Danske Bank A/S trading as Danske Bank v Macken & anor

Factual and Procedural Background

The Plaintiff initiated proceedings seeking possession of the Defendants' family home located in County Roscommon pursuant to a charge registered in 2009. The Defendants, represented by Mr. Defendant himself, had attended multiple prior hearings. On the scheduled hearing date in November 2015, Mr. Defendant became unwell due to a panic attack and was unable to attend court. Despite notifying the Plaintiff's solicitor via email, the Plaintiff proceeded with the hearing in the Defendants' absence, resulting in an order for possession granted by the court.

The Defendants subsequently applied to set aside the possession order under Order 36 rule 33 of the Rules of the Superior Courts, which allows setting aside judgments obtained in the absence of a party under certain conditions. The initial application was refused by the trial judge on the basis of the functus officio doctrine. The Defendants appealed, and the Court of Appeal found error in that refusal, remitting the matter for fresh consideration.

Separately, an application was made by Company B (Pepper Finance Corporation (Ireland) DAC) to be substituted as Plaintiff in place of the original Plaintiff (Company A - Danske Bank) based on a loan portfolio sale and assignment. The court was tasked with determining both the setting aside of the possession order and the substitution application.

Legal Issues Presented

1. Whether the proceedings should continue with Company B substituted as Plaintiff in place of Company A or as an additional Plaintiff.
2. Whether the possession order granted in the absence of the Defendants should be set aside pursuant to Order 36 rule 33 of the Rules of the Superior Courts.

Arguments of the Parties

Defendants' Arguments

• The Defendants contended that Mr. Defendant was unable to attend court due to a medically verified panic attack, constituting a force majeure event justifying the setting aside of the possession order.
• They argued that the Plaintiff was aware of the situation through email communications and should have agreed to an adjournment.
• The Defendants challenged the validity and execution of the loan sale and assignment documents underpinning Company B's application for substitution, questioning the clarity of roles and the authenticity of notices.

Plaintiff's Arguments

• The Plaintiff maintained that the Defendants failed to attend court and did not have representation to seek an adjournment, which is required under the rules.
• The Plaintiff did not consent to setting aside the possession order obtained in the Defendants' absence.
• Regarding substitution, the Plaintiff did not explicitly contest the procedural application but implicitly relied on the validity of the original ownership and proceedings.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Nolan v. Carrick [2013] IEHC 523	Clarification of the scope of Order 36 rule 33 regarding setting aside judgments obtained in absence; distinguishes deliberate absence from inadvertence or force majeure.	The court applied the principles to find the Defendants' absence was not deliberate but due to medical incapacity, justifying relief under O.36 r.33.
Shocked & Anor v. Goldschmidt & Anor [1994] Times (4th November, 1994)	Enumerated factors for setting aside judgments obtained in absence, including explanation for absence, prospects of success, delay, prejudice, and public interest.	The court used these factors to assess the Defendants' application and found that the threshold for setting aside was met.
Irish Bank Resolution Corporation Ltd v. Halpin [2014] IECA 3	Standard for procedural applications to substitute plaintiffs requires prima facie evidence of entitlement, leaving substantive validity for trial.	The court applied this standard in granting substitution of Company B as Plaintiff based on prima facie evidence of assignment.
Irish Bank Resolution Corporation v. Comer [2014] IEHC 671	Confirms that substitution applications are procedural and do not adjudicate on validity of assignments or notices; requires sufficient evidence to justify substitution.	The court followed this approach, refraining from substantive adjudication and focusing on prima facie evidence.
Bank of Scotland Plc v. McDermott [2017] IEHC 77	Held that Order 36 rule 33 does not apply to summary summons governed by Order 37, but this point was not considered binding here.	The court acknowledged the decision but followed the contrary approach of the Court of Appeal, applying O.36 r.33 to special summons proceedings.

Court's Reasoning and Analysis

The court first addressed the application to set aside the possession order under Order 36 rule 33, which permits setting aside judgments obtained in the absence of a party within six days of trial. The Defendants' absence was medically substantiated as involuntary due to a panic attack, representing a force majeure event rather than deliberate non-attendance. The court considered the email communications and found no prejudice to the Plaintiff in extending the time to bring the application, given the Defendants' prompt action and the Plaintiff's failure to acknowledge the initial email requesting adjournment.

The court applied established principles from precedent, emphasizing that O.36 r.33 is designed to address situations where a party is prevented from attending court due to unforeseen circumstances, ensuring justice between parties. It rejected the Plaintiff's argument that the Defendants should have appealed rather than seek to set aside the order, noting that the discretion at the original hearing is broader and that an appeal is less attractive when the judgment was obtained undefended.

Regarding the substitution application, the court examined the procedural rules allowing substitution before trial upon motion. It reviewed the evidence presented by Company B, including the loan sale and assignment deeds, data tapes, and notices to the Defendants. While the Defendants challenged the validity and execution of these documents, the court held that such substantive issues are reserved for trial and that the procedural threshold requires only prima facie evidence of entitlement to proceed. Satisfied that this threshold was met, the court ordered substitution of Company B as Plaintiff.

The court also addressed conflicting authority concerning the applicability of O.36 r.33 to special summons proceedings, ultimately following the Court of Appeal's ruling that the rule applies in this context.

Holding and Implications

The court ORDERED that the possession order dated 2nd November 2015 be set aside pursuant to Order 36 rule 33 and that the matter be relisted for hearing.

Furthermore, the court GRANTED the application to substitute Company B (Pepper Finance Corporation (Ireland) DAC) as Plaintiff in place of Company A (Danske Bank a/s trading as Danske Bank), authorizing Company B to continue the proceedings.

The decision reinstates the Defendants' opportunity to contest the possession claim and clarifies procedural standards for substitution of parties in loan assignment contexts. No substantive findings were made regarding the validity of loan sale or assignment documents, preserving these issues for trial. The ruling underscores the court's commitment to ensuring justice where absence from court is involuntary and to facilitating procedural substitutions without premature adjudication on merits.