Danske Bank A/S t/a Danske Bank v John Meagher

• Jurisdiction: Ireland
• Judge: Ms. Justice Laffoy
• Judgment Date: 01 April 2014
• Neutral Citation: [2014] IESC 38
• Court: Supreme Court
• Date: 01 April 2014

BETWEEN

DANSKE BANK A/S TRADING AS DANSKE BANK

PLAINTIFF/RESPONDENT

AND

JOHN MEAGHER

DEFENDANT/APPELLANT

[2014] IESC 38

Fennelly J.

Laffoy J.

Dunne J.

[Appeal No. 487/13)

THE SUPREME COURT

Commercial Law – Unpaid Loans – Summary Judgment – Practice and Procedure – Service of Proceedings – Substituted Service Order

Facts: The plaintiff/respondent issued a summons claiming an order for summary judgment against the defendant/appellant in the amount of £6,984,826 for unpaid loans. In the commercial division of the High Court, Mr Justice Kelly was satisfied that the summons had been served on the defendant/appellant and entered summary judgment against him in his absence. The defendant/appellant issued a motion in the High Court to have the summary judgment order set aside.

During the High Court hearing Mr Justice Peart permitted the defendant/appellant application to amend the notice of motion to include a relief to set aside the substituted service order made by Mr Justice Kelly. Mr Justice Kelly made this order because the plaintiff/respondent had been unable to serve proceedings on the defendant/appellant directly. This order permitted the plaintiff/respondent to serve proceedings on the defendant/appellant at the home of one of his relatives. Mr Justice Peart concluded that it was an appropriate order for Mr Justice Kelly to make and there was no basis for setting it aside. It followed that the plaintiff”s/respondent”s judgment had not been irregularly obtained. Mr Justice Peart also refused to set the summary judgment order aside. He said that the defendants/appellants “mere averment” that he had no knowledge of proceedings before the judgment was granted was an insufficient defence.

The defendant appealed Mr Justice Peart”s decision to the Supreme Court. The defendant/appellant submitted that at the time the proceedings had been served, he had not been in the jurisdiction and the address used for service was incorrect as it was not his residence. For these reasons, the defendant/appellant argued that service had not been affected properly and the High Court had proceeded to make orders against him without his knowledge. The appellant therefore said he had been denied the opportunity to defend himself and the substituted service order had not been regular.

Held by Laffoy J: The person being served with an order for substituted service does not have to be in the jurisdiction at the time the order is made or effected. Laffoy J said the evidence established that the respondent was unable to serve the proceedings on the defendant due to his being at an unknown location in Sri Lanka at the time. As a result, it was appropriate for Mr Justice Kelly to grant the substituted service order. Furthermore, Mr Justice Kelly was correct to conclude that service of proceedings at the address of the appellant”s sister would result in him being put on notice of the judgment application. In addition there was even more evidence before Mr Justice Peart to reach the same conclusion that the defendant had notice of the proceedings.

In relation to the second issue, Mr Justice Peart did not believe the appellant was telling the truth when he claimed that he was unaware of proceedings before the summary judgment order was made. Laffoy J said that the Supreme Court would be slow to interfere with a finding of fact made by a judge in the High Court particularly when it relates to the credibility. There was no basis on which the Supreme Court could determine that Mr Justice Peart”s decision in relation to the appellant”s knowledge of the proceedings was incorrect. The Supreme Court therefore rejected the argument that there was any irregularity in service and said the judgment had been regularly obtained.

FARDEN v RICHTER 1889 23 QBD 124

RSC O.9 r2

RSC O.10

RSC O.10 r1

RSC O.10 r2

CRANE & SONS LTD v WALLIS 1915 2 IR 411 1915 49 ILTR 213

RSC O.37

DELANY & MCGRATH CIVIL PROCEDURE IN THE SUPERIOR COURTS 3ED 2012 PARA 26.34

HEFFERNAN v RYAN 2005 1 IR 32 2005 1 ILRM 457 2004/21/4893 2004 IEHC 408

TISDALL v HUMPHREY 1867 1 IRCL 1

POOLE v STEWART 1903 37 ILTR 74

ROYAL BANK OF IRELAND LTD v NOLAN 1958 92 ILTR 60

DELANY & MCGRATH CIVIL PROCEDURE IN THE SUPERIOR COURTS 3ED 2012 PARA 3.23

RSC O.11

UWAYDAH v NOLAN & ORS UNREP BARRON 21.2.1997 1997/12/3898 1997 IEHC 35

RSC O.9 r15

HAY v O'GRADY 1992 1 IR 210 1992 ILRM 689 1992/2/502

RSC O.58

CONSTITUTION ART 34

1 Judgment of Ms. Justice Laffoy delivered on 1st April, 2014

2 Judgment delivered by Laffoy J.

Background to appeal

3 1. The High Court proceedings in which the order of the High Court (Peart J.) made on 8 ^th November, 2013 under appeal was made (Record No. 2013 No. 176S) were initiated by a summary summons which issued on 18 ^th 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 2 ^nd January, 2013 on foot of a Facility Letter dated 28 ^th 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 5 ^th January, 2000 (the 2000 Mortgage).

4 2. On 31 ^st 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 30 ^th 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 30 ^th January, 2013 by Tom Ryan, who described himself as "a summons server". Mr. Ryan made the following averments in his affidavit:

5 (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";

6 (b) that he first attempted to serve the appellant with the summary summons by attending at "the Defendant's House" on Monday, 21 ^st 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;

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

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

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

10 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.

11 3. On 25 ^th February, 2013 the respondent's notice of motion dated 31 ^st January, 2013 seeking orders -

12 (a) entering the proceedings in the Commercial List and

13 (b) for summary judgment against the appellant,

14 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 15 ^th February, 2013, which proved that on 7 ^th February, 2013, pursuant to the order made by Kelly J. on 31 ^st 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 25 ^th 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...