EBS ltd. v Dempsey [2019] IECA 277 (31 October 2019)

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JUDGMENT of the Court delivered by Ms. Justice Donnelly on the 31st day of October

1. This is an appeal against the refusal of the High Court to set aside a judgment obtained

by EBS Limited (“EBS”) against the appellant in default of appearance in the amount of

€860,485.75 plus costs in the amount of €384.00 (the “default judgment”).

2. The proceedings were initiated by summary summons issued on the 18th December,

2013. EBS sought judgment against the appellant on foot of the terms of a loan facility

letter dated 18th April, 2005 pursuant to which EBS advanced to the appellant a loan in

the amount of €860,000. The default judgment was entered in the Central Office of the

3. Two issues arose for consideration on the hearing of the motion in the High Court. These

(a) Whether the appellant had been properly served with summary summons; and

(b) whether the appellant had a good defence to the claim of EBS.

4. At the hearing of this appeal those two points were pursued but it should be noted that

the good defence claimed by the appellant was entirely different to that advanced in the

High Court. It was acknowledged by EBS that if there had been no proper service of the

summary summons, then the default judgment should be set aside without any need to

5. The affidavit of service upon which judgment was given was initially sworn by Colum

Smith on the 7th February, 2014. In that affidavit he averred as follows: -

“At the time of such service aforesaid, I showed the original of the said summons to

6. That affidavit was re-sworn on the 27th May, 2014. That affidavit contained handwritten

additions inserted into the original. The new paragraph three now reads as follows: -

“At the time of such service aforesaid, I showed the original of the said summons to

7. According to the solicitor for EBS, the affidavit was re-sworn because when it was

presented to the Central Office of the High Court by the solicitors for EBS, they were

informed of a change in protocol. This meant the Central Office would no longer accept

an affidavit of service which merely specified that the party being served had identified

themselves to the party effecting service. Instead, in order to mark judgment in default

of appearance, the Central Office now requires all affidavits of service to specify that the

appearance of the party being served was known to the party effecting service at the time

8. In her affidavit grounding her application to set aside judgment, the appellant averred

that she did not identify herself to Mr. Smith, nor was he acquainted with her appearance

on the 27th January, 2014. She said he did not personally serve her at Oasis Florists, her

business, on the said date as she was not at the premises at that date. She said she was

at the house of one of her sisters for an annual event with her sisters and did not return

home until late that evening. She said that when she was not in attendance at her florist

shop, another employee, Aisling Fanning, worked alone on the premises with the

exception of busy periods such as St. Valentine’s Day. She stated she believed that on

the 27th January, 2014 Aisling Fanning was working alone in Oasis Florists. She said that

given the nature of the business of being a florist she maintained a daily business diary

and retained copies of orders. She exhibited the daily business diary from the 25th

January, 2014 to the 1st February, 2014. This did not contain any information relevant to

9. Aisling Fanning also swore an affidavit saying that on the 27th January, 2014, she was

working alone in Oasis Florists for the entire day as the defendant was away. She said

that Mr. Smith did not attend Oasis Florists on the 27th January, 2014 and that in the

circumstances, he did not serve any documents on the defendant on that date.

10. Mr. Smith, a professional summons server, swore an affidavit in reply to the motion.

Having set out the circumstances in which his affidavit of service had come to be

amended, he went on to describe the manner in which service was effected. He said that

he first tried to serve the summons on the 15th January, 2014. Before trying to effect

service he had noted various images of the appellant from a Google search of her

business website, her association with Terenure Traders Association and her Facebook

public profile. He said that he had attended her private residence, and he spoke with a

young man who identified himself as her son. He called back at the time he was advised

she would return, but there was no answer. On that date, he also attended the business

of Oasis Florists and was advised by a female member of staff that the appellant would be

likely to return around 4pm. He returned after that time but the appellant did not appear

to be in attendance. He then described that between the 15th January, 2014 and 23rd

January, 2014, he made a number of further attempts to effect personal service on the

appellant at her place of residence. There was no response on each occasion.

