‘Special Circumstances’ and Setting Aside Default Judgments

The Court of Appeal has recently looked at when a default judgment can be set aside. In doing so, it considered whether ‘special circumstances’ existed to justify exercising the discretion to do so. Our Commercial Disputes team explores the decision with valuable insights for practitioners on evidentiary standards and the court’s approach to balancing procedural fairness.

Under Irish law, a default judgment is a judgment entered by a court against a party who has failed to take a required step in legal proceedings – typically, failing to enter an appearance or deliver a defence within the time limits set out in the Rules of the Superior Courts (RSC).

A recent Court of Appeal decision has considered the test applicable to the setting aside of default judgments.[1] The RSC set out the consequences of being in default in terms of the conduct of proceedings, which includes the possibility that judgment may be awarded against the defaulting party. In this case, arising from ongoing issues in proceedings, including the failure to make discovery, a plaintiff secured an order striking out the defendants’ defence. The defendants subsequently brought a motion to set aside that order which was granted by the High Court. The plaintiff appealed to the Court of Appeal. In delivering a lengthy judgment, the Court of Appeal upheld the High Court decision and confirmed that the requirement for ‘special circumstances’ had been met in this case.

Background

The underlying proceedings involved a personal injury action for, amongst other things, alleged battery by the first defendant and other unknown members of Ireland’s police force, An Garda Síochána. In addition, negligence, breach of duty and vicarious liability against the Commissioner of An Garda Síochána and the State were also alleged. The defendants had failed to make discovery and a motion to compel discovery issued, at which hearing the defendants did not appear. Despite a discovery order being made, it was not complied with and a motion to strike out the defence issued. Additional time for compliance was granted, but that was also not complied with and so a further motion to strike out the defence was issued. The defendants failed to attend that motion hearing, and the Deputy Master granted the default orders sought. The defendants successfully persuaded the High Court, Mr Justice O’Connor presiding, to set aside the default judgment under Order 27, Rule 15(2) of the RSC on the basis that ‘special circumstances’ existed at the time of the default. The plaintiff appealed that ruling.

Decision

The Court of Appeal began by looking at the standard of review in an appeal based on the exercise of discretion by a lower court. As a general principle, a discretionary order made by a trial judge should not be interfered with unless an error in the decision-making process can be identified.[2] However, such an appeal should not be approached as a fresh hearing of the original application[3]. Instead, the appellate court should exercise its discretion independently of the trial judge.[4] Ultimately, although great deference will be afforded to the views of the trial judge, the appeal court has jurisdiction to overturn a judgment and the interests of justice are fundamental.[5]

The jurisdiction to set aside default judgments under Order 27, Rule 15(2) of the RSC was then addressed. The entitlement to do so is explicitly stated to require the court to be satisfied that “at the time of the default special circumstances… existed.” The Court of Appeal noted that it “is incumbent on the party who seeks to have an order set aside to satisfy the court that at the relevant time (i.e. the time of the default) special circumstances existed which both explain and justify the defalcation in question…” It also acknowledged that the meaning of ‘special circumstances’ for the purpose of that rule is not clarified in the rule itself but noted that “whether special circumstances arise must be decided based on the facts of a particular case and it would be unwise to lay down any hard and fast rule”.[6] However, case law did suggest that it was a higher test than ‘good reason’, but although “beyond the ordinary or the usual”, the bar was not raised to ‘extraordinary’.[7]

Special circumstances considered

In considering the relevant factors here, the High Court and Court of Appeal had regard to:

• The acute medical condition of the Chief State Solicitor Office (CSSO) solicitor having carriage of the file. The solicitor involved swore an affidavit regarding their serious psychiatric and other health issues, including intermittent depression and two periods of hospitalisation.
• Medical and logistical issues relating to the COVID-19 pandemic, including home working, had a particularly adverse impact on his/her mental health and exacerbated the situation, not least by removing the support and structures of the office environment.
• The affidavit also addressed how connectivity issues presented logistical difficulties for the solicitor involved throughout the lockdown periods when the solicitor was working remotely from home.

The court considered that these factors represented “an exceptional cluster of unusual and extreme circumstances which merged and combined to create a perfect storm”. It also rejected criticism of the CSSO solicitor as “deeply unattractive”. It noted that it was unrealistic to expect the CSSO to anticipate and pre-empt the effect of the lockdowns on vulnerable individuals. Rather, the factual matrix in the solicitor’s affidavits did justify the finding on the evidence.

The interests of justice

The Court of Appeal also considered these factors in the context of the ‘interests of justice’, noting that “the object of the court is to decide the rights of the parties not to punish them for mistakes they made in the conduct of their case”.[8] In doing so, the Court of Appeal attached significance to the fact that the plaintiff did not dispute or contradict the circumstances set out in the affidavit of the CSSO solicitor giving details regarding the relevant factors.

It was also mindful of delays by the plaintiff in commencing the underlying proceedings and other procedural delays by the plaintiff once they had been commenced. However, it particularly referenced the fact that the underlying proceedings involved serious allegations against members of An Garda Síochána in which there was a public interest in properly and cogently stress-testing. An individual whose reputation and good name is at stake should not be excluded from participating unless that can be demonstrated to offset a greater prejudice to the other party and to be in the interests of justice. The court was satisfied the trial judge had engaged in a balancing exercise as between both sides and adopted the correct approach in identifying the existence of special circumstances. The appeal was therefore dismissed.

Conclusion

Although the facts of the case were exceptional, particularly the solicitor’s health and the impact of pandemic lockdowns, the decision helps clarify what constitutes ‘special circumstances’. It also highlights the level of detail and candour required to explain such circumstances in a way that is not vague or generic.

While a similar outcome might be expected in the case of a small legal practice facing comparable circumstances, it is less certain whether the same level of judicial sympathy would apply to a larger firm, where responsibility for files is usually shared across a hierarchical team rather than resting with one individual.

For more information and expert advice on commercial disputes, contact a member of our Commercial Disputes team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

[1]Bowe v Sherriff, Commissioner of An Garda Siochana, Ireland & Attorney General [2025] IECA 14.

[2] E.g., In Bonis Morelli, Vella v Morelli [1968] IR 11

[3] Stephens v Paul Flynn Ltd. [2008] IESC 4

[4] Lismore Homes Ltd v. Bank of Ireland [1999] 1IR 501

[5] See Collins v Minister for Justice [2015] IECA 27; Desmond v MGN Ltd [2008] IESC 56; Lismore Builders Ltd (In Receivership) v Bank of Ireland Finance Ltd [2013] IESC 6.

[6] Per Haughton J. in Murphy v. HSE [2021] IECA 3, para. 70.

[7] Per Ferriter J. in De Souza v Liffey Meats [2023] IEHC 402

[8] Per Bowen LJ in Cropper v Smith (1884) 2 Ch.D. 700 – he further observed “I know of no kind of error or mistake which if not fraudulent or intended to overreach, the court ought not to correct if it can be done without prejudice to the other party.”