ACC Bank Plc (plaintiff) v Johnston, Practising under the style and title of Brian Johnson & Company Solicitors (defendant) & Traynor & Mallon (Third parties)
| Jurisdiction | Ireland |
| Judge | Mr. Justice Clarke |
| Judgment Date | 04 March 2011 |
| Neutral Citation | [2011] IEHC 108 |
| Date | 2011 |
| Year | 2011 |
| Court | High Court |
BETWEEN
AND
AND
[2011] IEHC 108
THE HIGH COURT
PROFESSIONS
Partnership
Dissolution of partnership - Date of dissolution - Undertakings - Ostensible authority - Obligation of notice - Ordinary course of business - Indemnity and contribution - Causation - Concurrent wrongdoer - Damages - Mortgage and lending transaction - Negligence - Whether partnership still in being when undertakings given - Whether unambiguous intention to dissolve partnership - Whether partner had authority to bind partnership - Whether implied or ostensible authority - Whether giving of undertakings within ordinary scope of solicitor's practice - Whether concurrent wrongdoer - ACC Bank plc v Johnston [2010] IEHC 236, (Unrep, 1/6/2010); Stewart v Gladstone [1878] 10 Ch D 626; Re Hall [1865] Ir Ch 287; Martin v Sherry [1905] 2 IR 62; People (DPP) v McLoughlin [1986] IR 355; Allied Pharmaceutical Distributors v Walsh [1991] 2 IR 8; Kooragang Investments Pty Ltd v Richardson [1982] AC 462; Parkin v Carruthers 3 Esp NPC 248; Carter v Whalley (1830) 109 ER 691; Tower Cabinet Co Ltd v Ingram [1949] 2 KB 397; United Bank of Kuwait v Hammond [1887] 1 WLR 1051; Moloney v Liddy [2010] IEHC 218, (Unrep, HC, Clarke J, 1/6/2010) and Canole v Redbank Oyster Company Ltd [1976] 1 IR 191 considered - Civil Liability Act 1961 (No 41), s 11 - Partnership Act 1890 (53 & 54 Vict. c. 39), s 36(1) - Indemnity and contribution given (2008/10559P - Clarke J - 4/3/2011) [2011] IEHC 108
ACC Bank plc v Johnston
ACC BANK PLC v JOHNSTON T/A BRIAN JOHNSTON & CO SOLICITORS & ORS UNREP CLARKE 1.6.2010 2010 IEHC 236
HALSBURYS LAWS OF ENGLAND 5ED 2011 VOL 35 PARA 164
STEUART v GLADSTONE 1878-79 10 CH D 626
HALL, A BANKRUPT, IN RE 1864 15 ICHR 287
MARTIN v SHERRY 1905 2 IR 62
DPP & COLLECTOR GENERAL v MCLOUGHLIN 1986 IR 355 1986 ILRM 493 1986/2/530
ALLIED PHARMACEUTICAL DISTRIBUTORS LTD & ALL-PHAR SERVICES LTD v WALSH & ORS T/A ROBERT J KIDNEY & CO 1991 2 IR 8 1991/7/1561
KOORAGANG INVESTMENTS PTY LTD v RICHARDSON & WRENCH LTD 1982 AC 462 1981 3 WLR 493 1981 3 AER 65
PARTNERSHIP ACT 1890 S36(1)
PARKINS v CARRUTHERS & ORS 170 ER 604 1800 3 ESP 248
CARTER v WHALLEY & ORS 109 ER 691 1830 1 B & AD 11
TOWER CABINET CO LTD v INGRAM 1949 2 KB 397 1949 1 AER 1033
UNITED BANK OF KUWAIT v HAMMOUD & ORS; CITY TRUST LTD & ANOR v LEVY 1988 1 WLR 1051 1988 3 AER 418
MOLONEY v LIDDY & ORS (T/A HUGHES & LIDDY SOLICITORS) UNREP CLARKE 1.6.2010 2010 IEHC 218
CIVIL LIABILITY ACT 1961 S11(1)
CANOLE v REDBANK OYSTER CO LTD & ORS 1976 IR 191
2 1.1 This judgment relates to issues which have arisen between two solicitors. In an earlier judgment in these proceedings ( ACC v. Johnston [2010] IEHC 236) ("the principal judgment") I found that the defendant ("Mr. Johnston") was guilty of negligence in the way in which he handled a mortgage and lending transaction on behalf of the plaintiff ("ACC"). Mr. Johnston has sought an indemnity against the firm of solicitors who acted for the purchaser/borrower in the same transaction. One of the disputes which arises concerns whether the second named third party ("Mr. Mallon") was, in fact, a member of the firm in question at all material times.
3 1.2 There is no doubt but that undertakings were given on a number of occasions relating to the underlying transaction, which undertakings appear on notepaper bearing the title "Traynor Mallon" Mr. Johnston seeks to make both the first named third party ("Mr. Traynor") and Mr. Mallon liable on foot of those undertakings in circumstances where it is clear that the relevant undertakings have not been complied with.
