No Appearance (2022)

AIB v Darcy

[2012] IEHC 305

JUDGMENT of Mr. Justice Sean Ryan delivered 20th July 2012
The bank obtained judgment against the defendants for over €17 million on the 16th February, 2011. The judgment was obtained in the Central Office in default of Appearance by either of the defendants. The bank issued separate proceedings by way of special summons to obtain possession of properties that were the subject of the loans that gave rise to the defendants’ liability to the bank in the first place. Those possession proceedings took a protracted course and ultimately led to an order being made in this Court by McGovern J. While the proceedings are quite separate, there is some inevitable cross-referencing from this application by Mr. Darcy on behalf of himself and his wife with the other special summons proceedings that have been determined by this Court.

In this application Mr. Darcy appearing personally and also speaking on behalf of his wife, who is the other defendant, seeks to set aside the judgment that was obtained in the Central Office in default of appearance. He has filed a number of affidavits. One of them is referable to the proceedings before McGovern J. and to why that judgment should be set aside and obviously that is not a matter for me but the issues raised may be advanced by Mr. and Mrs. Darcy in the Supreme Court in any appeal. Nevertheless, Mr. Darcy says that I should have regard to the affidavit because it contains relevant material to the grounds of defence that are advanced by Mr. Darcy in support of his application to set aside the judgment.

Mr. Darcy’s case is that the defendants have a good defence in law to the claim by the bank. He claims to have identified in his affidavits 22 legal points in support of his case and against the bank’s entitlement, to have demonstrated 12 violations of law or codes perpetrated by the bank and to have 4 fundamental reasons that reveal that the bank is not entitled to have a trading licence. I will deal with the points raised by Mr. Darcy on his and his wife’s behalf in his affidavits in due course.

The applicant’s first point is that he and his wife have got a good defence to the bank’s action. Secondly, he says that he did not defend the proceedings because he was depressed because of a series of tragedies and disasters that befell him and his family. These were the loss of his business, the destruction of his family home by fire and a series of bereavements of family members. He does not exhibit any medical reports to back up this claim but that may be due to the fact that Mr. Darcy is inexperienced in legal matters.

As to the delay in moving to set aside the default judgment, which is from the date of the judgment- 16th February, 2011- to the date of this motion, the 12th April, 2012, Mr. Darcy says that he did not know that he could apply to set aside the judgment until a comment was made by Dunne J. at some point in the protracted course of the court applications in connection with the special summons proceedings for possession of the properties that the defendants acquired with the funds they borrowed from the bank.

The bank’s case is that Mr. Darcy has not demonstrated any defence to the claim. Mr. Rossa Fanning, Barrister, points out that the defendants do not deny that the money was borrowed and that it was not repaid and suggests that Mr. Darcy is trying to raise a variety of arguments of a general nature that do not actually amount to any defence in law. Mr. Fanning contends that the loans in this case were advanced for commercial property developments that went badly wrong, as so many other ventures of that kind did. He says that the letters of sanction, the default and the demands are not in dispute. What is being alleged in fact is a series of collateral complaints or grievances.

Mr. Fanning says that the points of suggested defence raised by Mr. Darcy were in fact considered by McGovern J. in the course of the possession proceedings. However, he stops short of saying that there is a legal estoppel arising, but as I understand he says that Mr. Darcy is repeating these points in the hope of succeeding in this Court where he failed to resist the possession application.

Mr. Fanning says in summary that:-

(1) The judgment was regularly obtained;
(2) There is nothing to suggest mistake, error or surprise or anything of that kind;

(3) Mr. Darcy does not explain why he did not challenge the judgment;

(4) Counsel were in and out of the case in the sense that Mr. Darcy was twice represented by Senior Counsel on adjournment applications of the possession proceedings and Mrs. Darcy was represented by junior counsel on one occasion;

(5) There is no explanation for the delay in bringing this motion to set aside the default judgment.

It is helpful to set out the chronology of this matter in a table as follows:-
27th April 2010 Letter of demand.
14th May, 2010 Summary summons.

2nd June, 2010 Summary summons served.

16th February, 2011 Judgment in default in Central Office.

21st March, 2011 Judgment registered.

22nd July, 2010 Special summons for possession etc issued.

11th October, 2010 Substituted service order granted by Peart J. for proceedings on special summons.

18th October, 2010 Special summons served by ordinary post.

26th November, 2010 Master of High Court adjourned special summons.

17th December, 2010 Master of High Court adjourned special summons.

28th January, 2011 Master of High Court adjourned special summons (senior counsel appeared for Mr. Darcy).

25th February, 2011 Master of High Court adjourned special summons (senior counsel appeared for Mr. Darcy).

8th April, 2011 Master of High Court adjourned special summons (Junior counsel appeared for Mrs. Darcy).

7th April, 2011 Appearance entered for Mrs. Darcy.

13th May, 2011 Master sent case to Judges List.

11th July, 2011 High Court adjourned application.

25th July, 2011 High Court adjourned application.

17th October, 2011 High Court adjourned application.

28th November, 2011 High Court adjourned application- application by Mrs. Darcy.

19th December, 2011 Second defendant filed affidavit.

16th January, 2012 Plaintiff filed replying affidavit.

6th February, 2012 Second defendant filed second affidavit and first defendant filed affidavit.

27th February, 2012 High Court adjourned matter.

12th April, 2012 First defendant Mr. Darcy filed affidavit.

12th April, 2012 Grounding affidavit sworn by Mr. Darcy for this motion.

16th April, 2012 High Court ordered possession etc. on foot of special summons, with stay on family home for a period of nine months.

I now want to try to identify all the points of defence that Mr. Darcy raises in his affidavits and then I will examine the questions of surprise, mistake etc. and the final question of delay in moving to set aside the judgment.
Mr. Darcy relied on two affidavits that were sworn respectively on the 3rd July, 2012 and on the 21st June, 2012. I put them in this order because that is the way Mr. Darcy dealt with them. Mr. Darcy’s argument as to why he and his wife are entitled to an order setting aside the judgment that was obtain in default of appearance is as follows.

(a) The contract document was “materially flawed” because it was and “adhesion contract” for an interest rollup loan facility.
(b) The money was advanced by the bank on only two conditions namely (i) clearance of account and (ii) refinance and those conditions were not within the control of the defendants so they did not breach any conditions or terms of the contract.

(c) The bank frustrated the performance of the contract by terminating thus imposing an “objective impossibility of the contract to perform”.

(d) Because of the termination, the defendants did not derive any interest, benefit or profit from the contract.

(e) The bank induced and encouraged the defendants to enter into the loans on the basis of the two conditions and thereby the bank wilfully misrepresented and concealed material facts.

(f) The contract is void or voidable because of misconduct in the bank being unreasonable, making misrepresentations, behaving oppressively and not notifying the defendants of material changes to the contract.

(g) The contract was unconscionable and totally one sided and the plaintiff changed the terms and conditions at will. Mr. Darcy cites an example of this as he says that occurred on the 3rd September 2009, when the bank without notice appointed a planning consultant to take over the running of the planning of the proposed development and also compelled the defendants to withdraw judicial review proceedings by threatening to terminate the loan facility and to evict the defendants from their family home over which the bank held a legal charge.

(h) The bank “advanced the defendants monies before the contract was in place” which means that the contract is bad because there was no consideration for the mortgage document.

(i) The bank charged fees for the facilities but made no provision for those charges in the loan contract and Mr. Darcy says this is evidence of gross negligence over “self dealing” by the bank which undermines the entire loan facility.

(j) The bank did not comply with statutory regulatory requirements by liquidity requirements and it did to hold “a true perfected” trading licence.

Mr. Darcy made an additional contention in an affidavit sworn on the 21st June, 2012. He acknowledges that this affidavit is directed to seeking a stay or a review or setting aside the order of McGovern J. rather than to the present motion but he says that the arguments in this affidavit are the additional ones that he wants to advance in support of this application. I ignore the matters that relate specifically to the special summons proceedings.
The demand letter of the 27th April, 2010 seeks repayment of a sum that is different from the amount claimed in the summary summons. Mr. Darcy says that the summons cannot be valid when it demanded a sum that was less by €35,000 than the amount in the demand letter. I may comment at this point that I do not see how such a discrepancy could invalidate the summons.
Discussion
The bank got judgment against the defendants for the amount of the loan that was outstanding at the date of demand and the proceedings claimed continuing interest on the money that was due and owing. The bank subsequently instituted separate proceeding by way of special summons to enforce its charge over the various properties that were provided as security for the loans. The claim for enforcement of security and orders of possession was based on the same loan facilities as the summary summons claiming judgment in the amount of the outstanding balance. It is therefore true to say as Mr. Fanning maintained that there is an overlap between the two sets of proceedings. But if Mr. and Mrs. Darcy were to succeed in having the default judgment set aside and if the matter were to be reheard or heard and sent to plenary hearing, that would have no impact on the enforcement proceedings in which the bank got possession of the properties. It might arguably be a basis for an application to the Supreme Court for a stay on the operation of the orders made by McGovern J. pending the hearing of the defendants’ appeal.

It is not easy to see how the criticisms and points made by Mr. Darcy might furnish a defence. The first, that the bank drafted an adhesion contract, is not a ground of defence to the bank’s claim for the money it lent.

Neither is it a defence to say that clearance of account and refinance were conditions, without producing any documentation in support of that contention. That is the first fundamental evidential point. It does not seem to me to appear from the letters of sanction that are exhibited. Neither does it furnish a defence to say that the conditions were not in the control of the defendants.

The bank did indeed frustrate the performance or perhaps the further performance of the contract by terminating it and made it impossible to perform or to do so in any further fashion. But the bank did that on foot of a demand letter for the repayment of the money it had lent and that would appear to be in accordance with the terms of the letters of sanction.

It is not a defence to say that the defendants did not derive any interest benefit or profit.

The defendant has not made out any case for misrepresentation by commission or omission.

The contract for the loan is not void or voidable on any basis of fact advanced by Mr. Darcy.

A mere allegation that the contract was unconscionable or one sided and that the plaintiff changed the conditions “at will” is not evidence to prove breach of contract or to afford a defence. The example of oppressive behaviour put forward does not constitute a ground of defence.

Neither is it a defence to say that money was advanced before a facility letter was sent and signed. Continuation of the facility on terms contained in a statement such as in a letter is consideration.

The fact that the bank made charges for the loans is not a ground for defence.

The series of allegations made by Mr. Darcy about regulatory non-compliance by the bank and other statutory breaches is not backed up by any specific information and does not in any event provide a defence to the bank’s claim. There was nothing about the transaction in itself that was unlawful or impermissible or that nullified the effect of the agreement. This is not a defence.

The difference in amount between the letter of demand of the 27th April, 2010, and the summary summons is not a ground of defence. In fact as I mentioned above, the letter of demand claims a somewhat higher figure than was claimed in the summary summons. But that does not afford any comfort to Mr. Darcy in seeking to apply to set aside the default judgment. In the result it seems to me that the defendants through Mr. Darcy have not put forward any basis of defence that could justify setting aside the default judgment.
The circumstances of the default judgment
Mr. Darcy has put forward an explanation for not resisting the claim in the summary summons. He says that he was deeply depressed. He had it seems ample reason for being depressed. His business had collapsed, his family home had been destroyed by fire and he had family bereavements. All this means that he is and was deserving of considerable sympathy. Without wishing in any way to diminish the extent of Mr. Darcy’s distress, it is of course a legal requirement to demonstrate some incapacity or mistake or surprise or other event that explains why a person failed to respond to a claim made against him or her. The implication of the jurisdiction to obtain summary default judgment is that if a person has a defence he or she will put it forward in some shape or form. And the mere fact that a person has been afflicted by unfortunate events – even a series of unfortunate events – is not sufficient to demonstrate a degree of incapacity by reason of clinical depression. I do not know if Mr. Darcy received medical treatment. Neither do I know when exactly the events that he refers to took place. It seems to me that the explanation for failing to do anything about the summary summons is in the circumstances less than sufficient.

The delay in moving to make this application is more difficult to explain. Mr. Darcy’s depression cannot explain that because he was actively engaged in the special summons proceedings and filed affidavits and was represented and he availed himself of opportunities to make his case. Mrs Darcy was also involved in that process. It follows that I think that Mr. Darcy has not overcome this obstacle of explaining the delay.

Overall, it seems to me that the fundamental question here is whether there is a defence to the bank’s claim. And in all the circumstances I cannot see that there is.

I refuse this application to set aside the bank’s judgment on its summary summons.

FCR Media Ltd v Farrell

[2013] IEHC 560

EX TEMPORE RULING of Mr. Justice Cooke delivered the 4th day of November 2013
1. On the 14th September, 2009, a summary summons was issued by the plaintiff claiming the liquidated sum of €38,747.76 as due and owing by the defendant. No appearance was entered and on the 21st September, 2010, a judgment in favour of the plaintiff was entered by default in the Central Office of the High Court. The defendant has now, on the 19th July, 2013, issued a notice of motion under O. 13, r. 11 to set aside that judgment.

2. In the grounding affidavit of the 26th July, 2013, and a later supplemental affidavit, the defendant raises what appear to be series of queries about the accuracy of figures in documents relating to the account her solicitors firm had with the plaintiff as publishers of the Golden Pages telephone directory. She wrote to the plaintiff’s solicitors on the 1st July, 2013, asking for the agreement upon which the claim had apparently been based and requesting to be furnished with documents. In particular she now raises a series of queries as to how a figure of €84,665 appears in the documents. The subsequent exchange of correspondence indicates that no such sum was ever claimed as being due and that the balance outstanding of the account was the sum claimed in the summons.

3. What is striking, however, is that the defendant’s affidavits are wholly silent as to how judgment came to be entered against her in September 2010. No explanation is given as to why no step was taken to set aside the judgment over a period of almost three years since it was entered. There is no assertion that the summary summons was not properly served. She makes no claim not to have known of the existence of the claim either before the proceedings were brought or before judgment was entered. No explanation is given for her failing to enter an appearance. No evidence is given as to when exactly she learned that judgment had been entered against her.

4. The defendant is a practising solicitor and she must, therefore, be taken as having understood the summary summons procedure and to have appreciated the implications both of failing to enter an appearance and of not moving promptly to set aside a judgment once entered.

5. In moving the present motion, the only explanation offered by the defendant was that at the time she was “inundated with other proceedings”.

6. It is true, of course, that the Court has a very wide discretion in exercising its powers under O. 13, r. 11 to set aside a judgment obtained by default and perhaps especially so when it is a judgment for a liquidated sum marked in the Central Office in default of appearance. Nevertheless, there must be some evidence of facts before the Court upon which the Court can judicially exercise that discretion.

7. In particular, there must be some explanation as to how it came about that the defendant failed to enter an appearance or to defend the matter at the appropriate time. That is especially so in the case of a solicitor who is personally sued.

8. There must be evidence either that there was some irregularity in the manner in which judgment was obtained or that, if obtained regularly, the defendant’s failure to enter an appearance was due to some mistake or to having been taken by surprise. Above all, there must be put before the Court some basis for a valid and bona fide defence to the claim which has a real prospect of success.

9. In the judgment of the Court, none of these ingredients is satisfied in the material place before the Court by the defendant on this motion. The most that can be said is that the defendant raises some somewhat vague queries about the accuracy of figures appearing in the documents furnished to her. There is, however, no sworn statement that she has a defence or what the basis of that defence might be. While querying the manner in which the plaintiff conducted the account or maintained its records, she does not set out what she claims to have been the terms of the contract she had with the company or what amount, if any, she maintains might have properly been due.

10. In these circumstances and having regard particularly to the exceptional and wholly unexplained lapse of time since judgment was entered, it would, in the view of this Court, be manifestly unjust now to deprive the plaintiff of the judgment it had obtained.

11. The motion is denied.

Danske Bank v Meagher

[2013] IEHC 496

JUDGMENT OF MR JUSTICE MICHAEL PEART DELIVERED ON THE 4TH OCTOBER 2013:
1. The defendant seeks to set aside a judgment for almost €7 million granted against him in default of appearance by order of Mr Justice Kelly dated the 25th February 2013 in the Commercial Court. He says he never received the summary summons after it was served by ordinary prepaid post pursuant to an order for substituted service made by Kelly J. on the 31st January 2013.

2. That order permitted the plaintiff to serve same on him by ordinary prepaid post at Milltown, Ashbourne, County Meath. Following service of the summary summons by ordinary post to that address, the documents were not returned to the plaintiff’s solicitors. He says he only became aware that judgment had been obtained around the end of June 2013, after other steps had been taken by the plaintiff by way of enforcement. I will come to that.

3. In so far as the plaintiff says that there was no irregualrity in the manner in which it proceeded to obtain judgment in default of appearance, since it served the proceedings precisely in accordance with an order for substituted service duly obtained, the defendant seeks to set aide that order on the basis that the information as to the residence of the defendant put before the court was incorrect. He says that the address in question is not his residence, that he does not reside there and never has, and he does not own the house there and never has. It has emerged that the house is owned by his sister Cora, and her husband Edward Cox, who live there with thgeir family.

4. Having obtained its judgment, the plaintiff took certain further steps in its attempt to have the judgment satisfied. It served a Notice of Motion and grounding papers by ordinary post to the same address seeking an order for discovery of assets and oral examination of the defendant. That application was granted by Kelly J. on the 13th May 2013. That order was served on the defendant, again by ordinary post to the same address. It required the defendant, inter alia, to make discovery of his assets and documents relating thereto by a certain date, and to attend before the Court on the 10th July 2013 for examination. He did not attend on that date.

5. On the 13th May 2013 the plaintiff obtained also an order of Garnishee by which a sum of €70,000 paybale to the defendant by Dublin County Council was ordered to be paid to the plaintiff in part satisfaction of the amount owing to the plaintiff..

6. Again, the defendant says that he did not receive any of these documents, as the address to which they were sent is not where he resides. An order for his attachment was made. He was out of the country at this time apparently, but heard about that through a friend who read about it in the newspapers. He returned to the country, and appears to have presented himself to Mr Justice Kelly and explained that he was unaware of an order requiring him to do anything, and appears to have been given liberty to bring the present application to set aside the judgment and other orders.

7. Before dealing with the evidence that was put before the Commercial Court on the 31st January 2013 to ground the application for substituted service was obtained prior to service of the summary summons, I want to set out a sequence of events which occurred after the plaintiff’s solicitor attempted to serve the order for discovery and examination of the defendant which had been obtained on the 13th May 2013.

8. In his affidavit sworn on the 10th June 2013, Ian Bell, solicitor has averred, inter alia, that following his service of the said documents by ordinary post to the said address, they were returned to him from that address. He mentioned also that two letters sent to the defendant by registered post had been returned marked ‘not called for’. When the documents were returned to Mr Bell they were accompanied by a letter from Edward Cox, who, as I have stated above is the defendant’s brother-in-law being married to the defendant’s sister, Cora Cox. The letter states:

“To whom it may concern:
Please be advised that these letters are continually arriving here and that John Meagher does not live here and he is not receiving these letters. We have opened some to get the return address.

Please do not send anymore as they will not be accepted.

Yours faithfully,

Edward Cox,

Milltown,

Ashbourne,

County Meath.”

9. The purpose of Mr Bell’s affidavit was to bring this fact to the attention of the Court and to seek an alternative method of serving the documents on the defendant, namely by serving a firm of solicitors which, it had been ascertained, was acting for the defendant in relation to the proceedings brought by the defendant against Dublin City Council.
10. Mr Bell has averred that on the 5th June 2013 Mark O’Callaghan, solicitor of CCK Law Firm had telephoned him and said that he was acting for the defendant in the proceedings against Dublin City Council. Some discussion took place, some of which was off the record, according to Mr Bell, and he has been at pains not to reveal any of the discussion that was off the record. However, Mr O’Callaghan appears to have been aware to some extent of the within proceedings by Danske Bank. He appears also to have seen a copy of the order of Garnishee made on the 13th May 2013, though I am unaware of who may have shown it to him.

11. Understandably, Mr Bell asked Mr O’Callaghan if he could serve the documents relevant to the order for discovery and oral examination on the 10th July 2013 on him on behalf of the defendant. Mr O’Callaghan stated that he had no instructions in that regard, and did not indicate that he would seek those instructions.

12. Mr Bell swore a further affidavit on the 10th June 2013, and on the 11th June 2013, following the plaintiff’s application for a further order for substituted service, Mr Justice Kelly made another order for that the documents in question could be served “by hand during the course of the business day” on CCK Law Firm for the defendant. That service was effected by hand by Mr Bell that day. However, by the time he served the documents on CCK Law Firm the order made that morning had not yet been perfected, which may account for the fact that on the 13th June 2013 CCK Law Firm faxed a letter to Mr Bell stating that while the letter accompanying the served documents referred to orders of Mr Justice Kelly made on the 11th June 2013, there was no indication as to what that order was, and they sought clarification of the basis on which the documents had been served upon the firm.

13. By faxed letter of the same date, Mr Bell replied enclosing a copy of the order made on the 11th June 2013, and referred to the fact that service of the documents on the 11th June 2013 had been effected in accordance with the terms of the order. He also explained that the reason the order had not been included with the papers served on the 11th June 2013 was that the order had not been perfected at that stage.

