Factual and Procedural Background
This opinion concerns an application brought by the Defendant pursuant to Order 13, rule 11 of the Rules of the Superior Courts seeking to set aside orders made by the Court on 8th December 2014 and 9th July 2015. The Defendant obtained a judgment in May 2010 against Company A (Carigna Investments N.V.), trading as Chequepoint Netherlands, in the Dutch Courts for damages exceeding €3.8 million, which with interest now exceeds €15 million. The Defendant claims Company A has no assets to satisfy the judgment due to actions by the Plaintiff and his son, who allegedly controlled and stripped Company A of assets.
The Defendant advanced claims against the Plaintiff and his son in Dutch proceedings (the "Grovit proceedings"), currently stayed pending the outcome of these Irish proceedings. Because the Plaintiff's address was unknown and his lawyer refused service, a notice was published in newspapers in the Netherlands and England summoning the Plaintiff and his son as witnesses in the Dutch proceedings. The Plaintiff contends the notice was defamatory and initiated defamation proceedings in this jurisdiction.
The Plaintiff’s solicitors purported to serve the proceedings on the Defendant at the address of his lawyers in Amsterdam by registered post and personal service in court. The Defendant acknowledges awareness of the proceedings but denies proper service, asserting no obligation to appear or engage. A motion for judgment in default of appearance was granted on 8th December 2014, followed by an assessment hearing on 9th July 2015, resulting in a correction order to publish a notice clarifying the defamatory notice. The Defendant entered a conditional appearance in May 2016 and subsequently brought this application to set aside the orders.
Legal Issues Presented
- Whether the service of the defamation proceedings on the Defendant was properly effected in accordance with EU law, Dutch law, and Irish law.
- Whether the Plaintiff complied with statutory and procedural requirements, including the Defamation Act 2009 and the Rules of the Superior Courts.
- Whether the Plaintiff’s proceedings were irregularly obtained and should be set aside.
- Whether the Defendant has a bona fide defence with a real prospect of success on the merits.
- Whether the delay by the Defendant in bringing the application to set aside the judgment affects the entitlement to relief.
Arguments of the Parties
Defendant's Arguments
- Service was not properly effected as the Plaintiff failed to comply with Regulation (EC) 1393/2007 ("Service Regulation"), which does not permit individuals to serve documents by post—only Member States may do so.
- The Notice published by the Dutch Court did not authorize service of these proceedings on the Defendant’s lawyers for this defamation action.
- The Plaintiff misled the Court by claiming the Defendant had authorized his lawyers to accept service and by misrepresenting a letter from the Dutch lawyer for Company A.
- The Plaintiff failed to comply with section 8 of the Defamation Act 2009 by not serving or filing an affidavit of verification.
- The Plaintiff failed to properly endorse the summons under Order 4, rule 1A, incorrectly citing Article 5(1) of Council Regulation (EC) No. 44/2001 instead of the correct jurisdictional provision for torts.
- The Plaintiff failed to serve the Defendant with a "Notice of Summons" as required by the Rules of the Superior Courts for non-Irish citizens.
- The proceedings were issued during the Long Vacation without court consent, constituting procedural irregularity.
- The Defendant has a good defence on the merits, including that the Notice was published under qualified or absolute privilege and that it is not defamatory within the meaning of the Defamation Act 2009.
Plaintiff's Arguments
- The Plaintiff contends service was properly effected by registered post to the address nominated by the Defendant in the Notice, relying on Article 14 of the Service Regulation and Order 11D of the Rules of the Superior Courts.
- The Plaintiff argues the Defendant was aware of the proceedings and deliberately chose not to engage.
- The Plaintiff submits that failure to serve an affidavit of verification is excused because the statement of claim was filed in the Central Office and the plenary summons serves only as notice of the claim's general nature.
- The Plaintiff relies on procedural rules allowing amendment of pleadings and contends any defect in jurisdictional endorsement can be corrected without injustice.
