O'Brien v McMahon
| Jurisdiction | Ireland |
| Judge | Mr. Justice Brian O'Moore |
| Judgment Date | 10 July 2023 |
| Neutral Citation | [2023] IEHC 393 |
| Court | High Court |
| Docket Number | Record No. 2020/7827P |
[2023] IEHC 393
Record No. 2020/7827P
THE HIGH COURT
Judgment in default of defence – Special circumstances – Grounds of defence – Defendants seeking to set aside the default judgment granted to the plaintiffs – Whether at the time of the default special circumstances existed to explain and justify the failure to deliver the requisite pleading
Facts: The High Court (O’Moore J), on the 6th March, 2023, granted the plaintiffs, Mr O'Brien, Ms Larkin and Pepper Finance Corporation (Ireland) Designated Activity Company, judgment in default of defence against the defendants, Mr McMahon (as administrator ad litem of Ms McMahon, deceased). The proceedings were then listed in the list to fix dates on the 31st March, 2023 for the purpose of finalising the reliefs to which the plaintiffs were entitled on foot of the default judgment. On that date, the solicitor for the defendants appeared in court and sought an opportunity to set aside the order which O’Moore J had made on the 6th March. The defendants were given the chance to seek to do so, and directions were made in respect of the application. In accordance with those, the defendants issued a motion on the 21st April, 2023, returnable for the 15th May, 2023. By that motion, the defendants sought the following orders: (1) an order seeking to re-enter the plenary action; (2) an order allowing the defendant to file a defence and counterclaim; (3) such further other order as the court deems fit; and (4) costs of the application. The application was one brought pursuant to O. 27, r. 15(2) of the Rules of the Superior Courts seeking to set aside the default judgment granted to the plaintiffs on the 6th March. O. 27, r. 15(2) requires the court to be “satisfied that at the time of the default special circumstances (to be recited in order) existed to explain and justify the failure” to deliver the requisite pleading. The first question, therefore, to be determined was whether or not such special circumstances existed. It was further submitted to O’Moore J by counsel for the plaintiffs that, even if such special circumstances existed, the defendants must show that they had a real ground of defence to the proceedings.
Held by O’Moore J that, having considered all of the evidence and argument put before him, the defendants had not made out any special circumstances which explained or justified the failure to deliver a defence within the requirements of the rules or to meet the motion which resulted in the order of the 6th March, 2023. For that reason alone, O’Moore J held that the application could not succeed. O’Moore J held that the motion should fail because the proposed defence was one which was simply unstateable, and therefore permitting the defendant to plead it would be pointless.
O’Moore J refused the motion seeking to set aside the order of the 6th March, 2023, on the basis that no special circumstances, within the meaning of O. 27, r. 15(2), had been established on behalf of the defendants. O’Moore J also refused the application on the basis that the one ground of defence which it was proposed to plead was one which, on the authorities, could not succeed.
Motion refused.
Judgment of Mr. Justice Brian O'Moore delivered the 10th day of July 2023
. On the 6 th March, 2023 I granted the plaintiffs judgment in default of defence against both defendants.
. The proceedings were then listed in the List to Fix dates on the 31 st March, 2023 for the purpose of finalising the reliefs to which the plaintiffs were entitled on foot of this default judgment. On that date, the solicitor for the defendants appeared in court and sought an opportunity to set aside the order which I had made on the 6 th March. The defendants were given the chance to seek to do so, and directions were made in respect of this application. In accordance with these, the defendants issued a motion on the 21 st April, 2023, returnable for the 15 th May, 2023.
. By that motion, the defendants sought the following orders:
“(1) An order seeking to re-enter the Plenary action had herein.
(2) An order allowing the defendant to file a defence and counterclaim.
(3) Such further other order as this honourable court deems fit;
(4) costs of the within application.”
. In truth, the application was one brought pursuant to O. 27, r. 15(2) of the Rules of the Superior Courts seeking to set aside the default judgment granted to the plaintiffs on the 6 th March.