14. That letter received a reply from CCK Law Form acknowledging receipt of the orders of Kelly J. made on the 11th June 2013, but for some reason went on to state:

“You have still not clarified the basis upon which these documents have been sent to us. Please forward by return the affidavit of Ian Bell which it appears was sworn on the 10th June 2013. Please be advised that we do not have instructions in relation to the above proceedings or these matters and we do not understand why a Court would direct service of documents which have nothing to do with us. Why have they been served on us and what are we to do with them? Neither the Orders nor your letters have explained.”
15. This is an extraordinary letter given the uncontradicted averment by Mr Bell in his affidavit of the 10th June 2013 that on the 5th June 2013 it was Mr O’Callaghan of CCK Law Firm who had telephoned him, and that what is described as a ‘broad ranging discussion” took place about matters clearly pertaining to the defendant, and since it is clearly the case that the firm acts for the defendant, albeit in relation to the DCC proceedings. I would have thought that an experienced litigation solicitor would immediately understand why in such circumstances a Court would feel justified in making the substituted service order that was made, in the certain knowledge that the firm had a means of contacting their client, and thus ensure that the documents came to his attention.
16. At any rate, Mr Bell responded to Mr O’Callaghan’s letter dated 13th June 2013 pointing out the fact that the Court directed service upon the firm for the defendant, and stating also “obviously, you should bring the papers to your client’s attention”. Mr Bell went on to refer to his several unsuccessful attempts to speak to Mr O’Callaghan by telephone over the course of the 10th and 11th June 2013.

17. A even more extraordinary letter was sent by CCK Law Firm on the 14th June 2013 which reads:

“We refer to your letters of the 11th June which are relating to the above matter.
We return all the papers enclosed with your letter of the 11th June.

We are not instructed in relation to the matter. We do not have authority to accept service of documents on matters for which we are not instructed.

Yours faithfully.”

18. That letter shows two things. Firstly, it shows a failure on the part of Mr O’Callaghan to appreciate the nature of a substituted service order actually granted by the Court. On an application for substituted service the Court is not necessarily concerned with whether or not the solicitor has been instructed in the particular matter, though that helps greatly. The Court’s concern is to be satisfied that the solicitor who, on a factual basis, is identified as being one who acts for the defendant, albeit in another matter, will be in a position to bring the documents to the attention of the defendant. Clearly where the Court was satisfied that CCK Law Firm act for the defendant in the DCC matter, and where that solicitor had actually telephoned Mr Bell on the 5th June 2013, perhaps in relation to the Garnishee Order which had been obtained by Danske Bank over the sum payable to his client by DCC, and the two had had a discussion about the matter generally, it was perfectly sensible, and not at all unusual that the order made by Kelly J. should have been made.
19. Secondly, to my mind, it shows a failure on the part of Mr O’Callaghan to appreciate at the time that he is an Officer of the Court. He has over-arching duties to the Court as an Officer of the Court, and the appropriate thing for him to have done in circumstances where he felt that he was not in a position to fulfill the Court’s intention by bringing the documents to the defendant’s attention, for whatever reason (which is unclear to me I have to say) was not to ignore the Court’s order by returning the documents, but to come to the Court and ask to be relieved of the task imposed upon him by the Court, such as it might be, and have the order set aside. Indeed, in his response dated 14th June 2013, Mr Bell recommended this course of action to CCK Law Firm, suggesting that they do so on the 17th June 2013 when the plaintiff’s motion was listed. In my view he fails in his duty to the Court if he engages in the sort of tiresome and unnecessary obfuscation which he was indulged in in this case.

20. I am unclear as to precisely what transpired on the 17th June 2013. Mr Bell in his second affidavit filed on the present motion has stated at paragraph 14 thereof that Counsel appeared on that date on behalf of CCK Law Firm “as recorded in the orders made on 17 June 2013”. I have not seen those orders so am not aware of what is contained therein. But it appears that on that date, leave was given to the plaintiff to bring a motion for attachment and committal returnable for the 24th June 2013.

21. On the 19th June 2013 the plaintiff issued a motion for attachment and committal against the defendant for his failure to comply with the order of the court made on the 13th May 2013 requiring that he make discovery in relation to his assets. That motion was returnable for the 24th June 2013, and was served together with the grounding affidavit firstly by hand upon CCK Law Firm, and secondly by ordinary prepaid post to the defendant at Milltown, Ashbourne, County Meath.

22. The motion for attachment came on for hearing on the return date the 24th June 2013. There was no appearance by or on behalf of the defendant. The Court was satisfied that the defendant had been served with the relevant documents and it states within the order for the defendant’s attachment that “he has chosen to ignore this division of the Court whilst conducting litigation in another division of the Court”. I note in passing also that the Court order refers to two letters from CCK Law Firm to the plaintiff’s solicitors. I have not seen those letters so am unaware of what is stated therein.

23. An Order of Attachment directed to the Commissioner and members of An Garda Siochana issued from the Central Office on the 26th June 2013 pursuant to the order for attachment granted by Mr Justice Kelly.

24. According to the defendant’s first affidavit filed on the present application, he was out of the country around this time, but a friend contacted him to tell him that he had read in the newspapers that an order for his arrest had been made. He says that up to that point in time he had no knowledge that he was required to do anything by any order of the court. In his second affidavit he has stated that in early June he had no knowledge of any orders made “or indeed of the proceedings herein”. He states that in particular he had neither seen nor knew of any orders requiring any action on his part until he was informed by telephone by a friend that a newspaper had recorded an order for his arrest. He states that on hearing that news he made arrangements to come home, and returned to this country on the 30th June 2013. He states further that he then contacted CCK Law Firm and was advised that while he had been away in the Far East they had been sent papers relating to these proceedings and in which they had no instructions, and that they had returned the papers. He says he was not informed by CCK Law Firm of the nature of the proceedings, and that he was advised that he should appear at the Court to deal with what he describes as “the charges against me”.

25. The defendant seems to have appeared before Mr Justice Kelly on the 10th July 2013. I am unclear as to what happened on that date, except that the defendant has stated that he handed his passport into court on that date. The matter appears to have been adjourned to the 16th July 2013 because the defendant in his second affidavit on this motion states that he had not instructed CCK Law Firm in relation to this matter “until after considering the advice of the Honourable Mr Justice Kelly on the 16th July 2013”, and that the firm accepted instructions to act on the 19th July 2013.

26. In his first affidavit he refers to having been granted leave to issue the present Notice of Motion on the 17th July 2013. At any rate, in his second affidavit he reiterates that the firm had not been instructed by him in relation to these proceedings at any point prior to that date. That averment sits uncomfortably with Mr Bell’s averment which is uncontradicted, that Mr O’Callaghan telephoned him on the 5th June 2013. However, I need not resolve every conflict of evidence in order to reach my conclusions on this present application, which is one whereby the defendant at this very late stage seeks to set aside the order made on the 25th February 2013 whereby judgment was granted to the plaintiff. He seeks orders also setting aside all subsequent orders. The plaintiff’s motion seeking the committal of the defendant is also before the Court. In the event that the Court refuses the defendant’s application to set aside the judgment granted to the plaintiff, it is agreed that the application for the committal of the defendant would be put back to be dealt with on a later date.

27. As I have said, the defendant instructed CCK Law Firm in relation to this matter, according to his affidavit evidence, on the 19th July 2013. While the defendant’s motion to set aside the judgment was issued by CCK Law Firm on the 28th August 2013, the grounding affidavit of the defendant, and of Lauren Cox (the daughter of Edward and Cora Cox and niece of the defendant) grounding same were sworn on the 24th July 2013, only a few days after the firm was instructed to act.

28. Bearing in mind that the 19th July 2013 was a Friday, it seems unlikely that CCK Law Firm would have been in a position to have drafted and prepared those two affidavits in order to have them sworn on Wednesday 24th July 2013, and even if they had done so, it is likely that the motion would have issued earlier than it did. I have a feeling not simply because of that fact, but also because of the way in which some at least of the affidavit is worded or drafted, that the defendant himself or some other non-lawyer may have been the draftsman of those affidavits. Nothing much turns on that, but it is an impression that I have.

29. At any rate the Notice of Motion seeking to set aside the judgment was issued on the 28th August 2013 and was made returnable before me on the 23rd September 2013. Maurice Gaffney SC has appeared for the defendant and moving party. The plaintiff was represented by Rossa Fanning BL.

30. Following the issue of the Summary Summons, personal service on the defendant was attempted on several occasions by Tom Ryan, a summons server engaged by the plaintiff’s solicitors. The plaintiff’s application for substituted service was grounded on his affidavit. He states therein that he was informed by the plaintiff’s solicitor that the defendant resided at Milltown, Ashbourne, County Meath, and attended at the address on Monday 21st January 2013.Upon arrival he discovered that access was through large wooden gates which were closed. There is apparently an intercom fixed to soome adjoining fencing together with a bell. There appeared also to be a CCTV camera above the intercom device. Upon pressing the button on the intercom there was no response. Mr Ryan then pressed the bell several times at intervals of about one minute, but on no occasion could he get a response. He attended again on the following day, and once again his attempt to speak to anybody was unsuccessful. Two days later on the 24th January 2013 Mr Ryan returned to the address, and again after several attempts to make contact with anyone on the premises by pressing the intercom and the bell, he left the property.

31. He renewed his efforts at personal service on Friday the 25th January 2013. On his way to the address that day he met the local postman, and having given the address to the postman he asked him if he knew whether the defendant lived there. The postman, according to Mr Ryan, replied that a John Meagher lived at the property,. The defendant and also Lauren Cox, his niece, have denied on affidavit that the defendant ever lived there. It is unlikely that the postman has any first hand knowledge that the defendant lives at the address, and it is fair to assume that in so far as he stated his belief that the defendant lives at the address, he meant that it is an address to which he often delivers post addressed to a John Meagher. The reason why that is probably the case is that the defendant has himself used that address for the purpose of several important dicuments, and I shall come to that.

32. Having spoken to the postman, Mr Ryan proceeded to the address to find that the gates were open on that occasion. He could see that there was a small grey car parked in a courtyard in front of the house. But having pressed the intercom at the gate he again got no response. He proceeded to walk towards the house through the gates. As he approached the house and was about to knock on the front door it was opened by a young lady, who turns out to be Lauren Cox, the defendant’s niece. Mr Ryan says that he asked if he could speak to the defendant, but was informed that he was not there. He says that he then asked her if this was the defendant’s house and he says that “she confirmed that it was, but that the defendant was not there at the moment”. Mr Ryan says that he then asked the young lady if she was related to the defendant and what her name was, to which she replied that she was his niece but declined to give her name. We know that this lady is Lauren Cox because she has sworn an affidavit in which she gives a different account of the conversation between her and Mr Ryan on that occasion, and I will come to that too.

33. Mr Ryan concluded his affidavit grounding the application for substituted service by saying that he said to the defendant’s niece that he had some documents for the defendant to which she said that “I should call back sometime next week”. He then left the property.

34. Lauren Cox has sworn a grounding affidavit for the present application setting out her response to what Mr Ryan had sworn for the purposes of the application for substituted service. That affidavit, as I have already stated, was sworn on the 24th July 2913 as was the grounding affidavit of the defendant. She says that she has read Mr Ryan’s affidavit, and that the house at Milltown, Ashbourne, County Meath belongs to her parents, Edward Cox and Cora Cox, and that she herself has lived there for about 16 years. Cora Cox is the defendant’s sister. She says also that the defendant is her uncle and that he has been a very occasional visitor to her home, mostly visiting around Christmas, and that she has no recollection of his ever having stayed there.

35. She takes issue with Mr Ryan’s version of what happened on the 25th January 2013. She states that while walking through the house she noticed a man in the courtyard, and that when she opened the door of the house he asked her if John Meagher was there to which she says she replied “No he isn’t”. She says that the man asked her then if she was his daughter, to which she said that she was his niece. She goes on to deny that she said that it was the defendant’s house, and says also that she was not asked if it was his house. She says that the man never gave his name, but said that he was a friend of the defendant’s and that he had something for him, and that he was carrying an envelope or document. She says that he asked if he could leave the envelope or document with her but that she said there would be no point because she had no idea when the defendant would next be there.

36. The defendant in his first affidavit sworn on the 24th July 2013 states that it is sworn for the purpose seeking leave to issue a Notice of Motion seeking to have the judgment set aside on the basis firstly that he had no notice of the proceedings at the time judgment was obtained, not having been served, and on the basis also that the judgment was obtained by misrepresentation. The wording of the Notice of Motion as issued is very different, and, unlike the grounding affidavits, has the hall marks of professional draftsmanship. This may account for the delay in getting the motion issued, notwithstanding that the grounding affidavits were sworn on the 24th July 2013.

37. As far as the present application is concerned the defendant has averred that he has never owned or lived in Milltown, Ashbourne, County Meath, and that it could never be described as his house or where he resides. He says that he never received any correspondence from the plaintiff in the period shortly before the issue of these proceedings on the 18th January 2013. He says that he left the jurisdiction on or about the 27th December 2012 and returned on the 5th March 2013. He did however visit his sister and brother-in-law over the Christmas period before he left.

38. He says that this judgment was obtained during the period of his absence, and that he received “no papers or other information” while he was abroad. He takes issue with several of the averments contained in the affidavit of Tom Ryan. In so far as the affidavit made reference to the address being of “the defendant’s house” he maintains that the Court was induced by these assertions and misrepresentations to make the substituted service order. He says that it could not be true that Lauren Cox told Mr Ryan that it was his house, because it is not. Again, he submits that this incorrect averment by Mr Ryan may have been a factor in persuading the Court to make the order for substituted service. He takes issue with what the postman stated to Mr Ryan too.

39. Ian Bell, solicitor, has sworn a replying affidavit. At the outset it is worth explaining that when the plaintiff bank granted the loan facility to the defendant on the 28th Febryary 2011 it was addressed to the defendant at 8, Charlemont Street, Dublin 2, which was one of a number of properties on Charlemont Street owned by the defendant. That facility was for the purpose of restructuring existing borrowings which has been the subject of two earlier facilities in 2005 and 2006. Those earlier facility letters were addressed to the defendant c/o Sancta Maria Properties Limited, 6 Charlemont Street, Dublin 2. However, on the 18th December 2012, the Bank had appointed a Receiver over all the Charlemont Street properties, and hence could no longer communicate with the defendant in writing to either 6 or 8 Charlemont Street.

40. However, it would appear that there existed a banking relationship between the plaintiff and the defendant going back to at least the year 2000, because by deed of mortgage dated 5th January 2000, a copy of which Mr Bell has exhibited in his replying affidavit, the defendant mortgaged property at Charlemont Street to the bank as security for borrowings at that time. Importantly, the defendant’s address contained at the commencement of that deed is Milltown, Ashbourne, County Meath. That was clearly an address which the bank had on file for the defendant and which it used for correspondence and the proceedings after the Receiver had taken possession of the properties at Charlemont Street.

41. Mr Bell has also exhibited certain B1 annual return forms from the Companies Registration Office which were filed as late as November 2012 relating to two companies of which the defendant is a named director and the sole member. The defendant gave his name and the Milltown address as presenter of the form, and this appears under the heading “Person to whom queries can be addressed”. That makes it perfectly clear that this is an address to which queries for the defendant may be addressed. His sister, Cora Cox is also a named director of both companies. These companies are Sancta Maria Properties Limited, and Sancta Maria Building & Civil Engineering Limited, each with a registered office at 3-8 Charlemont Street, Dublin 2. The Presenter’s name and address on each is given as John Meagher, and he gives his address as Milltown, Ashbourne, County Meath. The same address is given for him where his name appears as the sole member of each company, and where it appears as a director of each company. The address for his sister, Cora Cox, is also given as Milltown, Ashbourne, County Meath. Each form is signed by both the defendant and Cora Cox, as director and secretary respectively of each company, below a certification by both the defendant and Cora Cox that the form contains the particuloars for the company as of the date of the return.

42. Mr Bell has also referred to what is stated by Henry O’Callaghan in his affidavit. Mr O’Callaghan (not to be confused with Mark O’Callaghan, solicitor, already referred to) is an employee in the firm of Ferris & Associates, the Receivers appointed over the defendant’s properties. He has stated he had a telephone conversation with the defendant on the 20th December 2012, which was two days after the receiver was appointed, because he had been asked by Mr Ferris, the receiver, to obtain contact details for the defendant and to arrange a meeting with him. Mr O’Callaghan says that he rang the defendant on his mobile phone number at about 2.30pm that day. He says that during that call he asked the defendant for an email address and a postal address so that formal notification of Mr Ferris’s appointment as Receiver and certain n other documentation could be sent to him. He states that the defendant gave Milltown, Ashbourne, County Meath as his postal address, and gave his email address as johnmeagher100@gmail.com. Following that call, Mr O’Callaghan sent an email to the defendant to that email address, and referred to that telephone call. He attached certain documents to the email, but also stated:

“The above [documents] have been issued separately by post to the advised address of Milltown, Ashbourne, County Meath” [emphasis added]
43. On that same date, as stated in the email, Mr O’Callaghan sent a letter and a number of documents by post to the defendant at that address.
44. On the following day, the 21st December 2012 Mr O’Callaghan sent an email to Mr Scully of the plaintiff bank in which he referred to the conversation with the defendant. It is worth noting that in that email he specifically reported that the defendant had given “correspondence details of Milltown, Ashbourne, County Meath”.

45. None of the above details were before Kelly J. when he granted the order for substituted service order on the 31st January 2013 or any later such order. It was unnecessary in the circumstances. However, if it had, it would no doubt have served only to reinforce the Court’s confidence that any service by ordinary post to the defendant at that address would achieve its purpose.

46. Mr Meagher has sworn an affidavit in order to reply to what was stated by Mr Belol in the affidavit just referred to. He states that he never made any arrangement with his niece or her family to have post forwarded to him from their address. He denies that he received any post which might have been sent to him at that address. Unfortunately, there is no affidavit sworn by either Edward Cox and/or Cora Cox which could have thrown some light on whether they made the defendant aware of any correspondence addressed to him which arrived at their house, or if they did not, what they did with it. The Court is simply left with the defendant’s denial.

47. He denies that he gave that address to Mr O’Callaghan for postal correspondence, and denies that he ever gave to anybody else. He denies that he gave him his email address. He denies that Mr O’Callaghan mentioned the appointment of a Receiver over his properties. He says that Mr O’Callaghan did not identify what the purpose of the proposed meeting with him was, except to say it was in the context of his business with the plaintiff bank. In relation to the proposed meeting, he states that he told Mr O’Callaghan that he hoped to be at the airport on 23rd December 2012 to which he says Mr O’Callaghan stated that he would have to talk with a colleague first. He also referred Mr O’Callaghan to his accountant, and asked his accountant to contact Mr O’Callaghan, and refers to that person, Alan Dilloughery in that regard. Mr Dilloughery has sworn an affidavit, but it is not of much assistance for present purposes.

48. Henry O’Callaghan filed a second affidavit to respond to the defendant’s denials. He repeats, inter alia, that the defendant provided the address and the email address referred to. He goes on to refer to the defendant’s reference to being at his sister and brother-in-law’s over Christmas 2012. In that regard he notes that his letter to the defendant was dated 20th December 2012, the clear implication being that it would have been seen by the defendant when he visited the house over Christmas.

49. It is against these facts that the defendant asserts in his grounding affidavit that the Court was “induced to granting substituted service by post to this address partly as a result of these incorrect assertions and misrepresentations”.

50. There are two elements to this application. Firstly, in my view, it is necessary to consider the application, now made, that the ex parte substituted service order made on the 31st January 2013 should be set aside on the basis that material facts now brought before the Court by the defendant were not before Kelly J.when he made his order, and had they been he ought not to have granted the order. If that order is set aside, then the judgment must also be set aside since no proper service of the summons has been effected.

51. Secondly, however, the application to set aside the judgment must be considered even if the Court is satisfied that the substituted service order should not be set aside. The onus would be on the defendant to satisfy the Court that because of mistake on his part, or that he was taken by surprise, which deprived him of an opportunity to defend the claim, the Court should set aside the judgment. However, any consideration of the latter would be predicated on the fact that as far as the plaintiff is concerned the judgment was obtained regularly. Service of the summons was found to be in order, there was no appearance entered by the defendant, there was no appearance by him or on his behalf in Court, and the debt was duly proven. The judgment was in all respects in thise circumstances properly and regularly obtained.
Application to set aside the substituted service order:
52. I have serious concerns as to the defendant’s credibility when he says that he never became aware of these proceedings until June 2013. He is a man who has used his sister and brother-in-law’s address for business purposes at least as far back as January 2000. He has as recently as November 2012 filed documents in the Companies Registration Office stating that his address is Milltown, Ashbourne, County Meath. It beggars belief in circumstances where his sister is also a signatory to those documents filed in the Companies Registration Office, that she and her brother would not have discussed and agreed the fact that he was giving her address as his own. In those circumstances the Court cannot conclude simply on the basis of the defendant’s denials that any post which arrives at her house addressed to the defendant would not be brought to his attention, forwarded to him. It must be assumed that a sensible and workable arrangement was put in place.

53. It is also a feature of this application that no affidavit has been sworn by Edward or Cora Cox. They might have supported what the defendant says, such as it is. They could have referred to the considerable amount of mail they were receiving from time to time for the defendant and could have told the Court what they did with it, or what arrangement they had with the defendant. It is not credible that there was none. Neither would it be credible in my view that these family members would simply bin or otherwise dispose of any such post addressed to the defendant without either opening it to see how important it might be, or without at least contacting the defendant to know how to get it to him. There is no suggest that they have fallen out or are not on normal family terms.

54. While the defendant denies that he gave that address to Henry O’Callaghan, the latter’s evidence is that he did, and that is corroborated by the fact that when he emailed Donal Scully of the plaintiff bank on the following day, the 21st December 2012, he specifically stated that the defendant had given that address to him. I do not accept that Mr O’Callaghan would have said that if he had not been so informed by the defendant.

