The Court of Appeal has set aside a High Court order requiring Willowrock Limited, trading as McCormack Fuels, to lodge €400,000 to reopen a debt case brought by EMO Oil Limited. The appeal court replaced it with an order requiring €100,000 security, payment of specified costs and a charge over property, while allowing the underlying claim to proceed to a defence.
EMO Oil sued in 2009, seeking €693,243.03 plus interest for oil supplied over six years. After Willowrock did not enter an appearance, EMO obtained judgment for €688,242.98 in January 2010 and registered it as a judgment mortgage against Willowrock’s property in County Galway.
Willowrock applied to set aside the judgment. It disputed the invoices and alleged overcharging, claiming it had a defence and set-off. EMO contested those assertions. The High Court accepted that a mistake by Willowrock or its solicitor had led to the default and that Willowrock had a real chance of defending the claim, but found an unexplained five-month delay in seeking to reopen the judgment.
In July 2012, the High Court ordered that the judgment could be set aside only if Willowrock lodged €400,000. Willowrock appealed, arguing that the condition was disproportionate and would prevent it from defending the case. EMO argued that the terms were justified to protect its position and account for the delay and costs.
The Court of Appeal allowed the appeal. It said the High Court had wrongly treated lodgement of the full judgment amount as usual practice, relied on an unsupported assumption that Willowrock could raise €400,000 against its property, and included anticipated costs of a future trial in setting the terms. The appeal court said the five-month delay could be considered, but did not justify the €400,000 condition in light of the findings that Willowrock had made a mistake and had a real prospect of defending the claim.
The replacement order sets aside the January 2010 judgment. Willowrock must pay EMO’s costs of obtaining judgment and of the set-aside motion, when taxed and ascertained, and pay €20,000 immediately on account of those costs. It must lodge €100,000 in court or place it on joint deposit with EMO’s solicitors, grant EMO a charge over lands in Folio 13057F, County Galway, to the value of the claim, and comply strictly with relevant time limits in its defence unless EMO agrees otherwise or the High Court grants leave. The appeal judgment does not decide the underlying oil debt claim.