The High Court has allowed three defendants to defend proceedings seeking to enforce a North Carolina judgment for $1,190,781, sending the case to a plenary hearing on the meaning of a supply agreement, the US court’s jurisdiction and whether the judgment was obtained by fraud.
Mr Justice Meenan’s judgment, delivered on 19 December 2019, concerns a 2017 judgment obtained by Innovative Health Care Distribution L.L.C. and Envirotek World Wide L.L.C. against Seamus Kilgannon, Work Lab Innovation Limited and Work Lab Investments Limited. The plaintiffs sought summary judgment in Ireland to enforce it. The defendants opposed the application and sought leave to defend.
The US judgment arose from a supply agreement made in June 2016 between Envirotek and Schivo Precision Limited, later renamed Work Lab Innovation Limited. It required Schivo to manufacture, assemble and sell specified products and provided for claims to be brought in North Carolina. The agreement was signed for Schivo by Kilgannon, identified in the judgment as its chief executive.
The defendants argued that the agreement bound only the second plaintiff and the second defendant, and that Kilgannon signed only on behalf of the company. The plaintiffs contended that the agreement’s wording also covered the other plaintiff and defendants. Justice Meenan found that identifying the agreement’s parties was not straightforward and that deciding the issue on a summary application risked injustice. He held that the defendants had an arguable case that the North Carolina court lacked jurisdiction. He also found that their motion to set aside the US judgment, which expressly contested jurisdiction, did not amount to submitting to it.
The defendants also alleged that the plaintiffs’ US complaint included false or duplicated claims. They disputed, among other matters, who made a $400,000 payment, which entity placed an order associated with $409,058.50, and whether a $41,000 payment was claimed twice. The judge said the defendants had provided detail and supporting documents, and that the issues could not be resolved on affidavit. He found the allegations went beyond mere inaccuracy and arguably amounted to fraud, granting leave to defend on that issue. The court did not determine that fraud had occurred.
The defendants’ separate claim that the US hearing breached natural justice because it was handled on a “five-minute motion calendar” was treated as an assertion that did not meet the threshold for an arguable defence. The judge also said no serious issue appeared to arise over service.
The order grants leave to defend and remits the matter to plenary hearing on the supply agreement’s construction, the North Carolina court’s jurisdiction and alleged fraud. It does not resolve those questions or finally determine the plaintiffs’ enforcement claim.