55. All of this suggests that the postman to whom Mr Ryan spoke on his way to the address on the 25th January 2013 was correct to confirm the address as that of the defendant. I have already said that it can be presumed that the postman was indicating by his response that this was an address to which he was used to delivering post addressed to John Meagher.

56. The defendant makes much of the fact that when Mr Ryan swore his affidavit he stated that he had been informed that he had been informed by the plaintiff’s solicitor that he resides at the address. In similar vein he protests at Mr Ryan’s reference in his affidavit of service to “the defendant’s house”, He has even counted those various references and reached a total of ten. These complaints form the basis for his contention that Mr Justice Kelly was misled by the plaintiff on the application for substituted service, and that the order should be set aside.

57. It is remarkable to my way of thinking that nowhere in his affidavits has the defendant taken the trouble to say where he does in fact reside, or what address these documents ought to have been sent to in order that they might reach him. His grounding affidavits refer to him as being “of Apartment 10, Atlantic House, West Beach, Cobh, County Cork”. The first affidavit was sworn on the 24th July 2013. Yet, I note that on the 5th June 2013 when he commenced his High Court against Dublin City Council, he gave his address on page 3 thereof as 302, Harold’s Cross Road, Dublin 6W. He appears either to live a very peripatetic existence frequently moving from address to address, or he chooses to conduct his affairs using different addresses for different purposes.

58. In my view there is no proper basis for setting aside the order for substituted service. There was a sufficient basis even as set forth in Mr Ryan’s affidavit for the making of the order. Nothing except a bare denial has been put forward by the defendant. Put against the evidence that has been sworn to on behalf of the plaintiff, his denials sound hollow, even if the affidavit of Lauren Cox is taken into account by way of support. The sworn evidence and documents exhibited on behalf of the plaintiff only serve to persuade me further that the order for substituted service made by Kelly J.was an appropriate order for him to have made, and I see no basis for setting it aside. I refuse that application. It follows that in my view the plaintiff’s judgment was not irregualrly obtained.
Application to set aside the judgment:
59. Where a defendant claims that a judgment was obtained irregularly by the plaintiff, the defendant must specify the irregularity in question. This requirement is reflected in the provisions of Order 124, rule 3 RSC. If the Court is satisfied that there has been an irregularity in the manner in which the judgment was obtained, the defendant will be entitled to have that judgment set aside ex debito justiciae. There will in such circumstances be no requirement upon the defendant to demonstrate an arguable defence to the plaintiff’s claim. Clearly, where a judgment ought not to have been granted due to some fundamental error on the part of the plaintiff seeking judgment, or on the part of the Court, it could not possibly stand. But the error must be established to the satisfaction of the Court. In such circumstances it would be unjust if a defendant had to go a step further than establishing the irregularity, and establish also that he had an arguable defence. Indeed, Mr Gaffney submitted as much on the present application when addressing the fact that in this case the defendfant has not stated on affidavit what his defence to the proceedings might consist of. I accept his submission in that regard, but only in circumstances where there has been an established irregularity in the judgment obtained.

60. That this should be so does not really require authority. It would seem to reflect basic justice. But there is plenty of authority, some of which is of long-standing. By way opf example, I would refer to a Court of Appeal judgment of O’Brien L.C. in Crane & Son v Wallis 1915 2 IR 411. In that case the plaintiff had applied for judgment in default of appearance. However no affidavit of service of the summons had been filed, and the Court at first instance was not informed of this failure to observe the terms of Order 13 of the then Rules of the Superior Courts which required that prior to applying for judgment the plaintiff shall file an affidavit of service. This had not been done, even though service had been properly effected. This error was held to have deprived the Court of jurisdiction to grant judgment. It was a case where it was clear there could be no defence on the merits. Nevertheless the judgment could not stand as the Court simply had no jurisdiction under the Rules of the Superior Courts to grant judgment. In so holding, O’Brien L.C at p.415 stated that “apart from the rules, the Court has no jurisdiction to give judgment against a defendant who has not brought himself before the Court by entering an appearance”.

61. But in the present case, I have already held that there is no proper basis for setting aside the order for substituted service. Even at this stage, and in the light of all the evidence which has been adduced, and accepting that the defendant did not reside at the particular address, I would consider that the order was an appropriate one. As I have said, I do not find it credible that this defendant was not made aware of the proceedings, and the absence of any evidence from Edward and Cora Cox is significant in this regard. Service in compliance with that order was proven by affidavit of service prior to judgment being granted by Kelly J. There is no irregularity therefore in the manner in which this judgment was obtained.

62. As far back as Farden v. Richter 1889 23 QBD 124 it has been held that where judgment is regular “it is an inflexible rule that the judgment could not be set aside without an affidavit by the defendant suggesting that he had a defence to the plaintiff’s claim”. In his judgment, Huddleston B. P. stated at p. 129:

“where there is no such affidavit, it is only natural that the Court should suspect that the object of the applicant is to set up some mere technical case. At any rate, when such an application is not thus supported, it ought not to be granted except for some very sufficient reason.”
63. In the present case The defendant has not stated on affidavit any defence which he wishes to make to the plaintiff’s claim. His affidavits are silent in this respect. Mr Gaffney has submitted in this regard that where a person has not been served with proceedings he should be under no obligation to disclose his defence. I have no difficulty in accepting that submission as a general principle. But here the defendant was served in accordance with an order for substituted service, which I have determined is not an order which ought to be set aside. The defendant could not have assumed in his preparation for this application to set aside judgment that he would be successful in establishing that the judgment was irregularly obtained. He must be taken to be aware that in the event that the Court was satisfied that the judgment was regularly granted he would be required to set forth an arguable defence to the claim before the judgment was set aside. He has not done so. Farden v. Richter [supra] does not rule out that there may be some exceptional circumstance where this otherwise inflexible rule should not be an obstacle to a defendant who seeks to set aside a judgment obtained against him. But there are no such circumstances in this case. The defendant’s mere averment that he had no knowledge of the proceedings before judgment was granted is insufficient in the light of the evidence in this case. Put more bluntly, I do not believe the defendant when he says this.
64. For these reasons I refuse to set aside the judgment obtained by the plaintiff on the 25th February 2013, and I refuse to set aside any order made subsequently.

Danske Bank v Meagher

[2014] IESC 38

Judgment of Ms. Justice Laffoy delivered on 1st April, 2014
Background to appeal
1. The High Court proceedings in which the order of the High Court (Peart J.) made on 8th November, 2013 under appeal was made (Record No. 2013 No. 176S) were initiated by a summary summons which issued on 18th January, 2013, which was addressed to “The Defendant, John Meagher, of Milltown Ashbourne in the County of Meath”. In the endorsement of claim on the summary summons the plaintiff/respondent claimed an order for summary judgment against the defendant in the sum of €6,984,826.48 being the total debt due by the appellant to the respondent on 2nd January, 2013 on foot of a Facility Letter dated 28th February, 2011 and also interest and costs. Just short of a fortnight before the summary summons was issued, the respondent had appointed Martin Ferris of Ferris & Associates (the Receiver) to be receiver of assets referred to, comprised in and charged by two mortgages granted by the defendant/appellant to National Irish Bank Limited, the respondent’s predecessor in title, the first of which was dated 5th January, 2000 (the 2000 Mortgage).

2. On 31st January, 2013, on an ex parte application made to the High Court, it was ordered by the High Court (Kelly J.) that the respondent be at liberty to effect service of the summary summons and, inter alia, the notice of motion and the grounding affidavit of Donal Scully, the Property Credit Manager of the respondent, sworn on 30th January, 2013 on the appellant “by ordinary pre-paid post addressed to him at his residence at Milltown, Ashbourne, County Meath”. The ex parte application was grounded on the grounding affidavit of Mr. Scully and also on an affidavit sworn on 30th January, 2013 by Tom Ryan, who described himself as “a summons server”. Mr. Ryan made the following averments in his affidavit:

(a) that he had been informed by the respondent’s solicitors that the appellant resided at Milltown, Ashbourne, County Meath, which he subsequently referred to as “the Defendant’s House”;
(b) that he first attempted to serve the appellant with the summary summons by attending at “the Defendant’s House” on Monday, 21st January, 2013 at 3.30pm, but the gates in the fencing surrounding the property were closed and there was no response when he pressed the intercom button and the bell adjacent to the gates several times;

(c) that his second attempt to serve the appellant was on 22nd January, 2013, but again there was no response when he pressed the intercom button and the bell;

(d) that his third attempt to serve the defendant was on the evening of 24th January, 2013 and again there was no response when he pressed the intercom button and the bell;

(e) that his fourth attempt to serve the defendant was on 25th January, 2013 at 9.45am.

As there is a conflict of evidence as to what happened on that occasion, it is necessary to consider the fourth attempt in some detail. Mr. Ryan averred that on his way to “the Defendant’s House” he met a postman who was delivering post in the area, who confirmed that a John Meagher lived at the property which Mr. Ryan understood to be “the Defendant’s House”. When he arrived at “the Defendant’s House”, the gates were open. He pressed the button on the intercom and he pressed the bell but there was no reply. He then walked through the open gates into the courtyard area. He was about to knock on the front door of the house when it was opened by a young woman. He asked if he could speak to the appellant, and the young woman’s response was that he was not there. He asked the young woman if the house was the appellant’s house. He specifically averred that she confirmed that it was, but that he was not there at the moment. He asked her if she was related to the appellant and what her name was. He specifically averred that she said she was the appellant’s niece but that she declined to give her name. He told the appellant’s niece that he had some documents for the appellant. He specifically averred that she said that he “should call back some time next week”. He then left the property.
3. On 25th February, 2013 the respondent’s notice of motion dated 31st January, 2013 seeking orders –

(a) entering the proceedings in the Commercial List and
(b) for summary judgment against the appellant,

was before the High Court (Commercial Division). Amongst the documents before the High Court on that day was an affidavit of Ian Bell, a solicitor in the firm of MacCarthy Johnston, the solicitors on record for the respondent , sworn on 15th February, 2013, which proved that on 7th February, 2013, pursuant to the order made by Kelly J. on 31st January, 2013 (the Substituted Service Order), he had served the appellant by ordinary pre-paid post to the address at Milltown, Ashbourne, County Meath with copies of the relevant documents. By order of 25th February, 2013 (the Summary Judgment Order) made by Kelly J., in which it was recited that there was no attendance in Court by or on behalf of the appellant and that the Court was satisfied as to service on the appellant, it was ordered that the proceedings be entered into the Commercial List and it was further ordered and adjudged that the respondent recover as against the appellant the sum of €6,984,826.48 together with the costs of the proceedings when taxed and ascertained to include all reserved costs.
4. Subsequent to the making of the Summary Judgment Order, further orders were made in the High Court by Kelly J., namely:

(a) by an order made on 13th May, 2013 –

(i) a garnishee order nisi that the sum of €70,000 due by Dublin City Council to the appellant be attached to answer the Summary Judgment Order was made and it was ordered that the matter be listed on 17th June, 2013 to show cause why Dublin City Council should not pay to the plaintiff the said sum of €70,000, and
(ii) it was further ordered that Ian Bell, solicitor, be appointed receiver by way of equitable execution to receive on behalf of the respondent all other monies that might be due to the appellant from Dublin City Council in proceedings pending in the High Court by the appellant against Dublin City Council and Northern Area Health Board (High Court Record No. 2005 No. 336S) (the Appellant’s 2005 Proceedings); and

(b) by a further order dated 13th May, 2013, it was ordered –

(i) that the defendant make discovery of certain documents outlined within four weeks of the date of the order;
(ii) that the appellant attend Court to be orally examined on 10th July, 2013; and

(iii) that the defendant produce to the Court and to the solicitors for the respondent two weeks prior to the conduct of the examination certain documents specified.

Both orders dated 13th May, 2013 recited that there was no attendance in Court by or on behalf of the appellant on that day and that the Court was satisfied as to service on the appellant of the notice of motion and other documents on foot of which the orders were made.
5. Each of the orders dated 13th May, 2013 provided that service was to be effected on the appellant in the same way as he had been served to that date, including service of the second order with a penal endorsement thereon. What precipitated the next application made ex parte to the High Court was that on 6th June, 2013 there was returned to Mr. Bell in person the copy documents, including the copies of the two orders made on 13th May, 2013, which he had served by post to the appellant at the address at Milltown, Ashbourne, County Meath together with a letter from a Mr. Edward Cox, which was attached to the front of the envelopes. It is clear on the evidence that Edward Cox is married to Cora Cox who is a sister of the appellant. The letter signed by Mr. Cox was dated 4th June, 2013 and it stated:

“Please be advised that these letters are continually arriving here and that John Meagher does not live here and he is not receiving these letters. We have opened some to get the return address.
Please do not send any more as they will not be accepted.”

6. The ex parte application was made on 11th June, 2013 on behalf of the respondent. As a result, it was ordered by the High Court (Kelly J.) that all papers in connection with the proceedings that were required to be served on the appellant be thenceforth be served on CCK Law Firm (CCK) at 66, Fitzwilliam Square, Dublin, 2, including copies of the orders made on 13th May, 2013 with the necessary penal endorsement. The mode of service directed was that they be served by hand during the course of the business day on CCK. In an affidavit sworn on 10th June, 2013 to ground the ex parte application, Mr. Bell had averred that he had received a telephone call from Mark O’Callaghan, a solicitor with CCK, on 5th June, 2013 and that Mr. O’Callaghan had informed him that he was acting for the appellant in the Appellant’s 2005 Proceedings. He also averred that from a review of the online High Court database, it appeared that a summons had issued on 5th June, 2013 in proceedings between the appellant and Dublin City Council (Record No. 2013/5642P) and that CCK had been identified as the solicitors on record for the appellant in those proceedings. Despite the terms of the order of 11th June, 2013, CCK adopted the attitude that they had not been instructed by the appellant in these proceedings and that they did not have authority to accept service of documents on matters for which they were not instructed. While that attitude gave rise to criticism of CCK in the judgment of Peart J. referred to later, on the hearing of the appeal it was common case that this aspect of the matter is peripheral to the real issues in the case.
7. There is some lack of clarity on the papers before this Court, as the judgment of Peart J. indicates was also the case in the High Court, in relation to what happened next in the High Court. Apparently, on 17th June, 2013 the respondent was given leave to bring a motion for the attachment and committal of the appellant, which was returnable for 24th June, 2013. In any event, by order of the High Court (Kelly J.) made on 24th June, 2013, having recited –

(a) that the two letters dated 21st June, 2013 received by the solicitors for the respondent from CCK, which are not before this Court but which I assume contained the explanation why CCK considered they could not accept service, had been read,
(b) that there had been no attendance in Court by or on behalf of the appellant, and

(c) that the Court was satisfied that the appellant had been duly served with all the relevant documents and that he had chosen to ignore the Commercial Division of the Court whilst conducting litigation in another division of the Court and that prima facie he was in breach of the order of the Court made on 13th May, 2013,

it was ordered that the defendant be attached and be brought to Court at the first available opportunity to show cause why he should not be committed to prison for failure to comply with the order of 13th May, 2013.
8. There is also lack of clarity on the papers before this Court as to what happened subsequently. As recorded by Peart J. in his judgment, the appellant seems to have appeared in the High Court before Kelly J. on 10th July, 2013, but it is unclear as to what happened on that date, except that the appellant stated subsequently that he handed his passport into Court. The matter appears to have been adjourned and on 17th July, 2013 the appellant was given leave to issue the motion which was the subject of the judgment and order of Peart J. and is the subject of this appeal.
The motion in the High Court
9. In the notice of motion which was filed in the High Court on 28th August, 2013 and which was returnable for 23rd September, 2013, the appellant sought the following reliefs:

(a) that the Summary Judgment Order be set aside;
(b) that all subsequent orders, reference being made to orders made on 13th May, 2013, 11th June, 2013, 17th June, 2013, 24th June, 2013 and 26th June, 2013, be set aside; and

(c) that the €70,000 paid to the respondent by Dublin City Council pursuant to the order made on 13th May, 2013 and made absolute on 17th June, 2013, be paid to the appellant forthwith.

The notice of motion stated that the application would be grounded on the affidavits of the appellant, Lauren Cox and Alan Dilloughery.
The affidavit evidence on the motion
10. Some of the affidavits on the motion were sworn and filed prior to the filing of the notice of motion in the Central Office of the High Court. However, I am satisfied that nothing turns on that. I propose outlining the contents of the affidavits in the chronological order in which they were filed.
Appellant’s grounding affidavit
11. In his affidavit sworn on 24th July, 2013, the appellant averred that he was seeking to have the Summary Judgment Order set aside on the basis that he “had neither service nor notice nor knowledge” of the proceedings at the time the said judgment was given and that it was obtained by misrepresentation in relation to his notice of the proceedings. The facts relevant to that assertion averred to by the appellant were as follows:

(a) that he did not live and had never lived at Milltown, Ashbourne, County Meath, that he had never owned that property, and that it could never be truthfully described as his “house”;
(b) that he left the jurisdiction on or about 27th December, 2012 and returned on 5th March, 2013 and that the judgment was sought and obtained in that period and no papers or other information were received by him while he was abroad;

(c) that he did not receive any correspondence from the respondent “shortly prior to the commencement of these proceedings” at the address in Milltown, Ashbourne, County Meath and that correspondence from the respondent to him had been addressed to him at Charlemont Street, Dublin;

(d) the description of the premises at Milltown, Ashbourne, County Meath as “the Defendant’s House” was incorrect and that he had concluded from the affidavit of Mr. Ryan and an affidavit of Mr. Bell that the house visited by Mr. Ryan belonged to his sister and her husband;

(e) that he had never met the Receiver, although he did receive phone calls in or about 21st December, 2012 from a Mr. O’Callaghan, whom he believed worked for the Receiver, who rang him when he was abroad, but did not identify himself as a receiver or a person acting for a receiver, but said he would like to meet him in relation to the respondent but did not tell him what he wanted to discuss with him;

(f) that he told Mr. O’Callaghan that, if it was urgent, he should contact or send any materials he had for the attention of his accountant in Cork, whose name and address he gave to Mr. O’Callaghan;

(g) that he told Mr. O’Callaghan that he would be visiting his sister and her family in Ashbourne, County Meath, but he did not represent her home as his address, or a place at which he could or should be contacted;

(h) that he had no knowledge of any order of the Court which placed an obligation on him to do any act or to appear before it until he was informed that an order for his “arrest” had been made by a friend who had learned of it through newspaper reports;

(i) that he first saw the relevant orders when they were handed to him on 11th July, 2013 by direction of the Court; and

(j) that any orders requiring action by him were never conveyed to him and he had no knowledge of them and, as soon as he learned that an order was made, he immediately took steps to return to the jurisdiction at great cost and inconvenience.

At the commencement of the affidavit the appellant’s address was given as an apartment in Cobh, County Cork. It was filed in the High Court on 25th July, 2013.
Affidavit of Lauren Cox
12. Lauren Cox, who swore an affidavit on 24th July, 2013, is the niece of the appellant and the daughter of Edward Cox and Cora Cox. The purpose of her affidavit was to contradict the averments in Mr. Ryan’s affidavit sworn on 30th January, 2013 referred to at para. 2 above. Lauren Cox averred that the house at Milltown, Ashbourne, County Meath belongs to her parents, Edward Cox and Cora Cox, and it had been her home and she had lived there for about sixteen years. She averred that the appellant, her uncle, had been “a very occasional visitor” to her home, mostly around Christmas. She had no recollection of the appellant ever having stayed there. As regards her encounter with Mr. Ryan on 25th January, 2013, Lauren Cox averred that she had never confirmed that the house was the appellant’s house. She was never asked if the house at Milltown, Ashbourne, County Meath was the appellant’s house. The man who called to the house that day never gave his name. He said that he was a friend of the appellant and that he had something for him. He carried an envelope or document. He asked whether he could leave it with her. She responded by telling him there was no point in leaving it there with her because she had no idea when the appellant might next be there. She averred that she did not say to the man who called that he should call back sometime next week. She did not refuse to give her name. She was not asked for her name. Lauren Cox averred that it was wholly incorrect that she confirmed or gave any impression that her home was the appellant’s house or that he resided there.
Affidavit of Mr. Bell
13. Chronologically, the next affidavit in the sequence was an affidavit sworn by Mr. Bell on 26th July, 2013. He exhibited a number of documents which he contended clearly demonstrated the appellant’s address as being Milltown, Ashbourne, County Meath. The documents included two Forms B1 (Annual Returns) filed in the Companies Registration Office (CRO) on 26th November, 2012 in respect of two companies, namely –

(a) Sancta Maria Properties Limited; and
(b) Sancta Maria Building & Civil Engineering Limited.

