Neutral Citation no. [2001] NIQB 24
Ref:     
HIGC3453

 
Judgment: approved by the Court for handing down
Delivered:
27.06.2001
(subject to editorial corrections)

 

 

IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND
 
QUEEN’S BENCH DIVISION
 
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BETWEEN:
 
ANDREW HYNDMAN
 
Plaintiff;
 
and
 
SAMUEL WALLS T/A DERRY ARMS
 
Defendant.
 
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HIGGINS J
            This is an appeal from the County Court in which a preliminary point was taken relating to the issues which could be litigated on appeal.  On 19 June 1997 the plaintiff issued a Civil Bill against the defendant for damages for personal injury, loss and damage sustained by the plaintiff by reason of the negligence of the defendant in the employment of his staff and by reason of assault, battery and trespass to the plaintiff’s person caused by the defendant’s staff.  The defendant is the owner of a public house and the plaintiff alleges he was assaulted by staff employed by the defendant.
            Order 8 Rule 2 of the County Court Rules (Northern Ireland) 1981 as amended provides that a defendant who wishes to defend a Civil Bill should lodge a Notice of Intention to Defend.  No Notice of Intention to Defend was lodged with the court.  Order 8 Rule 2 states:
“     2.-(1)   Without prejudice to paragraph (2), in any proceedings commenced by civil bill which a defendant intends to defend he shall, within a period of 21 days from the date of service upon him of the civil bill, serve on the other party or parties to the proceedings a notice of intention to defend in Form 42.
 
     (2)   A defendant shall not serve a notice of intention to defend after the expiration of a period of 21 days after service upon him of the civil bill except with the consent in writing of the other party or parties or with the leave of the judge or the district judge as the case may be.
 
     (3)   Service by a defendant of a notice of intention to defend shall not prevent a defendant from raising any issue or defence which he would otherwise be entitled to raise concerning the civil bill, or issue or service of the civil bill, or the jurisdiction of the court.”
 
Thus a defendant is obliged to serve a notice to defend in Form 42 within 21 days from service of the Civil Bill.  Service of a notice to defend outside the 21 day period is only permitted with the consent in writing of the other party or with the leave of the court.  No consent was sought nor was any application made for leave to serve out of time.
            On 1 May 1998 the plaintiff’s solicitors sent to the defendant personally, a certificate of readiness to proceed with the Civil Bill.  At some stage the defendant produced this document to his solicitor.
            Where, in a Civil Bill for damages, no notice of intention to defend is served, the plaintiff may move for judgment by default under Order 12.  On 10 November 1998 the plaintiff applied for judgment by default under Order 12 Rule 10.  On 5 August 1999 a certificate that no Notice of Intention to Defend had been received was filed with the court on 5 August 1999.  On 12 August 1999, no Notice of Intention to Defend  having been served, judgment by default was entered by the Deputy Chief Clerk and “it was ordered and decreed that the defendant do pay the plaintiff damages to be assessed by the district judge”.
            On 12 August 1999 a Summons for the Hearing of Assessment of Damages after Judgment was issued for 1 October 1999 and served on all the parties.  On 1 October 1999 the District Judge, under Order 12 Rule 14, assessed damages at £6,500 together with £1,296.30 costs.  
            On 10 October 1999 the plaintiff’s solicitors wrote personally to the defendant informing him of the decree awarded against him together with a note of their costs and requesting payment of same within 14 days.  On 19 October 1999 the defendant appealed to the High Court against the whole of the decree made by the County Court on 1 October 1999.  On the same date the defendant’s solicitor wrote to the plaintiff’s solicitor stating “please find enclosed Notice of Appeal by way of service”.
            There then followed some correspondence about an application to set aside judgment and finally a letter from the defendant’s solicitor stating “an appeal is a full hearing on the merits and all issues are open”.  More correspondence ensued relating to discovery and medical notes and records.  On 2 March 2001 the defendant agreed the plaintiff’s medical evidence.
            It was agreed between the parties that a preliminary point arose and the case was listed for the hearing of that issue.  The preliminary point is whether an appeal to the High Court against a decree in proceedings where damages assessed by a District Judge on foot of a default judgment is an appeal against the amount of damages or an appeal on all issues which would have been before the County Court where default judgment had not been entered.
            Under Order 12 Rule 12 a judgment obtained in default of a Notice of Intention to Defend may be set aside or varied.  Order 12 Rule 12 states:
“     12.   Without prejudice to Rule 7(3) and (4) and to Part III of Order 25, the judge or the district judge may, on such terms as he thinks just, set aside or vary any judgment entered in pursuance of this Order.”
 
