O'Tuama and Others v Casey and Casey

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 28 February 2008
• Neutral Citation: [2008] IEHC 49
• Court: High Court
• Date: 28 February 2008

O'Tuama & Ors v Casey & Co Solicitors

BETWEEN/

THOMAS O'TUAMA, JOHN V. O'SULLIVAN, MICHAEL CAREY, PADRAIG O'SHEA, JOHN FINN AND PATRICK McCARTHY

PLAINTIFFS

AND

GREG CASEY AND MAIREAD CASEY T/A CASEY & COMPANY SOLICITORS

DEFENDANTS

[2008] IEHC 49

No. 16308 P/2002

THE HIGH COURT

PRACTICE AND PROCEDURE

Judgment in default of appearance

Application to set aside - Judgment regularly obtained - Whether defence had real prospect of success - Martin O'Callaghan Ltd v O'Donovan (Unrep, SC, 13/5/1997) applied; The Saudi Eagle [1986] LLR 2, Irwin & Co v Austin & Sons (1907) 41 ILTR 190, Maker v Dixon [1995] 1 ILRM 218 followed; Philip v Ryan [2004] IESC 204 mentioned - Relief granted (2002/16308P - Clarke J - 28/2/08) [2008] IEHC 49

O'Tuama v Casey

Facts: the plaintiffs had instructed the defendants to act as their solicitors in a defamation action. The defendants issued a plenary summons but failed to serve it within the time limited for doing so under the Rules of the Superior Courts. The plaintiffs then instructed different solicitors who intended to apply to renew the summons and, to that end, requested that the defendants provide an explanation as to why the proceedings had not been served. The defendants failed to reply to that request. The plaintiffs then instituted proceedings against the defendants alleging loss and damage as a result of professional negligence on the defendants' part in the conduct of the defamation proceedings. The plaintiffs obtained judgment in default of appearance against the defendants. The defendants applied to have judgment set aside. They contended that they had a strong defence to the proceedings on the basis, inter alia, that there was a question as to the strength of the plaintiffs' defamation proceedings and that they had not received clear instructions from the plaintiffs as to how to proceed in light of the fact that the plaintiffs had not obtained sufficient indemnity from their employers in relation to the proceedings in the event that they were unsuccessful therein.

Held by Mr Justice Clarke in setting aside the judgment on terms that the defendants could only enter a limited defence, comply strictly with the time limits set by the Court and were liable for the costs of the proceedings to date:

I. That where a plaintiff was left in a position where he believed that proceedings would be pursued, but where they were either not commenced or commenced but not served in time so as to have placed a continuance of the proceedings at risk, a claim in negligence against the solicitors would prima facie arise.

II. That the calculation of the damages to which a plaintiff may be entitled would have regard to the extent to which the proceedings might have been likely to have been successful and the value of any relief that might have been obtained had they been successful. These were matters which went to the quantum of damages to which he may be entitled in an action for negligence against his solicitor rather than providing a defence to the solicitor as such.

III. that where judgment in default had been obtained irregularly, the court would normally set aside the judgment without enquiring into the merits of the proposed defence. However, where judgment had been obtained regularly, the court could be persuaded to set aside the judgment but would only do so after considering the possible merits of the defence which the defendant wished to advance.

IV. That a defendant who asked a court to exercise its discretion in its favour to set aside judgment in default obtained regularly had to show that he had a defence which had a real prospect of success.

V. That, if it was established that the plaintiffs had been unwilling to proceed with their defamation proceedings in the absence of a better form of indemnity from their employers than was forthcoming, that would afford a full defence to the within proceedings. The defendants had therefore met the relevant test in relation to establishing a possible defence on that ground.

Reporter: P.C.

STATUTE OF LIMITATIONS 1957

IRWIN & CO v AUSTIN & SONS 1907 41 ILTR 190

MAHER v DIXON 1995 1 ILRM 218

DELANY & MCGRATH CIVIL PROCEDURE IN THE SUPERIOR COURTS 2ED 2005 PARAS 4.33 - 4.47

PHILIP v RYAN 2004 4 IR 257

MARTIN O'CALLAGHAN LTD v O'DONOVAN T/A CORK CITY FOOTBALL CLUB UNREP SUPREME 13.5.1997 1998/28/11079

ALPINE BULK TRANSPORT CO INC v SAUDI EAGLE SHIPPING CO INC 1986 2 LLOYD'S REP 221

1. Introduction

2 2 1.1The plaintiffs in these proceedings are customs officials who claim to have been defamed in newspaper articles in the latter part of 1995 and the earlier part of 1996. It is common case that the plaintiffs retained the defendant firm of solicitors ("Casey & Co.") for the purposes of advising and, if appropriate, maintaining proceedings in respect of the alleged defamation. It would appear that proceedings were issued some three years later which was well within the time limit prescribed by the Statute of Limitations, 1957. However, those proceedings were not served on the intended defendants.