Each of the Annual Returns was for the financial year which coincided with the calendar year 2011. Each recorded the “Presenter details” or “Person to whom queries can be addressed” as John Meagher, whose address was recorded as Milltown, Ashbourne, County Meath. The appellant was also recorded as a member of each of the companies with an address at Milltown, Ashbourne, County Meath, as secretary of one of the companies and as a director of the other company with a “Residential address” at Milltown, Ashbourne, County Meath. Both forms were signed by the appellant and by Cora Cox. The other document exhibited by Mr. Bell was a copy of the 2000 Mortgage at the commencement of which the mortgagor was named as “John Meagher of Milltown, Ashbourne, County Meath”.
14. In his affidavit Mr. Bell averred that he had been informed by a solicitor with Dublin City Council that the Appellant’s 2005 Proceedings had commenced in the High Court on 12th March, 2013 and that the appellant had attended Court and had given evidence in those proceedings on 12th , 13th and 14th March, 2013. Further, he had been informed that the solicitor in question had informed senior counsel for Dublin City Council to bring to the attention of senior counsel acting for the appellant that judgment had been obtained by the respondent against the appellant on 25th February, 2013, which had occurred.
Affidavit of Henry O’Callaghan
15. The Mr. O’Callaghan referred to in the appellant’s affidavit sworn on 24th July, 2013 was Henry O’Callaghan, a certified chartered accountant employed by Ferris & Associates as a Manager in December 2012. Mr. O’Callaghan swore an affidavit on 26th July, 2013 which was filed on behalf of the respondent on that day. Mr. O’Callaghan averred that following the appointment of the Receiver he called the appellant on a mobile number at approximately 2.30pm on 20th December, 2012. At the start of the call he introduced himself to the appellant and said he was calling from the offices of Ferris & Associates and he then informed the appellant that the Receiver had been appointed. Mr. O’Callaghan averred that during the course of the telephone call he asked the appellant for an e-mail address and a postal address so that formal notification of the appointment of the Receiver could be sent to him together with some further documentation relating to the properties the subject of the receivership. Mr. O’Callaghan averred that the appellant provided him with the postal address of Milltown, Ashbourne, County Meath and with an e-mail address which is set out in the affidavit. Mr. O’Callaghan averred that shortly after the telephone conversation, on the same day, he sent an e-mail to the e-mail address which the appellant had provided and he attached various documents thereto. He advised in the e-mail that the attached documents had been “issued separately by post to the advised address of Milltown, Ashbourne, County Meath”. He received no response to that e-mail and he was not informed that post would not reach the appellant at the address indicated. On 21st December, 2012 he notified Mr. Scully of the e-mail address and the postal address which had been furnished to him by the appellant. Mr. O’Callaghan averred that further calls were made to the appellant to arrange a suitable time and date for a meeting with the Receiver. On 23rd December, 2012 the appellant informed him that he was not prepared to meet the Receiver until such time as he had reviewed the Receiver’s appointment. Further calls to the appellant on 2nd, 3rd and 4th January, 2013 “were diverted to a Ms. Cora Cox”.

16. As regards the appellant’s averment that he advised Mr. O’Callaghan that he should contact his accountant in Cork, Mr. O’Callaghan averred that the appellant’s evidence was not correct. Mr. O’Callaghan averred that the appellant provided him with the name of a person whom he said was his adviser. That person was Mr. Alan Dilloughery. The appellant advised Mr. O’Callaghan that Mr. Dilloughery would contact him. He received a telephone call from Mr. Dilloughery on 21st December, 2012 at approximately 3.40pm. Mr. Dilloughery was unable to provide any information of any substance regarding the properties over which the Receiver had been appointed and he was not in a position to provide a date or time for a meeting with the appellant. Mr. Dilloughery advised Mr. O’Callaghan that he should contact the appellant directly. At no time had Mr. Dilloughery told him that he should send any documentation or communications in relation to the appellant to Mr. Dilloughery, which he would not have been in a position to do in the absence of a signed letter of authority from the appellant authorising him to do so.
Affidavit of Alan Dilloughery
17. Mr. Dilloughery swore a short affidavit on 21st August, 2013, which was filed in the High Court on 26th August, 2013 on behalf of the appellant. In that affidavit Mr. Dilloughery averred that he had been requested by the appellant to contact Mr. O’Callaghan. In relation to the telephone conversation which occurred on the afternoon of 21st December, 2012, Mr. Dilloughery did not recall suggesting to Mr. O’Callaghan that he should contact the appellant directly. He indicated to Mr. O’Callaghan that he would travel to Dublin and make himself available to meet with him on Monday, 24th December, 2012 should that be necessary. Mr. O’Callaghan did not take up his offer for a meeting. He recalled no discussion or mention of documentation by Mr. O’Callaghan with him.
Appellant’s second affidavit
18. Continuing with the affidavits in chronological order, the appellant swore a second affidavit on 22nd August, 2013, which was filed on 26th August, 2013. In that affidavit the appellant reiterated that he had never owned the house at Milltown, Ashbourne, County Meath or resided in it. He had been on occasion a visitor to the house. He did not give that house as an address for postal correspondence to Mr. O’Callaghan or anybody else at any time since December 2013. He specifically averred that at no time did he receive any of the mail sent or alleged to have been sent on behalf of the respondent to that address. He had no arrangement with his niece or her family for forwarding of post delivered to their house. He had not visited the house since 25th December, 2012 and any correspondence that might have been sent there was not received by him. He specifically averred that he received no notice of these proceedings. He explained the reference to the address on the Forms B1 filed in the CRO on the basis that it was the same address that was given when the companies were incorporated in 2003, that it was his address for the conduct of the business of the companies and that the companies had not, in fact, traded since in or about 2007. As regards the address on the 2000 Mortgage, it was never intended as a statement of where his private residence was. The appellant specifically averred that he did not give Mr. O’Callaghan “any postal address in County Meath”. He further averred that his senior counsel in the Appellant’s 2005 Proceedings had not conveyed to him what was “alleged to have been a message for him” from the solicitor for Dublin City Council. The appellant reiterated that Mr. O’Callaghan did not mention the appointment of the Receiver to him during the call on 20th December, 2012.
Second affidavits of Mr. Bell and Mr. O’Callaghan
19. Two further affidavits were filed on behalf of the respondent. One was a further affidavit sworn by Mr. Bell on 3rd September, 2013, which does not elaborate on the factual position as between the parties prior to the making of the Summary Judgment Order.

20. The other was an affidavit sworn by Mr. O’Callaghan on 2nd September, 2013 in which he reiterated that, in the course of the telephone call on 20th December, 2012, he had informed the appellant of the appointment of a receiver and that the appellant had provided him with a postal address of Milltown, Ashbourne, County Meath and had given him the e-mail address that he set out in his first affidavit referred to at 15 above. Mr. O’Callaghan clarified that the letter dated 20th December, 2012 addressed to the appellant at Milltown, Ashbourne, County Meath, which enclosed a copy of the deed of appointment of the Receiver, was sent on 20th December, 2012 to that address.

21. In outlining the contents of the affidavits filed on behalf of both sides, the emphasis has been on the facts disclosed as to what transpired between the parties and their respective agents up to the time the Summary Judgment Order was made on 25th February, 2013, rather than on other material contained in the affidavits, much of which is of an argumentative nature.
The hearing in the High Court
22. In the course of the hearing in the High Court on 23rd September, 2013, Peart J. acceded to an application by counsel for the appellant for liberty to amend the notice of motion filed on 28th August, 2013 to include a relief in respect of the setting aside of the Substituted Service Order. As Peart J. pointed out in his judgment (at para. 50), if that order was set aside, then the Summary Judgment Order must also be set aside, since no proper service of the summons would have been effected.

23. As is disclosed in the order of the Court made on 8th November, 2013, in addition to the various affidavits outlined above, the Court heard the oral evidence of the appellant. As I understand it, notice to cross-examine the appellant was served on behalf of the respondent, but no notice was served by either side to cross-examine any of the other deponents. A very unsatisfactory aspect of this appeal is that there is no transcript available to this Court of the oral evidence given by the appellant in the High Court. On the hearing of the appeal this Court was informed that there was no stenographer present in Court when the appellant was testifying, although, of course, there would have been a digital audio recording of the evidence. This Court was informed by counsel for the appellant that the appellant had applied to the High Court for a transcript with the implicit consent of the respondent and that the position adopted in the High Court was that, if the Supreme Court considered a transcript was necessary, it would be ordered that a transcript be produced. The hearing of the appeal proceeded without the views of this Court being canvassed.
The judgment of the High Court
24. The judgment of the High Court was delivered on 4th October, 2013.

25. As I have already recorded, Peart J. stated in his judgment that, if the Substituted Service Order was to be set aside, the Summary Judgment Order would also have to be set aside. However, he also stated that the application to set aside the Summary Judgment Order required to be considered even if the Court was satisfied that the Substituted Service Order should not be set aside. In that event the onus would be on the appellant to satisfy the Court that because of a mistake on his part, or that he was taken by surprise, which deprived him of an opportunity to defend the claim, the Court should set aside the judgment, but consideration of those matters would be predicated on the fact that, as far as the plaintiff was concerned, the judgment was obtained regularly.

26. In addressing the issue as to whether the Substituted Service Order should be set aside, Peart J. stated (at para. 52):

“I have serious concerns as to the [appellant’s] credibility when he says that he never became aware of these proceedings until June 2013. He is a man who has used his sister and brother-in-law’s address for business purposes at least as far back as January 2000. He has as recently as November 2012 filed documents in the Companies Registration Office stating that his address is Milltown, Ashbourne, County Meath. It beggars belief in circumstances where his sister is also a signatory to those documents filed in the Companies Registration Office, that she and her brother would not have discussed and agreed the fact that he was giving her address as his own. In those circumstances the Court cannot conclude simply on the basis of the defendant’s denials that any post which arrives at her house addressed to the defendant would not be brought to his attention, forwarded to him. It must be assumed that a sensible and workable arrangement was put in place.”
Peart J. also stated that, while the appellant denied that he gave the County Meath address to Mr. O’Callaghan, Mr. O’Callaghan’s evidence was that he did and it was corroborated by the fact that, when he e-mailed Mr. Scully on the following day, 21st December, 2012, Mr. O’Callaghan specifically stated that the appellant had given that address to him. Peart J. stated that he did not accept that Mr. O’Callaghan would have said that, if he had not been so informed by the appellant. Peart J. interpreted the evidence as to what the postman told Mr. Ryan on 25th January, 2013 as that the postman was indicating by his response that the address was the address to which he was used to delivering post addressed to the appellant. Peart J. observed (at para. 57) that it was remarkable that nowhere in his affidavits had the appellant taken the trouble to say where he does in fact reside, or what address the documents ought to have been sent to in order that they might reach him. He noted that the appellant had given an apartment in Cobh, County Cork as his address in the first affidavit sworn by him on 24th July, 2013, while on 5th June, 2013, when he commenced his new High Court proceedings against Dublin City Council, he had given premises in Harold’s Cross Road in Dublin 6W as his address.
27. Peart J. set out his conclusion on the issue as to whether the Substituted Service Order should be set aside as follows (at para. 58):

“In my view there is no proper basis for setting aside the order for substituted service. There was a sufficient basis even as set forth in Mr Ryan’s affidavit for the making of the order. Nothing except a bare denial has been put forward by the [appellant]. Put against the evidence that has been sworn to on behalf of the [respondent], his denials sound hollow, even if the affidavit of Lauren Cox is taken into account by way of support. The sworn evidence and documents exhibited on behalf of the [respondent] only serve to persuade me further that the order for substituted service made by Kelly J. was an appropriate order for him to have made, and I see no basis for setting it aside. I refuse that application. It follows that in my view the plaintiff’s judgment was not irregularly obtained.”
28. On the second issue which he considered, namely, whether the Summary Judgment Order should be set aside, Peart J. stated that, as far back as 1889, and the decision in Farden v. Richter 1889 23 Q.B.D. 124, it has been held that, where a judgment is regular, “it is an inflexible rule that the judgment could not be set aside without an affidavit by the defendant suggesting that he had a defence to the plaintiff’s claim”. Having pointed out that the appellant had not set forth an arguable defence to the respondent’s claim, Peart J. stated (at para. 63):
“Farden v. Richter [supra] does not rule out that there may be some exceptional circumstance where this otherwise inflexible rule should not be an obstacle to a defendant who seeks to set aside a judgment obtained against him. But there are no such circumstances in this case. The defendant’s mere averment that he had no knowledge of the proceedings before judgment was granted is insufficient in the light of the evidence in this case. Put more bluntly, I do not believe the defendant when he says this.”
For the foregoing reasons, Peart J. refused to set aside the Summary Judgment Order.
29. It is appropriate to record that on the hearing of the appeal, counsel for the respondent made it clear that the respondent has always conceded that, if the appellant wants to defend the claim for summary judgment, the respondent will not resist an application to do so provided that –

(a) the appellant files an affidavit showing that he has a defence to the claim on the merits, and
(b) he makes some offer as to suitable terms, suggesting that an order for payment of funds into Court might be suitable.

The order appealed against and the grounds of appeal
30. The judgment of Peart J. was given effect to in the order dated 8th November, 2013, in which it was ordered that the notice of motion dated 28th August, 2013 on behalf of the appellant be refused and that the respondent recover against the appellant its costs of and incidental to the motion, the costs to be taxed in default of agreement.
31. The grounds of appeal against that order set out in the appellant’s notice of appeal filed on 29th November, 2013 were as follows:

(a) that the Substituted Service Order was irregular in law insofar as the requirements of Order 9, rule 2 of the Rules of the Superior Courts (the Rules) were not met, there being no evidence before the Court that the appellant was at that time within the jurisdiction of the Court, and because the appellant was overseas at that time, and because the appellant did not at that or any time reside at Milltown, Ashbourne, County Meath;
(b) that Peart J. erred in law and on the facts insofar as he failed to set aside the Substituted Service Order, when evidence, uncontradicted by the respondent, was put before the Court that at the relevant time the appellant was outside the jurisdiction, and that the appellant had at no time resided at Milltown, Ashbourne, County Meath;

(c) that Peart J. erred in law and on the facts in preferring the evidence that Milltown, Ashbourne, County Meath was the appellant’s residence to (a) the evidence of the appellant himself and (b) the unrebutted evidence of his niece, the long-term occupier of those premises with her parents;

(d) that Peart J. erred in law and on the facts insofar as he found that the appellant had notice of these proceedings prior to June 2013, in that his finding was based on an assumption as to facts which, even if true, did not in fact form any adequate basis for concluding that the appellant had notice of the proceedings prior to the making of the Summary Judgment Order; and

(e) insofar as the evidence on which the Substituted Service Order was made was shown to be false, Peart J. erred in law in effectively placing the burden of proof of the irregularity of the Substituted Service Order on the appellant rather than putting the burden of proof of the regularity thereof on the respondent.

As there was consensus on the hearing of the appeal that the issues which arose in relation to the order for substituted service on CCK made on 11th June, 2013 were peripheral, I consider that it is not necessary to address the ground of appeal advanced on behalf of the appellant that Peart J. misdirected himself in law and on the facts insofar as he gave any weight to the fact that CCK, who had no instructions at the time in the proceedings, had refused to accept service of the proceedings.
The submissions on behalf of the appellant: outline and discussion
32. The fundamental point advanced on behalf of the appellant was the contention that injustice had been perpetrated on him by the making of orders in the High Court against his interests when he had no chance to respond or defend himself. The appellant’s position was that the Rules reflect the principle that justice requires that no one should be judged before he or she has knowledge of the identity of his accuser, knowledge of the allegation and complaint, and an adequate opportunity to respond. However, in this case, it was submitted that the Rules were not complied with.

33. In particular, counsel for the appellant submitted that Order 9, rule 2 of the Rules was not complied with. That rule provides:

“Service of any summons on the defendant shall, except in the cases in the following rules of this Order specified, be effected by personal service if it be reasonably practicable. Where it shall appear by affidavit that such defendant is personally within the jurisdiction and that due and reasonable diligence has been exercised in endeavouring to effect such personal service, service of such summons may be effected by delivering a copy thereof at the defendant’s house or place of residence, or at his or her office, warehouse, counting house, shop, factory, or place of business, to the wife, husband, child, father, mother, brother, or sister of the defendant, or to any servant or clerk of the defendant (the person to whom such copy shall be delivered being of the age of sixteen years or upwards) and showing to such person the original or duplicate original of such summons.”
Counsel for the appellant emphasised the words “personally within the jurisdiction” in the second sentence of rule 2 and pointed to the uncontroverted evidence that the appellant left the jurisdiction on or about 27th December, 2012, that he was in the jurisdiction for some days in March but was not otherwise in the jurisdiction at any relevant time up to the end of June 2012. Reference was made to the appellant being in the Far East, which I understand to mean Sri Lanka, while he was out of the jurisdiction. It was further submitted that the premises at Milltown, Ashbourne, County Meath were not the appellant’s “house or place of residence”.
34. Of course, in this case, the respondent did not rely on the option available under the second sentence of rule 2 to endeavour to effect service on the appellant by serving a connected person. Rather, the respondent invoked Order 10 of the Rules and applied to the High Court for an order for substituted service. Rule 1 of Order 10 provides:

“If it be made to appear to the Court that the plaintiff is from any cause unable to effect prompt personal service, or such other service as is prescribed by these Rules, the Court may make an order for substituted or other service, or for the substitution for service of notice by advertisement or otherwise.”
Rule 2 of Order 10 provides:
“Every application to the Court for an order for substituted or other service, or for the substitution for service of notice, shall be supported by an affidavit setting forth the grounds upon which the application is made.”
Here, the appellant alleged the irregularity of the Substituted Service Order on two grounds: first, that the facts put before the Court as to where the appellant could be served, and on which the Court acted, were incorrect; and, secondly, that no evidence was put before the Court that the appellant was within the jurisdiction either on 31st January, 2013 or during February 2013.
35. Elaborating on the alleged irregularity, counsel for the appellant submitted that service of the summary summons and the motion for judgment and other relevant documents was not regular, because the Substituted Service Order was not regular because –

(a) the appellant was outside the jurisdiction,
(b) the premises at Milltown, Ashbourne, County Meath were not his house or place of residence; and

(c) the evidence on the application for substituted service was deficient in that –

(i) it did not state that the appellant was within the jurisdiction; and
(ii) it wrongly referred to the premises at Milltown as his residence.

It was submitted that service being irregular, the appellant was entitled to have the Summary Judgment Order set aside, unless there was good reason for not so doing. It was acknowledged that a situation where, despite the order for substituted service being based on wrongful facts, the existence of the proceedings and application had come to the knowledge of the litigant the subject of the order for substituted service, who took no action, would constitute circumstances in which the litigant could not seek to have an order made against him set aside. It was submitted that the appellant in this case is not in that position, in that Peart J. made no finding as to when he became aware of the proceedings. However, that submission is not correct, because, as the passage from the judgment of Peart J. quoted at para. 28 above illustrates, Peart J. dismissed what he described as the “mere averment” of the appellant that he had no knowledge of the proceedings before judgment was granted as not being true.
36. Counsel for the appellant challenged the correctness of the findings of fact which had been made by Peart J., asserting that they were seriously faulty. It was contended that Peart J. had failed to resolve the conflict of evidence between Mr. Ryan and Lauren Cox and pointed out that the respondent had not sought to cross-examine Lauren Cox. He contended that it was not appropriate for the Court to have found that there must have been a sensible and working arrangement in place between the appellant and his sister, Cora Cox, in relation to the use of the address of Cora Cox as the appellant’s address in filings in the CRO, when there was no evidence of the existence of such an arrangement, or what the arrangement was. The evidence was insubstantial and insufficient to warrant forming a disadvantageous view as against the appellant, he submitted. Given that the appellant testified that he was not within the jurisdiction prior to the making of the Summary Judgment Order and that there was no contra evidence, his counsel contended that the Court was not entitled to conclude that the appellant was telling lies. At no time was there the slightest evidence that the appellant intended to disobey a Court order, he contended. On that last point, there was no suggestion that the appellant left the jurisdiction to avoid service of proceeding on him and, indeed, it was made clear by counsel for the respondent that the respondent was not suggesting otherwise.

37. Turning to the authorities relied on by counsel for the appellant, it is undoubtedly the case, as laid down by the Court of Appeal in Crane & Sons v. Wallis [1915] 2 I.R. 411, that the Rules must be strictly complied with in the case of a judgment by default. As O’Brien L.C. stated (at p. 415), the jurisdiction of the Court can only come into existence if the Rules have been complied with. In this case the motion on foot of which the Summary Judgment Order was made sought an order for summary judgment invoking Order 37 of the Rules. Having said that, the courts take a strict approach to compliance with summary summons procedure, as is pointed out in Delany & McGrath on Civil Procedure in the Superior Courts, 3rd Ed., (at para. 26 – 34).

38. The decision of the High Court (Herbert J.) in Heffernan v. Ryan [2005] 1 I.R. 32 cited on behalf of the appellant concerned the proper application of the alternative form of service where the defendant is personally within the jurisdiction and due care and diligence was exercised in endeavouring to effect personal service, as provided in the second sentence of rule 2 of Order 9 of the Rules. Counsel for the appellant referred the Court to two aspects of the judgment of Herbert J. The first was his interpretation of the meaning of “place of residence” and “house” in Order 9, rule 2, in relation to which he stated (at para. 22):

“As used in O. 9, r. 2 of the Rules . . . in my judgment ‘place of residence’ was intended to denote the place where a defendant might be actually living at a particular time, where he ate drank and slept, while ‘house’ was intended to denote his or her dwelling house or permanent abode, the place where he or she was at home. I consider that ‘place of residence’ was intended to cover all sorts of more or less temporary residences inhabited by persons living or working away from their dwelling house, such as hotels, lodging houses, hostels, institutional residences and seasonal residences.”
The second was the interpretation by Herbert J. of the meaning of “personally within the jurisdiction” in Order 9, rule 2. He stated (at para. 27):
“The use in O. 9, r. 2 of the word ‘personally’ in my judgment, shows that nothing short of the actual physical presence of the defendant in the jurisdiction at the moment of alternative service under O. 9, r. 2 will suffice.”
Neither of those interpretations is of obvious relevance to the application of Order 10.
39. Counsel for the appellant also relied on two authorities in which judgment was set aside because the Court was not satisfied that the defendant was within the jurisdiction at the time of the alleged service: Tisdall v. Humphrey I.R. 1, C.L. 1, a decision dating from 1867; and Poole v. Stewart (1903) 37 ILTR, in which the earlier decision was followed. Each of those decisions was concerned with whether service purported to be effected pursuant to a provision analogous to Order 9, rule 2 then in force was regular, not with a situation in which an order for substituted service had been obtained from the Court. Incidentally, those decisions have been departed from in recent years in an authority relied on by counsel for the respondent: Royal Bank of Ireland v. Nolan (1958) 92 ILTR 60, in which Dixon J. held that, where an application to set aside a judgment is brought on the basis of an irregularity in service, it is a prerequisite to relief that the defendant swear an affidavit establishing that he did not have notice of the proceedings.
Submissions on behalf of the respondent: outline and discussion
40. Counsel for the respondent’s starting point in addressing the challenge to the Substituted Service Order was the submission that it falls to be considered in the first instance under Order 10, rule 1. In that provision, which as been quoted in para. 34 above, there is no requirement that a defendant is “personally within the jurisdiction” before an order for substituted service may be granted. Counsel submitted that it is sufficient if the plaintiff demonstrates an inability to effect prompt personal service “from any cause”. It was submitted that as a matter of fact, on 31st January, 2013, the High Court (Kelly J.) was satisfied that the respondent was unable to effect prompt personal service on the appellant and exercised the discretion conferred by Order 10, rule 1 and made the Substituted Service Order.

