A. ¢. AND PRIVY COUNCIL. [HOUSE OF LORDS.] EVANS ..... . . . « « + APPELLANT; BARTLAM ... . . . . + + + RESPONDENT. Practice—Setting aside judgment obtained by default—Discretion of judge —Jurisdiction of Court of Appeal to interfere with exercise of judge's discretion—R. S.C. Order x1tt., 7. 10; Order xxvit., 7. 15. Where a discretionary jurisdiction is given to the Court or a judge, the judge in Chambers is in no way fettered by the previous exercise of discretion by the Master, although no doubt he will give the weight it deserves to that decision. A judgment debtor who asks for and obtains a stay of execution does not thereby approbate the judgment or elect to treat it as binding so as to preclude him from thereafter secking to set it aside whether on appeal or otherwise, While the Court of Appeal will not normally interfere except on grounds of law with the exercise of the judge's discretion, if it is seen that on other grounds his decision would result in injustice being done, the Court of Appeal has both the power and the duty to remedy it. Cooper v. Cooper [1936] W. N. 205 approved. Campbell & Co. v. Pollak [1927] A. C. 732 distinguished. Decision of Court of Appeal [1936] r K. B. 202 reversed. AprEAL by the defendant Evans from a decision of the Court of Appeal (1). The defendant had betting transactions with, resulting in indebtedness to, the plaintiff. The latter’s agent threatened to report the defendant as a defaulter if he failed to pay the losses. Thereupon the defendant, as the plaintiff alleged, promised to pay. The defendant not having paid, the plaintiff brought an action against him for the amount, but the defendant failed to enter an appearance within the stipulated time and judgment was signed against him by default. In reply to an application by the plaintiff's solicitor for payment of the amount of the judgment, the defendant asked for time so that he could make arrangements to pay, and time was given to him. Subsequently the defendant entered an appearance to the writ, applied to have the judgment set * Present: Lorp Arkin, Lorp THANKERTON, Lorp RUSSELL oF Kitiowen, Lorp Wricut, and Lorp RocxE. (1) [1936] 1 K. B. 202. 473 HLL. (E)* 1937 April 8, 9, 30.474 H,L. (EB) 1937 4 EVANS ¥. BartLam. HOUSE OF LORDS (1987] aside, and for leave to defend. The Master dismissed the application, but Greaves-Lord J. in Chambers set aside the judgment and gave leave to defend upon terms. On appeal to the Court of Appeal Slesser and Scott L.JJ. (Greer L.J. dissenting) came to the conclusion that the judge was precluded from exercising his discretion to set aside the judgment by the fact that with knowledge of the judgment the defendant applied for the matter to stand over for him to see if he could arrange to pay, and the plaintiff had consented to let it stand over for seven days. In Slesser L.J.’s opinion the defendant was seeking to approbate and reprobate; Scott L.J. took the view that the defendant knew or must be presumed to know that he had the right to apply to set aside the judgment, and by asking for and obtaining time he irrevocably elected to abide by the judgment. The defendant appealed to this House. Beyfus K.C. and Charles L. Henderson for the appellant. The view taken by the majority of the Court of Appeal that the doctrine of approbation and reprobation or election applied to the facts of this case has no application. Under Order xi., r. ro, the Court is expressly given power to set aside or vary a judgment obtained by default upon such terms as may be just ; see also Order xxvit., r. 15, to the like effect, and Watt v. Barnett (1). Greaves-Lord J. made an order setting aside the judgment obtained by default and giving leave to defend on terms. In doing so he exercised his discretion, which was unfettered by the view taken by the Master in Chambers, and having done so his decision cannot be interfered with. In Campbell & Co. v. Pollak (2), Viscount Cave said (3) : “ When a judge, deliberately intending to exercise his discretionary powers, has acted on facts connected with or — up to the litigation which have been proved before him . then it seems to me that a Court of Appeal, although it may y deem his reasons insufficient and may disagree with his conclusion, is prohibited by the statute from entertaining (1) (1878) 3 Q. B. D. 363. (3) [1927] A.C. 8x2. (2) [1927] A.C. 732.A. C. AND PRIVY COUNCIL. 475 an appeal from it.” The principle there stated applies H.L. (E.) precisely to the present case. See also Wright v. Mills (1) and Andromeda Handelsaktieselskab v. Holme. (2) In the latter case Atkin L.J. said: ‘‘ I think it is important to make it clear that nothing which is said in this decision will affect the complete discretion of the Master or a judge when asked to set aside a judgment regularly obtained to impose any just and reasonable terms upon the party so applying.” With that exercise of judicial discretion the Court of Appeal should not interfere unless for very special reasons which are not present in this case. Croom-Joknson K.C. and Shanly for the respondent. To entitle a litigant against whom a judgment has been regularly signed to have it set aside he must satisfy the Court of two things, first, that there is a real defence to the claim, and secondly how it is that judgment has been signed against him by default, and he must give some satisfactory explana- tion why he did not defend the action. A plaintiff who gets a judgment obtains thereby a right of property of which he should not be deprived unless certain conditions have been fulfilled, In Haigh v. Haigh (3) Pearson J., after citing certain passages from Atwood v. Chichester (4), said that there was no case which showed that the rule as to setting aside a judgment obtained by default could be acted upon where the party seeking to put it in force had, with full knowledge and wilfully, allowed judgment to go by default. Further, the judge in Chambers ought not to overrule the exercise of the Master’s discretion, where the Master who has the powers of a judge in Chambers—see Order tiv., r. 12—has exercised his discretion on right principles. [Lorp ATKIN. Masters are not intended to be the final judges between the parties.] [Lorp Rocur. The hearing before the judge is a rehearing.] The judge must have some materials upon which to exercise his discretion, and we contend that there were no materials in this case upon which he could do so. (x) (1889) 60 L. T. 887. (3) (1885) 31 Ch. D. 478. (2) (1923) 130 L. T. 329. (4) (1878) 3 Q. B. D. 722. 