3 3 1.2 The plaintiffs state that they became ultimately dissatisfied with the lack of progress in maintaining their claim, discharged Casey & Co., and instructed alternative solicitors to prosecute their claim. Those events occurred in 2003 which was, of course, after the limitation period had expired. It is then said that those new solicitors discovered the existence of the proceedings as issued and the fact that the summons had not been served. It would appear that those solicitors wrote to Casey & Co. inviting Casey & Co. to inform them of any reason that might be given for the fact that the proceedings had not been served. It is said that such information was necessary, by virtue of the fact that quite some period of time had elapsed from the issue of the proceedings during which the proceedings remained unserved so that any application to renew the summons would have required a significant explanation in order to satisfy the court that it was appropriate to make the renewal sought. It was, of course, the case that by that time it was too late to issue fresh proceedings as any such proceedings would have been statute barred. The plenary summons had been issued in late 1998, some three years after the alleged defamation. The requests for explanations as to why the summons had not been served were maintained throughout 2003. It is clear, therefore, that if the summons was to have been renewed in 2003, it would have required the court to be satisfied that it was appropriate to renew the summons, notwithstanding the fact that some four or five years had elapsed from its issue without it being served and that, in that period, the time limit provided for by the Statue of Limitations had expired.

4 4 1.3 Against the background of the failure of Casey & Co. to serve the relevant proceedings and/or to afford any explanation to the plaintiffs' new solicitors which might have led to a successful application to renew the summons in 2003, these proceedings for negligence as against Casey & Co. are maintained.

5 5 1.4 The plaintiffs obtained judgment in default of appearance on 20 ^th December, 2004. As it happens, I made the relevant order in circumstances where no appearance had been entered to the proceedings and where there was no appearance on behalf of Casey & Co. at the motion for judgment. My order of that date provided that the damages to which the plaintiffs might be entitled were to be assessed by a judge sitting alone. On foot of that order the plaintiffs proceeded to set down the issue of the assessment of their damages for trial. Subsequent to the case being listed for hearing, it was intimated on behalf of Casey & Co. that it was wished to bring an application to set aside the judgment obtained in default. In those circumstances the proceedings for assessment of damages were unable to go ahead and a motion was made returnable for last October, seeking the setting aside of the order for judgment in default of appearance. This judgment is concerned with that application.

6 6 1.5 The hearing has, for reasons which will become apparent, proceeded in two parts. I had earlier made a ruling on one aspect of the matter, which ruling was delivered ex tempore. In order to properly understand the issue which I now have to decide I should briefly refer to that ruling.

2. The previous ruling

2 2 2.1 When the motion originally came before the court there was an issue between the parties as to whether the judgment could be properly said to have been obtained either regularly or irregularly. The jurisprudence of the courts in this regard is clear. See for example Irwin & Co v. Austin & Sons [1907] 41 ILTR 190, Maker v. Dixon [1995] 1 ILRM 218 and Delaney & McGrath on Civil Procedure in the Superior Courts (2 ^nd Edition) at paragraphs 4-33 to 4-47. Thus, where judgment is obtained irregularly, the court will normally set aside the judgment without enquiring into the merits of the proposed defence. The logic of this position is that the judgment should not have been obtained in the first place and a plaintiff who has obtained judgment irregularly should not have any benefit by reason of having obtained judgment in that fashion. On the other hand, where judgment is obtained regularly, the court may, nonetheless, be persuaded to set aside the judgment so as to permit the defendant to defend the proceedings but will only do so after considering the possible merits of the defence which the defendant would wish to put forward. I will turn to the precise test by reference to which a defendant's potential defence is to be assessed in due course.

3 3 2.2 In any event, there was a dispute between the parties as to whether the judgment had, in fact, been obtained regularly or irregularly. The first...