            In order to set aside judgment the defendant must show some irregularity in the obtaining of the judgment, for example, lack of service of the Civil Bill or service on the wrong person.  In the absence of irregularity the defendant must show some defence or genuine merits which the court could not ignore – see Cooper v Scott‑Funell [1969] 1 AER 178 and Day v RAC TLR 24 (November 1998).  An application to set aside judgment should be made within a reasonable period of time.  No such application was ever made.
            If a decree is obtained irregularly, that is by reason of non-compliance with any rule or practice in the County Court, it may be set aside on application under Order 43 Rule 4.  No such application was made.
            Under Order 25 Rule 20 any decree whether obtained regularly or not may be set aside upon application.  Order 25 Rule 20 states –
“   20.-(1)  Where in any case it is shown to the satisfaction of the Judge that a decree has been obtained by fraud, misrepresentation, surprise, mistake or other irregularity, or because the civil bill or other initiating process did not come to the knowledge of the defendant in time, the person against whom the decree was obtained (in this Rule referred to as ‘the unsuccessful party’) may in accordance with this Rule apply for and obtain a hearing or re-hearing.
 
     (2)   An application for a hearing or re-hearing under this Rule shall, subject to paragraph (3), be made by motion to a court in the division in which the decree was obtained; notice of such motion shall be lodged in the Office and shall be served on the solicitor for the party in whose favour the decree was obtained (in this Rule referred to as ‘the successful party’) or, where the party has sued in person, on that party within ten days from the day on which the unsuccessful party or his solicitor has notice of the decree or within such further time as the Judge may consider reasonable.
 
     (3)   Where the notice alleges that the unsuccessful party did not have knowledge of the initiating process or that the process which was sought to be served by post in accordance with the provisions of Order 6 did not come to his knowledge in time to defend the action or to appeal in the matter, then if the chief clerk is satisfied that the successful party consents to a hearing or re-hearing of the case, he may grant the application without the motion being made to the court and in so doing, unless the parties are agreed as to incidence and amount of the costs in the application, may make such order as to costs as he thinks fit.
 
     (4)   The notice shall be signed by the unsuccessful party or his solicitor and shall state the grounds upon which the hearing or re-hearing is sought and the nature of the fraud, misrepresentation, surprise, mistake or other irregularity relied upon and the motion shall be moved on the first convenient day after the end of a period of four days from the date of the service of the notice on the successful party or his solicitor.
 
     (5)   Except where the Judge otherwise directs, the service of the notice shall not operate as a stay of execution in the action unless the unsuccessful party lodges in the Office, together with a copy of the notice of motion, the amount for which the decree was made with costs.
 
     (6)   If it comes to the notice of the chief clerk that a decree may have been obtained by fraud, misrepresentation, surprise, mistake or other irregularity, he may bring the suspected irregularity to the attention of the Judge and the Judge may give such directions or make such further order as he considers just including an order for a hearing or re-hearing of the action.
 
     (7)   Upon any hearing or  re-hearing under paragraph (1), (3) or (6) such order may be made (whether by way of affirmance, variation or rescission) subject to such conditions as the Judge thinks proper and on any such hearing or re-hearing the costs shall be in the discretion of the Judge.
 
     (8)   Paragraphs (2) to (5) shall apply mutatis mutandis to the parties to a counterclaim.”
 