1937 EVANS v BARTLaM.476 HLL. (E) 1937 EVANS v BARTLAM. HOUSE OF LORDS [1937] Beyfus K.C. was not called upon to reply, but he referred to Cooper v. Cooper. (1) 1937. April 9. The House took time for consideration. April 30. Lorp Arkin. My Lords, this is an appeal by the defendant from an order of the Court of Appeal (Slesser and Scott L.JJ., Greer L.J. dissenting), who reversed an order of Greaves-Lord J., sitting in Chambers, setting aside on terms a judgment obtained against the defendant on default of appearance. The case came before the learned judge in Chambers on appeal from a Master who had refused the application. It appears that the defendant in 193 had incurred losses to the plaintiff, a bookmaker, for bets on horse races to the amount of 1336/., which by the end of 1932 had been reduced by small payments on account to r2qz/. 11s. 9d. In May, 1935, the plaintiff, not having received any further pay- ments, gave an authority in writing to one Irving, who carried on business as the National Turf Protection Society in the name of A. Harrison Ford, to recover the amount claimed by any steps he deemed expedient by further reporting the debtor to the Committee of Tattersalls or other authority. On May 13 Mr. Irving saw the defendant, and according to an affidavit made by Mr. Irving sworn on October 9, 1935, he told the defendant that the default would be reported to Tattersalls, and eventually agreed with him that the case would be withheld from Tattersalls so long as Mr. Irving was satisfied that the defendant would settle within a reasonable time. No further payments were made: there was a corre- spondence in which the defendant appeared to make it clear that he had no means to pay and that if pressed he would have to plead the Gaming Act. On July x9, 1935, the writ in the action was issued, the endorsement being for 12411. 11s, 9d., “the amount due to the plaintiff under and by virtue of an agreement made on May 13 between the Proprietor Secretary of the National Turf Protection Society acting as duly authorized agents of the plaintiff and the defendant.” The writ was not (1) [1936] W. N. 205.A. 0. AND PRIVY COUNCIL, 477 served until September 16, 1935, when it was served personally H. L. (E.) on the defendant by Mr. Irving. The defendant says that he was then told by Mr. Irving that he bad three or four weeks 1937 Evans for appearance ; Mr. Irving denies this. On September 24 the Banrzan. plaintiff’s solicitors signed judgment on default of appearance 1 shin, and on the same day wrote to inform the defendant and asked for a cheque. Two letters followed which form the ground tor the decision of the majority of the Court of Appeal. On September 26 the defendant wrote to the plaintiff's solicitor : “T am in receipt of yours of the 24th and note contents. I have seen Mr. Bartlam to-day and explained my position and he is willing for the matter to stand over so that I can see if I can make any arrangement to pay. I have never refused to pay him but have not had any income to do it with owing to bad trade. He is writing to Mr. Ford to-night. At the moment I have nothing and no assets and know he does not want to lose his money. P.S.—Kindly hold over for meand oblige.” The solicitor’s answer was on September 28, 1935: ‘I am in receipt of your letter of the 26th inst. I have also received a letter from my client who states that he wishes me to do whatever may be necessary to obtain satis- faction of the judgment obtained against you. You will readily appreciate that you have brought the present position upon yourself. You have made numerous promises both to my client and to his agent Mr. Harrison Ford as to the settlement of the amount due. No one of such promises has been performed by you and my client was left without option but to proceed as he did. In all the circumstances I am prepared to let the matter stand over for a further period of seven days, but I must ask you to understand please that, unless at the expiration of that period I receive payment of the total amount due, proceedings will be taken to enforce the judgment withoat further notice to you.” On October 3, 1935, the defendant took out a summons to set aside the default judgment and supported it by an affidavit in which he made the statement above mentioned as to having been told by Mr. Irving that he need not take any steps for a month, and stated that the alleged contract, if made at478 HLL. (E) 1937 EVANS v BarTLam, Lord Atkin, HOUSE OF LORDS [1987] all, which was denied, was a contract by way of gaming and wagering. The Master dismissed the application ; the learned judge on appeal granted it and set aside the judgment on terms as to costs. The power to set aside a judgment obtained on default of appearance is given to the Court or a judge under Order xmi1.,r. 10 ; and a similar power extending to judgments by default under any rule is given by Order xxvil., r. 15. It is a power entrusted to the discretion of the Court or judge, and by Order tiv., r. 12, the Master is given jurisdiction to exercise the discretion. As to the limits of the discretion, if any, it may be necessary to say a word or two later. I only stay to mention a contention of the respondent that the Master having exercised his discretion the judge in Chambers should not reverse him unless it was made