A 2026 decision of the ADGM Court of First Instance is a clean illustration of how Rule 41 of the ADGM Court Procedure Rules 2016 operates when a defendant tries to set aside a default judgment — and a sharp reminder that denying liability and asking the Court to “put the claimant to proof” is not, by itself, a defence. The same claim produced three orders in four months: a default judgment, the dismissal of a set-aside application, and the refusal of permission to appeal. The reasoning hardened at each stage.
1. The dispute in brief
A real-estate management company (the managing agent) claimed roughly USD 247,570 in unpaid service charges said to be owed by a unit owner across fifteen residential units on Al Reem Island, Abu Dhabi. The obligations arose under sale and purchase agreements and related master community declarations requiring the owner to pay service charges, maintenance fees and common-area contributions. The claim form was served by email; no acknowledgement of service or defence was filed; and in April 2026 the Court entered judgment in default for the principal sum, pre-judgment interest, post-judgment interest at 5% per annum, filing fees and costs.
The owner then applied to set the judgment aside. That application was dismissed in May 2026, and permission to appeal was refused in July 2026. Across all three stages the owner’s position was essentially the same: she did not admit the sums claimed and wanted the managing agent put to strict proof of every element of the account.
2. The Rule 41 framework
Rule 41 governs when a default judgment may be set aside or varied. The material parts provide that the Court may set aside or vary a judgment:
“(a) if the defendant has a real prospect of successfully defending the claim; or
(b) if it appears to the Court that there is some other good reason why the judgment should be set aside or varied or the defendant should be allowed to defend the claim; and
(c) the application to set aside or vary the judgment was made promptly.
(3) An application under this Rule must be supported by evidence.”
The structure matters. Limb (c) is conjunctive: a real prospect under (a) or a good reason under (b) is not enough on its own — the application must also have been made promptly. And Rule 41(3) makes evidence mandatory.
3. Promptness is necessary — but never sufficient
On the facts, promptness was not in issue. Only seven days elapsed between the default judgment and the set-aside application, and the Court accepted that this was prompt for the purpose of Rule 41(2)(c). Importantly, the Court measured promptness from the date the default judgment was issued, not from the defendant’s earlier awareness of the claim. The managing agent’s point that the owner had long known about the claim did not defeat promptness.
But clearing the promptness hurdle bought the defendant nothing on its own. The application still failed because it could not satisfy limb (a).
4. “Put the claimant to proof” is not a defence
This is the heart of the decision. The owner denied liability and said that, in a defence, she would require the managing agent to prove each element — the amount due per unit, the period covered, the basis of each calculation, credits and adjustments, entitlement to recover, and the interest calculation. The Court held that this stance does not indicate a defence at all:
“It merely indicates that the Defendant wishes the Claimant to be put into the position of proving the elements said to be essential … without indicating what are the alternative findings which the Defendant would hope to prove and what is the evidence considered capable of supporting those alternative findings.”
Once a judgment has been regularly entered, the burden shifts. As the Court put it, the defendant must show “a line of defence which is real as opposed to fanciful and which has palpable prospects of success.” A speculative hope that the claimant might fail to substantiate its figures is not the same thing.
5. Where the evidential burden actually sits
The owner’s most developed argument, advanced at the permission stage, was that two units attracting identical later annual charges nonetheless carried materially different historic “carried-forward” balances — and that the Court could not test whether the difference was justified “without access to a ledger.” She characterised this as a specific, document-based challenge rather than a bare denial.
The Court rejected the framing for three reasons that are worth committing to memory:
- A difference does not speak for itself. A change in a carried-forward balance between one year and the next does not indicate that the final figure is wrong — “it is equally possible that there had been an earlier error which has been corrected.”
- Pointing to a document is not evidence of error. Merely identifying a discrepancy, without material showing the probability that a balance was carried forward incorrectly, does not establish a real prospect of success.
- The debtor held the primary material. The owner had held the units since 2015 and had within her control the sale and purchase agreements and property obligations that generate the charges. She was therefore competent to produce her own calculation showing which charges were wrong — and could not convert her own inaction into a demand for the claimant’s ledgers.
The one near-miss — that an earlier (2024) demand was for a lower figure — could not help her either: she never asserted the earlier figure was correct, and a service-charge balance growing between 2024 and 2026 is unsurprising.
6. Rule 41(3): a graded standard of “evidence”
The Court gave useful guidance on what “evidence” means under Rule 41(3), holding that it varies with the nature of the challenge:
- Points of law — the “evidence” may be an authority said to have been overlooked, or a standard rule of construction.
- Arithmetical error — the circumstances speak for themselves (“30% of $100 does not amount to $40”).
- Underlying factual error — some basic evidence of fact is required (for example, proof that only two items were ordered, not three; or why an invoice or demand was never received).
The requirement is not a mere procedural formality — it is the safeguard that prevents a regularly obtained judgment from being displaced on the basis of conjecture.
7. Service defects and actual notice
The owner also hinted at inadequate service. The Court gave this short shrift. Any defect in service had ceased to matter because the owner became aware of the claim and the judgment and promptly applied to set aside. Service had in any event been effected at the email address given in the sale and purchase agreements and at the address used by the family representative who handled the correspondence for two years. Under the logic of Practice Direction 6.18, a defendant cannot rely on the failure of a communication channel she herself put in place: to allow otherwise would place the system of justice in a position where such assertions could not be appraised with any certainty.
8. Costs — proportionality applies even on default
A practical footnote with real bite: even when entering judgment in default, the Court independently assessed the managing agent’s costs for proportionality and cut them. It found that the time claimed on communications was “not warranted by the straightforward nature of the Claim,” and that most of the document work “should have been carried out by administrative staff, with only a modest amount of overview from a legal representative at associate level.” The claimed figures were reduced accordingly. A liquidated, uncomplicated claim will not support inflated fee-earner time.
9. Practical takeaways
If you are defending (debtor side):
- Do not build a set-aside on “put the claimant to proof.” Bring a draft defence with alternative figures and at least basic supporting evidence.
- If you hold the underlying contracts and records, run your own reconciliation and expose the specific error — do not simply demand the other side’s ledger.
- Move quickly after judgment, but remember speed cannot cure an evidential vacuum.
- Do not assume a service argument will rescue you once you have actual notice.
If you are recovering (creditor side):
- A carefully evidenced, liquidated claim is robust against set-aside where the debtor produces no counter-calculation.
- Serve at the contractually specified address and keep proof of actual notice.
- Keep costs proportionate — the Court will assess them even on an unopposed default.
This case note is for general information only and does not constitute legal advice. For advice on an ADGM debt-recovery, default-judgment or set-aside matter, please contact us. Last updated: 14 July 2026.