by Laura Mathews , Kevin Kelly February-27-2024 in Healthcare Law
The recent High Court judgment in Costern Unlimited Company v Susan Fenton[1] provides some insight into the nature of ‘Unless Orders’ and builds upon another recent High Court judgment in De Souza v. Liffey Meats[2]. These cases deal with the ‘special circumstances test’ arising in applications to set aside judgments obtained by default of an Unless Order.
Order 27 Rule 15 (2) deals with applications to set aside judgments obtained by default. It provides:
“Any judgment by default, whether under this Order or any other Order of these Rules, may be set aside by the Court upon such terms as to costs or otherwise as the Court may think fit, if the Court is satisfied that at the time of the default special circumstances (to be recited in the order) existed which explain and justify the failure…”.
Both Costern and De Souza concerned successful applications by defendants pursuant to O 27 r 15(2).
De Souza
In De Souza, an Unless Order required the defence to be delivered by 31 July 2022 and it was not delivered until 20 September 2022. The defendants chiefly relied on two factors - firstly, that the Unless Order was agreed by a legal secretary/ executive in the defendants’ solicitor’s office and the solicitor was unaware it was an Unless Order and secondly, the personal circumstances of the defendants’ counsel who had experienced close family illness and bereavement. The plaintiff’s principal submission was that the reason for failure to comply with the Unless Order was inadvertence.
Mr Justice Ferriter did not accept as a special circumstance the fact that the defendants’ solicitor was unaware an Unless Order had been agreed by a member of his staff. However, he did accept as a special circumstance the very difficult personal circumstances of counsel from May 2022 to 31 July 2022, such that the solicitor did not press him for a defence and counsel was not in a position to prepare and deliver a finalised defence. Ferriter J noted that counsel had acted with considerable alacrity until the onset of his family circumstances and he had little doubt that but for the very particular personal circumstances arising, he would have delivered a defence on time.
Ferriter J then considered the balance of justice and held that the special circumstance identified justified the setting aside of the judgment in default. He noted that the plaintiff was aware from the outset that the defendants intended to fully defend the matter, and he noted that they had an arguable defence, which he said is relevant to the balance of justice. He also noted there was no prejudice to the plaintiff which could not be addressed by an appropriate Order as to costs.
Costern
The Unless Order in Costern required the defence to be delivered by 6 June 2023. The defendant’s evidence was that the defence was sent by DX on 2 June 2023. The plaintiff’s position was that they never received the defence by DX and only received a copy by email on 8 June 2023. The defendant acknowledged oversight in not filing the defence until 9 June 2023.
Mr Justice O’Donnell considered the caselaw, primarily De Souza and O’Brien v McMahon.[3] He distinguished O’Brien on the basis of the very different factual circumstances arising and the very fact specific analysis required in these applications. In O’Brien, the Court found there was no reason for the defendants not to have delivered a defence or to have attempted to defend a motion for judgment in default of defence. There was also an issue as to the viability of the proposed defence.
O’Donnell J endorsed the guidance given by Ferriter J in De Souza, which he summarised as follows:
- The question of special circumstances is to be treated at the date of default i.e. when the “Unless Order” crystallises, and not when the Unless Order is made.
- These applications are very fact specific. However, the test of special circumstances is a higher test than “good reason” and while not “extraordinary”, is beyond the ordinary or usual.
- There is a two-step analysis – special circumstances, which justify an extension.
- “In the preponderance of cases”, inadvertence on the part of a solicitor will rarely constitute special circumstances.
O’Donnell J noted that that the defendant was a solicitor, an officer of the court, and accepted his evidence of the material events. This was not a case of mistake or inadvertence and the defendant’s belief that the defence was delivered on time amounted to special circumstances.
O’Donnell J then considered the failure to file the defence. He did not think the sub-rule required the Court to be satisfied that special circumstances existed independently for both the failure to deliver the defence and the failure to file the defence. He held that instead, the Court must consider the overall circumstances, and viewing both elements together here, he was satisfied that the test for special circumstances had been made out. Furthermore, he noted potential for a “harsh result” if, for instance, a defence had been delivered within the time specified in an Unless Order but not filed.
The Court then considered whether the special circumstances justified the failure. O’Donnell J could not see any prejudice to the plaintiff in setting aside judgment, noting that the plaintiff had the defence a number of days after the Unless Order expired. The Court noted the complex nature of the proceedings, the fact that the defendant intended to fully defend the action, and the potential claim for considerable damages if the Order was upheld. The Court noted that there would also be no proper determination of the litigation and was satisfied that the balance of justice “very strongly” favoured granting the application.
Conclusions
The default position remains that failure to deliver a Defence within the period specified in an Unless Orders will result in a plaintiff having liberty to enter judgment.
However, these judgments offer insight into the special circumstances, often human factors, that might arise and result in default of an Unless Order, the consequences of which are stark.
They also offer some practical guidance to solicitors acting for defendants including taking care not to delegate the agreeing of an Unless Orders, reviewing the Orders carefully, and remembering to allow sufficient time to file the defence and to deliver it.
[1] [2023] IEHC 552
[2] [2023] IEHC 402
[3] [2023] IEHC 393
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About the Authors
Laura Mathews
Laura is an associate solicitor in the Healthcare team at Hayes solicitors. Laura works in Healthcare litigation, defending clinical negligence claims on behalf of public hospitals and individual medical and dental practitioners in a variety of medical and dental scenarios.
Kevin Kelly
Kevin is a Legal Executive in the Healthcare Litigation Team. He works closely with partners, associates and solicitors in medical negligence defence claims including high value catastrophic injury cases. He liaises with clients, counsel and experts in preparing cases for trial and for settlement negotiations.