41. Counsel for the respondent also addressed whether the requirement of being personally within the jurisdiction should be imported into Order 10, rule 1. It was submitted that there was no basis for so doing. Reference was made to the commentary in Delany and McGrath (op. cit.) at page 216. In the passage in para. 3 – 23 quoted by counsel for the respondent, the authors state:

“Unlike Order 9, rule 2 dealing with service on connected persons, Order 10, rule 1 is not confined in its application to situations where the defendant is personally within the jurisdiction.”
The authors elaborate on that in the following passage in which they state that, therefore, it would appear that an order for substituted service can be made where leave to serve outside the jurisdiction has been obtained or, alternatively, at the same time that it is applied for. Counsel for the respondent acknowledged that in certain circumstances, for example, where the defendant is a foreign citizen or has no connection with this jurisdiction, an application to serve proceedings out of the jurisdiction under Order 11 of the Rules might be required as an initial step to seeking the order for substituted service. However, he submitted that such was not the case here because the defendant is an Irish citizen, who had substantial business and property interests within the jurisdiction, carried on business within the jurisdiction, entered into commercial banking facilities within the jurisdiction, and gave Irish resident addresses for himself to the CRO in respect of Irish companies of which he was a director and secretary.
42. Counsel for the respondent also relied on the decision of the High Court (Barron J.) in Uwaydah v. Nolan [1997] IEHC 35. However, in my view, that decision does not really advance the respondent’s case. Clearly in that case the service which the defendant sought to set aside and in respect of which the plaintiff sought an order under Order 9, rule 15 of the Rules declaring the service actually effected to be sufficient was service pursuant to the alternative option to personal service on a connected person, as provided for in the second sentence of Order 9, rule 2.

43. Of more assistance to this Court are the submissions which were made by counsel for the respondent as to the principles which apply to the review by this Court on appeal of the evidence which was before Peart J. in the High Court and on the basis of which he determined that service on the appellant was not irregular. The relevant principles are summarised in the judgment of McCarthy J., with whom the other Judges of the Supreme Court concurred, in Hay v. O’Grady [1992] 1 I.R. 210. Having quoted Order 58 of the Rules which provides, inter alia, that all appeals to the Supreme Court “shall be by way of re-hearing”, McCarthy J. stated (at p. 216) that this does not mean that the Supreme Court re-hears oral evidence but, rather, the arguments based upon the findings of fact, including arguments that findings are unsupported by evidence, itself a question of law. Having stated that, although the jurisdiction confirmed by Article 34 of the Constitution is, save as there expressed, unlimited, the Supreme Court has, in effect, limited its jurisdiction in the manner detailed in the succession of cases which had been cited in the course of argument in that case. McCarthy J. then (at p. 217) summarised the role of the Supreme Court stating, insofar as is relevant for present purposes, this Court being primarily concerned with review of findings of fact, as follows:

“The role of this court, in my view, may be stated as follows: –

1. An appellate court does not enjoy the opportunity of seeing and hearing the witnesses as does the trial judge who hears the substance of the evidence but, also, observes the manner in which it is given and the demeanour of those giving it. The arid pages of a transcript seldom reflect the atmosphere of a trial.
2. If the findings of fact made by the trial judge are supported by credible evidence, this Court is bound by those findings, however voluminous and, apparently, weighty the testimony against them. The truth is not the monopoly of any majority.

3. Inferences of fact are drawn in most trials; it is said that an appellate court is in as good a position as the trial judge to draw inferences of fact. . . . I do not accept that this is always necessarily so. It may be that the demeanour of a witness in giving evidence will, itself, lead to an appropriate inference which an appellate court would not draw. In my judgment, an appellate court should be slow to substitute its own inference of fact where such depends upon oral evidence or recollection of fact and a different inference has been drawn by the trial judge. In the drawing of inferences from circumstantial evidence, an appellate tribunal is in as good a position as the trial judge.”

Unfortunately, the difficulty for this Court in this case is not that it is subjected to reading arid pages of a transcript, which may not reflect the atmosphere of the hearing in the High Court. The difficulty, which has already been alluded to, is that this Court has no record of the oral evidence given by the appellant in the High Court either by way of transcript, digital audio recording, or even an agreed note.
44. On the issue as to whether Peart J. should have acceded to the appellant’s application to set aside the Substituted Service Order, counsel for the respondent submitted that the irresistible conclusion from the facts established before Peart J. in the High Court was that the address at Milltown, Ashbourne, County Meath was an address at which the defendant could be contacted. Counsel highlighted six elements of the additional evidence which was before Peart J., which was not before Kelly J. when he made the Substituted Service Order, namely:

(a) that the appellant’s address was given in the 2000 Mortgage as “Milltown, Ashbourne, County Meath”;
(b) that the Forms B1 which were filed in the CRO as late as autumn 2012, and which were filed in accordance with the statutory obligations of the appellant gave his address as Milltown, Ashbourne, County Meath;

(c) that the premises at Milltown were the appellant’s sister’s home;

(d) that the evidence of Mr. O’Callaghan that he got the appellant’s e-mail and postal correspondence addresses from him on 20th December, 2012 was corroborated by the fact that Mr. O’Callaghan e-mailed that information to Mr. Scully on the following day, 21st December, 2012;

(e) on the appellant’s best case, he left the jurisdiction on 27th December, 2012 without leaving any contact address, notwithstanding that he was an Irish citizen with an Irish business, so that the respondent had no address for him abroad; and

(f) that even in the summer of 2013 the appellant had not identified one single location as his address in this jurisdiction.

45. Counsel for the respondent submitted that the judgment on foot of the Summary Judgment Order was a regular judgment, not an irregular judgment, because it had been obtained on the basis of compliance with the Substituted Service Order. Apart from that, however, on the authority of the decision in Royal Bank of Ireland v. Nolan, to maintain an application to set aside the judgment on the basis of irregularity in service, the onus was on the appellant to establish that he did not have notice of the proceedings before judgment was ordered. Peart J. who had the opportunity to see the appellant being cross-examined and to form a view as to his credibility had found as a fact that the appellant was on notice of the proceedings before the Summary Judgment Order was made, which, it was submitted, was a correct finding.
Conclusion
46. The first issue this Court has to determine is whether the appellant has established that the Substituted Service Order should be set aside. I consider that he has not, for the following reasons.

47. First, there is no requirement, express or implied, in the Rules which confer jurisdiction on the superior courts to make an order for substituted service that the person sought to be served is personally within the jurisdiction, either when the application for substituted service is made or when service is effected. The only requirement in Order 10, rule 1 is that the Court is satisfied that prompt personal service cannot be effected on the person sought to be served. In the High Court, Kelly J., on the evidence before him, was satisfied that that requirement had been complied with. The evidence before Peart J. subsequently, in my view, put beyond “yea or nay” that the respondent was unable to effect prompt personal service on the appellant, who for most of the first half of 2013 was at an unknown location in Sri Lanka.

48. Secondly, in my view, on the evidence before him, Kelly J. was correct in concluding that service of the summary summons, the motion for judgment and the other relevant documentation on the appellant by pre-paid post addressed to him at Milltown, Ashbourne, County Meath would result in the appellant being put on notice of the proceedings and the motion for summary judgment, irrespective of the fact that, as is now acknowledged, the description of the premises at Milltown as the appellant’s “residence” was incorrect. As the analysis of the evidence which was before Peart J. conducted by counsel for the respondent illustrates, there was even more evidence before Peart J. than there had been before Kelly J. from which it would have been reasonable to conclude that the appellant would be put on notice of the proceedings and of the motion for judgment by service of the relevant documents on him in a manner directed in the Substituted Service Order. I am satisfied that it was reasonable for Peart J. to infer from the totality of the evidence that there was an arrangement in place between Cora Cox and the appellant whereby the appellant would be apprised that correspondence and documents had been sent to him by post at the address in Milltown, and that the appellant could ascertain the contents of the correspondence and documents, so that, in the case of documents for the initiation and prosecution of legal proceedings, the appellant would have an opportunity to respond thereto in whatever way he thought fit. As Dixon J. is reported to have said in giving his judgment in the Royal Bank of Ireland Ltd. v. John Nolan as to the importance of seeing that service was regular:

“One could not overlook the fundamental purpose of service which was to give the defendant notice and sufficient warning of the proceedings that he might have to contest.”
In that context, one can understand the observation of the appellant’s very experienced senior counsel that he considered this case to be of extreme importance and why he so vigorously advanced the appellant’s position.
49. The decision of Dixon J. leads to the second issue the Court has to determine. That is whether the appellant can rely on his assertion that he did not have knowledge of the existence of the proceedings when the Summary Judgment Order was made on 25th February, 2013 and what the consequences are, if he cannot rely on that assertion.

50. Having heard the oral evidence of the appellant on cross-examination, Peart J. concluded that the appellant was not telling the truth when he averred that he had no knowledge of the proceedings before the Summary Judgment Order was made on 25th February, 2013. At the risk of unnecessary repetition, unlike the trial Judge, this Court has not had the opportunity to see or hear the appellant testifying, and, more importantly, it has no record whatsoever of the testimony which he gave. In line with the principles set out in Hay v. O’Grady, in normal circumstances this Court is slow to interfere with a finding of fact made by a Judge in the High Court, particularly where the finding specifically relates to the credibility of the witness or witnesses. In the very unusual circumstances of this case, there is absolutely no basis on which this Court could determine that the conclusion of Peart J. as to the appellant’s knowledge of the proceedings before 25th February, 2013, which, as recorded earlier in para. 28, he put bluntly as that he did not believe the appellant’s testimony that he did not have “knowledge of the proceedings before judgment was granted”, was incorrect. Accordingly, this Court must act on the basis that the appellant did have knowledge of the proceedings before 25th February, 2013 and it must reject the appellant’s assertion to the contrary. The consequence is that the Court must reject the appellant’s assertion that the Summary Judgment Order was an irregular judgment because of the alleged irregularity in service.

51. Turning to the Summary Judgment Order, on the application for summary judgment, the respondent satisfied the Court that it had complied with the Substituted Service Order. On the basis of the additional evidence put before Peart J., he found that the appellant did have knowledge of the proceedings before the Summary Judgment Order was made and, for the reasons set out above, this Court cannot interfere with that finding. It follows that this Court must regard the Summary Judgment Order as having been regularly obtained.

52. The appellant, on the application to the High Court to set aside the Summary Judgment Order, did not even attempt to meet the essential prerequisite to a Court considering an application to set aside a regular judgment, namely, that he demonstrate on affidavit that he has a defence on the merits which has a reasonable prospect of success. Accordingly, it was not open to the High Court to consider setting aside the regular Summary Judgment Order and giving the appellant the opportunity to defend the proceedings on the basis that the interests of justice so required. That being the case, the issue does not arise on this appeal, although, in this regard, it appears that the respondent’s attitude to the appellant having an opportunity to defend the claim on the merits has at all times reasonable.

53. Having regard to the foregoing considerations, I consider that there should be an order dismissing the appeal.

Ashbourne Beef and Lamb Ltd v Woods

[2014] IEHC 212JUDGMENT of Kearns P. delivered on the 11th of April, 2014
Introduction
This is an appeal in which the appellant seeks an order setting aside the order of the Circuit Court of the 3rd December, 2013, which had set aside judgment in default of appearance obtained against him in the office.
Background
The appellant is a limited liability company trading in meat and meat products with premises at Ashbourne, County Meath. The respondent is a butcher and trades as Quality Meats in Dundalk, County Louth. He resides in Crossmaglen, County Armagh, Northern Ireland. The plaintiff claims for monies due and owing to it for goods sold and delivered and services rendered by the appellant to the respondent.
History of the Proceedings
By civil bill dated the 16th February, 2011, the appellant sought to recover the sum of €28,919.16 from the respondent. No appearance was entered by the respondent and by way of affidavit of debt of the 29th March, 2011, the appellant entered judgment in default of appearance in the Office of the Circuit Court on the same date in the sum of €29,919.16 plus costs of €624.00.

By notice of motion of the 8th April, 2013, supported by an affidavit of the respondent sworn the 4th April, 2013, the respondent sought to have the judgment set aside. He claims that the proceedings were not served on him and that he never received them. He also denies owing the sum to the appellant. The respondent asserts that he only became aware of the proceedings when he was served with an equity civil bill on the 27th February, 2013, in which well charging relief was sought against him.

The appellant, in a replying affidavit sworn on the 29th May, 2013, claims that the respondent used to live at the address at which the documents were served and refers to an affidavit of service from a summons server stating that he spoke to the respondent at that address.

In the Circuit Court it was argued by the respondent that service was not effected in accordance with the rules of court. The court was referred to Order 14B Rule 12 which provides that judgment in default of appearance cannot be entered without leave of the court. The appellant argued that service was effected under the ordinary rules for service outside the jurisdiction (Order 14) and that judgment in default of appearance may thereafter be sought in the office under Order 26.
Relevant law

Order 14B Rule 12

12. (1) Subject to Rule 12(5), judgement shall not be given or entered in default of Appearance in any proceedings to which this Order applies until it is established that:

(i) the document was served by a method prescribed by the internal law of the Member State addressed for the service of documents in domestic actions upon persons who are within its territory; or
(ii) the document was actually delivered to the Defendant or to his residence by another method provided for by the Regulation, and that in either case the service or delivery was effected in sufficient time to enable the Defendant to defend.

(2) Judgement in default of Appearance shall only be entered with leave of the Court.

Order 14
1. Notwithstanding the Rules of Order 13, service of a Civil Bill or notice thereof out of the jurisdiction is permissible without the leave of the Court, if, it complies with the following conditions:
(i) The claim made by the Civil Bill is one which by virtue of the 1998 Act the Court has power to hear and determine; and

(ii) No proceedings between the parties concerning the same cause of action is pending between the parties in another contracting state; and

(iii) either C

(a) the defendant or other person to be served is domiciled in Ireland or in any other contracting state, or

(b) the proceedings commenced by the Civil Bill are proceedings to which the provisions of Article 16 of the 1968 Convention concerning exclusive jurisdiction apply, or

(c) the defendant or other party to be served is a party to an agreement conferring jurisdiction to which the provisions of Article 17 of the 1968 Convention concerning prorogation of jurisdiction apply.

2. Where the person to be served is not a citizen of Ireland, notice of the document, and not the document itself, is to be served on him.

3. (i) Notwithstanding the provisions of Rules 3, 4 and 5 of Order 11 and save as provided in Rules 8, 9 and 11 of Order 11, service under this Order on an individual shall be effected by personal service or by registered or insured post and service on a corporation or association shall be effected in the manner provided by sub-rule (v) below.

(ii) Personal service shall be effected by delivery of a copy of the Civil Bill or notice thereof on the person to be served.

(iii) Service by registered or insured post shall be effected by delivery to the person to be served of an envelope addressed to such person. At the time of posting an application should be made to the postal authorities for an advice of delivery.

(iv) Where it appears that the person to be served is within the jurisdiction of the state where service is to be effected and that reasonable efforts have been made to effect service in accordance with the foregoing provisions of this Rule, service may be effected by delivery of such copy notice or envelope at the house or residence of the person to be served or at the place where such person carries on any profession, business or occupation, to the wife, husband, child, father, mother, brother or sister of the person to be served, or to any servant or clerk of the person to be served (the person to whom such copy notice or envelope shall be delivered being of the age of sixteen years or upwards).

Order 26
1. Where the plaintiffs claim in a Civil Bill is for a debt, or liquidated demand, or for the delivery of specific goods or chattels, and a defendant has not entered an Appearance within time limited in the Civil Bill,or, having entered an Appearance, has not delivered a Defence within the time limited by these Rules, the plaintiff may, in default of such Appearance or Defence, as the case may be, apply in the Office for judgment to be entered against such defendant. In any such cases in which the defendant shall, after action brought, have satisfied the plaintiff’s claim (save as to costs), the plaintiff may apply in the Office for judgment for the costs applicable to the plaintiff’s claim. The application for such judgment shall be supported by the documents mentioned in Rules 2 and 3 of this Order with such alterations and additions thereto as may be appropriate and shall be in accordance with Forms 9 and 10 of the Schedule of Forms annexed hereto.
2. An application under the provisions of Rule 1 of this Order shall be supported by:

(a) the sealed Civil Bill with endorsement of service thereon in accordance with these Rules;

(b) an affidavit or statutory declaration of service of the Civil Bill, or of service of notice thereof, as the case may be; and

(c) if the application be for judgment in default of Appearance, a certificate by the County Registrar that no Appearance has been entered, or if the application be for judgment in default of Defence, an affidavit by the plaintiff or solicitor for the Plaintiff verifying that an Appearance has been entered but that a Defence has not been delivered.

(d) an affidavit verifying the plaintiff’s claim made by the plaintiff, or by some other person on his behalf who can swear positively to the facts; and

(e) a certificate by the plaintiff where he sues in person, or, where he does not, then by his Solicitor, specifying the amount then actually due, or certifying that the goods or chattels in respect of which the judgment is sought are still withheld by the defendant as the case may be, and, in the case of judgment in default of Defence, that no Defence has been served.

Case made on Appeal
The appellant sought to rely on service under Order 14 and judgment in default of appearance under Order 26. Further the appellant advanced the argument that where there is evidence put forward on the part of the respondent that the proceedings were not received then it is within the discretion of the court to decide whether or not to allow the respondent proceed with its defence. To take this into account the court must evaluate whether there is a defence raised that has a reasonable prospect of success and not simply a stateable defence.
The appellant argued that, when serving proceedings out of the state on a person within the E.U., Order 14 of the Circuit Court Rules applies. It was argued that this rule applies to tort and contract issues and this was a straightforward case of debt arising out of supply of beef to a butcher. Within the rules, service effected by registered post is allowed for a person outside of the jurisdiction, per Order 14 Rule 3 (iii).

In response to the argument that Order 14B applies the appellant argues that this relates to transmitting and receiving agencies. It is contended that this is not relevant in the within circumstances.

The respondent argued that under Order 14B Rule 12 that judgement in default of appearance can only be granted with leave of the court rather than by way of application in the office. The respondent claims that the money is not due and owing and that they are anxious to file a defence to the claim against them. They allege that service of the Civil Bill by registered post was not sufficient and it ought to have been served personally.
Decision
Where the civil bill in this case related to a claim for monies due for provision of services it must be deemed to be under Order 14 of the Circuit Court Rules and defined as a contract where monies fall due. Therefore under Order 14 service by registered post outside the jurisdiction is in compliance with the rules under Order 14 Rule 3(iii) where the person is resident outside the jurisdiction. There cannot be any issue with service by registered post.

The respondent claims that they did not receive the proceedings when they were served by registered post. In these circumstances the court has discretion to set aside the judgment under Maher v. Dixon [1995] I.L.R.M. 218 and O’Callaghan v. O’Donovan (Unreported, Supreme Court, 13th May, 1997) where it was determined that where there is a “regular judgment” in compliance with the rules it may then assess whether the respondent has a reasonable prospect of success on the basis of the defence offered and not simply a stateable defence and in the justice of the matter it would be unfair to allow judgment to be entered against them without an opportunity to defend the claim against them. In the circumstances of the case presently before the court it cannot be said that the respondent has a reasonable prospect of success in defending the claim against them. There is no draft defence from the respondent and merely a bald assertion in the affidavit of Michael Woods of the 4th April, 2013, that the monies are not due and owing.

In the circumstances the Court cannot deem that the respondent has a reasonable prospect of success and exercise its discretion to set aside the judgment. Service was effected in the proper manner under Order 14 and judgment was correctly entered against the respondent under Order 26 of the Rules of the Circuit Court.

I would therefore vacate the order of the Circuit Court and allow judgment in default of appearance as against the respondent in the sum of €29,919.16.

 

 

 

In EMO Oil Ltd v Willowrock

[2016] IECA 200
Judgment of Ms. Justice Irvine delivered on the 6th day of July 2016
1. What are the principles to be applied by a High Court judge when faced with an application to set aside a summary judgment obtained in the Central Office of the High Court and were those principles properly applied by Hedigan J. in the present case when he made his Order on 27th July, 2012? These are the questions at the core of this appeal

Background

2. By summary summons dated 19th October, 2009, the plaintiff instituted proceedings seeking to recover a sum of €693,243.03 together with interest in respect of the supply of oil to the defendant (“Willowrock”) over the previous six year period.

