first stage: the seriousness of the breach

The Master found that this was a serious breach.

  1. Looking then at the Denton tests, I deal first with the question of the seriousness of the failure. Here the Claimant did not file a defence to counterclaim for some six months, from August 2015 to February 2016, notwithstanding, first of all, being chased in correspondence for it and, secondly, an application notice being issued for default judgment in respect of it. I have to say I am astonished that, with all that time available, the Claimant did not even trouble to produce a draft defence to counterclaim by the time of the February hearing (three months after the application notice was issued). Every trainee solicitor in a litigation seat knows that if you turn up at the hearing with a draft of what you are supposed to have already filed you are in a much stronger position than if you do not. A more deliberate, risk-taking approach I find it therefore difficult to imagine. The rules on statements of case and when they are to be served are there for a good reason. The Claimant’s failure meant that the Second Defendant did not know what was in issue and what not. The litigation could not progress. In my judgment, this is a serious failure.

Denton second stage: was there a good reason for the failure

The Master was somewhat scathing of the quality of the evidence put in support. There was no evidence which supported a good reason.

  1. Secondly, there is the question whether there is a good reason for the failure. The evidence of Mr McGuire for the Claimant is unsatisfactory on a number of grounds. First, it is short, running to 14 paragraphs over two substantive pages of A4. Second, it is bald, giving very little detail. Third, there is an inconsistency between what the Claimant says now and what it said back in February. Back in February it said that the delay in preparing a defence to counterclaim was that the Claimant considered that it would make more sense on costs efficiency grounds for the Second Defendant to amend her defence (to take account of proposed amendments to the Particulars of claim) before the Claimant filed and served a reply and defence to counterclaim. Now Mr McGuire does not mention any of that, but simply blames the lawyers for not telling him what was happening. Fourth, in the 14 paragraphs there are no fewer than four statements to the effect “without waiving any privilege”. Mr McGuire (no doubt on advice, for he is not a lawyer, but a salesman) seems to believe that if he uses those words he can say what he likes about the communications between himself (or the Claimant) and the law firm formerly instructed, without running the risk of inadvertently waiving legal privilege for those communications. But, whilst the intention not to waive privilege is significant, it cannot prevent waiver where the party seeks to rely on privileged communications and fairness demands that the whole of those communications be opened up so as to prevent cherry-picking.
  2. At all events, Mr McGuire explains in his witness statement that he was given responsibility on behalf of the Claimant to deal with this claim, and accordingly dealt with the former lawyers. In essence he blames them for not informing him (and through him the Claimant) that a defence to counterclaim had to be served within a certain time, that this had expired and the Claimant was vulnerable to a default judgment, or that the Second Defendant had applied for that default judgment. He also blames them for not telling him that the hearing of that application was fixed for 17 February 2016 (though he was told that the hearing that day would be for directions). He says that had he known these things, he would have instructed the lawyers to serve a defence to counterclaim. Apart from the bald statements of the substances of the communications, there is no additional detail given. Nothing is said as to when, where, how and with whom these communications occurred, and no letters, emails or attendance notes are exhibited in support. It is profoundly unsatisfactory. It is also, as I say, not the explanation given by counsel then acting for the Claimant at the hearing on 17 February.
  3. As already stated, the burden here lies on the Claimant. Just as in Devon & Cornwall Autistic Community Trust (trading as Spectrum) v Cornwall Council [2015] EWHC 129 (QB), simply relying on alleged failures by legal representatives may not be a sufficient explanation. In this case, since the Claimant blamed its lawyers for what had happened, it should have waived privilege and enabled a full explanation to be given by the lawyers of their criticised conduct. But it did not do so. The result is that I do not know what the lawyers would say. They may say they told Mr McGuire, or someone else at the Claimant. They may say that they did not tell Mr McGuire for some other reason. Or there may be some other explanation. The point I that I just do not know. And it is entirely within the control of the Claimant as to whether I am told or not. Accordingly, in my judgment the Claimant has not discharged the burden of properly explaining the reason for the failure

