The appellant insurer appealed a Small Claims Court decision dismissing its motion to set aside a default judgment.
The insurer had been served with the statement of claim, but due to inadvertence by an employee, it was not forwarded to the appropriate claims adjuster.
The Divisional Court allowed the appeal, finding that the Deputy Judge erred in principle by applying too stringent an interpretation of 'reasonable explanation' and failing to apply the test flexibly.
The default judgment was set aside to allow the matter to be determined on its merits.
