Wrongfully entering judgment has consequences
The recently reported case of Total Extraction Ltd v Aircentric Ltd highlights that the courts will not tolerate any abuse of its procedures.
In that case Total Extraction issued a claim through the Court’s Money Claim Online (MCOL) system for an alleged debt owed by Aircentric. Before the time for Aircentric to acknowledge the claim had expired, Total Extraction applied for and obtained judgment on a purported admission by Aircentric that it owed all the monies claimed. In fact, there had been no admission by Aircentric who continued to contest the claim. Aircentric only discovered the position when it tried to file its Acknowledgment of Service.
Subsequently, Aircentric was successful in having the judgment set judgment aside. In addition to setting aside the judgment, Aircentric also pursued a counterclaim against Total Extraction claiming that it was liable under the Tort of Abuse of Process for the losses it had suffered as a consequence of judgment being wrongly entered against it. Aircentric claimed that the erroneous judgment had caused it nearly £42,000 of damages arising from lost contracts and the inability to precure parts and supplies caused by the withdrawal of credit.
In defence of the counterclaim, Total Extraction claimed that it had applied for judgment by mistake. However, the Judge did not accept this explanation and said that Total Extractions’ explanation that it had selected the “admission” option by mistake was “inherently implausible” given that the function in the MCOL service warned against the option of selecting judgment by admission, stating that the user should only do so if they had a copy in writing of the admission which they could produce to the Court if requested. The Judge found that Total Extraction had intentionally applied for judgment and that there had been no mistake on its part.
The Judge said that although Aircentric could apply to have judgment set aside when it had been wrongly entered and recover the costs of such an application, that would not provide Aircentric with a real remedy for the damage which it had suffered as a result of Total Extractions’ unscrupulous actions. The Judge therefore found Total Extraction liable for Aircentric counterclaim with the amount of that claim to be decided at a later stage.
This case should act as a cautionary tale to court users that abusing the court process comes with real consequences.
If you are involved in any contractual dispute, please contact a member of our Dispute Resolution team via email or on 0113 207 0000.
Partner and Head of Dispute Resolution
Commercial Dispute Resolution
LPatel@LawBlacks.com
0113 227 9316
@LukeLawBlacks
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Luke Patel