Denton third stage: all the circumstances of the case

  1. I therefore turn to the third stage in the process. This is to assess all the relevant circumstances, including factors (a) and (b) in rule 3.9(1), although here promptness will also play a role. The Claimant failed, for reasons essentially still unexplained to the court, to file and serve a defence to counterclaim, even in draft form, for six months leading up to a well-heralded application for judgment in default of defence. Founding on a number of issues which I have found to be triable (in the sense that the Claimant enjoys a prospect of success which is not unreal or illusory, and in some respects is rather better than that), the Claimant then made an application to set aside which I have found not to be prompt. The Claimant has shown a cavalier disregard for the procedural rules in relation to the defence to counterclaim.
  2. It appears also from a letter from the Third Defendant’s solicitors to the Second Defendant’s solicitors dated 10 December 2015, and from paragraph 15 of the Claimant’s skeleton argument dated 13 December 2015, that the Claimant knew of the bankruptcy petition against the First Defendant at the date of the Charge, but nevertheless proceeded with the transaction, and so in one sense can be regarded as to that extent the author of its own misfortune. In addition, the Claimant must have become aware of the s 284 point at least by the time that the Second Defendant had filed and served her defence and counterclaim on 27 July 2015. Yet it made no proposal to amend its case to deal with this until December 2015. On the face of what Mr McGuire says in his witness statement, it would appear that the Claimant may have a claim against its former lawyers. If that is so, then the Claimant will not be entirely without remedy if it suffers any loss by virtue of the default judgment.
  3. I give specific consideration to the two factors set out in rule 3.9(1). Factor (a) is the need for litigation to be conducted efficiently and at proportionate cost. In my judgment it is not so conducted if, as here, a party ignores the rules and delays in proposing changes to its case to reflect the reality of the situation. Factor (b) is the need to ensure compliance with rules, practice directions and orders. Here the Claimant has simply ignored the rule requiring a defence to counterclaim to be filed and served. Although it is not a test, it seems to me that the failures here are rather worse than in Gentry or in Devon & Cornwall Autistic Community Trust, in both of which relief against sanctions was refused. Taking into account all these matters, I conclude that it is not a case in which in the exercise of my discretion I should give relief. The judgment in default in relation to the counterclaim therefore stands.
  4. Because I have taken into account the Denton/Mitchell criteria in reaching a conclusion on the application under rule 13.3, there is no justification for my considering separately whether to give relief from sanctions. The sanction was imposed on 17 February. Under rule 13.3 I have been considering whether to relieve from it. There is no sense in doing the exercise again.

