The Gazette 1989

GAZETTE

DECEMBER 1989

All agreed a Defendant may set off any liquidated sum due from the Plaintiff - this is a defence, not a counterclaim. All agreed the Defendant may as a defence set off an unliquidated sum by way of equitable set off i.e. where the claims are so closely related that in justice they must be regarded as part of the same claim. 9 As to a counterclaim for an unliquidated amount not amount- ing to an equitable set off, three of the Judges took the view that the Court had no discretion but must give the Plaintiff Judgment, the fourth took a directly contrary view and stated that the Court must allow the Defendant to file the counterclaim, while the fifth firstly suggested that the Court has a discretion and then apparently altered his view to agree with that of the majority. It appears therefore, that the ratio of Prendergast -v- Biddle is that a counterclaim for unliquidated dam- ages can never be pleaded against a claim for a liquidated amount which is admitted to be due. Subsequent Lew Given the problem of finding the ratio of Prendergast it is not surprising that in subsequent cases Judges have confined themselves to quoting whatever extract seems appropriate; however the danger of missing what was the majority view is obvious. In Gerrit van Gelderen -v- Sea field Gentex 10 Kenny J. quoted a passage from Kingsmill Moore J's Judgment to support the rule that unliquidated damages can never be set off against a claim for a negotiable instrument. In Agra Trading -v- Minister for Agriculture" the Court was faced with the same problem as in Prendergast'. the Plaintiff sought summary judgment for a liquidated sum, the Defendant admitted a debt and sought to file a counterclaim seeking unliqui- dated damages. Barrington J. referred 12 to the divergence between Order 19 Rule 2 and Order 37 Rule 7 and then stated that the parties agreed it was within his discretion whether or not to allow a counterclaim to be filed. 13 He referred for guidance to the passage at pages six and seven of Kingsmill Moore J.'s Judgment in Prendergast quoted above. Apply- ing the conditions there he found

"The real issue between the parties is who is indebted to the other and in what sum . . . no case is made that there would be any confusion arising on the trial of the action. Obviously it would be confined to the issue on the Counterclaim, Accordingly I see no reason for denying to the Defendant her right under the Act of 1877 and Rule 19 (3) to set up her counterclaim". 5 Lavery and O'Dalaigh J.J. were certain that the summary pro- cedure permits a defendant to raise a defence to the merits, or by way of set off (common law or equit- able) but not to file an unconnected counterclaim. Lavery J. said:- " I n my opinion the trial Judge must pronounce Judgment and if there is no defence - either set off or any other - he must give Judgment for the Plaintiff. The procedure by Summary Summons was provided in order to enable speedy justice to be done in particular cases where there is either no issue to be tried or the issues involved are simple and capable of being easily determined. I conclude that it would be contrary to the spirit and the letter of the Rules to deny a Plaintiff such relief." 6 O'Dalaigh J. said:- " I therefore cannot see that the new Rule can in any way be cut down or controlled by the pro- visions of the Judicature A c t . . . that the Rules of 1926 permit a Judge to enter up Judgment for a liquidated sum admitted to be due is not a matter for surprise. The law attaches to a Judgment debt several privileges." 7 Since Martin Maguire J. con- curred with Lavery J., this was in effect the view of the Court. Kingsmill Moore J's Judgment is the fullest and best known, but also the most problematical. At page 10 he said:- " I f there appears to be a de- fence, or a set off, common law or equitable (which is regarded as a defence) the case must to to a plenary hearing where such defence can be fully investi- gated . . . if however, there is no defence suggested it seems to me that the Plaintiff is entitled to his Judgment". If this is the ratio of his Judgment then he was in full agreement wi th the other majority judges. However,

at pages 6 to 7 there is a passage which must be considered because it has recently been cited wi th approval in the High court 8 and whiph suggests an approach closer to that of Maguire C.J. The relevant extract is:- "If however the Defendant while admitting that he has no direct defence to the claim, puts for- ward a plausible counterclaim, a difficult problem must arise . . . on the one hand it may be asked why a Plaintiff with a proved and perhaps uncon t es t ed claim should wait for judgment or execution of judgment on his claim because the Defendant asserts an improved (sic) and contestable counterclaim. On the other hand it may equally be asked why a defendant should be required to pay the Plaintiff's demand when he asserts and may be able to prove that the Plaintiff owes him a larger amount. To such questions there can be no hard and fast answer. It seems to me that a Judge in exercising his discretion may take into account the apparent strength of the counterclaim and the answer suggested to it, the conduct of the parties and the promptitude with which they have asserted their claims, the nature of these claims and also the financial position of the parties. If for instance the Defendant could show that the Plaintiff was in embarrassed c i r cums t ances it mi ght be considered a reason why the Plaintiff should not be allowed to get J u d gme n t . .. until after the Counterclaim had been heard . . . I mention only some of the factors which a Judge before whom the Application comes may have to take into account in the exercise of his discretion". This can only mean that the Judge has a discretion to allow the filing of an unrelated counterclaim - a statement which flatly contra- dicts the Judgments of Lavery and O'Dalaigh JJ. and the later part of Kingsmill Moore J.'s own judgment. Ratio To summarise, so far as one can, the effect of the decision: all the Judges agreed that a Defendant may contest the Plaintiff's entitle- ment to a summary judgment on its merits.

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