knowledge 20 May 2016 |

Conditional Appearances: Not Conditional for Long

Conditional appearances are common in jurisdiction challenges, eg where the defendant argues that the dispute should be before a court in another state. It is well-established that a defendant who appears unconditionally or substantively participates in the Irish proceedings (instead of applying to have them stayed or have service set aside), will be treated as waiving his right to litigate in another state.¹

Conditional appearances where service is contested are less common, because defects in service can easily be cured. If the plaintiff has difficulty in serving the defendant, and the defendant comes to court to contest service, the plaintiff will usually be happy to serve the defendant with whatever documents he says he has not received.

In Danske Bank A/S v Kirwan,² the Court of Appeal considered a conditional appearance contesting service. The bank claimed that it had experienced difficulty in serving its High Court proceedings at Mr Kirwan’s recorded address. It obtained a High Court order for substituted service in June 2014 permitting service at a second address. The bank claimed that it served Mr Kirwan at this second address in July 2014. This was disputed by Mr Kirwan, who claimed that he had not received the documents at that address. He entered a conditional appearance in October 2014. However, service was later deemed sufficient by a High Court order in March 2015 and a third order deemed Mr Kirwan’s appearance unconditional. Mr Kirwan applied to the Court of Appeal to extend time to appeal against all three orders.

The appeal largely turned on the principles in an application to extend time to appeal, established in Eire Continental Trading Company Ltd v Clonmel Foods Ltd,³ ie that the applicant must show:

• that he formed a bona fide intention to appeal within the permitted time;
• the existence of something like mistake, and mistake as to procedure (eg the time limit in the relevant rule) is insufficient;
• arguable grounds of appeal.

The Court of Appeal noted that these matters are not pre-requisites for an extension of time; the appellate court retains discretion to extend time where the application is not directly within the Eire Continental parameters.

The Court of Appeal found that it was unclear when Mr Kirwan first formed an intention to challenge the substituted service order. However, it could not have been later than his entry of a conditional appearance in October 2014. Mr Kirwan ought to have moved immediately, either to appeal that order or to seek to have it set aside, but he did nothing to challenge that order until February 2015, and did not explain his delay.

Mr Kirwan wished to argue that the order for substituted service was obtained fraudulently or maliciously, and that the bank misrepresented matters in its substituted service application. The Court of Appeal rejected this suggestion because much of the loan documentation had used the second address; the affidavit seeking substituted service deposed to the bank’s belief that Mr Kirwan resided at the second address; three unsuccessful attempts had been made to serve him at the first address; a neighbour had confirmed that Mr Kirwan resided at the second address and Mr Kirwan had told a tracing agent that he lived at the second address.

Even if Mr Kirwan was not in fact residing at the second address when the substituted service order was made, any argument of malice on the bank’s part was unstatable. While the court would engage with any meritorious arguments by a party seeking to extend time, there were no circumstances here to justify extending time.

Similar considerations applied to the order deeming service sufficient. As regards the order deeming the conditional appearance unconditional, again the delay was unexplained, and no bona fide ground of challenge was advanced. The court had deemed service valid. Mr Kirwan’s entitlement to maintain a conditional appearance was based on his right to challenge the substituted service order. As his challenge to that order had failed, he could not maintain a conditional appearance.

The Court of Appeal’s reasoning underlines that attempting to delay matters by contesting issues around service where it is clear that the defendant has received, or can readily be provided with, the originating document, will not receive sympathetic hearing. It is also clear that the courts attach importance to resolving as a priority any uncertainty signalled by the entry of a conditional appearance, whether arising from issues related to jurisdiction or to service.