Kearns v Evenson and Another

• Jurisdiction: Ireland
• Judge: Ms. Justice Butler
• Judgment Date: 11 December 2023
• Neutral Citation: [2023] IECA 297
• Court: Court of Appeal (Ireland)
• Docket Number: Record No.: 2022 No. 126 High Court Record Number: 2014/4948P

Between/

Joseph Kearns

Plaintiff/Appellant

and

Eric Evenson

Defendant/Respondent

[2023] IECA 297

Faherty J.

Haughton J.

Butler J.

Record No.: 2022 No. 126

2022 No. 127

High Court Record Number: 2014/4948P

THE COURT OF APPEAL

CIVIL

Set aside service – O. 12, r. 26 of the Rules of the Superior Courts – Renewal – Appellant appealing against the judgment acceding to an application brought by the defendant to set aside service of notice of the plenary summons – Whether the application was improperly brought under O. 12, r. 26 of the Rules of the Superior Courts

Facts: The plaintiff/appellant, Mr Kearns, appealed to the Court of Appeal against two decisions of the High Court (Sanfey J) delivered on 14 May 2020 ([2020] IEHC 257) and 15 December 2021 ([2021] IEHC 790) respectively. Those decisions were made in the context of protracted attempts by the plaintiff to serve notice of proceedings issued by way of plenary summons dated 30 May 2014 out of the jurisdiction on the defendant/respondent, Mr Evenson, who was resident in the Isle of Man. In the first of the two judgments Sanfey J acceded to an application brought by the defendant under O. 12, r. 26 of the Rules of the Superior Courts to set aside service of notice of the plenary summons and discharge an order of Eagar J made on 2 July 2018 authorising such service. That decision was made because the summons of which Eagar J had authorised service had expired and had not been renewed either at the time of the application to him or at the time of service. The plaintiff contended that the application was improperly brought under O. 12, r. 26 because the text of that rule envisages that an application will be made before a defendant enters an appearance. In this case the defendant had entered a conditional appearance, but the only issue raised on the face of the conditional appearance went to jurisdiction and not to the service of the summons. The plaintiff also contended that the application should have been brought – and refused under O. 124 which allows proceedings to be set aside for irregularity. As a result of that judgment the plaintiff then made an application under O. 8 seeking the renewal of the summons in July 2020. In the event that renewal were to be granted, the plaintiff also sought liberty to serve notice of the proceedings on the defendant in the Isle of Man under O. 11, r. 1. If that application had been allowed it would have been the third such order permitting service out of the jurisdiction of the proceedings. However, that order was never made because, in his second judgment, Sanfey J refused the plaintiff’s application to renew the summons. The appeals from both judgments were heard together by the Court of Appeal.

Held by Butler J that the High Court was correct in permitting the issue as to whether the High Court should have entertained the defendant’s argument as to the non-renewal of the summons prior to the purported service of notice of it to be raised. Once it was raised the issue was such an important one she did not think that the High Court could have declined to entertain it on the ground that it had not been raised in time. In her view the trial judge was correct both in allowing the defendant to raise an issue as to the validity of the service effected upon him at a time when the summons was not in force and in determining that issue as he did. She did not regard that issue as having been raised by the defendant at a late stage. In circumstances where O. 12, r. 26 provides a specific rule under which an application can be made to set aside service of a summons or notice of the summons and to discharge the order authorising such service she was not prepared to hold that in this case the defendant was bound to move under the more general provisions of O. 124 and seek to have the proceedings themselves set aside. She noted that the trial judge was acutely conscious that considering whether the special circumstances advanced by the plaintiff justified the renewal of the summons necessarily required the interests of justice, potential prejudice and the balance of hardship to be considered at the same time. She found that the trial judge carefully weighed those respective factors before concluding that the length of the delay coupled with the plaintiff’s repeated failures to observe the Rules of Court and the prejudice likely to be suffered by the defendant meant that the plaintiff had failed to establish special circumstances which justify an extension under O. 8, r. 4.

Butler J held that the appeals brought by the plaintiff should be dismissed.

Appeals dismissed.

