High Court: Judgment in default of defence set aside due to personal difficulties experienced by counsel

About this case:

• Citation:
  [2023] IEHC 402
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Rory Mulcahy

Delivering judgment in the case, Mr Justice Rory Mulcahy rejected the submission from the defendants that the unless order had been inadvertently consented to by a legal executive and that the solicitor was not aware of it until after the time had passed. Inadvertence by a legal practitioner did not by itself constitute “special circumstances” to set aside judgment. However, the unavailability of counsel was a special circumstance and the balance of justice favoured setting aside judgment.

Background

The plaintiff had issued personal injuries proceedings against the defendants alleging negligence in various aspects of his employment. The case involved three distinct and complex issues. In January 2022, the defendants’ solicitor briefed counsel to draft a defence. A draft defence was delivered within two weeks, along with a draft discovery request and a request for a consultation.

In February, the plaintiff’s solicitor requested a defence within 28 days, to which the defendant’s solicitor replied that a draft defence was in hand and would be delivered once approval was obtained from the clients.

A consultation occurred in February 2022 after which the defendants’ counsel provided an updated draft defence on the same day. Counsel advised that the defence was not to be delivered until further instructions and an engineering report were obtained.

Ultimately, the plaintiff issued a motion for judgment in default of defence in March 2022. The motion was listed for May 2022, by which time an engineer’s report had been sent to counsel.

The week before the default motion, a legal executive for the defendants’ solicitor corresponded with a trainee solicitor in the plaintiff solicitor’s firm. The legal executive requested that the motion be struck out since a draft defence was in hand and awaiting final confirmation. The trainee replied that they would allow an extension of 8 weeks for the defence with costs to the plaintiff.

This proposal was agreed by the legal executive. The next day, the trainee followed up with the legal executive and outlined that there were new court rules in relation to default of appearance and defence motions. As such, counsel had advised that a “unless type order” had to be made. The legal executive was asked to consent to an unless order allowing 10 weeks for the defence.

The legal executive consented to that order, which required a defence to be delivered by 31 July 2022. Unfortunately, it appeared that the legal executive did not appreciate that they were consenting to an order for judgment unless the defence was delivered within 10 weeks. The legal executive did not inform the solicitor about the unless order.

When the order was delivered to the defendants’ solicitor, he did not consider the terms as he was not informed that an unless order was made. A further conversation was had with counsel in June on getting the defence finalised. Two reminders were sent to counsel in September 2022.

The defendants’ solicitor only became aware of the unless order when the plaintiff’s solicitor reverted on 20 September 2022 outlining that the defence had not been delivered and therefore judgment had been obtained against the defendants.

The defendants issued a motion to set aside the judgment. The primary reasons offered for the application were 1) that the defendants’ legal executive had inadvertently consented to the unless order without understanding the implications and 2) that counsel had difficult personal circumstances between May and September. Specifically, counsel’s mother was very ill and passed away in July 2022. His father’s health was also a difficulty and minimised his engagement with his practice.

The plaintiff opposed the motion, stating that the reasons offered did not reach the threshold of “special circumstances” required to set aside judgment pursuant to Order 27 Rule 15(2) of the Superior Court Rules.

High Court

Mr Justice Mulcahy began by outlining that the date on which “special circumstances” were required to crystallise was 31 July 2022, being the date that the defence was due for delivery. More significantly, the court was required to assess the meaning of “special circumstances” under Order 27.

The court referred to Murphy v. HSE [2021] IECA 3, which dealt with analogous provisions for special circumstances for the renewal of a summons. In that case, it was outlined that there was no “hard and fast rule” as to what special circumstances might be. While the test for special circumstances was higher than the standard of “good reason”, this did not mean that extraordinary circumstances were required.

The court also referred to McGuinn v. Commissioner of An Garda Síochána [2011] IESC 33, which was the only decision to deal with Order 27 Rule 15(2). In that case, the Supreme Court held that the appellant had established special circumstances to set aside judgment where the defendant’s solicitor was completely unaware that a motion for judgment had not been struck out as agreed but had instead been adjourned. The solicitor was also told that the matter had been struck out.

In considering whether special circumstances existed in the present case, the court took account of the facts that an employee of the defendants’ solicitor held out that they had authority to agree to the unless order, a copy of the unless order was sent to the solicitor and the solicitor never properly acquainted himself with the order.

The court held that the failure by the defendants’ solicitor to become aware of the unless order would not of itself amount to a special circumstance. It was said: “If a solicitor chooses to delegate agreements in relation to important procedural matters such as the terms of orders for judgments in default (including unless orders) to a non-legally qualified staff member (or, indeed, to any staff member qualified or not), he cannot escape the consequences of that by saying that his staff member did not understand the consequences of the terms agreed or that he was not aware of the terms agreed.”

If the only issue in the case was the inadvertence of the solicitor, the court would not have accepted that special circumstances existed. However, the court noted the personal difficulties of counsel in the case which contributed significantly to the defence not being ready.

The court accepted that counsel was not in a position to attend to his practice in the same way during May and July 2022. Further, the court also noted that counsel had acted with “considerable alacrity” in drafted defences in the case prior to the difficulties. The court had little doubt that but for the personal circumstances of counsel, a defence would have been delivered within the required period.

As the court was satisfied that special circumstances existed as to why the defence was not delivered on time, the court turned to the balance of justice. It was outlined that the defendants’ solicitor had acted quickly once the mistake was identified, the plaintiff knew the defendants intended to fully defend the case and that the proceedings had a degree of complexity.

The court did not see that there was any prejudice to the plaintiff in setting aside judgment. However, a condition of the order was that the defendants should pay the plaintiff’s costs of the default motion and the set aside motion.

Conclusion

The court granted an order setting aside judgment owing to the very difficult personal circumstances of counsel which resulted in the solicitor not pressing him for a defence and the defence not being finalised before 31 July 2022.

De Souza v. Liffey Meats (Cavan) Unlimited Company and Ors. [2023] IEHC 402