3. The summons was served on 23rd October, 2009. In circumstances where Willowrock failed to enter an appearance, the plaintiff obtained judgment (“the judgment”) in the Central Office for the sum of €688,242.98 on 11th January 2010. A letter notifying Willowrock of that fact was sent by the plaintiff’s solicitors on 27th January, 2010. That letter evoked an immediate written response from Willowrock’s then solicitors, Cathal L. Flynn and Co. It is clear from the tone of their letter dated 29th January, 2010, that they were convinced that their client had not been served with the proceedings. The letter also expressed surprise that their firm had not been served with a courtesy copy of the proceedings. Finally, they advised that, having spoken to counsel, they were satisfied that their client had a good defence to the proceedings.

4. On 14th May, 2010, the solicitors on record for the plaintiff registered a judgment mortgage against the defendant’s interest in Folio 13057F of the Registrar of Freeholders County Galway.

5. By notice of motion dated 23rd July, 2010, Willowrock issued a motion seeking to set aside the judgment. That application was grounded upon the affidavit of Mr. Anthony McCormack who set out in some detail the basis upon which the defendant would, if permitted, defend the proceedings. He disputed the delivery of oil to the value of €693,243.03. He complained that he had made numerous unsuccessful requests, prior to the institution of the proceedings, that the plaintiff vouch the delivery of the goods the subject matter of the claim. Further, in support of his claim that the failure of Willowrock to enter an appearance was a bona fide mistake, he referred to the fact that two other sets of proceedings relevant to the dealings between the parties were in being and that an appearance had been entered to each of these.

6. Apart from maintaining that the defendant had a bona fide defence to the proceedings, Mr. McCormack also asserted that the plaintiff had breached its contractual obligations in that Willowrock had been overcharged for the oil supplied as a result of which it had been undermined in the market place. Its position had been exacerbated by the fact that it was contractually committed to purchasing all of its oil from the plaintiff. He further claimed an entitlement to a set off against the plaintiff’s claim in the sum of €282,974.94 which he maintained reflected an overcharge by the plaintiff. The plaintiff had applied charges which were only applicable when the oil was delivered whereas in the present case Willowrock had collected the oil from the plaintiff.

7. In her affidavit of 26th October, 2010, Ms. Deegan, on behalf of the plaintiff, challenged the assertions made by Mr. McCormack in his affidavit. She referred to the affidavit of service to establish that proper service had been effected on Willowrock. As to Mr. McCormack’s reliance upon the fact that appearances had been entered to other proceedings involving the same parties, she referred to the fact such appearances had only been entered after judgment had been obtained in the instant case. She further relied upon the delay of Willowrock in seeking to set aside the judgment as further evidence of its lack of bona fides.

8. As to Willowrock’s purported defence, Ms. Deegan maintained that the plaintiff had replied to all of the queries which had been raised concerning the invoices. She denied the representations relied upon by Mr. McCormack and his assertion that Willowrock was tied to selling its products. She further maintained that the sums claimed had been adjusted to reflect the fact that Willowrock collected its product. She denied any breach on the part of the plaintiff concerning what Mr. McCormack maintained was an “advertisement agreement” pointing to the fact that he had not identified the agreement or how it had been allegedly breached.

9. Mr. McCormack, in a lengthy supplemental affidavit sworn on 12th November, 2010, expanded upon the grounds of defence raised in his earlier affidavit. He explained that he has no records or bill of lading to match invoices to the total sum of €250,360.55. A bill of lading was a computerised document which existed in relation to every other invoice. He further explained why Willowrock was entitled to an additional rebate or discount to the extent of €168,382 for collecting the product supplied by the plaintiff rather than having them delivered. Thus he claimed that Willowrock had a defence to the extent of approximately €415,000.

10. Mr. McCormack also reiterated that, contrary to representations which had been made by the plaintiff, Willowrock had been charged prices above those it had afforded to its competitors and that this entitled Willowrock to a rebate of €631,688. He summarised the defendant’s position at paras. 28 and 29 of his affidavit as follows:-

“28. At present the plaintiff’s claim is in the sum of €693,243.03. Under the first two categories I state that the defendant has a defence in the sum of €418,742.55 which reduces the plaintiff’s claim to the amount of €274,500.48.
29. I state in addition there is a full dispute as to the amount of the schedule price and the amount of rebate due on foot thereof. That dispute is in the sum of €631,688. I state that when same is deducted from the remainder of the plaintiff’s claim the plaintiff may very well end up be[ing] indebted to the defendant in the sum of €357,187.52.”

11. It should be said that Mr. McCormack’s affidavit is supported by an affidavit of Ms. Irene Donegan, Willowrock’s accountant, who with greater particularity dealt with the invoices in dispute between the parties and the repercussions for Willowrock of the breaches of contract alleged by Mr. McCormack.
12. Willowrock’s motion, which was initially listed for hearing on 17th November, 2011, was adjourned and there followed yet further affidavits from Ms. Deegan and Mr. McCormack concerning Willowrock’s alleged defence to the proceedings.

13. Based upon these affidavits and the submissions of the parties, on 3rd July, 2012, Hedigan J. ruled that the judgment obtained by the plaintiff should be set aside. However, he indicated that he would only do so “on terms”. To see if agreement could be reached between the parties as to the terms which might be imposed, the application was further adjourned. In circumstances where the parties could not reach agreement further affidavits were sworn to enable the Court adjudicate upon the matter.

14. The position adopted by Willowrock, as advised by Mr. McCormack, was that he personally owned lands contained in Folio 14632F County Galway. They had a value, according to Sherry Fitzgerald Mannion, Auctioneers, of approximately €300,000 but were already charged to secure his obligations to the plaintiff on foot of a letter of guarantee dated 12th April, 2006.

15. Willowrock owned the property comprised in Folio 13057F County Galway. Those lands, which had been valued by Sherry FitzGerald Mannion in the approximate sum of €1.2m, were subject to a charge in favour of Bank of Ireland. This was also the folio against which the plaintiff’s judgment had been registered on 14th May, 2010. However, Willowrock’s potential liability to Bank of Ireland, according to Mr. McCormack, could never exceed €364,455.35. Thus, he maintained that the combined value of the aforementioned lands, less any potential liability to Bank of Ireland, was €1,135,544 and would be more than sufficient to meet any potential liability on the part of Willowrock and he invited the Court to set aside the judgment on condition that Willowrock granted the plaintiff a charge to the value of its claim over the lands contained in Folio 13057F County Galway.

16. In reply, the plaintiff’s solicitor, Mr. O’Donovan, advised that his client had already, in July, 2010, obtained an order for possession of the lands in Folio 14632F although that order was under appeal. He further exhibited a report valuing those lands at €75,000. He also reminded the Court that these lands were owned by Mr. McCormack personally. Thus there was no reality in the assertion that they might be available to secure any judgment obtained by the plaintiff against Willowrock.

17. As to the lands in Folio 13057F, these had been valued at €500,000 by Paddy Keane Properties. Mr. O’Donovan challenged Mr. McCormack’s assertion that Willowrock’s liability to Bank of Ireland under its charge might not exceed €364,455.35 given that the charge was an “all sums due charge” in respect of its present and future advances. Further, other creditors might, during the currency of the proceedings, secure themselves against that folio.

18. Finally, Mr. O’Donovan exhibited a report from his legal cost accountant concerning the costs which had already and would be incurred by the plaintiff if the judgment were to be set aside. These were as follows –

(i) To the costs incurred in obtaining judgment and registering the same, (€2,000 to €3,000 including Vat);
(ii) To the costs incurred in dealing with the motion to set aside the judgment (€15,000 to €17,500 including Vat), and

(iii) To the costs to be incurred in the course of a plenary hearing (€50,000 to €75,000 including Vat).

Judgment of the High Court
19. The parties have agreed a note of the ex tempore rulings of Hedigan J. given on 3rd July and 26th July, 2012. Given that this is not a rehearing of the application heard by the High Court, I think it would be helpful to refer to the paragraphs in that note which record the critical aspects of the High Court judge’s decision:-
“10. Mr. Justice Hedigan stated that there had been some apparent mistake on the part of the defendant / appellant or its then solicitor and, accordingly, he was minded to set judgment aside. However, given the delay coupled with the mistake, there must be conditions on any order the Court may make.
11. Mr. Justice Hedigan stated that the Court must give considerable latitude to a defendant who wishes to defend proceedings. There could be a full defence here. The accountancy errors in the invoices, if proven, could enable the defendant / appellant to successfully defend these proceedings.

12. Mr. Justice Hedigan stated that the judgment mortgage over the defendant / appellant’s property offered the plaintiff / respondent no security. He considered that other security over other property might provide this but he needed to be assured of that. He noted that the plaintiff / respondent was entirely innocent and its position must be as secure as possible. He commented that the position was normally that the defendant / appellant would have to lodge the full amount. While he did not want that to happen here, he wanted the plaintiff / respondent’s position to be secured.

13. Mr. Justice Hedigan adjourned the motion for one week, indicating that he would allow the defendant / appellant to defend the proceedings but that, unless the plaintiff / respondent’s position was secured, a very substantial lodgement would have to be made. Mr. Justice Hedigan indicated that he would deal with costs on the adjourned date.”

20. As to the ruling of Hedigan J. given on 27th July, 2012, and the terms and conditions upon which he ordered that the judgment might be set aside, the following is the relevant extract from counsels’ agreed note:-
“23. Mr. Justice Hedigan stated that he was prepared to set aside the judgment but only on terms that protected the plaintiff / respondent’s position in circumstances where the solicitor for the plaintiff / respondent had obtained a perfectly good judgment. He stated further that the defendant / appellant’s achievement in having the judgment set aside had been “against the odds.” The normal position would be for a defendant to lodge the full amount in court but this was a very substantial amount of money. In all the circumstances, he considered the sum of €400,000 should be lodged in court. If it was correct that there was equity of €850,000 in the lands, it must be possible for the defendant / appellant to arrange for the lodgement of that sum.”

Appeal
21. For the purposes of considering the matters raised by Willowrock in its notice of appeal, the Court has had the benefit of extremely helpful written and oral submissions from the parties. This being so, I will do no more than summarise in skeletal form the principal submissions advanced by counsel in the course of this appeal.
22. On Willowrock’s behalf, Mr. Molloy S.C. submitted:-

(i) That having decided that the judgment should be set aside to allow the defendant defend the proceedings and in fixing the terms and conditions of that order in the manner in which he did the High Court judge penalised or punished the defendant for the fact that the plaintiff had obtained judgment against it. He relied upon the decision of Murray J. in McGuinn v. Commissioner of An Garda Síochána [2011] IESC 33 to argue that this was an inappropriate approach.
(ii) That the sum which he directed be lodged in court could not be considered fair or proportionate in circumstances where he accepted that the defendant might have a full defence to the proceedings.

(iii) That the terms imposed were so erroneous that they constituted a bar to the defendant’s access to justice.

(iv) That the High Court judge erred in law in including within his consideration, the costs that would likely be incurred by the plaintiff in the event of the judgment being set aside and the action referred for a plenary hearing.

23. Apart from his legal submissions, Mr. Molloy S.C. advised the Court that as a result of recent events his client was now in a position to lodge a sum of €100,000 in court to the credit of the action in addition to the security which he had already offered in the course of the High Court hearing.
24. Ms. O’Brien S.C. on behalf of the plaintiff submitted: –

(i) That in considering the terms to be attached to the setting aside of the judgment, the Court was entitled to have regard to the defendant’s failure to provide any credible evidence as to how the mistake which had led to the judgment being obtained had occurred. It was noteworthy that insofar as blame was laid at the doorstep of Willowrock’s former solicitor, unlike what had happened in many other reported cases, no affidavit from the relevant solicitor had been forthcoming. Here Mr. McCormack’s explanations were contradictory, confusing and lacking in candour. No explanation whatsoever had been advanced as to what had happened the summons between the date upon which it was served by ordinary pre paid post and the date of the motion to set aside the judgment. She relied upon the decision of Peart J. in Allied Irish Banks Plc v. Lyons [2004] IEHC 129 to urge the Court that where an applicant sought to rely upon the mistake of their solicitor it was to be expected that the applicant would be in a position to file an affidavit sworn by their solicitor to explain what had occurred.
(ii) That the High Court judge was entitled to factor into his consideration, when seeking to balance the interests of the parties, the fact that the defendant’s five month delay in seeking to set aside the judgment had still not been explained.

(iii) While accepting that it was not, as advised by the High Court judge, the default position that a defendant would be required to lodge the full amount of the claim as a term of having judgment set aside the Court had, she submitted, a relatively free discretion and might do so if the conduct on the part of the defendant warranted such an approach. In that regard she relied upon the decision of Costello J. in Petronelli v. Collins (High Court, Costello P. 19th July, 1996).

(iv) The Court correctly viewed the defendant’s offer of a charge against Folio 13057F as one which could not provide any realistic security for the plaintiff’s claim.

(v) That the defendant had been afforded every opportunity to make a proposal to secure the plaintiff’s claim and had abjectly failed in this regard. It was only on the day of this appeal that Willowrock, for the first time, identified the cash sum it could provide by way of security.

(vi) Having regard to the quantum of the plaintiff’s claim, the fact that it had obtained a regular judgment and registered it as a judgment mortgage against the defendant’s lands, that it had and would incur significant legal costs if the judgment were to be set aside, the terms imposed by the High Court judge were just and proportionate and amounted to the proper exercise by the High Court judge of his discretion.

Discussion
25. The jurisdiction of the Court to set aside a judgment obtained in default of appearance is contained in O. 13, r. 11 of the Rules of the Superior Courts, 1986. It provides as follows:-
“Where final judgment is entered pursuant to any of the preceding rules of this Order, it shall be lawful for the Court to set aside or vary such judgment upon such terms as may be just.”
26. It is clear from this rule that the relief that may be afforded to an applicant is one which is at the court’s discretion. However, the rule provides no guidance as to the circumstances in which a Judge might exercise that discretion in favour of an applicant and neither does it circumscribe any time limits for the making of such an application. Some assistance, however, is to be found in the decision of Peart J. in Allied Irish Banks Plc v. Lyons where he emphasised the breadth of the discretion conferred by the rule and the necessity for the court to seek to achieve justice for both the plaintiff and the defendant. This is what he said at p. 4 of his judgment:-
“Clearly a wide discretion is given to the Court in its task of achieving justice between the parties, but the interests of both parties must be taken into account in the weighing exercise undertaken by the Court in considering the interest of each party, and not simply the hardship and distress pleaded on behalf of the applicant in this case”
27. It is usual for an applicant who seeks relief under O. 13, r.11 to able to demonstrate that there was some sort of irregularity in the procedure whereby the judgment which it seeks to set aside was obtained. If it can establish such an irregularity, the court will normally set aside the judgment without enquiring into the merits of the applicant’s proposed defence. The logic which underpins this approach is that if the judgment should never have been obtained in the first place the parties should rightly be returned to the position they enjoyed prior to judgment having been obtained. This is what Clarke J. stated at para. 2.1 of his judgment in O’Tuama v. Casey [2008] IEHC 49 concerning the jurisdiction of the court in such circumstances:-
“[W]here judgment is obtained irregularly, the court will normally set aside the judgment without enquiring into the merits of the proposed defence. The logic of this position is that the judgment should not have been obtained in the first place and a plaintiff who has obtained judgment irregularly should not have any benefit by reason of having obtained judgment in that fashion. On the other hand, where judgment is obtained regularly, the court may, nonetheless, be persuaded to set aside a judgment so as to permit the defendant to defend the proceedings but will only do so after considering the possible merits of the defence which the defendant would wish to put forward.”
28. By way of contrast, if the court is satisfied or the defendant accepts that judgment was obtained in accordance with the rules of court, as is the situation in the present case, the defendant who seeks to have the judgment set aside faces a significantly enhanced onus of proof. They must demonstrate first that they have a bona fide defence to the proceedings and secondly that having regard to all of the relevant circumstances and the interests of both parties that the interests of justice would favour the granting of the relief sought.
29. The most frequent example of this type of application is one brought by a defendant who seeks to rely upon some error on the part of their solicitor as a result of which judgment was obtained against them. Allied Irish Banks Plc v. Lyons, to which I have already referred, is one such case. There, the defendants’ solicitors mistakenly believed that for the plaintiff to obtain judgment in summary summons proceedings where no appearance had been entered, it would be necessary for the bank to issue and serve a motion for judgment. While the defendants’ solicitors were labouring under this mistaken belief, the plaintiff obtained judgment and registered that judgment as a mortgage against the property of the second named defendant. Having regard to the evidence before him Peart J. expressed himself satisfied that the judgment had been obtained in a regular manner and as a result of a mistake made by the defendant’s solicitor.

30. This decision is one which is of significant assistance to the Court in the present case. First, because it clearly establishes the nature and extent of the burden of proof which is on a defendant who seeks to set aside a judgment regularly obtained. In this regard Peart J. adopted the standard of proof applied by Sir Roger Ormrod in The Saudi Eagle [1986] 2 Lloyd’s Reports 221, a case in which it was successfully argued that the defendant needed to demonstrate more than an “arguable case” and had to show that the proposed defence had “a real chance of success”. Secondly, the judgment makes clear that the Court, in order to come to a fair and just conclusion, must weigh the consequences for both parties of granting or refusing the relief sought.

31. In carrying out that exercise Peart J. referred in some detail to the consequences for the second named defendant of refusing to set aside the judgment. He described how she would be put to the hazard of suing her solicitor with all of the consequential burdens that such an approach would have for her in terms of time, expense, and the stress and uncertainty attendant upon that litigation. He surmised that while all of this was happening the plaintiff might seek to execute its judgment, presumably by availing of a well charging order and order for sale of her house. On the other hand he was conscious of the obvious prejudice to the plaintiff if he were to set aside the judgment. The judgment mortgage would be undermined and the plaintiff would lose the comfort of that security.

32. Having taken all of these factors into account and having earlier concluded that the second named defendant had indeed established a potential defence which had a real chance of success, Peart J. concluded that justice favoured setting aside the judgment but he did so on the basis that the second named defendant would undertake not to take any steps to dispose of her property pending the determination of the proceedings.

33. It is perhaps worthwhile noting, given that the point was relied upon by Ms. O’Brien S.C. in the course of her submissions, that in the Lyons case an affidavit had been sworn by the second named defendant’s solicitor accepting that it was he who made the mistake which was relied upon to ground the O. 13, r. 11 application.

34. It is not necessary for the purposes of this appeal to deal to any great extent with the other authorities concerning the courts discretion when considering an application under O. 13. It is clear that each case is decided upon its own facts and that the court has a relatively unfettered discretion as to the terms upon which it will set aside any judgment obtained regularly.

35. There is perhaps one decision worthy of note at this juncture and that is the case of Petronelli .v Collins which Ms. O’Brien S.C. referred to in the course of her submissions. That decision is material insofar as it demonstrates that the court may, in certain circumstances, require a defendant to lodge the entirety of the sum claimed by a plaintiff as a term and condition of setting aside a judgment. However, the facts of that case are really quite unique insofar as Mr. Collins, who sought to set aside the judgment obtained against him, first challenged the validity of the service of the proceedings upon him such as would have entitled him to have the judgment set aside without establishing any mistake or that he had a defence which had a real chance of success. Costello J. concluded that his evidence was less than credible concerning the circumstances relating to service. He expressed himself satisfied that Mr. Collins had deliberately decided to ignore the proceedings thus allowing judgment to be obtained in default. These are clearly facts which are very different from those which present on this appeal. Further, the High Court judge expressed himself satisfied that Mr. Collins’ claim for relief had been highly unsatisfactory in relation to certain important details and further that he had deliberately sought to mislead the Court as to his place of residence. These were all factors that were weighed in the balance by Costello J. when he set aside the judgment but only on terms that Mr. Collins would lodge the full amount of the judgment earlier obtained.
Decision
36. As was advised by Ms. O’Brien S.C. in the course of her submissions, while an appellate court clearly enjoys the jurisdiction to overturn an order made by a High Court judge in the exercise of his/her discretion, it should nonetheless attach significant weight to the conclusions reached by the judge at first instance. (See the decision of this Court in Collins v. Minister for Justice [2015] IECA 27 and that of MacMenamin J. in Lismore Builders Ltd (in receivership) v. Bank of Ireland Finance limited [2013] IESC 6). It would be an incorrect approach for this Court to engage in a full reconsideration of the matters heard in the Court below and then substitute its own views for those of the High Court judge. Accordingly, the approach on this appeal is to assess whether or not the approach and conclusions of Hedigan J. were reasonable in all of the circumstances.

37. For my part, I am satisfied that the trial judge fell into error in a number of respects in the manner in which he approached the exercise of his discretion, particularly in relation to the terms which he imposed on the defendant as a condition of agreeing to set aside the judgment.

38. The High Court judge was, I believe, bound to approach his consideration as to what terms might fairly be imposed upon Willowrock, as a condition of setting aside the judgment, by reference to the findings and conclusions he reached in the course of the hearing. That being so, I believe it would be helpful to summarise his principal findings. These were as follows:-

(i) that there had been a mistake on the part of Willowrock or its solicitor as a result of which an appearance had not been entered and judgment had been obtained;
(ii) that there had been an unsatisfactory delay of five months on the part of Willowrock in bringing forward its application to set aside the judgment;

(iii) that Willowrock had met the threshold of establishing that it had a real chance of successfully defending the claim;

(iv) that there was residual equity to the approximate value of €850,000 in Folio 13057F County Galway owned by Willowrock, and

(v) that the plaintiff’s costs of the proceedings would be those advised by Mr. O’Donovan in his affidavit of 17th July, 2012.

