ICS Building Society v O'Brien
|Mr. Justice Allen
|07 December 2018
| IEHC 703
|[2013 No. 957 S.]
|07 December 2018
 IEHC 703
THE HIGH COURT
[2013 No. 957 S.]
Default judgment – Motion to set aside judgment – Notice – Defendant seeking order to set aside judgment made in default of appearance – Whether court should use its discretion under Order 13 Rule 11
Facts: The defendant, Patrick O’Brien, applied to the High Court for an order pursuant to O.13, r 11 and/or the inherent jurisdiction of the High Court to set aside a judgment entered against him in default of appearance in the Central Office on 10th June, 2013. The defendant had taken out six loans with the plaintiff, ICS Building Society, between 2001 and 2008, and went into arrears on these loans on 12th March 2013. The plaintiff issued a summary summons claiming payment for £1,373,676.11, and this was served on the defendant on 3rd April, 2013. The plaintiff emailed the defendant on 10th April 2013 requesting that no action be taken until he had an opportunity to meet with his solicitor that Friday. No further communication took place between the parties, and judgment was entered against the defendant on 10th June 2013. The defendant did engage in negotiations with the plaintiff after judgment was marked, and a letter dated 5th July 2013 documented their revised loan agreements. In seeking the default judgment to be set aside, the defendant argued, inter alia, that it was unfair and unjust as he was in the process of seeking legal advice, engaged in ongoing negotiations with the plaintiff, and should have been given further notice of the plaintiff’s intention to mark judgment.
Held by Allen J that the court should not use its discretion under Order 13, Rule 11 and the relevant authorities, to set aside the judgment against the defendant. While the court has wide discretion under Rule 11 to set aside or vary a final judgment, two distinct categories of case are outlined in the authorities: (i) where there has been a procedural irregularity in the way the judgment was obtained, in which case the defendant will be entitled to have the judgment set aside; and (ii) where the judgment was obtained in a regular manner but the defendant has a good defence to the claim and the interests of justice require him to be given an opportunity to defend the proceedings, in which case the defendant must file an affidavit of merit.
Held that the judgment in this case was regularly obtained, and that the defendant could not demonstrate a good defence to the claim. Allen J determined that the defendant had received adequate notice of the plaintiff’s intentions by way of the summons served on 3rd April, 2013, and that the renegotiation of the loans after judgment was entered could not be considered as a defence to the claim as the relevant date was the date on which judgment was marked.
This is an application made by notice of motion issued on 20th December, 2017 and originally returnable for 12th February, 2018 for an order pursuant to O. 13, r. 11 and/or the inherent jurisdiction of the High Court to set aside a judgment entered in default of appearance in the Central Office on 10th June, 2013.
Between 4th April, 2001 and 1st September, 2008 the defendant took out six loans with the plaintiff. Those loans went into arrears and on 12th March, 2013 the plaintiff's then solicitors issued six separate demands for payment, warning that failing payment in full within seven days High Court proceedings would be issued for the recovery of the full balance together with interest. The sums demanded were not paid and on 26th March, 2013 a summary summons was issued claiming payment of a total sum of €1,373,676.11. The summons was duly served on the defendant on 3rd April, 2013.
By email dated 10th April, 2013 the defendant acknowledged receipt of the summons. In the affidavit grounding this application he says that his understanding of the summons was that ‘… it had something to do with the appointment of a receiver’. The defendant does not give any basis for that misunderstanding. The summons plainly claimed judgment for €1,373,696.11.
In his email of 10th April, 2013 the defendant said ‘ I have an appointment this coming Friday with a solicitor. Can you refrain from any actions until I have had time to meet my solicitor? Thank you.’
The plaintiff complains that without further warning or any further correspondence, judgment in default of appearance was marked against him on 10th June, 2013. In his grounding affidavit he suggests that this was unfair and unjust, and in a second affidavit sworn on 4th April, 2018 he suggests that this amounted to sharp practice.
The evidence of the plaintiff is, variously, that at the time the judgment was marked against him he was not mentally capable of defending the proceedings; and that he was in the process of seeking legal advice; and that he was in negotiations with the plaintiff, which negotiations were ultimately successful. He says that he had assumed that the plaintiff was not progressing the proceedings but does not suggest that that assumption was based on anything done or said by or on behalf of the plaintiff.
The defendant's case is that at the time the judgment was entered against him he was in negotiations with the plaintiff and that those negotiations were ultimately successful. He exhibits a copy of a letter from the plaintiff of 5th July, 2013. That letter references the six mortgage accounts which were then in arrears and three security addresses. It referred to the defendant's ‘… recent proposals requesting discharge of receiver on the above listed properties’ and notified the defendant of a decision by the plaintiff's credit committee that one of the properties should be sold, and the receiver on the other two discharged upon terms that fixed repayments of €2,200 per month between the accounts referable to those securities would be made for a period of five years. The defendant was advised that further paperwork would issue under separate cover outlining the repayment arrangement on those two accounts, and that paperwork was duly issued on the same day.
The defendant's case is that he only became aware of the judgment by letter dated 10th July, 2017. He says that he was never served with an affidavit of debt by the...
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