JUDGMENT of Ms. Justice Butler delivered on the 11 ^th day of December 2023

Introduction

1 . This judgment deals with appeals brought against two decisions of the High Court (Sanfey J.) delivered on 14 May 2020 ( [2020] IEHC 257) and 15 December 2021 ( [2021] IEHC 790) respectively. These decisions were made in the context of protracted attempts by the plaintiff to serve notice of proceedings issued by way of plenary summons dated 30 May 2014 out of the jurisdiction on the defendant who is resident in the Isle of Man.

2 . In the first of the two judgments Sanfey J. acceded to an application brought by the defendant under O.12, r.26 of the Rules of the Superior Courts to set aside service of notice of the plenary summons and discharge an order of Eagar J. made on 2 July 2018 authorising such service. This decision was made because the summons of which Eagar J. had authorised service had expired and had not been renewed either at the time of the application to him or at the time of service. The plaintiff contended that the application was improperly brought under O.12, r.26 because the text of that rule envisages that an application will be made before a defendant enters an appearance. In this case the defendant had entered a conditional appearance, but the only issue raised on the face of the conditional appearance went to jurisdiction and not to the service of the summons. The plaintiff also contended that the application should have been brought – and refused – under O.124 which allows proceedings to be set aside for irregularity.

3 . As a result of this judgment the plaintiff then made an application under O.8 seeking the renewal of the summons in July 2020. In the event that renewal were to be granted, the plaintiff also sought liberty to serve notice of the proceedings on the defendant in the Isle of Man under O.11, r.1. As will be apparent from the chronology of events set out below, if that application had been allowed it would have been the third such order permitting service out of the jurisdiction of these proceedings. However, that order was never made because, in his second judgment, Sanfey J. refused the plaintiff's application to renew the summons.

4 . The appeals from both judgments were heard together by the Court of Appeal. Although the plaintiff was the appellant in both cases, having been the respondent in the first motion and the moving party in the second, I will refer to the parties throughout this judgment as the plaintiff and the defendant. This will, I think, bring greater clarity to the arguments in a case which deals fundamentally with the issuing of proceedings by a plaintiff and their service on a defendant resident outside the jurisdiction and indeed outside the area covered by what is now Regulation (EU) No. 1215/2012 (formerly Council Regulation No. 44/2001) and the Brussels and Lugano Conventions (1968 and 1988 respectively).

5 . Because of the complex and protracted procedural history of this case I propose initially to set out the factual background in some detail before looking separately at the procedural history. I will then deal with the legal arguments arising in each of the appeals. The first will involve a consideration of O.8, r.1, O.12, r.26 and O.124. The second will involve a consideration of the renewal of a summons under O.8, the terms of which had been revised in the year immediately preceding the plaintiff's application.

Factual Background to the Proceedings

6 . These proceedings have their origin in a dispute between the plaintiff and the defendant regarding certain investments made by the plaintiff and the Callary Pension Fund — which comprises largely, if not exclusively, the plaintiff's private pension fund — over a nine-month period between July 2011 and March 2012. The plaintiff and the defendant were friendly, although the friendship was not a longstanding one the parties having been introduced to each other in 2007 or 2008 and had been involved in some business together. The defendant is a Canadian national who resides in the Isle of Man. He also has business interests in Norway where certain members of his family reside. The plaintiff is an Irish national and a qualified chartered accountant who resides in Dublin. It seems to be agreed, or at least it is not overtly disputed, that these investments were made at a time when the plaintiff was under economic pressure and wanted to move assets off-shore in order to put them out of easy reach of his creditors. The amount invested by the plaintiff was large and his claim relates to a total sum of €965,000. This is split as between the pension fund at €490,000 and himself, personally, at €475,000.

7 . The dispute between the parties centres on whether the defendant is personally liable to the plaintiff for the return of these monies. The plaintiff claims that the monies were received by the defendant and are held by him as a trustee to be applied in accordance with the plaintiff's directions from time to time and to be returned on demand. The plaintiff also relies on an “Agreement of Understanding” dated 15 July 2011 and a further written agreement dated 13 December 2012 both of which are ostensibly signed by the defendant, under which the defendant acknowledged that he held the monies in...