39. As to the manner in which he might exercise his discretion, the High Court judge expressed himself satisfied that the usual practice was to require the party who sought to set aside a judgment obtained by mistake to lodge the full amount of the judgment as a term and condition of granting the relief sought.
40. While it is true to say that in exceptional circumstances, such as those advised by Costello J. in Petronelli, a court might demand the full sum of the judgment to be lodged as a term and condition of granting the relief sought, such an approach is rare. The reason for this is obvious. Depending upon the amount of the judgment, for many defendants the imposition of such a term would prove fatal to their ability to defend the proceedings. I fear that the High Court judge’s error in concluding that it was standard practice to direct the lodgement of the entire judgment was one of the reasons why he ultimately set aside the judgment on terms and conditions that I consider were disproportionate having regard to the findings which he made and the interests of the parties.

41. As already stated Hedigan J. was not overly critical of the conduct of Willowrock in the present case and by no stretch of the imagination could its conduct be equated to that of the defendant in Petronelli. There was no suggestion that Willowrock had sought to mislead the Court or had deliberately decided to ignore the proceedings. The judge clearly concluded that the judgment had been obtained by reason of the mistake made by Willowrock or its solicitor.

42. In my view the High Court judge made a further error when he concluded that, in light of Willowrock’s assertion that there was residual equity of approximately €800,000 in Folio 13057F to meet the plaintiff’s claim if successful, it followed that Willowrock could raise a loan of €400,000 from some financial institution by offering that property as security. I am not satisfied that there was evidence before him to justify that conclusion particularly in light of the existing “all sums due” charge in favour of Bank of Ireland and the judgment that had earlier been obtained by the plaintiff and registered against that folio. The concept of Willowrock being in a position to raise a loan of €400,000 to permit it defend a claim against it for €693,243.03 in respect of its alleged non-payment for oil products to that value would hardly encourage even the most enthusiastic lender particularly given that at the time the monies were required that judgment was charged against the property as a judgment mortgage. Regardless of the fact that Willowrock did not specifically file any further affidavit to advise the Court that it had been unable to raise a loan of €400,000 based upon whatever residual equity was left in Folio 13057F, I am quite satisfied that the High Court judge could not reasonably have come to the conclusion in all of the circumstances that Willowrock could raise the sum of €400,000 in the manner proposed. Once again, this error led ultimately to the imposition of terms which I believe were not proportionate in all of the circumstances. Further, as a result of this error, having decided that Willowrock had a realistic chance of successfully defending this claim, the High Court judge fixed the conditions upon which he would allow it advance that defence on an incorrect premise with the effect that it was to be denied that opportunity.

43. Regrettably, I fear the High Court judge made one further error in the manner in which he approached the exercise of his discretion. He included within his consideration the likely costs to be incurred by the plaintiff on a plenary hearing and accepted Mr. O’Donovan’s figure of €50,000 as being a reasonable estimate of these costs.

44. The High Court judge was quite correct to include within his consideration the costs which had been incurred by the plaintiff as a result of Willowrock’s failure to enter an appearance. But for that failure it would not have incurred the costs of obtaining judgment nor of having that judgment registered as a mortgage. Likewise, it would not have incurred legal costs in relation to the motion to set aside that judgment. However, in my view Hedigan J. fell into error when urged by the plaintiff to factor into his consideration the costs of €50,000 likely to be incurred by it in the course of the plenary hearing. Those are costs which it would have incurred in any event even if it had not obtained judgment against the defendant and do not arise as a result of the defendant’s default. They are costs which the plaintiff well knew, at the time it commenced the proceedings, it would have to bear as a consequence of the litigation.

45. While it is undoubtedly the case that Hedigan J. had a wide discretion as to the terms he might impose on the defendant as a condition of setting aside the judgment, including terms concerning costs incurred by the plaintiff arising from the defendants wrongdoing I regret to say that there was no legal basis upon which he was entitled to take into account, the costs likely to be incurred by the plaintiff at a plenary hearing.

46. The extent of the discretion of the High Court judge in such circumstances is clear from cases such as McGuinn v. Commissioner of An Garda Síochána [2011] IESC 33 to which the Court was referred in the course of the hearing. However, even that decision would lend no support to the plaintiff’s contention that the High Court judge was entitled to take into account the plaintiff’s likely trial costs and any reliance upon that decision to support such a proposition is misplaced.

47. In McGuinn the Supreme Court set aside a judgment which had been obtained by the plaintiff in default of defence but only did so on terms that the defendant pay the costs which had been incurred by the plaintiff up to the date of trial. It did not, however, order the defendant to pay the plaintiff’s costs of the trial itself. The Supreme Court made its order in circumstances where the plaintiff had obtained judgment in default of defence in March, 2007 at which stage the Court had made an order which provided that his claim would proceed as an assessment of damages only. When advised of that order, the defendant, in May, 2007, advised the plaintiff’s solicitor that it would seek to set aside the judgment in order to put liability back in issue. However, it did not make that application until January, 2009 at which stage the plaintiff had advised the defendant of his intention to apply for a hearing date to assess the damages to which he was entitled on foot of the earlier court order. By its order the Supreme Court sought to ensure that the plaintiff would not be left exposed in respect of those legal costs which he had incurred over the period when he was entitled to assume that his action would proceed as an assessment of damages only. However, there was no question of the Court seeking to secure the plaintiff’s actual trial costs, as occurred in the present case.

48. Ms. O’Brien S.C. nonetheless submits that the terms and conditions imposed were proportionate having regard to:-

(i) the weak and unmeritorious nature of Willowrock’s application;
(ii) Mr. McCormack’s contradictory and confusing evidence concerning the service of the summons;

(iii) his erroneous or alternatively misleading evidence concerning the other legal proceedings, and

(iv) his lack of candour in failing to explain what happened the summons from the date it was served by ordinary prepaid post on the company’s offices until such time as it moved to set aside the judgment. In this regard she noted that unlike what had occurred in Allied Irish Banks Plc v. Lyons where the second named defendants’ instructing solicitor had accepted responsibility for the fact that an appearance had not been entered no such affidavit had been sworn by Willowrock’s solicitors accepting any responsibility for what had occurred.

49. From the evidence and the submissions made available to this Court, it is undoubtedly the case that the unsatisfactory nature of Willowrock’s explanation for why it failed to enter an appearance was canvassed at length in the course of the High Court hearing. It follows that all of these matters were considered by Hedigan J. when he accepted, as he clearly did, that judgment had been obtained by the plaintiff as a result of a mistake on the part of Willowrock or its solicitor. He might well have decided, had he accepted Ms. O’Brien S.C. submissions, that there had been no mistake and that the reason no appearance was entered was because Willowrock had been reckless in the manner in which it had dealt with the plaintiff’s various claims or that the matters deposed to by Mr. McCormack lacked candour or detail to the point that it would be unjust in all of the circumstances to set the judgment aside.
50. The High Court judge, however, made no such findings regardless of the force of submissions made on the plaintiff’s behalf. He accepted that Willowrock or its solicitor made a mistake. He did not engage in any substantive criticism of Mr. McCormack’s evidence. He did not condemn his testimony as unmeritorious or lacking in candour. Thus, these are not matters which the plaintiff can rely upon when seeking to argue that the terms and conditions imposed by the High Court judge were, in all of the circumstances, proportionate. There is nothing in counsel’s agreed note of the ruling of Hedigan J. from which it can be inferred that he considered that the judgment had been obtained otherwise than as a result of an innocent albeit unfortunate mistake.

51. Counsel for the plaintiff is, however, correct that the trial judge viewed as unsatisfactory the delay on the part of Willowrock in moving to set aside the judgment, albeit that O. 13 does not impose any time limit within which such an application may be brought. It is clear that this was a factor he was entitled to take into account in exercising his discretion and in seeking to balance the rights of the parties, particularly in circumstances where during that period the plaintiff had converted its judgment into a judgment mortgage over the lands contained in Folio 13057F. However, that delay could not, in my view, have reasonably warranted the imposition of terms and conditions that required the defendant lodge in court a sum well in excess of half of the value of the plaintiff’s claim. It is perhaps relevant to note that the sum of €400,000 was proposed by counsel for the plaintiff and was stated to reflect approximately half of the value of the plaintiff’s claim together with the lower estimate in respect of the three categories of costs referred to at paras. 25 and 26 of Mr. O’Donovan’s affidavit of 17th July, 2012.

52. Having regard to the fact that the only substantive adverse finding made by the High Court judge against Willowrock, apart from concluding that there had been a mistake as a result of which judgment had been obtained, was its five-month unexplained delay in seeking to set aside the judgment, the question is what terms or conditions might be deemed proportionate in such circumstances. In this regard some guidance is to be found in the decision of Geoghegan J. in Croke v. Waterford Crystal Limited [2005] 2 IR 383 in the course of which he endorsed as “pertinent and useful” the dictum of Bowen L.J. in Cropper v. Smith (1884) 26 Ch.D. 700 at pp. 710 and 711 where he stated as follows:-

“[I]t is a well established principle that the object of the Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. ….I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or grace…. It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right.”
53. I accept, of course, that the aforementioned principles were enunciated in the context of a late application to amend a pleading, but the principles are in my view equally relevant to an application under O. 13, r. 11 particularly in circumstances where the Court did not find any conduct of a grossly culpable or fraudulent nature.
54. Some further guidance is to be found in the judgment of Murray J. in McGuinn where at p. 10 of his judgment he advised as follows:-

“The Courts in the interests of justice, lean in favour of a determination of litigation on the merits of the issues between the parties rather than preventing a party from having access to the Courts, when his or her rights or obligations are being determined, for procedural reasons including culpable delay. That is not to say that the Courts would not be more stringent in requiring adherence to time limits in particular when set by an order of a court in a particular case, for the reasons outlined by Hardiman J. and referred to above.”
55. What it is clear from the ruling of Hedigan J, is that he quite correctly sought to balance the interests of both parties in the present case. He was clearly mindful of the fact that not only had the plaintiff obtained judgment but it had secured that judgment by registering it as a mortgage against Willowrock’s property, security that would be undone by setting aside the judgment. He was clearly conscious of the fact that if the plaintiff proved successful in the proceedings that the priority of that security might be lost in favour of other creditors.
56. On the other hand, the High Court judge had concluded that it was only because of a “mistake” that judgment had been obtained in the first place and that he was satisfied that Willowrock had a real prospect of successfully defending the action. He considered it just and fair that it should, notwithstanding its delay in seeking to set aside the judgment, be permitted to defend the action. Further, it is to be inferred from his ruling that he considered it more than likely that Willowrock would be in a position to comply with those terms and conditions. However, as already stated that assumption was in my view misplaced on the evidence before him.
Conclusion
57. Having failed to make any finding of impropriety or wrongdoing on the part of Willowrock and having concluded that it had a real prospect of successfully defending the action, in my view it was not proportionate for him to have imposed, as a term and condition of setting aside the plaintiff’s judgment, the lodgment by the defendant of a sum of €400,000. Further, as already stated I am quite satisfied that the High Court judge in fixing the said sum acted on an incorrect factual premise in addition to which he erred in law in including within his consideration the likely cost to be incurred by the plaintiff on a plenary hearing.

58. For the reasons already stated I would allow the appeal and would set aside the order of Hedigan J. made on 27th July, 2012. In its place I would propose the following order:-

(a) That the judgment obtained by the plaintiff on 11th January 2010 be set aside.
(b) That the defendant do pay to the plaintiff its costs of obtaining judgment, when taxed and ascertained.

(c) That the defendant do pay to the plaintiff the costs of the motion to set aside the judgment, when taxed and ascertained.

(d) That the defendant do pay forthwith to the plaintiff a sum €20,000 on account of the costs orders at (b) and (c) above.

(e) That the defendant do lodge in court to the credit of the action or place on joint deposit with the plaintiff’s solicitors a sum of €100,000 to abide the outcome of the proceedings.

(f) That the defendant do grant to the plaintiff a charge, to the value of the plaintiffs claim, over the lands contained in Folio 13057F Co.Galway.

(g) That the defendant, save with the agreement of the plaintiff, or leave of the High Court, do strictly comply with all relevant time limits in and about its further defence of the within proceedings.

 

 

 

Emo Oil Ltd -v- Willowrock Ltd t/a McCormack Fuels

 

[2016] IECA 200 (06 July 2016) Irvine J

 

Discussion

25. The jurisdiction of the Court to set aside a judgment obtained in default of appearance is contained in O. 13, r. 11 of the Rules of the Superior Courts, 1986. It provides as follows:-

“Where final judgment is entered pursuant to any of the preceding rules of this Order, it shall be lawful for the Court to set aside or vary such judgment upon such terms as may be just.”

26. It is clear from this rule that the relief that may be afforded to an applicant is one which is at the court’s discretion. However, the rule provides no guidance as to the circumstances in which a Judge might exercise that discretion in favour of an applicant and neither does it circumscribe any time limits for the making of such an application. Some assistance, however, is to be found in the decision of Peart J. in Allied Irish Banks Plc v. Lyons where he emphasised the breadth of the discretion conferred by the rule and the necessity for the court to seek to achieve justice for both the plaintiff and the defendant. This is what he said at p. 4 of his judgment:-

“Clearly a wide discretion is given to the Court in its task of achieving justice between the parties, but the interests of both parties must be taken into account in the weighing exercise undertaken by the Court in considering the interest of each party, and not simply the hardship and distress pleaded on behalf of the applicant in this case”

27. It is usual for an applicant who seeks relief under O. 13, r.11 to able to demonstrate that there was some sort of irregularity in the procedure whereby the judgment which it seeks to set aside was obtained. If it can establish such an irregularity, the court will normally set aside the judgment without enquiring into the merits of the applicant’s proposed defence. The logic which underpins this approach is that if the judgment should never have been obtained in the first place the parties should rightly be returned to the position they enjoyed prior to judgment having been obtained. This is what Clarke J. stated at para. 2.1 of his judgment in O’Tuama v. Casey [2008] IEHC 49 concerning the jurisdiction of the court in such circumstances:-

“[W]here judgment is obtained irregularly, the court will normally set aside the judgment without enquiring into the merits of the proposed defence. The logic of this position is that the judgment should not have been obtained in the first place and a plaintiff who has obtained judgment irregularly should not have any benefit by reason of having obtained judgment in that fashion. On the other hand, where judgment is obtained regularly, the court may, nonetheless, be persuaded to set aside a judgment so as to permit the defendant to defend the proceedings but will only do so after considering the possible merits of the defence which the defendant would wish to put forward.”

28. By way of contrast, if the court is satisfied or the defendant accepts that judgment was obtained in accordance with the rules of court, as is the situation in the present case, the defendant who seeks to have the judgment set aside faces a significantly enhanced onus of proof. They must demonstrate first that they have a bona fide defence to the proceedings and secondly that having regard to all of the relevant circumstances and the interests of both parties that the interests of justice would favour the granting of the relief sought.
29. The most frequent example of this type of application is one brought by a defendant who seeks to rely upon some error on the part of their solicitor as a result of which judgment was obtained against them. Allied Irish Banks Plc v. Lyons, to which I have already referred, is one such case. There, the defendants’ solicitors mistakenly believed that for the plaintiff to obtain judgment in summary summons proceedings where no appearance had been entered, it would be necessary for the bank to issue and serve a motion for judgment. While the defendants’ solicitors were labouring under this mistaken belief, the plaintiff obtained judgment and registered that judgment as a mortgage against the property of the second named defendant. Having regard to the evidence before him Peart J. expressed himself satisfied that the judgment had been obtained in a regular manner and as a result of a mistake made by the defendant’s solicitor.

 

30. This decision is one which is of significant assistance to the Court in the present case. First, because it clearly establishes the nature and extent of the burden of proof which is on a defendant who seeks to set aside a judgment regularly obtained. In this regard Peart J. adopted the standard of proof applied by Sir Roger Ormrod in The Saudi Eagle [1986] 2 Lloyd’s Reports 221, a case in which it was successfully argued that the defendant needed to demonstrate more than an “arguable case” and had to show that the proposed defence had “a real chance of success”. Secondly, the judgment makes clear that the Court, in order to come to a fair and just conclusion, must weigh the consequences for both parties of granting or refusing the relief sought.

 

31. In carrying out that exercise Peart J. referred in some detail to the consequences for the second named defendant of refusing to set aside the judgment. He described how she would be put to the hazard of suing her solicitor with all of the consequential burdens that such an approach would have for her in terms of time, expense, and the stress and uncertainty attendant upon that litigation. He surmised that while all of this was happening the plaintiff might seek to execute its judgment, presumably by availing of a well charging order and order for sale of her house. On the other hand he was conscious of the obvious prejudice to the plaintiff if he were to set aside the judgment. The judgment mortgage would be undermined and the plaintiff would lose the comfort of that security.

 

32. Having taken all of these factors into account and having earlier concluded that the second named defendant had indeed established a potential defence which had a real chance of success, Peart J. concluded that justice favoured setting aside the judgment but he did so on the basis that the second named defendant would undertake not to take any steps to dispose of her property pending the determination of the proceedings.

 

33. It is perhaps worthwhile noting, given that the point was relied upon by Ms. O’Brien S.C. in the course of her submissions, that in the Lyons case an affidavit had been sworn by the second named defendant’s solicitor accepting that it was he who made the mistake which was relied upon to ground the O. 13, r. 11 application.

 

34. It is not necessary for the purposes of this appeal to deal to any great extent with the other authorities concerning the courts discretion when considering an application under O. 13. It is clear that each case is decided upon its own facts and that the court has a relatively unfettered discretion as to the terms upon which it will set aside any judgment obtained regularly.

 

35. There is perhaps one decision worthy of note at this juncture and that is the case of Petronelli .v Collins size=”2″ face=”Verdana”> which Ms. O’Brien S.C. referred to in the course of her submissions. That decision is material insofar as it demonstrates that the court may, in certain circumstances, require a defendant to lodge the entirety of the sum claimed by a plaintiff as a term and condition of setting aside a judgment. However, the facts of that case are really quite unique insofar as Mr. Collins, who sought to set aside the judgment obtained against him, first challenged the validity of the service of the proceedings upon him such as would have entitled him to have the judgment set aside without establishing any mistake or that he had a defence which had a real chance of success. Costello J. concluded that his evidence was less than credible concerning the circumstances relating to service. He expressed himself satisfied that Mr. Collins had deliberately decided to ignore the proceedings thus allowing judgment to be obtained in default. These are clearly facts which are very different from those which present on this appeal. Further, the High Court judge expressed himself satisfied that Mr. Collins’ claim for relief had been highly unsatisfactory in relation to certain important details and further that he had deliberately sought to mislead the Court as to his place of residence. These were all factors that were weighed in the balance by Costello J. when he set aside the judgment but only on terms that Mr. Collins would lodge the full amount of the judgment earlier obtained.

 

Decision

36. As was advised by Ms. O’Brien S.C. in the course of her submissions, while an appellate court clearly enjoys the jurisdiction to overturn an order made by a High Court judge in the exercise of his/her discretion, it should nonetheless attach significant weight to the conclusions reached by the judge at first instance. (See the decision of this Court in Collins v. Minister for Justice [2015] IECA 27 and that of MacMenamin J. in Lismore Builders Ltd (in receivership) v. Bank of Ireland Finance limited [2013] IESC 6). It would be an incorrect approach for this Court to engage in a full reconsideration of the matters heard in the Court below and then substitute its own views for those of the High Court judge. Accordingly, the approach on this appeal is to assess whether or not the approach and conclusions of Hedigan J. were reasonable in all of the circumstances.

 

37. For my part, I am satisfied that the trial judge fell into error in a number of respects in the manner in which he approached the exercise of his discretion, particularly in relation to the terms which he imposed on the defendant as a condition of agreeing to set aside the judgment.

 

38. The High Court judge was, I believe, bound to approach his consideration as to what terms might fairly be imposed upon Willowrock, as a condition of setting aside the judgment, by reference to the findings and conclusions he reached in the course of the hearing. That being so, I believe it would be helpful to summarise his principal findings. These were as follows:-

 

(i) that there had been a mistake on the part of Willowrock or its solicitor as a result of which an appearance had not been entered and judgment had been obtained;

(ii) that there had been an unsatisfactory delay of five months on the part of Willowrock in bringing forward its application to set aside the judgment;

 

(iii) that Willowrock had met the threshold of establishing that it had a real chance of successfully defending the claim;

 

(iv) that there was residual equity to the approximate value of €850,000 in Folio 13057F County Galway owned by Willowrock, and

 

(v) that the plaintiff’s costs of the proceedings would be those advised by Mr. O’Donovan in his affidavit of 17th July, 2012.

 

39. As to the manner in which he might exercise his discretion, the High Court judge expressed himself satisfied that the usual practice was to require the party who sought to set aside a judgment obtained by mistake to lodge the full amount of the judgment as a term and condition of granting the relief sought.
40. While it is true to say that in exceptional circumstances, such as those advised by Costello J. in Petronelli, a court might demand the full sum of the judgment to be lodged as a term and condition of granting the relief sought, such an approach is rare. The reason for this is obvious. Depending upon the amount of the judgment, for many defendants the imposition of such a term would prove fatal to their ability to defend the proceedings. I fear that the High Court judge’s error in concluding that it was standard practice to direct the lodgement of the entire judgment was one of the reasons why he ultimately set aside the judgment on terms and conditions that I consider were disproportionate having regard to the findings which he made and the interests of the parties.

 

41. As already stated Hedigan J. was not overly critical of the conduct of Willowrock in the present case and by no stretch of the imagination could its conduct be equated to that of the defendant in Petronelli. There was no suggestion that Willowrock had sought to mislead the Court or had deliberately decided to ignore the proceedings. The judge clearly concluded that the judgment had been obtained by reason of the mistake made by Willowrock or its solicitor.