11. On the morning of the 23rd January, 2014, Mr. Smith attended personally outside the

appellant’s residence and waited there for almost two hours in the hope he might

encounter her. Ultimately, he was told by another woman that the appellant had already

left but he was not given an answer as to what time the appellant ordinarily left the

property. He stated that on the basis of those matters, he formed a view that the

12. Mr. Smith said that in those circumstances he attended personally with his wife at the

appellant’s business premises on the afternoon of the 23rd January, 2014. Mr. Smith and

his wife indicated they were planning a large event and sought to speak to the appellant

directly. They were advised that the appellant was not present. Subsequently, Mr.

Smith’s wife contacted the shop looking to speak with the appellant and was told the

appellant would be present at the business premises on the 27th January, 2014 if she

13. Mr. Smith said that he called to the premises at approximately 3 pm and effected

personal service on the appellant. He said he was acquainted with her appearance from

the Google search. He said that as he was effecting service on the appellant, she

identified herself to him and stated “you have been looking for me” or words to that

effect. He said in those circumstances he has no doubt but that he effected personal

service of the summary summons on the defendant on the 27th January, 2014 in the

14. He disputed the relevance of diary entries. He made a general comment that it would be

unusual for a party to record the fact that they have been served with proceedings

seeking judgment for personal debts in the books for records of their business. In

relation to the averment by Ms. Fanning that he did not call to the premises on the given

day, he says that at the time he effected service there was no other person evidently

15. Peter McKenna, solicitor for EBS also swore an affidavit. Of particular note in his affidavit

is that on the 3rd December, 2013, his firm had sent a letter demanding payment of the

amount outstanding on foot of the loan facility forming the subject matter of the

proceedings. He said that it was apparent from the contents of the letter that the

appellant was informed that the commencement of the proceedings was imminent unless

she cleared her liability to EBS. Furthermore, a letter was sent on the 13th March, 2014

noting that service had been effected and advising the appellant of a failure to enter an

appearance to the proceedings. The letter warned her that if she did not make

appropriate proposals to EBS, then EBS would proceed to make judgment in default of

appearance against her. She was strongly urged in the letter to seek advice from a

solicitor. He said no explanation whatsoever was offered by the appellant in her affidavit,

for her failure to respond to the aforesaid correspondence. He said that this was matter

to which the court was entitled to have regard in assessing her credibility.

16. In response, the appellant swore a supplemental affidavit. She took issue with what had

been sworn by Mr. Smith. She pointed out that in his re-sworn affidavit, he had deleted

the averment that the appellant identified herself to him. She said that she was present

in the business all day on the 14th and 15th January, 2014; and if he had been

acquainted with her appearance, he could have effected personal service on either of

those dates. She again denied being present at the business on the 27th January, 2014

and specifically denied saying the words “you have been looking for me”.

17. Mr. Smith swore a second affidavit. In this he gave further details of what he described

as his extensive efforts to serve the appellant. He gave various explanations as to why

he had tried so often to serve her, including the fact that he was a native of Terenure

18. In reply to that affidavit, the appellant swore a second supplemental affidavit. The

appellant pointed out that she works approximately eighty-five percent of the time while

Ms. Fanning works the remainder of the time. Ordinarily it is rare other than for busy

periods such as Valentine’s Day that both herself and Ms. Fanning are in attendance in

the shop at the same time by reason of a work rota. She pointed out that there were no

other members of staff. She pointed out that the business was operated from a very

small premises, slightly larger than a kiosk. She again strenuously denied having

identified herself to Mr. Smith and denied saying the words “you have been looking for

19. The appellant averred that Mr. Smith did not personally serve her with the summons on

the 27th January, 2014, as at the time of the purported service on that day she was not

at the premises known as Oasis Florists. She also said that she was not personally served

20. The appellant also swore an affidavit setting out why she claimed she had a defence to

the EBS claim on the merits that it had a reasonable prospect of success.

