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 co-defendant is a privy or statutory provisions expressly provide otherwise. Section 39(3) FSMA does not create privity or vicarious liability, nor does it render the principal bound by a default judgment against the appointed representative. The Fifth Defendant is entitled to defend the claim by contesting the First Defendant's alleged negligence or breach of contract.

Citation
[2014] EWHC 1778 (QB)
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
Outcome
Preliminary issue determined in favour of the Fifth Defendant; Fifth Defendant is not bound by the default judgment against the First Defendant and may advance a defence inconsistent with that judgment.
Legal Topics
Section 39 Financial Services and Markets Act 2000, Default Judgment, Vicarious Liability, Estoppel, Res Judicata
Financial Services Law Professional Negligence Contract Law Section 39 Financial Services and Markets Act 2000 Default Judgment 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

Legal Issues

  1. 1 Does a default judgment against one defendant preclude another defendant 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 regarding principal liability for appointed representatives?

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 co-defendant is a privy or statutory provisions expressly provide otherwise. Section 39(3) FSMA does not create privity or vicarious liability, nor does it render the principal bound by a default judgment against the appointed representative. The Fifth Defendant is entitled to defend the claim by contesting the First Defendant's alleged negligence or breach of contract.

Court Disposition

Preliminary issue determined in favour of the Fifth Defendant; Fifth Defendant is not bound by the default judgment against the First Defendant and may advance a defence inconsistent with that judgment.

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 binding effect arises from the default judgment against the First Defendant as regards the Fifth Defendant.