AIB PLC v O Hara & anor [2019] IEHC 816 (25 November 2019)

EX TEMPORE JUDGMENT of Mr. Justice Tony O’Connor delivered on the 25th day of

1. The defendants applied pursuant to Order 13, rule 11 of the Rules of the Superior Courts

(“RSC”) to set aside the judgment in default of entering an appearance marked by the

registrar on 23rd August, 2017, for €613,445.74 and costs of €508.

2. Lord Russell of Killowen, at the very beginning of his judgment in Evans v. Bartlam

[1937] AC 473, [1937] 2 All ER 646, explained in relation to a similar rule, O. 13, r. 10,

that it is “unfettered by any conditions, and purports to confer upon the court or a judge

full power to set aside a judgment signed in default of appearance, and, if thought fit, to

impose such terms, as a condition of the setting aside, as may be just” (p. 481, p. 651).

3. Peart J. in AIB v. Lyons [2004] IEHC 129 (unreported, High Court, 21st July, 2004), set

aside a judgment obtained in default of appearance against the second named defendant

on 16th December, 2003. There the defendant’s solicitor conceded his mistaken

impression that a motion was required to obtain judgment. Therefore that was a case

where judgment in default of appearance was obtained by virtue of a mistake by an agent

of the second named defendant. The second named defendant submitted that the

relevant facilities letter was only addressed to her husband, the first named defendant. A

judgment mortgage on foot of the default judgment was registered against her interest in

a property. It was accepted by Peart J. that she had a possible defence which had a

reasonable prospect of success. The second named defendant offered undertakings to

leave the judgment mortgage in place and not to dispose of the relevant property. Peart

J. in those circumstances set aside the judgment on condition that the second named

defendant comply with the said undertaking.

4. Mr. Rowan, counsel for the plaintiff in these proceedings, stressed that the setting aside

of the entire judgment may affect the status of the judgment mortgage if further

judgment mortgages are registered before a determination of a plenary trial. Mr.

Pidgeon, counsel for the defendants, pointed to the wide discretion given to the court to

do justice between the parties.

5. The solicitor for the defendant swore three affidavits and the first named defendant swore

an affidavit subsequently. The said solicitor averred in his first affidavit that his

instructions were that if his clients “had been aware that the Plaintiff would, in spite of

their engagement, [i.e. of his firm] proceed to Judgment in default they would of course

have instructed his office to enter an Appearance”. Counsel for the plaintiff submitted

that this does not square with the failure or omission of the defendants’ solicitor to

confirm, as requested by the plaintiff’s solicitor in a letter dated 5th October, 2016, that

the defendants’ solicitors had authority to accept service of the proceedings. Further, it

was contended for the plaintiff that the first named defendant did not in his one and only

affidavit confirm the thrust of the averments made by the plaintiff’s solicitor.

6. Counsel for the plaintiff then focused on the elapse of time from the service of the

summary summons on the defendants on 4th October, 2016, and the date of judgment

one year later on 23rd August, 2017, to the issue of the motion herein on 20th October,

2017. It was suggested that this did not amount to a mistake like that found by Peart J.

in AIB v. Lyons. This Court recognises the officer of court status of a solicitor; it would be

unfair, if not invidious, for this Court to impugn the integrity of such a solicitor by finding

effectively that his averments were untrue or disingenuous. The solicitor for the

defendants explained at para. 8 of his third affidavit his expectation from more than 30

years of practice that a copy of the proceedings would have been sent to his firm given

the exchange of communications which had preceded the issue of the summary

summons. I am satisfied that the failure to enter an appearance was the result of “a

simple lack of communication” in the words of the solicitor for the defendants.

7. The proposed defence relates to:-

(i) The payment in cash around February 1998 of some IR£23,600 to an officer of the

(ii) The incorrect application of the interest rate to the relevant account for:-

(a) Much of the loan period or;

(b) From 2008 to 2012 when an undisputed refinancing arrangement was

(iii) A counterclaim for the effects of applying the allegedly incorrect interest rates to

8. The first named defendant in his affidavit explained the overcharging allegations which

were the subject of correspondence between the solicitors for the parties prior to the

issue of the summary summons. He exhibited an account which confirmed a statement of

an actuary (who he had engaged) that the plaintiff had overcharged €369,985. The

defendants have also offered an undertaking not to dispose of the property which is the

subject of a judgment mortgage based on the summary judgment. Further, they have

also, through counsel, indicated that they will deliver a defence soon if the matter is sent

forward for plenary hearing. No effort was made on behalf of the defendants to issue a

claim for the effects of a counterclaim of the alleged overcharging. The claim for

accommodating the cash sum of IR£23,600 has not been articulated other than in

correspondence which predated the summary summons. It appears that this is a claim

which can be the subject of a separate claim or a counterclaim in these proceedings.

9. If this Court had been tasked in 2017 to determine whether the plaintiff bank was entitled

to judgment for the undisputed interest, it would probably have sent that part of the

claim to plenary hearing. There is a realistic dispute about the applicable interest rates.

10. The Court will therefore:-

(i) Make an order varying the summary judgment to the sum of, and subject to

correction by counsel, €243,460.74 (being €613,445.74 less €369,985) plus the

costs at summary judgement level relevant to that sum;

(ii) Note the undertaking of the defendants not to dispose of the property (which is not

registered in the land registry), which is the subject of the judgment mortgage,

until the expiration of two calendar months following delivery of judgment in the

plenary trial of these proceedings;

(iii) Order that the defendants be restrained from seeking to vacate the said judgment

(iv) Order that the plaintiff be restrained from seeking to act further on the said

judgment mortgage for the sooner of (a) the period of one calendar year from

today’s date or (b) the determination or compromise of the plenary proceedings

including any counterclaim to be pursued;

(v) Direct the defendants to deliver a defence in any counterclaim, subject to what

counsel might submit, by 16.00 on 19th December, 2019, and the plaintiff to

deliver any reply or defence, if necessary, by 16.00 on 20th January, 2020;

(vi) Give liberty to the parties to apply for further directions to this Court on Tuesday

28th January, 2020, at 10.30 provided two clear days’ notice by letter is delivered

by a firm of solicitors to the other firm on record.

Application for costs

11. This is now an application for the costs of the motion seeking to set aside summary

judgment. Counsel for the plaintiff submits that this is a mistake on the part of the

defendants. Order 99 RSC requires me where possible to determine the issue of any

interlocutory costs motion. I cannot determine the issue of the costs for this motion

because it may emerge at the trial of these proceedings that the correspondence which

predated the issue of the summary summons is relevant. At the moment, the Court only

has an interpretation as proposed by counsel. It is preferable for the trial judge to

consider the relevance and context of that correspondence. I reserve the issue of costs to

the trial judge for determination.

12. As requested I also grant liberty to the plaintiff to apply within seven days of the

perfection of this order for a stay on any part of the order made today which the plaintiff

may wish to appeal to the Court of Appeal.

13. On 4th December, 2019, the application by the plaintiff for a stay on the directions for

closing the pleadings was refused.

Result: Application to set aside a 2017 judgment in the office - partly granted with terms for judgment mortgage registered and directions for plenary trial

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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> AIB PLC v O Hara & anor [2019] IEHC 816 (25 November 2019) URL: http://www.bailii.org/ie/cases/IEHC/2019/2019IEHC816.html Cite as: [2019] IEHC 816

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