21. The trial judge set out the conflicting evidence before him. He gave his decision on the

“It is of course impossible for a court to seek to determine in a situation where

affidavits contradict each other where the truth lies. The court notes that as this is the

application by the defendant it is surprising that no application was made to cross-

examine Colum Smith or Peter McKenna on their affidavits where they are so

trenchantly opposed. It appears to the court that this failure to seek to cross-examine

the summons server and the solicitor who engaged him and who had carriage of the

proceedings places the defendant in the position that the court is satisfied that she

Further despite Mr. Smith’s evidence on affidavit evidence that he had called to her

residence on a number of occasions there is no affidavit from either her son who

answered the door or any other person who resides with the defendant in relation to

these events. It is also clear that the solicitors on behalf of the plaintiffs wrote prior to

the issue of the summons and also subsequently to the service of the summons and at

no stage did the defendant seek to raise an issue with these solicitors as one would

Whilst it might also have been helpful for Mr. Smith’s wife to have sworn an affidavit

nevertheless the defendant does not dispute that some event was suggested to her by

Mr. and Mrs. Smith when they called to the business premises on the 27th January,

2014 nor does Ms. Fanning make any reference to same. In all the circumstances the

court is satisfied in the absence of a motion to cross-examine Mr. Smith by the

22. Order 13, rule 11 provides that where final judgment is entered pursuant to any of the

rules of that order, the court may set aside or vary such judgment upon such terms as

may be just. As the trial judge correctly indicated the authorities disclose two distinct

categories of case upon which the discretion may be exercised. The first is where there

was some irregularity in the proceedings or the procedure by which the judgment sought

to be set aside or varied was obtained; and secondly, where the judgment was obtained

in a regular manner but the defendant may have a good defence to the claim and the

interests of justice require that he should be given the opportunity to defend the

23. As stated by Peart J. in Allied Irish Banks Plc. v. Lyons [2004] IEHC 129 at para. 12 and

“Clearly a wide discretion is given to the Court in its task of achieving justice between

the parties, but the interests of both parties must be taken into account in the

weighing exercise undertaken by the Court in considering the interest of each party…”

24. There is much authority to the effect that as regards default judgments, the courts will

require strict compliance with the rules. This has been said to be “extremely important

having regard to the potential grave consequences for any defendant against whom

judgment is obtained.” Per Irvine J. in McGrath v. Godfrey [2016] IECA 178 at para. 22.

Undoubtedly, if a person has not been served at all there is a gross defect of the most

fundamental nature and therefore no compliance with the rules. The issue in the present

case however is one of proof. That is, proof as to whether or not service was actually

25. The question of proof of service means that the primary issue on this appeal is whether

Mr. Smith’s affidavit of service on the appellant was correctly accepted as credible by the

trial judge or whether it should have been rejected and the affidavit evidence of the

appellant and her employee accepted in its stead. I am satisfied, that there was no

defect in the re-sworn affidavit of service filed with the Central Office and that was never

an argument in the proceedings. Instead, the change in the affidavit was called in aid by

the appellant to support her contention that Mr. Smith’s evidence stating she was served

should be rejected. Thus, the focus at the trial and on the appeal was whether there was

26. This raises the question of whether the trial judge was incorrect in his finding of fact that

the appellant had been served with the summons. In her submissions, the appellant

argues that the weight of the evidence, in particular the corroborative evidence of Ms.