No application under Order 25 Rule 20 was ever made.  A defendant who with knowledge of the Civil Bill and the proceedings and who wilfully allows judgment to be entered against him is not entitled to have such judgment set aside.  Thus none of the options available to the defendant in the County Court were taken by him.
            Any party dissatisfied with any decree in a civil case in the County Court may appeal to the High Court.  Article 60 of the County Court (Northern Ireland) Order 1980 (the County Court Order) states:
“     60.-(1)   Any party dissatisfied with any decree of a county court made in the exercise of the jurisdiction conferred by Part III may appeal from that decree to the High Court.
 
      (3)  The decision of the High Court on an appeal under this Article shall, except as provided by Article 62, be final.”
 
            An appeal must be lodged within 10 days from the date on which the decree was pronounced in court.  The decree in this case is dated 1 October 1999 and is on Form 57 headed Decree in Proceedings where Damages Assessed by the District Judge and is in the following terms:
“WHEREAS, on 12th August 1999 interlocutory judgment for damages to be assessed under Order 12 Rule 2, was entered herein by the Chief Clerk and whereas a Summons in Form 70 was issued and served on all parties for the assessment of damages herein it is this day ordered and decreed that the plaintiff do recover from the Defendant the sum of £6,500 for damages, together with the sum of £1,296.30 for costs.”
 
            The term ‘decree’ is not defined in the County Court Order but it includes a dismiss – see Article 2 County Court Order.  A decree is the order or judgment of the court and the Notice of Appeal states that the defendant appeals from the whole of the decree whereby the defendant was ordered to pay £6,500 damages and costs.  A right to appeal by any party to the High Court is enshrined in Article 60 of the County Court Order.  The powers of the High Court on an appeal from the County Court are set out in Article 64(a)-(f) of the County Court Order.  The appellate court may, inter alia:
“(b)      draw any inference of fact which might have been drawn or give any judgment or make any order which might have been given or made by the county court;
 
(c)        remit the proceedings for rehearing and determination by the county court;
 
…
 
(e)        make such order as to costs incurred in the appeal and in the proceedings in the county court as the appellate court thinks fit;
 
(f)         make such other order as may be necessary for the due determination of the appeal.”
 
Section 22 of the Interpretation Act 1954 provides that an appellate court has, for all purposes of the appeal hearing all the powers, authority and jurisdiction of the original tribunal.  In addition it may –
“(a)      adjourn the hearing from time to time;
 
(b)        draw any inference of fact which might have been drawn or give any judgment or make any order which might have been given or made by the county court;
 
(c)        remit the proceedings for rehearing and determination by the county court;
 
