The High Court has refused an application by Patrick McMahon, acting as administrator ad litem of the late Angela McMahon, to set aside a judgment granted against the defendants after they failed to deliver a defence.
Mr Justice Brian O’Moore had granted judgment in default of defence to Tom O’Brien, Hilary Larkin and Pepper Finance Corporation (Ireland) DAC on 6 March 2023. The defendants later sought permission to re-enter the plenary action and file a defence and counterclaim. The court treated the motion as an application under Order 27, rule 15(2) to set aside the default judgment.
That rule required the defendants to establish special circumstances explaining and justifying their failure to deliver a defence. The judge found they had not done so. The explanations included that settlement discussions were expected to succeed, that the defendants’ solicitors had not responded to correspondence while hoping for a settlement, and that Covid in the solicitors’ office and an administrative error contributed to non-attendance at the March hearing. The judge said the Covid and administrative-error explanations lacked detail. He also found the correspondence showed no meaningful negotiation was underway when the default judgment motion was issued or heard.
Counsel for the defendants referred to Mr McMahon’s health difficulties and family bereavements. The judge expressed sympathy, but concluded those circumstances did not explain why a defence was not filed or why the earlier motion was not opposed. Mr McMahon’s medical episode occurred after the default judgment, the judge said.
The application also failed because the proposed defence was, in the judge’s assessment, unstateable. Its central point was that the receivers had not been properly appointed because their deed described them as “receivers” rather than “receivers and managers”. The judge said that argument had been rejected by the Court of Appeal in Fennell v Corrigan and addressed in earlier High Court decisions. The defendants had not identified a material flaw in the security or appointment documents in this case.
The draft counterclaim also sought a declaration concerning the first plaintiff’s position as charge holder and alleged retrospective legislation was unconstitutional. The judge said the basis for that relief had not been coherently explained. He noted that the first named plaintiff was not the charge holder and that the defendants’ counsel had identified the receiver appointment point as their live defence.
The court refused the motion on both grounds: the defendants had not established the special circumstances required by the rule, and the proposed defence could not succeed on the authorities. The default judgment therefore remained in place. The judgment does not itself set out the final relief due to the plaintiffs following that judgment.