Fanning and the two narratives set out in the original affidavit of service of Mr. Smith

supported the appellant’s contention that she was not served. In particular, the appellant

states that the learned trial judge determined the conflict of fact with regard to service by

drawing an inference from the absence of a motion to cross-examine Mr. Smith by the

appellant that she had been served with the summons. It is submitted that the lack of

cross-examination was the sole rationale given by the trial judge for determining the

27. The appellant relies on Hay v. O’Grady [1992] 1 I.R. 210 which was summarised in a

judgment of the Court of Appeal Emerald Isle Assurances and Investments Ltd. v. Dorgan

[2016] IECA 12. Furthermore, she relies on a decision of Hogan J. in the Court of Appeal

in Lynch v. Cooney [2016] IECA 1. Hogan J. had pointed to the necessity for the trial

court to engage with the facts in the case. The appellant submitted that the trial judge

did not engage with the evidence. It was submitted that when the trial judge stated the

impossibility of determining the conflict of fact with regard to service that he should have

adjourned the hearing of the motion and directed the attendance of all witnesses for the

purposes of hearing oral testimony so as to determine the conflicts of fact.

28. Although no authority was open to the Court as to where the burden of proof lay in an

application to set aside a judgment, I am of the view that the appeal was correctly

premised on the principle that the burden must lie with the party seeking to set aside the

judgment. This is a logical corollary of the position that the obtaining of the judgment

must be accorded some standing and therefore requires a defendant to point to some

factor at a minimum to demonstrate irregularity. This is entirely consistent with the

requirement that there must be strict compliance shown by a plaintiff. A defendant

seeking to set aside a default judgment must present to the court a prima facie case

giving rise to a concern that there has not been strict compliance.

29. During the course of his submissions, counsel for the appellant argued that the affidavit of

the employee, Ms. Fanning amounted to a shifting of the burden of proof. In so

submitting, it appears counsel was suggesting that on the facts, the evidential burden had

shifted back onto the plaintiff not that as a matter of law the legal burden of proof had

shifted. In the appellant’s submission therefore, this corroborative affidavit of Ms.

Fanning tilted proceedings in his favour and no cross-examination was required.

30. Insofar as the appellant has relied upon the number of affidavits to support his contention

that an evidential burden shifts, the passage in McGrath, Evidence (2nd ed., Round Hall,

“In general, the common law eschews any quantitative requirements with regard to

testimony, concentrating instead on the qualitative aspect of such evidence.”

31. This suggests that a burden, even an evidential burden, cannot be said to shift, merely

because one party has put forward a greater number of witnesses than the other.

Equally, the courts are always alert to the weight to be given to apparently corroborative

evidence based upon relationships between witnesses or other potentially relevant

factors. Moreover, the statement by the trial judge that it was impossible to determine

where the truth lies in a situation where the affidavits contradicted each other is one

which is often to be found in legal decisions. The matter is resolved in those

circumstances by reference to the question of where the burden of proof lies. As Hedigan

J stated in Finnegan v. Superintendent of Tallaght Garda Station [2017] IECA 222 an

applicant bearing a burden of proof cannot have a conflict of affidavit evidence resolved in

“It was submitted that this Court can prefer one account over another. The respondent

could have applied to give oral evidence or cross-examine the Garda witnesses. The

respondent, as the applicant, bore the burden of proof and as such, a conflict of

32. The appellant submitted that if the trial judge was of the view that the conflict could not

be resolved without cross-examination that he should have adjourned the hearing of the

case for that purpose. That submission must be rejected. Under the adversarial system

in operation in these courts, a moving party bears the burden of being ready to present

the case. If he or she have not satisfied that burden, there is no obligation on a trial

judge to point this out and give a further opportunity to satisfy that burden. That is not

to say that a trial judge, in the exercise of his or her discretion, may not, in an

exceptional case, suggest an adjournment for the purpose of enabling the Court to

determine the real issues in the case in the interests of justice. That, as stated, would

arise only in exceptional circumstances. The interests of justice demand that parties are

ready to proceed with and adduce evidence to prove their cases at the time listed for the

hearing of that case. It would in general be contrary to the interests of justice to require

courts to adjourn merely because a party has through error, oversight or inability been

33. In all those circumstances therefore, the trial judge was entitled as a matter of law and

on the facts to determine that it was, in his words, “impossible to determine where the

truth [lay]” where there was a clear conflict on the affidavits as to a central item of

evidence: whether the appellant was served or not served with the summons. In those

circumstances it was clear that he was entitled to hold that the appellant had not

discharged the burden to demonstrate that there was irregularity in the service.