4 1.3 Mr. Traynor has allowed judgment to be given against him in default. However, Mr. Mallon has suggested that no liability attaches to him on a number of bases to which it will be necessary to refer in early course.
5 1.4 It should also be noted that, for reasons set out in the principal judgment, the question of the calculation of any damages to which ACC might be entitled as against Mr. Johnston awaits further hearing. Likewise, I directed that the issues which should be tried as and between Mr. Johnston and Mr. Mallon, at this stage, should be confined to liability issues, with the question of the quantum of any indemnity or contribution which Mr. Mallon might have to make (in the event that he is liable) being also left over to such a further hearing. Obviously if no liability attaches to Mr. Mallon, then he is not an appropriate or necessary party to that further hearing. On the other hand, if Mr. Mallon is found liable, then it equally follows that he is entitled to be heard on the damages question.
6 1.5 In that context, it is appropriate to turn to the issues which arise.
2 2.1 As already noted there is no dispute but that certain undertakings were given on notepaper headed "Traynor Mallon" and that the undertakings concerned have not been complied with. Likewise, there is no dispute but that it was Mr. Traynor who was personally responsible for the giving of the undertakings concerned. Mr. Mallon has given sworn testimony (which was not challenged on behalf of Mr. Johnston) that he had nothing to do with the giving of the undertakings concerned and, indeed, was unaware at any material time that such undertakings had been given. There is, therefore, no allegation of personal wrongdoing on the part of Mr. Mallon. However, the case made on behalf of Mr. Johnston is that the relevant undertakings were given with either the actual or ostensible authority of Mr. Mallon such that he is now liable for any breach of same.
3 2.2 Against that proposition a number of arguments are put forward by Mr. Mallon.
4 2.3 First, it is said on behalf of Mr. Mallon that, while a partnership between Mr. Traynor and himself formerly existed and practised under the title of Traynor Mallon, that partnership, it is said, came to an end in March, 2006 (there being some debate about the precise date in March), such that the partnership was no longer in being when any of the relevant undertakings were given. The first in time of the undertakings which are material to this case was given in August, 2006. On that basis it is argued on behalf of Mr. Mallon that the partnership which he had with Mr. Traynor had terminated prior to any of the undertakings in question being given. Mr. Johnston contests, on the facts, as to whether the partnership between Mr. Mallon and Mr. Traynor in fact ended in March. Rather, it is argued that the partnership did not come to an end until the 30 th August, 2006, by which stage at least the first (and financially most significant) of the relevant undertakings had been given. The first issue is, therefore, as to when the partnership between Mr. Traynor and Mr. Mallon in fact came to an end.
5 2.4 The second issue which arises concerns the question of whether Mr. Traynor still had ostensible authority to bind Mr. Mallon even after the partnership came to an end. This issue arises in two different ways. First, ostensible authority is argued on behalf of Mr. Johnston as a fallback position in respect of the August undertaking to which I have referred. In that context it is said that, even if Mr. Johnston is wrong in arguing that the partnership continued to subsist until the 30 th August, nonetheless Mr. Traynor continued to have ostensible authority to bind Mr. Mallon notwithstanding the earlier dissolution of the partnership concerned. In addition, it is clear that the other undertakings relied on post-dated, on either view, the dissolution of the partnership for those undertakings were given well after the 30 th August. So far as those later undertakings are concerned, Mr. Johnston accepts that they were given at a time when the partnership did not exist but nonetheless contends that Mr. Traynor retained ostensible authority to bind Mr. Mallon. The second set of issues which arise are, therefore, questions of both law and fact as to whether Mr. Traynor had ostensible authority so as to bind Mr. Mallon even after the partnership between them had been dissolved. The factual basis for Mr. Johnston's argument under this heading stems from the fact that it is said that Mr. Traynor had taken no steps to inform the public (and, in particular, Mr. Johnston) that the partnership between him and Mr. Traynor had come to an end.
6 2.5 In summary, so far as the status of the partnership is concerned, the issue is one of actual authority with ostensible authority as a fallback position insofar as the August, 2006 undertaking is concerned, while the issue is one of ostensible authority only in relation to the subsequent undertakings.
7 2.6 Clearly, if Mr. Mallon is right in respect of those issues, then he is not responsible for any undertakings given by Mr. Traynor and no further issues arise. However, even if Mr. Mallon is found, contrary to those submissions, to be responsible for some or all of the relevant undertakings given by Mr. Traynor, then a number of other issues are raised by Mr. Mallon in his defence.
8 2.7 First, Mr. Mallon argues that there is no direct link of sufficient causal connection between any losses which ACC may have suffered and the undertakings given by Mr. Traynor. For the reasons set out in the principal judgment I was satisfied that Mr. Johnston was negligent and in breach of his contractual terms of retainer with ACC in accepting the undertakings concerned. On that basis, Mr. Mallon argues that there is no true casual connection between any losses which ACC might have suffered...
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