We are pleased to announce a recent success of our corporate litigation team, where our law firm successfully set aside a judgment issued in default for over $700,000.

Our client, a prominent investment firm in Cyprus, had a judgment issued against them in default due to a failure to appear in the proceedings.

Principles Governing the Setting Aside of Default Judgments

The District Court of Limassol, in its judgment, reiterated the principles that govern the setting aside of a default judgment, as outlined in Order 17, Rule 10 of the Cypriot Civil Procedure Rules (“CPR”).

The said rule states: “it shall be lawful for the Court in a proper case to set aside or vary such judgment upon such terms as may be just.”

In this case, the English landmark judgment of Evans v. Bartlam [1937] 2 All E.R. 646 was pivotal. This judgment has been adopted in Cypriot case law through several judgments of the Supreme Court of Cyprus, such as in Bush a.o. v. Giannaki Gianni (2001) 1(B) A.A.D. 1342. In exercising the discretionary power of setting aside a judgment granted to the Court via Order 17, Rule 7 of the CPR, a power which, as indicated in Evans v. Bartlam, is not subject to any strictures, the Court directs its attention to two principal factors:

1. Explanation for Delay: Whether the delay in filing an appearance and the application to set aside has been explained in such a way that it appears that the setting aside does not defeat the proper administration of justice. This includes considering the conduct of the Applicant and the necessity of a definitive end to the litigation, adhering to the principle interest repulicae ut sit finis litium.
2. Prima Facie Defence: Whether a prima facie arguable defense to the claim was demonstrated.

Applicability to Facts

In this case, the default judgment was set aside due to several significant points raised by the defendant. The Court carefully examined the circumstances surrounding the failure to appear and the subsequent actions taken by the defendant. This included a thorough review of the procedural history, the timing and nature of the communications between the parties, and any extenuating factors that might have impacted the defendant’s ability to respond in a timely manner.

The Court also considered the broader context in which the case arose, including any external influences that might have affected the defendant's situation. This comprehensive evaluation ensured that all relevant factors were taken into account, providing a fair and just basis for the decision to set aside the default judgment.

Additionally, the defendant presented a compelling argument supported by evidence that demonstrated a credible defense to the claims made against them. This evidence included documentation and testimony that addressed the core issues of the case, highlighting the defendant’s efforts to comply with legal obligations despite challenging circumstances.

Importance

The judgment underscores the importance of the principles established in Evans v. Bartlam and the discretionary power of the Court in ensuring that justice is served.