Thus the High Court has all the powers of the County Court under the County Court Order 1980 and may make such order as may be necessary in order to determine the appeal.
            Thus the issue arose whether the defendant on appeal is entitled to a rehearing on all the issues, that is liability and damages, or whether the appeal is limited to an assessment of damages which was the issue before the District Judge on 1 October 1999 in respect of which the decree issued.
            Counsel on behalf of the defendant submitted that there is nothing in the County Court Order which precludes a rehearing on all issues.  The powers of the High Court are sufficiently wide to permit the case to be litigated afresh and the defendant has a right provided by statute to appeal against the decree issued.  He submitted that the defendant could not appeal the judgment in default, as that is not a decree.  The County Court Order does not distinguish between different types of decree.  There is only one decree and that is the final order made.
            Counsel on behalf of the plaintiff submitted that what the defendant proposed was an abuse of process.  No intention to defend has been lodged, yet the defendant proposes to defend the proceedings in the High Court on appeal.  It was accepted that the defendant had a right to appeal preserved by statute, but that appeal was limited to the proceedings on 1 October 1999, related to the assessment of damages.  The defendant could have appealed the default judgment and is now out of time or could have sought to set it aside.  He has done none of those things.
            The Notice of Intention to Defend is an important part of the Civil Bill process in the County Court.  Service of the Notice determines the nature of the proceedings whether defended or undefended.  It informs the Chief Clerk when and before whom the case should be listed.  Thus Order 8 Rule 2 requires a defendant who intends to defend to serve Notice on the other party or parties within 21 days.  A decision not to serve a Notice of Intention to Defend or failure to do so, informs the court that the case is undefended.  However, Order 8 Rule 2(2) provides a saving clause where, for good reason, no notice to defend has been served within the requisite time period.  The parties can consent to late service or the court may grant leave.  The court could refuse leave, in which situation the case remains undefended.  There is no reason why a refusal of leave could not be appealed.  The word ‘decree’ in Article 60 of the County Court Order means no more than ‘an order’ of that court.
            The instant case when it appeared in the list of the District Judge on 1 October 1999 was an undefended matter in which the court’s function was to assess damages, which it did.  The decree or order of the court on that day was an assessment of damages in a case in which interlocutory judgment had already been entered.  The defendant appeals against that order and submits that he has a right to a hearing on the merits in the appellate court.  However the case still remains an undefended case, as no notice of intention to defend has been lodged and as an undefended case the only issue which can be the subject of appeal is the assessment of damages.  No appeal has been lodged against the interlocutory judgment.  Can an appeal against an assessment of damages, where interlocutory judgment is entered, convert an undefended case into a defended case?  I do not think it can.  An appeal from the County Court to the High Court may be a rehearing, but it is a rehearing of what was litigated in the court below.  It does not seem to me that a defendant can fail to observe the rules in the County Court and expect the High Court to ignore his failure and treat an undefended case as a defended case.  This would ignore the purpose of the rules. 
            In Davis v NI Carriers [199] NI 19 Lowry LCJ (as he then was) said at page 20:
“Where a time-limit is imposed by statute it cannot be extended unless that or another statute contains a dispensing power.  Where the time is imposed by rules of court which embody a dispensing power, such as that found in Order 64, rule 7, the court must exercise its discretion in each case, and for that purpose the relevant principles are:
 
(1)        whether the time is sped: a court will, where the reason is a good one, look more favourably on an application made before the time is up;
 
(2)        when the time-limit has expired, the extent to which the party applying is in default;
 
(3)        the effect on the opposite party of granting the application and, in particular, whether he can be compensated by costs;
 
(4)        whether a hearing on the merits has taken place or would be denied by refusing an extension;
 
(5)        whether there is a point of substance (which in effect means a legal point of substance when dealing with cases stated) to be made which could not otherwise be put forward; and
 
(6)        whether the point is of general, and not merely particular significance.
 
To these I add the important principle:
 
(7)        that the rules of court are there to be observed.
 
In this connection I could not hope to improve on what Lord Guest has said in Ratnam v. Cumarasamy [1965] 1 W.L.R. 8, 12:
 
‘The rules of court must prima facie be obeyed, and in order to justify a court in extending the time during which some step in procedure requires to be taken there must be some material upon which the court can exercise its discretion.  If the law were otherwise, a party in breach would have an unqualified right to an extension of time which would defeat the purpose of the rules, which is to provide a time table for the conduct of litigation’. …” 
 
The importance of the rules and compliance with them cannot be overlooked.  Various savings are provided by the County Court Rules where for good reason, the Rules have not been complied with.  The issue of liability has never been litigated in the County Court.  The purpose of an appeal is to allow a party, dissatisfied with the decision of the lower court, to appeal against the decision of the lower court.  The County Court has not determined the merits of the liability issue other than to enter judgment by default.  It cannot be good law for the question of liability to be litigated for the first time in the appellate court.  Therefore my ruling is that the only issue on appeal is the assessment of damages.

 IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND
 
QUEEN’S BENCH DIVISION
 
------------ 
 
BETWEEN:
 
ANDREW HYNDMAN
 
Plaintiff;
 
and
 
SAMUEL WALLS T/A DERRY ARMS
 
Defendant.
 
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JUDGMENT

 
OF

 
HIGGINS J

 
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