Page v Champion Financial Managementltd & Ors [2014] EWHC 1778 (QB) (06 June 2014)

Page v Champion Financial Managementltd & Ors [2014] EWHC 1778 (QB) (06 June 2014)

A default judgment obtained against one defendant does not preclude another defendant in the same proceedings from advancing a defence inconsistent with that judgment, unless the second defendant is a privy or otherwise bound by the judgment. Section 39(3) FSMA 2000 does not make the principal a privy of the appointed representative nor does it create strict vicarious liability; therefore, the Fifth Defendant is entitled to defend the claim on the merits and is not estopped by the default judgment against the First Defendant.

Citation
[2014] EWHC 1778
Parties
Claimant: John Page; First Defendant: Champion Financial Management Limited; Second Defendant: Champion Business Solutions Limited; Third Defendant: Champion Consulting Limited; Fourth Defendant: Champion Accountants LLP; Fifth Defendant: Park Row Associates Limited (In Liquidation)
Jurisdiction
England and Wales
Judgment Date
06 June 2014
Procedural Posture
Professional Negligence Claim / Judgment on Preliminary Issue Regarding Effect of Default Judgment and Operation of Section 39 FSMA 2000
Outcome
Preliminary issue determined in favour of the Fifth Defendant; the Fifth Defendant is not bound by the default judgment against the First Defendant and may defend the claim on the merits.
Legal Topics
Default Judgment, Section 39 Financial Services and Markets Act 2000, Professional Negligence, Vicarious Liability, Estoppel, Res Judicata
Financial Services Law Civil Procedure Default Judgment Section 39 Financial Services and Markets Act 2000 Professional Negligence Vicarious Liability Estoppel Res Judicata

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Parties

John Page

Claimant

Champion Financial Management Limited

First Defendant

Champion Business Solutions Limited

Second Defendant

Champion Consulting Limited

Third Defendant

Champion Accountants LLP

Fourth Defendant

Park Row Associates Limited (In Liquidation)

Fifth Defendant

Procedural Posture

Professional Negligence Claim / Judgment on Preliminary Issue Regarding Effect of Default Judgment and Operation of Section 39 FSMA 2000

Legal Issues

  1. 1 Does a default judgment against one defendant preclude another defendant in the same proceedings from advancing a defence inconsistent with that judgment?
  2. 2 What is the operation and effect of section 39 of the Financial Services and Markets Act 2000 on the liability of a principal for its appointed representative?

Ratio Decidendi

A default judgment obtained against one defendant does not preclude another defendant in the same proceedings from advancing a defence inconsistent with that judgment, unless the second defendant is a privy or otherwise bound by the judgment. Section 39(3) FSMA 2000 does not make the principal a privy of the appointed representative nor does it create strict vicarious liability; therefore, the Fifth Defendant is entitled to defend the claim on the merits and is not estopped by the default judgment against the First Defendant.

Court Disposition

Preliminary issue determined in favour of the Fifth Defendant; the Fifth Defendant is not bound by the default judgment against the First Defendant and may defend the claim on the merits.

Orders

  • The Fifth Defendant is entitled to defend the claim on the grounds that the First Defendant was neither negligent nor in breach of contract.
  • No estoppel or preclusion arises from the default judgment against the First Defendant.