Bank of Scotland Plc v McDermott
| Jurisdiction | Ireland |
| Judge | Mr Justice Max Barrett |
| Judgment Date | 15 February 2017 |
| Neutral Citation | [2017] IEHC 77 |
| Docket Number | [2013 No. 1833S] |
| Court | High Court |
| Date | 15 February 2017 |
[2017] IEHC 77
THE HIGH COURT
Barrett J.
[2013 No. 1833S]
Banking & Finance – Summary judgment – Setting aside of summary judgment – Mental illness – O. 36, r. 33 of the Rules of the Superior Courts – Inherent jurisdiction
Facts: Following the grant of summary judgment by the High Court to the plaintiff against the defendant, the defendant now sought an order for setting aside the impugned order of the High Court. The plaintiff contended that the said order could not be set aside as the defendant, after making an initial formal appearance, had wilfully abstained from attending the matter any further. The defendant asserted that he had no recollection of the service of summary summons as he was suffering from mental illness. The defendant asserted that the Court should exercise its jurisdiction under o. 36, r. 33 of the Rules of the Superior Courts to set aside the impugned order as the defendant had a good defence and serious prejudice would be caused to the defendant if deprived of his family farmlands.
Mr. Justice Max Barrett granted an order for setting aside the judgment of the High Court and thus, acceded to the defendant's application. The Court held that under o.36, r.33 of the Rules of the Superior Courts, the Court could exercise its inherent jurisdiction if it was just and equitable to do so. The Court opined that the burden rested on the applicant to prove the existence of circumstances that had called the intervention of the Court, such as serious fraud or breach of constitutional rights. The Court found that though the defendant had been served the summary summons, yet his mental condition was such that he had no recollection of having received the service of the plaintiff's motion at that time. The Court took into account the medical report to support the conclusion that the defendant was unable to comprehend that likely effect of the motion that was earlier served to him.
What are the rules applicable as regards setting aside a summary judgment obtained after a hearing at which a defendant neither attends nor is represented, despite having entered a formal appearance?
Following the service of the summary summons in the within proceedings, Mr McDermott entered a formal appearance on 9th July, 2013. On 22nd July, 2013, Bank of Scotland issued a notice of motion seeking an order directing that the proceedings be entered into the Commercial List of the High Court. That motion had a return date of 29th July, 2013. On the return date, Bank of Scotland turned up in court and Mr McDermott did not. As it happens, this is not an especially common occurrence. Parties can sometimes make it difficult for themselves to be served with papers (and there is no legal obligation on them to make it easy), but once papers are served, a party generally tends to turn up in court on the designated date of hearing and, whether represented or unrepresented by a legal advisor, will seek to be, and will be, heard by the court. In the within proceedings, where the amount which it was sought to recover from Mr McDermott was close on €7m, an amount so great that it would be financially ruinous to demand it of most people, it was perhaps especially unusual that a defendant did not turn up. But Mr McDermott did not turn up. What happened next is recited in the below-quoted extract from the perfected copy of the order made by the High Court (Kelly J.) on that date:
‘ And on reading…the Certificate…of Mark Traynor of A&L Goodbody Solicitors [the solicitor's certificate required under O63A, r.4(2) of the Rules of the Superior Courts required as part of an the application to enter the Commercial List], the Affidavit of Raymond Tierney [the grounding affidavit in the summary proceedings, in which Mr Tierney, as it happens, avers in error that he is an employee of Bank of Scotland plc], the exhibits referred to in said Affidavit, the Summary Summons issued herein, and the Appearance entered thereto
And on hearing said counsel [ i.e. counsel for Bank of Scotland] – there being no attendance in Court by or on behalf of the Defendant.
And on reading the Affidavit of Paul Kelly [possibly a summons server, though this is not clear from the papers before this Court] averring as to substituted service of the Motion Papers on the Defendant by prepaid ordinary post and by prepaid registered post
And the Court noting that the Order of Mr Justice Birmingham made on the 24th day of June 2013 only permitted substituted service of the Summons [so no need for personal service] on the Defendant
And on reading the Affidavit of Richard Ballagh [possibly a summons server, though this is not clear from the papers before this Court] filed on the 26th day of July 2013 as to attempts to effect personal service of the Motion Papers on the Defendant
And on hearing said Counsel
The Court doth deem the service effected of the Motion Papers on the Defendant to be good and sufficient service in the circumstances outlined in the said Affidavits of Paul Kelly and Richard Ballagh
And the Court being satisfied that these proceedings are commercial proceedings within the meaning of Order 63A Rule 1(a)(i) of the Rules of the Superior Courts
IT IS ORDERED that these proceedings be entered in the Commercial List for hearing and that all further applications and Motions be heard in said list
And said Counsel seeking summary judgment as against the Defendant in in the sum of €6,971,856.49….
IT IS ORDERED AND ADJUDGED that the Plaintiff do recover as against the Defendant the sum of €6,971,856.49 and the costs of these proceedings…’.
The perfected version of Kelly J.'s order issued on 7th August, 2013. Notably, it was not until 18 months later, by notice of motion of 23rd February, 2015, that Mr McDermott issued a notice of motion seeking from the High Court (i) an order extending the time for Mr McDermott to apply to set aside the judgment and order of Kelly J. made on 29th July, 2013, and perfected on the following 7th August, (ii) an order pursuant to O. 36, r.33 of the Rules of the Superior Courts and/or the inherent jurisdiction of the High Court setting aside the said judgment and order, (iii) an order granting Mr McDermott leave to defend the within proceedings, and (iv) certain ancillary reliefs.
In an affidavit of 23rd February, 2015 grounding this motion, Mr McDermott indicates, inter alia, that (a) he was ‘ mentally and psychologically unwell’ at the time of the July, 2013 application (the court is satisfied from the evidence before it that Mr McDermott was very unwell around this time), (b) the pace of the summary proceedings, with a notice of motion issuing on 22nd July with a return date on 29th July, with the court granting summary judgment on that later date had the result that Mr McDermott was unable to get legal representation and (Mr McDermott alleges) was denied a basic fairness of procedures, (c) that he had a good, unheard defence to the proceedings, being, in effect, that Bank of Scotland's figures were incorrect and that certain evidence purportedly provided to the court under the Banker's Book Evidence Acts was not properly before the court, and (d) the entering of judgment would cause severe and irreversible prejudice to him.
As regards whether or not he had received service of the notice of motion of 22nd July, Mr McDermott notes in his affidavit that he had been suffering from poor mental health from July, 2013 continuing through to February, 2015 (which may offer some explanation as to why the set-aside application was a quite long time in issuing), had been in such a poor state mentally in the period May to August, 2013 that he was ‘ practically a recluse…unable to leave my house for any period, withdrawn from the world, suffering from panic attacks, depression [etc]’. It is necessary to mention this aspect of matters in this little detail (the court has been supplied with more detail) as it offers a credible basis on which Mr McDermott can aver, as he does, that ‘ I have no recollection of having received [substituted service of] the documents’.
As to how Mr McDermott can aver that “I do not remember having received correspondence” and “There was no time to arrange for legal representation between 22nd and 27th July, 2013”, while these may appear at first glance to be somewhat inconsistent (why would one be arranging for legal...
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