34. I am of the view that this decision was entirely reasonable based upon the conflict of

evidence in the case. The credibility was at issue on both sides, as indicated by the

affidavit of Mr. McKenna pointing towards the failure of the appellant to deal with receipt

of letters. There is no doubt that credibility as to the averments lay at the heart of the

decision and where there was such a clear conflict on basic facts, the trial judge correctly

identified the failure to cross-examine Mr. Smith and Mr. McKenna as a crucial factor in

his decision. In the absence of cross-examination, the conflict of affidavit evidence could

35. It is important also to note that the Supreme Court has recently addressed the issue of

the resolution of factual disputes. Although that decision was given in the context of the

hearing of judicial review proceedings, the principles are apposite. In RAS Medical

Limited v. Royal College of Surgeons in Ireland [2019] IESC 4 the Supreme Court stated

“However, where reliance is placed on evidence to be found either in affidavits, in

documents exhibited in affidavits, or in documents which are presented by agreement

to the court, then a more difficult situation arises where it is suggested that there is a

conflict of evidence whose resolution is necessary to the proper determination of the

proceedings. Just as it is inappropriate to argue in a trial conducted on oral evidence

that the evidence of a witness should not be accepted, either on grounds of lack of

credibility or unreliability, without having given that witness a fair opportunity to

answer any issues arising in that context, so also is it impermissible to ask a decider of

fact (such as the trial judge in this case) to determine contested questions of fact on

“But it is frankly not appropriate for parties to enter into controversy as to the facts

contained either in affidavit evidence or in documents which are admitted before the

court without successful challenge, without exploring the necessity for at least some

oral evidence. If it is suggested that there are facts which are material to the final

determination of the proceeding and in respect of which there is potentially conflicting

evidence to be found in such affidavits or documentation, then it is incumbent on the

party who bears the onus of proof in establishing the contested facts in its favour to

use appropriate procedural measures to ensure that the potentially conflicting

evidence is challenged. Where, for example, two individuals have given conflicting

affidavit evidence and where it is considered that a resolution of the dispute between

those witnesses is necessary to the proper disposition of the case, then there has to be

cross-examination and the onus in that regard rests on the party on whom the onus of

37. In my view, the principles set out in RAS Medical Limited demonstrate the correctness of

the approach adopted by the trial judge in this case. For the reasons set out herein, I

would dismiss the appellant’s appeal on the irregularity of the service on her of the

38. At the hearing of the motion, the appellant put forward four grounds of defence on the

(iii) clause 7 valuation/condition precedent not complied with; and

39. At the hearing before this court, the appellant sought to advance a new proposed ground

of defence, namely, that the loan was invalid in light of the respondent’s breach of the

Consumer Protection Code, 2012. At the hearing of the appeal, counsel for the appellant

effectively conceded that his only real grounds of defence were the new points he was

40. In my view, having considered the points raised in the written submissions and dealt with

by the trial judge, none of the grounds advanced in the High Court reached the low

threshold required under the decision in Aer Rianta Cpt v. Ryanair Ltd [2001] IESC 94.

There had been an error at one point in the summary summons but it had no bearing on

the amount claimed by the appellant as of the 17th December, 2013 and contained in the

affidavit grounding the motion for judgment. It is not disputed that this figure was

41. In relation to the affidavit of debt, it had been claimed that no credit had been given for a

particular sum. It appears that the manner in which the respondent confined its claim, by

not seeking additional contractual interest, meant that the sum claimed was not in excess

of the amount due and owing from the appellant on the 4th June, 2014.

