Defending Default Judgements: Supreme Court Refuses to Rescue Former CEO from His Own Inaction

Team Leader (Insolvency & Insurance Litigation), Partner

In the recent judgement of Green Realisations 123 Limited (in Liquidation) v Julian Edwards and Others, the Supreme Court of Gibraltar considered an application made by the First Defendant, Julian Edwards, to set aside a default judgment obtained against him on 19 December 2025 by the Green Realisations 123 Limited (in liquidation) (the "Company”).

Background

The Company, formerly MCE Insurance Company Limited, a Gibraltar-based insurer specialising in UK motor insurance, brought proceedings against its former CEO, Julian Edwards, for, inter alia, breach of fiduciary duty. The company alleged that Mr Edwards presided over systematic under-reserving, misstatement of assets, and the funnelling of inflated payments to a related UK entity, MCE Insurance Limited, which were then distributed as dividends totalling over £26 million to Mr Edwards and his father.

After being granted six extensions of time and a court-ordered final deadline of 30 November 2025 to file his defence, Mr Edwards failed to do so. Consequently, an application for judgement in default was entered on 19 December 2025. Mr Edwards, acting as a litigant in person, applied to set it aside, citing the burden of parallel freezing order proceedings in England, health vulnerabilities including dyslexia and anxiety, and financial hardship.

The Decision

Mr Justice Restano dismissed the application on all grounds. The Court held that Mr Edwards' proposed defence consisted largely of "bare denials" and "broad-brush explanations" lacking clarity and the evidential support needed to demonstrate a realistic prospect of success. Despite being granted ample time, Mr Edwards had failed to produce supporting documents, particulars, or a coherent factual narrative on any of the core allegations.

Additionally, the Court found that Mr Edwards had deliberately prioritised ongoing self-generated court proceedings in England over filing his defence in Gibraltar, making his claim of ignorance about the consequences of non-compliance “inherently implausible”. His medical and financial difficulties were found to amount to no more than the "generalised stresses and pressures" of litigation, particularly given evidence that he owned substantial assets.

Daniel Feetham KC, Darren Martinez and Nikhil Nagrani of Hassans International Law Firm, acting for the Joint Liquidators of the Company resisted the application to set aside the judgment in default.

Key Takeaways

This judgement is a stark reminder that procedural deadlines carry real consequences, and the Court will not treat self-inflicted delay as a valid excuse for non-compliance. Moreover, production of a last-minute draft defence built on generalities rather than evidence will not meet the threshold for setting aside a default judgement.

For directors facing breach of duty and insolvency claims, the case underscores that delegation and regulatory oversight do not of themselves provide a defence; what matters is whether the director knew, or ought to have known, about the issues in question, and what they did about them.

If you wish to discuss any insolvency matters, please feel free to reach out to our Insolvency Litigation Team:

Daniel Feetham KC, Partner