evident that the Master has exercised his discretion on wrong principles. I wish to state my conviction that where there is a discretionary jurisdiction given to the Court or a judge the judge in Chambers is in no way fettered. by the previous exercise of the Master’s discretion. His own discretion is intended by the rules to determine the parties’ rights: and he is entitled to exercise it as though the matter came before him for the first time. He will, of course, give the weight it deserves to the previous decision of the Master : but he is in no way bound by it. This in my experience has always been the practice in Chambers, and I am glad to find it confirmed by the recent decision of the Court of Appeal in Cooper v. Cooper (x), with which I entirely agree. On appeal to the Court of Appeal by special leave the majority, Slesser and Scott L.JJ., came to the conclusion that the judge was precluded from exercising his discretion to set aside the judgment by the fact that with knowledge of the judgment the defendant had applied for the matter to stand over for him to see if he could arrange to pay and the plaintiff had consented to let it stand over for seven days. Slesser L.J. preferred to put it on the ground that the defendant was seeking to approbate and reprobate. He tooka benefit under the judgment, namely, seven days’ time, and could (2) [1936] W. N. 205.A.C. AND PRIVY COUNCIL. not thereafter be allowed to seek to set it aside. Scott LJ. preferred to put it on election. The defendant knew or must be presumed to know that he had the right to apply to set the judgment aside and by asking for and obtaining time he irrevocably elected to abide by the judgment. My Lords, I do not find myself convinced by these judgments. I find nothing in the facts analogous to cases where a party having obtained and enjoyed material benefit from a judgment has been held precluded from attacking it while he still is in enjoyment of the benefit. I cannot bring myself to think that a judgment debtor who asks for and receives a stay of execution approbates the judgment, so as to preclude him thereafter from seeking to set it aside whether by appeal or otherwise. Nor do I find it possible to apply the doctrine of election. It is a simple answer to say that to infer election it must be shown that the person concerned had full knowledge of the various rights amongst which he elects. There is here no evidence that the defendant at the time he asked for and received time had any knowledge of his right to apply to set the judgment aside. I cannot think that there is any presumption that he knew of this remedy either sufficiently for the purposes of the doctrine as to election or at all. For my part I am not prepared to accept the view that there is in law any presumption that any one, even a judge, knows all the rules and orders of the Supreme Court. The fact is that there is not and never has been a presumption that every one knows the law. There is the rule that ignorance of the law does not excuse, a maxim of very different scope and application. Neither of the Lords Justices expressed any intention to review the discretion exercised by the judge in Chambers except by reference to the point which in their opinion in law precluded him from exercising any discretion in favour of the defendant. Coming to the conclusion that this point of law is ill-founded, I think it follows that the appeal to the Court of Appeal should have been dismissed. I find myself in agreement with the reasoning of Greer L.J. except onone point. I agree that both rules, Order xtIl., r. 10, and Order xxvit., r. 15, give a discretionary power to the judge in 479 HL. (E) 1937 — Evans v. BARTLAM. Lord Atkin,480 HLL. (E) 1937 Evans v BarTLam. Lord Atkin. HOUSE OF LORDS (1937) Chambers to set aside a default judgment. The discretion is in terms unconditional. The Courts, however, have laid down for themselves rules to guide them in the normal exercise of their discretion. One is that where the judgment was obtained regularly there must be an affidavit of merits, meaning that the applicant must produce to the Court evidence that he has a prima facie defence. It was suggested in argument that there is another rule that the applicant must satisfy the Court that there is a reasonable explanation why judgment was allowed to go by default, such as mistake, accident, traud or the like. I do not think that any such rule exists, though obviously the reason, if any, for allowing judgment and thereafter applying to set it aside is one of the matters to which the Court will have regard in exercising its discretion. If there were a rigid rule that no one could have a default judgment set aside who knew at the time and intended that there should be a judgment signed, the two rules would be deprived of most of their efficacy. The principle obviously is that unless and until the Court has pronounced a judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has only been obtained by a failure to follow any of the rules of procedure, But in any case in my opinion the Court does not, and I doubt whether it can, lay down rigid rules which deprive it of jurisdiction. Even the first rule as to affidavit of merits could, in no doubt rare but appropriate cases, be departed from. The supposed second rule does not in my opinion exist. But while the judge has such a discretion as I have mentioned I conceive it to be a mistake to hold, as Greer L.J. seems to do, that the jurisdiction of the Court of Appeal on appeal from such an order is limited so that, as the Lord Justice said, the Court of Appeal “have no power to interfere with his exercise of discretion unless we think that he acted upon some wrong principle of law.” Appellate jurisdiction is always statutory: there is in the statute no restriction upon the jurisdiction of the Court of Appeal: and while the appellate Court in the exercise of its appellate power is no