 

42. In my view the High Court judge made a further error when he concluded that, in light of Willowrock’s assertion that there was residual equity of approximately €800,000 in Folio 13057F to meet the plaintiff’s claim if successful, it followed that Willowrock could raise a loan of €400,000 from some financial institution by offering that property as security. I am not satisfied that there was evidence before him to justify that conclusion particularly in light of the existing “all sums due” charge in favour of Bank of Ireland and the judgment that had earlier been obtained by the plaintiff and registered against that folio. The concept of Willowrock being in a position to raise a loan of €400,000 to permit it defend a claim against it for €693,243.03 in respect of its alleged non-payment for oil products to that value would hardly encourage even the most enthusiastic lender particularly given that at the time the monies were required that judgment was charged against the property as a judgment mortgage. Regardless of the fact that Willowrock did not specifically file any further affidavit to advise the Court that it had been unable to raise a loan of €400,000 based upon whatever residual equity was left in Folio 13057F, I am quite satisfied that the High Court judge could not reasonably have come to the conclusion in all of the circumstances that Willowrock could raise the sum of €400,000 in the manner proposed. Once again, this error led ultimately to the imposition of terms which I believe were not proportionate in all of the circumstances. Further, as a result of this error, having decided that Willowrock had a realistic chance of successfully defending this claim, the High Court judge fixed the conditions upon which he would allow it advance that defence on an incorrect premise with the effect that it was to be denied that opportunity.

 

43. Regrettably, I fear the High Court judge made one further error in the manner in which he approached the exercise of his discretion. He included within his consideration the likely costs to be incurred by the plaintiff on a plenary hearing and accepted Mr. O’Donovan’s figure of €50,000 as being a reasonable estimate of these costs.

 

44. The High Court judge was quite correct to include within his consideration the costs which had been incurred by the plaintiff as a result of Willowrock’s failure to enter an appearance. But for that failure it would not have incurred the costs of obtaining judgment nor of having that judgment registered as a mortgage. Likewise, it would not have incurred legal costs in relation to the motion to set aside that judgment. However, in my view Hedigan J. fell into error when urged by the plaintiff to factor into his consideration the costs of €50,000 likely to be incurred by it in the course of the plenary hearing. Those are costs which it would have incurred in any event even if it had not obtained judgment against the defendant and do not arise as a result of the defendant’s default. They are costs which the plaintiff well knew, at the time it commenced the proceedings, it would have to bear as a consequence of the litigation.

 

45. While it is undoubtedly the case that Hedigan J. had a wide discretion as to the terms he might impose on the defendant as a condition of setting aside the judgment, including terms concerning costs incurred by the plaintiff arising from the defendants wrongdoing I regret to say that there was no legal basis upon which he was entitled to take into account, the costs likely to be incurred by the plaintiff at a plenary hearing.

 

46. The extent of the discretion of the High Court judge in such circumstances is clear from cases such as McGuinn v. Commissioner of An Garda Síochána [2011] IESC 33 to which the Court was referred in the course of the hearing. However, even that decision would lend no support to the plaintiff’s contention that the High Court judge was entitled to take into account the plaintiff’s likely trial costs and any reliance upon that decision to support such a proposition is misplaced.

 

47. In McGuinn the Supreme Court set aside a judgment which had been obtained by the plaintiff in default of defence but only did so on terms that the defendant pay the costs which had been incurred by the plaintiff up to the date of trial. It did not, however, order the defendant to pay the plaintiff’s costs of the trial itself. The Supreme Court made its order in circumstances where the plaintiff had obtained judgment in default of defence in March, 2007 at which stage the Court had made an order which provided that his claim would proceed as an assessment of damages only. When advised of that order, the defendant, in May, 2007, advised the plaintiff’s solicitor that it would seek to set aside the judgment in order to put liability back in issue. However, it did not make that application until January, 2009 at which stage the plaintiff had advised the defendant of his intention to apply for a hearing date to assess the damages to which he was entitled on foot of the earlier court order. By its order the Supreme Court sought to ensure that the plaintiff would not be left exposed in respect of those legal costs which he had incurred over the period when he was entitled to assume that his action would proceed as an assessment of damages only. However, there was no question of the Court seeking to secure the plaintiff’s actual trial costs, as occurred in the present case.

 

48. Ms. O’Brien S.C. nonetheless submits that the terms and conditions imposed were proportionate having regard to:-

 

(i) the weak and unmeritorious nature of Willowrock’s application;

(ii) Mr. McCormack’s contradictory and confusing evidence concerning the service of the summons;

 

(iii) his erroneous or alternatively misleading evidence concerning the other legal proceedings, and

 

(iv) his lack of candour in failing to explain what happened the summons from the date it was served by ordinary prepaid post on the company’s offices until such time as it moved to set aside the judgment. In this regard she noted that unlike what had occurred in Allied Irish Banks Plc v. Lyons where the second named defendants’ instructing solicitor had accepted responsibility for the fact that an appearance had not been entered no such affidavit had been sworn by Willowrock’s solicitors accepting any responsibility for what had occurred.

 

49. From the evidence and the submissions made available to this Court, it is undoubtedly the case that the unsatisfactory nature of Willowrock’s explanation for why it failed to enter an appearance was canvassed at length in the course of the High Court hearing. It follows that all of these matters were considered by Hedigan J. when he accepted, as he clearly did, that judgment had been obtained by the plaintiff as a result of a mistake on the part of Willowrock or its solicitor. He might well have decided, had he accepted Ms. O’Brien S.C. submissions, that there had been no mistake and that the reason no appearance was entered was because Willowrock had been reckless in the manner in which it had dealt with the plaintiff’s various claims or that the matters deposed to by Mr. McCormack lacked candour or detail to the point that it would be unjust in all of the circumstances to set the judgment aside.
50. The High Court judge, however, made no such findings regardless of the force of submissions made on the plaintiff’s behalf. He accepted that Willowrock or its solicitor made a mistake. He did not engage in any substantive criticism of Mr. McCormack’s evidence. He did not condemn his testimony as unmeritorious or lacking in candour. Thus, these are not matters which the plaintiff can rely upon when seeking to argue that the terms and conditions imposed by the High Court judge were, in all of the circumstances, proportionate. There is nothing in counsel’s agreed note of the ruling of Hedigan J. from which it can be inferred that he considered that the judgment had been obtained otherwise than as a result of an innocent albeit unfortunate mistake.

 

51. Counsel for the plaintiff is, however, correct that the trial judge viewed as unsatisfactory the delay on the part of Willowrock in moving to set aside the judgment, albeit that O. 13 does not impose any time limit within which such an application may be brought. It is clear that this was a factor he was entitled to take into account in exercising his discretion and in seeking to balance the rights of the parties, particularly in circumstances where during that period the plaintiff had converted its judgment into a judgment mortgage over the lands contained in Folio 13057F. However, that delay could not, in my view, have reasonably warranted the imposition of terms and conditions that required the defendant lodge in court a sum well in excess of half of the value of the plaintiff’s claim. It is perhaps relevant to note that the sum of €400,000 was proposed by counsel for the plaintiff and was stated to reflect approximately half of the value of the plaintiff’s claim together with the lower estimate in respect of the three categories of costs referred to at paras. 25 and 26 of Mr. O’Donovan’s affidavit of 17th July, 2012.

 

52. Having regard to the fact that the only substantive adverse finding made by the High Court judge against Willowrock, apart from concluding that there had been a mistake as a result of which judgment had been obtained, was its five-month unexplained delay in seeking to set aside the judgment, the question is what terms or conditions might be deemed proportionate in such circumstances. In this regard some guidance is to be found in the decision of Geoghegan J. in Croke v. Waterford Crystal Limited [2005] 2 IR 383 in the course of which he endorsed as “pertinent and useful” the dictum of Bowen L.J. in Cropper v. Smith (1884) 26 Ch.D. 700 at pp. 710 and 711 where he stated as follows:-

 

“[I]t is a well established principle that the object of the Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. ….I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or grace…. It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right.”

53. I accept, of course, that the aforementioned principles were enunciated in the context of a late application to amend a pleading, but the principles are in my view equally relevant to an application under O. 13, r. 11 particularly in circumstances where the Court did not find any conduct of a grossly culpable or fraudulent nature.
54. Some further guidance is to be found in the judgment of Murray J. in McGuinn where at p. 10 of his judgment he advised as follows:-

 

“The Courts in the interests of justice, lean in favour of a determination of litigation on the merits of the issues between the parties rather than preventing a party from having access to the Courts, when his or her rights or obligations are being determined, for procedural reasons including culpable delay. That is not to say that the Courts would not be more stringent in requiring adherence to time limits in particular when set by an order of a court in a particular case, for the reasons outlined by Hardiman J. and referred to above.”

55. What it is clear from the ruling of Hedigan J, is that he quite correctly sought to balance the interests of both parties in the present case. He was clearly mindful of the fact that not only had the plaintiff obtained judgment but it had secured that judgment by registering it as a mortgage against Willowrock’s property, security that would be undone by setting aside the judgment. He was clearly conscious of the fact that if the plaintiff proved successful in the proceedings that the priority of that security might be lost in favour of other creditors.
56. On the other hand, the High Court judge had concluded that it was only because of a “mistake” that judgment had been obtained in the first place and that he was satisfied that Willowrock had a real prospect of successfully defending the action. He considered it just and fair that it should, notwithstanding its delay in seeking to set aside the judgment, be permitted to defend the action. Further, it is to be inferred from his ruling that he considered it more than likely that Willowrock would be in a position to comply with those terms and conditions. However, as already stated that assumption was in my view misplaced on the evidence before him.

Conclusion

57. Having failed to make any finding of impropriety or wrongdoing on the part of Willowrock and having concluded that it had a real prospect of successfully defending the action, in my view it was not proportionate for him to have imposed, as a term and condition of setting aside the plaintiff’s judgment, the lodgment by the defendant of a sum of €400,000. Further, as already stated I am quite satisfied that the High Court judge in fixing the said sum acted on an incorrect factual premise in addition to which he erred in law in including within his consideration the likely cost to be incurred by the plaintiff on a plenary hearing.

 

58. For the reasons already stated I would allow the appeal and would set aside the order of Hedigan J. made on 27th July, 2012. In its place I would propose the following order:-

 

(a) That the judgment obtained by the plaintiff on 11th January 2010 be set aside.

(b) That the defendant do pay to the plaintiff its costs of obtaining judgment, when taxed and ascertained.

 

(c) That the defendant do pay to the plaintiff the costs of the motion to set aside the judgment, when taxed and ascertained.

 

(d) That the defendant do pay forthwith to the plaintiff a sum €20,000 on account of the costs orders at (b) and (c) above.

 

(e) That the defendant do lodge in court to the credit of the action or place on joint deposit with the plaintiff’s solicitors a sum of €100,000 to abide the outcome of the proceedings.

 

(f) That the defendant do grant to the plaintiff a charge, to the value of the plaintiffs claim, over the lands contained in Folio 13057F Co.Galway.

 

(g) That the defendant, save with the agreement of the plaintiff, or leave of the High Court, do strictly comply with all relevant time limits in and about its further defence of the within proceedings.

 

 

 

 

 

Ulster Bank Ireland Ltd -v- Fortune & Anor [2014] IEHC 272 (16 May 2014) Barton J

 

The Law

30. There was broad agreement between the parties as to the legal principles applicable in relation to an application for liberty to enter summary judgment. These have been the subject matter of a number of decisions which in modern times can conveniently be said to commence with the decision of the Supreme Court in First National Commercial Bank Plc v. Anglin [1996] 1 IR 75.

 

31. In that case, the plaintiff had issued a summary summons seeking judgment on foot of a personal guarantee allegedly given by the defendant; the Master of the High Court directed that the case should be placed in the judges’ list. Costello J. refused to give the defendant leave to defend the action on the basis that there was no credible evidence of a real bona fide defence to the plaintiff’s claim and granted summary judgment to the plaintiff. On appeal by the defendant, the Supreme Court, in a judgment delivered by Murphy J. stated that:-

 

“For the court to grant summary judgment to a plaintiff and to refuse leave to defend it is not sufficient that the court should have reason to doubt the bona fides of the defendant or to doubt whether the defendant has a genuine cause of action…

In my view the test to be applied is that laid down in Banque de Paris v. de Naray [1984] 1 Lloyd’s Law Rep. 21, which was referred to in the judgment of the President of the High Court and reaffirmed in National Westminster Bank Plc v. Daniel [1993] 1 W.L.R. 1453. The principle laid down in the Banque de Paris case is summarised in the headnote thereto in the following terms:-

 

 

‘The mere assertion in an affidavit of a given situation which was to be the basis of a defence did not of itself provide leave to defend; the Court had to look at the whole situation to see whether the defendant had satisfied the Court that there was a fair or reasonable probability of the defendants having a real or bona fide defence.’

 

In the National Westminster Bank case, Glidewell L.J. identified two questions to be posed in determining whether leave to defend should be given. He expressed the matter as follows:-

 

‘I think it right to ask, using the words of Ackner L.J. in the Banque de Paris case, at p. 23, ‘Is there a fair or reasonable probability of the defendants having a real or bona fide defence?’

 

The test posed by Lloyd L.J. in the Standard Chartered Bank case, Court of Appeal (Civil Division), Transcript No. 699 of 1990 is what the defendant says credible?, amounts to much the same thing as I see it. If it is not credible, then there is no fair or reasonable probability of the defendant having a defence.”

32. This statement of the principles was followed by the Supreme Court in Aer Rianta CPT v. Ryanair Limited [2001] 4 IR 607. In her judgment, McGuinness J. endorsed the test laid down in First National Commercial Bank Plc v. Anglin and summarised it as follows:-

“Thus it is for this Court to decide whether in the instant case the defence set out in the affidavits of Mr O’Leary, together with the documents exhibited therewith, is credible, or in other words, whether there is a fair or reasonable probability of the defendant having a real or bona fide defence…. The Court does not ask whether Mr O’Leary’s account of events is probable, or likely to be true; nor does it ask whether Mr Byrne’s account of events is more likely. The question is rather whether the proposed defence is so far fetched or so self contradictory as not to be credible.”

33. Hardiman J. delivered a concurring judgment in which he engaged in a comprehensive review of the authorities relating to the jurisdiction to grant summary judgment. Having reviewed the case law he expressed his own view in the following terms:-

“In my view, the fundamental question be posed on an application such as this remains: is it ‘very clear’ that the defendant has no case?; is there either no issue to be tried or only issues which are simple and easily determined?; do the defendant’s affidavits fail to disclose even an arguable defence?”

34. In Harrisrange Limited v. Duncan [2003] 4 IR 1, McKechnie J., enumerated the principles to be applied by a court in deciding whether to grant summary judgment or give a defendant leave to defend in the following way:-

“(i) The power to grant summary judgment should be exercised with discernible caution,

(ii) In deciding upon this issue the Court should look at the entirety of the situation and consider the particular facts of each individual case, there being several ways in which this may best be done,

 

(iii) In so doing the Court should assess not only the Defendant’s response, but also in the context of that response, the cogency of the evidence adduced on behalf of the Plaintiff, being mindful at all times of the unavoidable limitations which are inherent on any conflicting Affidavit evidence,

 

(iv) Where truly, there are no issues or issues of simplicity only or issues easily determinable, then this procedure is suitable for use,

 

(v) Where however, there are issues of fact which in themselves are material to success or failure, then their resolution is unsuitable for this procedure,

 

(vi) Where there are issues of law, this summary process may be appropriate but only so, if it is clear that fuller argument and greater thought, is evidently not required for a better determination of such issues,

 

(vii) The test to be applied, as now formulated is whether the Defendant has satisfied the Court that he has a fair or reasonable probability of having a real or bona fide defence; or as it is sometimes put, ‘is what the Defendant says credible?’, which latter phrase I would take as having as against the former an equivalence of both meaning and result,

 

(viii) This test is not the same as and should be not be elevated into a threshold of a Defendant having to prove that his defence will probably succeed or that success is not improbable, it being sufficient if there is an arguable defence,

 

(ix) Leave to defend should be granted unless it is very clear that there is no defence,

 

(x) Leave to defend should not be refused only because the Court has reason to doubt the bona fides of the Defendant or has reason to doubt whether he has a genuine cause of action,

 

(xi) Leave should not be granted where the only relevant averment in the totality of the evidence, is a mere assertion of a given situation which is to form the basis of a defence and finally,

 

(xii) The overriding determinative factor, bearing in mind the constitutional basis of a person’s right of access to justice either to assert or respond to litigation, is the achievement of a just result whether that be liberty to enter Judgment or leave to defend, as the case may be.”

 

35. This annunciation of the approach to be taken by the court in connection with an application for liberty to enter a summary judgment was cited with approval by Finlay Geoghegan J., in her judgment in Bank of Ireland v. Walsh delivered on 8th May, 2009.
36. In relation to the test to be applied, she observed:-

 

“As appears from sub-paragraph (vii) above, the threshold is one of an arguable defence and is, in relative terms, a low threshold. However, in making that determination, the Court should have regard to whether what the defendant is saying is mere assertion and whether the proposed defence is credible in the sense explained by Hardiman J. in Aer Rianta c.p.t. v. Ryanair Ltd. [2001] 4 IR 607.”

37. With regard to the approach to be adopted in relation to factual issues, Clarke J. in McGrath v. O’Driscoll [2007] 1 ILRM 203, referring to the decision in Aer Rianta v. Ryanair stated at para. 3.4:-

“So far as factual issues are concerned it is clear, therefore, that a mere assertion of a defence is insufficient but any evidence of fact which would, if true, arguably give rise to a defence will, in the ordinary way, be sufficient to require that leave to defend be given so that that issue of fact can be resolved.”

38. In applying the test, the court must be mindful that the completeness of the defence available to a defendant may only be available as a result of the adoption of certain court procedures such as discovery, inspection or interrogatories. However, a general assertion that a defence may well become available as a result of the adoption of these procedures would clearly be insufficient. In GE Capital Woodchester Limited v. Aktiv Kapital Asset Investment Limited [2009] IEHC 512, Clarke J. observed:-

“However, it seems to me that where a defendant satisfies the court that there is a credible basis for asserting that a particular state of facts might exist which state of facts, if same were in truth to exist, could be established by appropriate discovery and/or interrogatories, then such defendant should be entitled to liberty to defend. It should, again, be emphasized that mere assertion is insufficient. A credible basis for the assertion needs to be put forward even if it is not, at the stage of the motion for summary judgment, possible to put before the court direct evidence of the assertion concerned.”

39. With regard to the approach that should be adopted in relation to legal issues on a motion for summary judgment, Clarke J. in McGrath v. O’Driscoll stated:-

“So far as questions of law or construction are concerned the court can, on a motion for summary judgment, resolve such questions (including, where appropriate, questions of the construction of documents), but should only do so where the issues which arise are relatively straightforward and where there is no real risk of an injustice being done by determining those questions within the somewhat limited framework of a motion for summary judgment.”

40. Whilst it may well be open to a court on a motion for summary judgment to resolve a question of law or to construe a document there is no obligation on the court to do so. Rather the question is whether the defendant has established an arguable defence. (See Danske Bank v. Durkan New Homes [2010] IESC 22 and Bussoleno Limited v. Kelly [2011] IEHC 220.)

Decision

41. Applying these principles and having read and considered the affidavits filed and the submissions made by counsel, I am not satisfied that the defendants have met the low threshold of an arguable defence to the plaintiff’s claim in respect of the sums due on foot of the current account facility nor in respect of the term loan, the subject matter of the facility letter of 27th April, 2004.

 

42. As to the loan, the subject matter of the facility letter of 4th April, 2006, I am, however, satisfied that there is an issue for determination in relation to the construction and true meaning of certain terms and conditions of that letter which it would not be appropriate for the court to attempt to resolve on an application for summary judgment. In coming to this conclusion, I have not overlooked the fact that the defendants, through their accountants by letter dated 27th April, 2011, acknowledged that they were indebted to the plaintiff. However, this was without specifying in what amount such acknowledgment was being made and moreover, may well have been made without the benefit of legal advice nor have I overlooked the fact that the defendants do not dispute but that the loan amount, the subject matter of the facility letter of 4th April, 2006, was drawn down by them. The defendants contend, however, that they had a very specific understanding and agreement with the plaintiff and that this agreement is reflected in what they say is the correct interpretation and construction to be placed on certain terms of the facility letter, particularly those relating to repayment of the loan. That proposition the plaintiff disputes and contends that irrespective of that the monies are due by reason of the non-payment of the interest on the monies borrowed. The defendants, however, contend that no valid demand was made in accordance with the terms of the demand provision contained in the facility letter of 4th April, 2006. In this regard, I note that the demand provisions differ from the provisions of the facility letter of 27th April, 2004. I am satisfied there is in fact an issue as to whether or not the demand made on behalf of the plaintiff by the plaintiff’s solicitors complies with the express provisions in that regard and comprised in the facility letter of 4th April, 2006. Moreover, there is also a conflict of evidence in relation to the issue as to whether or not a default schedule relied upon by the plaintiff is in fact referable at all to this particular facility. That there are such issues and that such a conflict as to the true meaning and interpretation to be placed on certain terms and conditions of the agreement exists confirms me in the view that if resolved in the defendants’ favour, it would offer a defence to the plaintiff’s claim and consequently, is more properly to be dealt with by plenary hearing. That being so, I direct that aspect of the plaintiff’s claim be dealt with accordingly.

 

43. I will discuss with counsel the form of the orders to be made on foot of the notice of motion of 31st July, 2013.