. Order 27, rule 15(2) requires the court to be “satisfied that at the time of the default special circumstances (to be recited in order) existed to explain and justify the failure…” to deliver the requisite pleading.
. The first question, therefore, to be determined is whether or not such special circumstances exist. It is further submitted to me by counsel for the plaintiffs that, even if such special circumstances exist, the defendants must show that they have a real ground of defence to the proceedings.
. GN & Co., the solicitors for the defendant, responded to the order of the 6 th March, 2023 with a letter of the 30 th March. This letter seeks to explain the grant of the order for judgment in default by reference to the following factors:-
(a) “We were instructed that our client had engaged a third party to negotiate a settlement with Pepper Finance Corporation DAC. In the circumstances we believe that a settlement to our client would be the best result for all concerned and erroneously also thought that agreement was achievable and close.”
This is no reason whatsoever not to have delivered a Defence, or not to have attempted to defend the motion for judgment in default of defence. The fact that negotiations were ongoing, a contention to which I will return, is no reason to ignore a motion brought on notice to the defendants seeking judgment against them.
(b) “We assumed, incorrectly, that your client would have made you aware of the ongoing negotiations. This was obviously not the case.”
As I said, even if there were ongoing negotiations that does not preclude the bringing of a motion seeking judgment. That is particularly the case in these proceedings, where the statement of claim was delivered on the 9 th May, 2022 and where the plaintiffs may well have wanted to bring on the case in the absence of any concluded settlement.
(c) “We accept that you did correspond with us, and we did not reply at the time in the hope that negotiations would bear fruit.”
Again, this position is entirely untenable. This approach on the part of the solicitors, as set out in their own correspondence, suggest that a conscious decision was made not to respond to correspondence in respect of the outstanding defence as it was hoped that the proceedings would settle. In making this conscious decision not to engage in correspondence GN & Co. left their clients completely at the mercy of the negotiations. If the negotiations did not succeed, then the threatened motion for judgment in default of defence would issue and (if GN and Co. did not attend to resist the application for judgment) would proceed to the detriment of the defendants.
(d) “We were not in attendance on the 6 th March due to the unfortunate circumstances of Covid in our office affecting staff at the time.”
This explanation is to be so vague as to be effectively meaningless. It is not indicated who (or what sort of person in the office) contracted Covid. It is not explained how the contracting of Covid on the part of this individual prevented attendance at the hearing of the motion on the 6 th March. It is not explained when the individual contracted Covid, or the extent to which they were absent from the office or capable of working from home as a result of having been infected with the virus. It is not explained why, if an outbreak of Covid had a direct effect on the person due to attend in court, a letter or email was not sent to the solicitors for the plaintiffs to notify them of that fact.
. Peculiarly, the letter of the 30 th March, 2023 states in addition:
“We did have a defence drafted in relation to a discrete issue involving the receivers in the hope of avoiding protracted and costly litigation.”
. If, as this portion on the letter suggests, a defence was in fact drafted at the time the motion was threatened, (or, at the latest, the date the motion was heard) it is impossible to understand why a copy of that defence was not sent to the solicitors for the plaintiffs with a request the time be extended to allow the defence to be filed. It is also difficult to square this contention with the balance of the letter, which suggests that the solicitors for the defendant had hoped that the case would settle. If the solicitors were so confident the case was going to resolve that they did not even respond to correspondence, it is difficult to understand why they nonetheless went to the cost of drafting a defence. Having gone to that expense, it is even more difficult to understand why the defence was not made available to the solicitors for the plaintiffs prior to the hearing of the motion.
. These bundle of reasons, taken individually or together, do not constitute “special circumstances” such as would justify the setting aside of the order of the 6 th March.
. The affidavit of Geoffrey Nwadike, grounding the current motion, does not carry the matter significantly further. Mr. Nwadike apologises “for what occurred”, and indeed these apologies were repeated on a number of occasions by counsel for the defendants at the hearing of the motion. While these apologies are welcome, they do not in themselves go towards establishing the “special circumstances” which the rule requires.
. Mr. Nwadike...
To continue reading
Request your trial