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11 March 2014
Irish procedure has a specific summary procedure for cases which are suitable for summary disposition without pleadings and on affidavit. Although the rules provide for various types of case to be progressed using this mechanism,(1) the most common type involves liquidated damages claims. In the High Court, the summary mechanism for such cases involves the issuance of a summary summons, in which the plaintiff gives specifics of the debt and outlines in detail the nature of how it is due. Once the summons is served on a defendant and an appearance is entered, the plaintiff may then issue a motion grounded on affidavit seeking liberty to enter final judgment returnable before the master of the High Court. The defendant may seek to defend the motion by filing a relying affidavit. Under the rules, in uncontested cases, the master may deal with the matter summarily.(2) If the case is contested, the master must transfer the motion for hearing by the High Court when it is administratively ready for hearing, when all affidavits are filed and sworn.(3)
The High Court recently dealt with an appeal against the master's decision in a case where a financial institution had sought judgment against the defendants for sums due under a loan agreement.(4) Appearances were entered to the proceedings and replying affidavits were filed in respect of the motion seeking liberty to enter final judgment. The plaintiff conceded that the matter was contested and appropriate to be transferred to the High Court list. However, the defendant argued that since the plaintiff was aware when the proceedings commenced that the defendant had a substantive defence, the proceedings should be struck out as they were inappropriate for the summary procedure. In a reserved decision, the master acceded to the defendants' request, striking out the proceedings and commenting that they could be recommenced as a plenary action. The plaintiff appealed to the High Court.
In hearing the appeal, the court noted that the procedure governing the hearing of proceedings commenced by summary summons is set out in Order 37 of the Rules of the Superior Courts. The court reviewed the relevant provisions of the order and drew specific attention to those giving the master power over uncontested claims on one hand and contested claims on the other. The court recited from Order 37, Rule 6 which deals with contested cases, and stated simply that in such cases "the Master shall transfer the case, when in order for hearing by the court, to the Court list for hearing on the first opportunity", as well as outlining the steps that the master may direct in furtherance of that objective.
The court observed that although it is curious that the relevant provisions of Order 37 have received comparatively little judicial scrutiny, the meaning and effect is clear. The court concluded that:
"the Master has no jurisdiction to enter final judgment in contested cases. His task in such cases is rather to the transfer of the matter to the High Court for hearing when the case is in order for hearing by the Court… The phrase does not give the Master a jurisdiction to strike out contested cases on the ground that the pleadings are in some way irregular or that the proceedings ought to have been commenced by plenary action rather than by way of summary summons."
Since the master has no jurisdiction to determine contested cases, the court felt that the case turned on whether it was a contested or uncontested case. It held that an uncontested case is one where the defendant offers no opposition to the application over and above the entry of the appearance – the appearance alone being insufficient to make the case contested, as it is simply an administrative mechanism to acknowledge due service. However, the court recognised that in this case the defendant had filed affidavits disputing the claim, which in the court's view meant that it was contested.
The court concluded that the master is empowered under the rules to transfer the case into the High Court for adjudication once satisfied that the papers are in order.(5) It went on to state that, in circumstances where a case is contested, the master's sole jurisdiction was to transfer the case to the High Court under Order 37, Rule 6. Accordingly, the master has no jurisdiction to strike out the proceedings where the claim was advanced on a summary basis notwithstanding a known defence.
The decision confirms that for summary proceedings, the master's powers are circumscribed by the rules and the master's jurisdiction is limited to the specific empowerments provided for therein. Notwithstanding that the High Court upheld the appeal and permitted the matter to be transferred to the High Court list under Order 37, Rule 6, a party considering pursuing summary proceedings in respect of liquidated damages should consider whether there is a reasonable probability that the defendant has a real and bona fide defence.(6) If so, it may be preferable – and ultimately more cost effective – to commence proceedings by way of plenary action. However, knowledge of a basis for a defence to a liquidated damages claim should not preclude a plaintiff from commencing proceedings in the manner that it deems appropriate.
For further information please contact Gearoid Carey at Matheson by telephone (+353 1 232 2000), fax (+353 1 232 3333) or email (email@example.com). The Matheson website can be accessed at www.matheson.com.
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