The High Court has set aside a summary judgment of €6,971,856.49 obtained by Bank of Scotland plc against Eugene McDermott, finding that he had no true notice of the motion hearing because of his poor mental health at the time.
Mr Justice Max Barrett delivered the judgment on 15 February 2017. The original order was made by Mr Justice Kelly on 29 July 2013, after Mr McDermott failed to attend or be represented. He had entered a formal appearance in the proceedings earlier that month. The order was perfected on 7 August 2013.
The bank’s motion to have the case entered in the High Court’s Commercial List was issued on 22 July, with a return date seven days later. The court-directed substituted service process was followed, including posting the motion papers to Mr McDermott’s home. Mr Justice Barrett said Mr Justice Kelly was entitled to find service good and sufficient on the evidence then before him.
Mr McDermott applied in February 2015 to extend time, set aside the judgment and obtain leave to defend. He said he had been mentally and psychologically unwell, had no recollection of receiving the motion papers and had too little time to arrange legal representation. He also asserted that the bank’s figures were wrong and challenged evidence about the debt. The bank disputed the extent of his illness. Mr Justice Barrett said a psychiatrist’s report supported Mr McDermott’s account and that the suggestion he was feigning illness was not credible.
The application had first been refused by the High Court in May 2015. On appeal, the Court of Appeal identified uncertainty about the legal basis on which the application had been considered and vacated that order, directing that the set-aside application be heard afresh in the High Court.
Mr Justice Barrett said the summary-proceedings rules contained no specific set-aside provision for this situation, so the application fell to be considered under the High Court’s inherent jurisdiction. He described the burden on a person seeking to reopen a final order under that jurisdiction as very heavy.
The judge accepted that, despite compliance with the mechanics of service, Mr McDermott had no true notice of the motion in circumstances connected to his poor mental health. He said the court could not persist in treating him as having notice. The judge did not set aside the judgment on the separate challenge to the bank’s affidavit evidence; he said it was legally permissible for the bank to prove its debt through direct evidence based on analysis of its books and records.
The court set aside the 2013 judgment and order. It proposed to hear the bank’s summary judgment motion itself in the next court term, subject to neither party appealing the 2017 judgment. It did not decide whether the bank was entitled to summary judgment or whether the case should proceed to a plenary hearing.