- The Plaintiff submits that delay by the Defendant in bringing the application should weigh against setting aside the judgment.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| McGrath v. Godfrey [2016] IECA 78 |
Principles governing setting aside default judgments; broad judicial discretion balancing interests of parties. |
Guided the Court’s approach to discretion and the requirement to prove irregularity or a bona fide defence with a real chance of success. |
| Allied Irish Banks plc v. Lyons [2004] IEHC 129 |
Necessity to balance interests of parties and threshold for setting aside judgment requiring more than an arguable case. |
Supported the Court’s assessment of the Defendant’s burden to show a real prospect of success and the balancing exercise. |
| O'Tuama v. Casey [2008] IEHC 49 |
Judgment obtained irregularly should normally be set aside without considering merits. |
Reinforced that irregular service warrants setting aside judgment without inquiry into defence merits. |
| Royal Bank of Ireland v. Nolan (1958) 92 ILTR 60 |
Onus on applicant to prove lack of notice of proceedings to set aside judgment for irregularity in service. |
The Court required the Defendant to establish no notice, but found Defendant was aware, diminishing the weight of irregular service. |
| Danske Bank A/S t/a Danske Bank v. John Meagher [2014] IESC 38 |
Confirmed requirement to prove lack of notice for setting aside judgment due to irregular service. |
Supported the principle that awareness of proceedings affects relief despite irregular service. |
| O'Connor v. Commercial General [1996] 1 I.R. 68 |
Failure to serve notice of summons is a ground for setting aside service. |
Supported the Court’s conclusion that failure to serve notice of summons was an irregularity. |
| Castlelyons Enterprises Ltd v. Eukor Car Carriers Inc [2016] IEHC 537 |
Strict approach to jurisdictional endorsement requirements under Regulation (EC) No. 44/2001. |
Supported the finding that incorrect jurisdictional endorsement was an irregularity requiring setting aside judgment. |
| Croke v. Waterford Crystal Ltd [2005] 2 IR 383 |
Permitting amendment of pleadings where no injustice results. |
Allowed the Plaintiff to be permitted to amend jurisdictional endorsement post judgment setting aside. |
| Petronelli v. Collins (Unreported, High Court, 19th July 1996) |
Court’s discretion to set terms when setting aside judgment. |
Provided basis for imposing terms on setting aside judgment, including costs and procedural directions. |
Court's Reasoning and Analysis
The Court first examined whether there were irregularities in the proceedings leading to the judgment in default of appearance. It found multiple procedural irregularities: improper service of proceedings by registered post contrary to the Service Regulation and Dutch law; lack of clear authority for the Defendant's lawyers to accept service; failure to serve an affidavit of verification as required by the Defamation Act 2009; incorrect jurisdictional endorsement on the summons; failure to serve a notice of summons as required for non-Irish citizens; and issuing proceedings during the Long Vacation in breach of the Rules.
Regarding the Service Regulation, the Court held Article 14 allows only Member States to serve documents by post, not private litigants. The Plaintiff’s reliance on Article 14 was a mistaken interpretation. The Court also found that the Notice did not authorize service of these proceedings on the Defendant’s lawyers, and the Plaintiff failed to comply with procedural requirements for service outside the jurisdiction.
Despite these irregularities, the Defendant was fully aware of the proceedings and deliberately chose not to engage, a tactic the Court described as a "game of cat and mouse." The Court acknowledged that while formal service rules are important, the Defendant's awareness mitigates the impact of irregular service.
On the merits, the Court found the Defendant had a good defence with a real prospect of success. The Notice was published under an order of the Dutch Court (albeit granted by telephone with no formal record) and likely enjoys qualified or absolute privilege. Moreover, the Notice was not defamatory as it merely summoned the Plaintiff as a witness and did not impugn his character or assert wrongdoing.
The Court then considered the Defendant’s delay in bringing the application to set aside the judgment. The delay was unexplained and significant, weighing against the Defendant. However, balancing all factors, including the multiple irregularities and the Defendant’s good defence, the Court concluded the interests of justice favored setting aside the judgment despite the delay.
Finally, the Court exercised its discretion to impose terms on the setting aside, including affirming costs orders against the Defendant, permitting the Plaintiff to amend the proceedings to correct deficiencies, requiring the Plaintiff to file an affidavit of verification, and setting timelines for further pleadings.
Holding and Implications
The Court’s final decision was to SET ASIDE the judgment obtained in default of appearance against the Defendant.
The direct effect is that the Defendant may now defend the defamation proceedings on their merits, subject to the terms imposed by the Court. The Plaintiff is permitted to amend the pleadings to correct procedural defects and must file an affidavit of verification within twenty-one days. The Defendant must deliver a defence within twenty-one days thereafter.
No new precedent was established by this decision; rather, the Court applied established principles governing service, procedural compliance, and setting aside default judgments, emphasizing the balancing of justice between parties. The decision clarifies the limited scope of Article 14 of the Service Regulation and underscores the importance of strict compliance with service and procedural rules, while also recognizing the Court’s discretion to set aside judgments in the interests of justice despite delay.