Application to set aside a default judgment is an application for relief from sanction (Scenic International Group Ltd (in provisional liquidation) v Adenaike)
Restructuring & Insolvency analysis: This was an application to set aside default judgments entered for different amounts against the first, fourth, fifth and sixth defendants. The judgments related to claims based on the fraudulent evasion of VAT and Pay As You Earn/National Insurance Contribution (PAYE/NIC) by a company during the period 2017 to 2023. The VAT assessments which the claim was based on could not be challenged as the company had not filed any VAT returns. Applying FXF v English Karate Federation Ltd, an application to set aside a default judgment under CPR 13.3 is an application for relief from sanction to which CPR 3.9 also applies. Therefore, the right approach to deciding these applications is to apply Denton and others v TH White Ltd and another once the two specific matters in CPR 13.3 have been considered. Accordingly, the court held that the applicants had no real prospect of defending the claim and dismissed the application. Written by Andrew Mace, barrister, Tanfield Chambers.