42. The third ground related to clause 7 of the facility letter which the appellant contended

required EBS to be satisfied that an independent valuation showed a loan to value ratio of

not more than seventy-five percent. There is no suggestion in the facility letter that this

was a condition precedent. Furthermore, it is clearly a clause which operated for the

benefit of EBS alone. Moreover, two valuation reports had been obtained by the

appellant. Nothing in clause 7 gives rise to an arguable ground of defence.

43. Finally, in respect of the allocation of payments, the appellant contends that the

respondent had acted in breach of a purported arrangement reached with her regarding

the appropriate allocation of payments made by her between three separate loan facilities

with the respondent, two of which had nothing to do with the proceedings. These

44. The new point relating to the Code of Conduct on Mortgage Arrears, 2013 and the

obligation of a financial institution to comply therewith were only advanced at the last

possible moment in these proceedings. It was not advanced in the High Court nor was it

put forward in the Notice of Appeal nor indeed in the written submissions that had been

filed. Counsel for the appellant submitted that the Court on appeal was obliged to adopt

a process which was fair and in the interests of justice and that there were means by

which the court could mitigate against any prejudice e.g. by way of costs order.

45. In relying on the substantive point, counsel referred to para 5.1 of the judgment delivered

by Clarke J. in Irish Life and Permanent plc v. Dunne [2016] I.R. 92. and also the

judgment of Peart J. in Bank of Ireland v. Quinn [2016] IECA 30 at para. 49.

46. Such an eleventh hour change to the basis upon which a case has been argued must be

regarded prima facie as contrary to the interests of justice. As a general rule, an

opposing party should be entitled to have their case heard at first instance with a right of

appeal if dissatisfied with the outcome. Although it may be permissible in certain

circumstances to hear arguments de nova on appeal, the circumstances must surely

diminish where the grounds are only raised on the day of the appeal.

47. I do not consider that this court has to make a final determination that the ground should

not be entertained simply because I am of the view that the factual basis for the claim

under the Consumer Credit Code has not been laid. As it was not an argument in

contemplation of the appellant or her lawyers at the High Court, it is clear that no

attention was given to giving a factual basis for what, if any, breaches of the Code are

actually alleged to have been committed by EBS. Even in legal argument, counsel for the

appellant did not point to any particular breaches that could be said to arise on the

evidence before the court. In those circumstances, I am satisfied that this theoretical

contention on the part of the appellant does not give rise to any good or arguable ground

48. Furthermore, even if there were breaches of the Code, it has not been demonstrated that

those breaches would amount to a good defence to an otherwise prima facie obligation to

repay money borrowed by the appellant from EBS. See for example the decision of

McGovern J. in Freeman and Another v. Bank of Scotland Plc and Others [2014] IEHC 284.

49. Finally, with regard to a new claim in relation to appropriation of payments, the appellant

claimed that it was for her to decide the account to which a credit goes. The appellant

has relied upon Odgers, Paget’s Law of Banking (15th edn. LexisNexis UK, 2018 at pp.

239 - 241) to show that in general the debtor has the first right to appropriate a payment

to a particular debt. In my view, again, this does not amount to a good defence in

circumstances where at the very least the factual basis for the exercise of this right of

50. In seeking an order to set aside the judgment obtained in default in the Central Office by

EBS, the onus lay on the appellant to satisfy the court that (a) service of the summons

was irregular or (b) that she had a good and arguable defence to these proceedings. In

circumstances where there was a clear conflict on the affidavits concerning the central

issue in the motion, that is whether the professional summons server had actually served

the appellant, the trial judge was correct in finding that this issue was impossible to

decide without oral evidence. In circumstances where the appellant had not sought to

cross-examine the professional summons server and the solicitor for EBS, the appellant

51. In relation to the grounds of defence raised in the High Court, the trial judge correctly

concluded that these did not, on the facts, amount to a good defence. In relation to the

points raised at the eleventh hour in this appeal, those points do not disclose a good or

52. I therefore dismiss this appeal.

Result: Appeal dismissed

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