THE EFFECT OF THE JUDGMENT ON THE COUNTERCLAIM ON THE CLAIM

The Master then considered the arguments that the counterclaim was not definitive of the issues between the parties. He held that it was.
  1. However, I must now go on to consider what effect the default judgment has on the Claimant’s claim. The primary focus is on the question of res judicata. As mentioned above, since the parties had not come to the hearing prepared to argue this, I adjourned to permit written submissions to be made. I am grateful to both counsel for their contributions, which I have found very helpful.
  2. [The Master then considered the case law in detail]
  1. In the present case the position is obviously factually different from any of these decisions. The default judgment here is not obtained in relation to a different contract, or to a contract which forms part only of the alleged complete transaction. Instead it is obtained in relation to a counterclaim which mirrors the defence, and in essence seeks declarations of non-liability in respect of the Claimant’s claims and relief from the transaction which is alleged to give rise to such liability. Unlike the Pugh case, where the default judgment was in respect of the same contract, we have the benefit of the Deputy Master’s judgment.
  2. The Claimant argues (in summary) two main points. The first is that the default judgment only gives rise to an estoppel in relation to the legalcharge which the charge of 2 July 2014 was designed to create. Hence it cannot bar any claim founded on an equitable charge, even arising out of the same transaction. But, secondly, even if there was no equitable charge, the Second Defendant was not entitled to default judgment on the Claimant’s claim, for two separate reasons. One is that the Second Defendant did not seek dismissal of the Claimant’s claim in her counterclaim. The other is that there is no power in the rules to give default judgment against the Claimant on its claim.
  3. On the other hand the Second Defendant argues (in summary) that the default judgment justifies dismissal of the Claimant’s claim because both claims required the determination of the same issues. However, at the same time the Second Defendant appears to accept that the Claimant couldbring a claim on an equitable charge, because “the existence of such was not an issue on the pleadings, and therefore not res judicata“. At first blush these two propositions seem inconsistent. However, for the reasons which I give below in relation to the Claimant’s arguments, I do not think that the second is right.
  4. The Claimant’s primary point is that the counterclaim sought declaratory relief in relation to the “Transaction”, defined as “the First and Second Defendants’ purported granting of the Charge over the Property…”, and “the Charge” was defined as “the legal charge dated 2 July 2014”. The Claimant founds on the words “legal charge”. It says that the claim to set aside the Charge was limited to a claim to set aside the “legal charge”, meaning a charge of the legal estate in the land having effect at law, and not any charge that might arise in equity. Hence the default judgment could only be in relation to such a limited claim. Since (as it argued, and I have held) on these statements of case a claim was also possible, and triable, to an equitable charge in the same land, there could be no estoppel in relation a claim to such an equitable charge.
  5. In my judgment this is a false opposition, derived from a misconstruction of the words used in the defence and counterclaim. The rules of pleading do not require the pleading of legal conclusions, just of facts. The phrase “the legal charge dated 2 July 2014” plainly refers to a concrete document intended to create a legal charge rather than to the abstract transaction which creates such a legal charge (and only such a charge). It refers to the document entered into by the First Defendant and the Second Defendant on that date, which was no doubt considered by the parties (or at least their lawyers) to be in appropriate form to create a charge on the fee simple estate in the land concerned. It is not confined to a document which only creates a legal charge and nothing else.
  6. I can illustrate the point in this way. If A, as the legal and beneficial owner of the fee simple estate in Blackacre on sale executes a deed of conveyance of Blackacre to B, that is not two conveyances, one of the legal estate and one of the equitable interest. It is just one conveyance, of the legal estate, carrying with it the beneficial enjoyment. Now suppose instead that the document executed by A and intended to achieve the conveyance of the legal estate is formally defective (eg no witness), so that it does not qualify as a deed, but that it nevertheless satisfies the requirements of signed writing sufficient for the equitable interest to pass to B. In that case there is a conveyance, by a document purporting to be a conveyance of the legal estate, of the equitable interest to B, with A remaining the owner of the legal estate. Whether the document is a deed or not, either way it operates as a single conveyance: the question is simply what is its effect at law and in equity. In my judgment the present claim was a claim to whatever security could be obtained from “the Transaction”, meaning the document executed on 2 July 2014. The parties may well have thought it was a legal charge, and originally argued the case on that basis, even though it turned out not to be.
  7. The Second Defendant’s counterclaim sought declaratory and other relief in relation to the document constituting “the Transaction”. It alleged that it was unenforceable, or void, or voidable. The Claimant then failed to file a defence to counterclaim. Given the default, the Deputy Master gave a judgment in default in which he set “the Transaction” aside “as against the Second Defendant’s legal and beneficial interests in the Property” and made a declaration that “the Charge” (meaning “The charge dated 2 July 2014”) was void under s 284 of the Insolvency Act 1986. The Second Defendant had claimed that the Transaction had no effect as against her. Consequently, the default judgment given is about the (lack of) effect as against the Second Defendant of the Transaction, ie the document executed as a legal charge on 2 July 2014. The “necessary and precise” determination of the default judgment is that the charge document of 2 July 2014 does not create any valid security in favour of the Claimant which was binding on the Second Defendant.
  8. The Claimant complains of a failure by the Second Defendant to include in her prayer a specific claim to an order setting aside the Transaction. I do not think that this matters, given that in paragraph 31 of the counterclaim there is a clear assertion as to its unenforceability, voidness or voidability, and the prayer includes a claim to “such other relief as the Court deems fit”. The Claimant also says that the words “and beneficial” in para 4 of the order of Deputy Master Rhys should not have been included. On the contrary, in my judgment they express the Court’s decision that the Transaction had no effect whether at law or in equity as against the Second Defendant, or at any rate was being completely set aside as against her. For these reasons, then, I consider that the default judgment operates as an issue estoppel in relation to the entire legal effect of the Transaction as against the Second Defendant, and that the Claimant cannot be allowed to continue its claim in respect of that Transaction as against her. Hence paragraph 2 of the Deputy Master’s order is in my judgment correct, and must stand.
  9. If I were wrong, and it was right that the Claimant was claiming all along on the basis of having a legal charge alone, and not on the wider basis of having simply a charge (of whatever sort it turned out to be), and therefore the Second Defendant in her counterclaim was only defending and counterclaiming in relation to that claim, then the matter would be different. On the face of it, it would follow that the default judgment was similarly limited, and there could be no issue estoppel against the Claimant in relation to the claim so far as based on an equitable charge. But in that case the claimant would first of all need to amend his claim, to plead the equitable or other charge. This would require permission. Secondly, there would be at least a question as to the applicability of the well-known rule in Henderson v Henderson (1843) 3 Hare 100, as explained in Johnson v Gore Wood & Co [2002] 2 AC 1, that a party must bring forward the whole of his claim on one occasion, and not seek to litigate it in successive parts. But none of this was explored before me, and it is not relevant in view of my holdings. Therefore I should and do say nothing about it now.
  10. The Claimant argues, secondly, that even if there was no equitable charge, the Second Defendant was not entitled to default judgment on the Claimant’s claim, for two quite separate reasons. The first of these is that the Second Defendant did not seek dismissal of the Claimant’s claim in her counterclaim. This is quite true. But it is also irrelevant. It is unnecessary for a defendant to seek dismissal of a claim at all, in the counterclaim or otherwise. If the defence is made good, the dismissal of the claim follows as of course. The counterclaim seeks relief based on an independent cause of action which may or may not impeach the title of the Claimant to obtain relief on its claim (and if so may constitute a true defence justifying dismissal of the claim rather than merely – at best – an equitable set-off). But whether the counterclaim sought the dismissal of the claim is irrelevant in considering whether the dismissal of the claim was justified by any issue estoppel created by the default judgment. That is a quite different question.
  11. The second reason given by the Claimant for denying the default judgment is that there is no power in the rules to give default judgment against the Claimant on its claim. I accept the premise. The CPR do not give the power to the court to award default judgment on a claim because there is a default on a counterclaim. But the conclusion is wrong. I do not say that the Second Defendant is entitled to judgment on the Claimant’s claim against her because of some rule that a default on a counterclaim entitles the innocent party to a judgment on the claim. I say that she is entitled to it because the issue estoppel arising from the default judgment on the counterclaim, properly and narrowly analysed, means that the Claimant is unable to pursue its original claim against her. That results from the law of res judicata, not the statutory rules of procedure.
Conclusion
  1. For the reasons given, this application fails and must be dismissed.

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