Behan v McGinley

JurisdictionIreland
JudgeMs. Justice Irvine
Judgment Date24 January 2008
Neutral Citation[2008] IEHC 18
Date24 January 2008
CourtHigh Court
Docket Number[2005 No. 2424
Behan v Governor and Company of Bank of Ireland & Ors

BETWEEN

JAMES BEHAN
PLAINTIFF

AND

EDWARD McGINLEY
DEFENDANT

BETWEEN

JAMES BEHAN
PLAINTIFF

AND

THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND, EDWARD McGINLEY OF ROYAL AND SUN ALLIANCE, MICHAEL O'KENNEDY AND CHARLES CORCORAN
DEFENDANT

[2008] IEHC 18

[No. 10061 P/2002]
[No. 2424 P/2005]

THE HIGH COURT

PRACTICE AND PROCEDURE

Dismissal of proceedings

Inherent jurisdiction - Abuse of process - Whether claim frivolous or vexatious - Whether claim abuse of process - Res judicata - Whether issues already determined - Professional negligence action - Barry v Buckley [1981] IR 306, Riordan v Ireland (No 5) [2001] 4 IR 463 and Arthur JS Hall & Co v Simons [2002] 1 AC 615 considered; EO'K v DK [2001] 3 IR 568 applied - Rules of the Superior Courts 1986 (SI 15/1986), O 19, rr 5(2) and 28 - Constitution of Ireland 1937, Articles 34 to 36 - Claims dismissed (2005/2424P - Irvine J - 24/1/2008) [2008] IEHC 18

Behan v Bank of Ireland

RSC O.19 r28

RSC O.19 r5(2)

K (D) v K (A) 1994 1 IR 166

SUN FAT CHAN v OSSEOUS LTD 1992 1 IR 425

BARRY v BUCKLEY 1981 IR 306

RIORDAN v IRELAND (NO 5) 2001 4 IR 463

LANG MICHENER & FABIAN, RE 1987 37 DLR (4TH) 685

O'K (E) v K (D) & ORS 2001 3 IR 568

ARTHUR JS HALL & CO v SIMONS 2000 3 AER 673

1

Judgment of Ms. Justice Irvine delivered the 24th day of January, 2008

2

The plaintiff in this action at the time of the events which give rise to these proceedings, had been a customer of the Bank of Ireland for many years at its Carlow branch where he dealt regularly with Mr. Vincent Power, the branch Manager. The plaintiff owned a valuable farm of approximately 240 acres at Athy, Co. Kildare and found himself, like many other farmers in 1980 in significant difficulties, principally due to rising interest rates and falling land values.

3

The business dealings between the plaintiff and his bank have resulted in the institution by the plaintiff of a number of sets of legal proceedings to which I will refer later in this judgment.

4

The first action in the title hereto was commenced by plenary summons dated 19th July, 2002 ("the 2002 proceedings"). The defendant to the action is the party nominated to defend the interests of the late Noel Clancy, S.C. who represented the plaintiff in the course of his first action against the Bank of Ireland, which was heard in the High Court in the summer of 1997 and dealt with an appeal on the Supreme Court the following year.

5

There are a number of motions which are the subject matter of this judgment the first of which is dated the 27th April, 2006. In that motion the defendant asks the court to strike out the plaintiff's pleadings pursuant to O. 19, r. 28 of the Rules of the Superior Courts on the basis that the same that the same are vexatious, frivolous and/or disclose no reasonable cause of action as against the defendant.

6

The plaintiff has instituted further proceedings in the High Court under Record No. 2005/2424P ("the 2005 Proceedings") being the second action in the title hereto. The defendants in that action are the Governor and Company of the Bank of Ireland, Edward McGinley of Royal and Sun Alliance, Michael O'Kennedy and Charles Corcoran.

7

In the 2005 proceedings there are two motions before the Court. The first motion is that of the first named defendant, the Governor and Company of the Bank of Ireland, dated the 15th of January 2007 wherein the Court is asked to strike out the plaintiff's pleadings pursuant to O. 19, r. 28 of the Rules of the Superior Courts on the basis that the pleadings disclose no reasonable cause of action. Alternatively, the Court is asked to direct that the proceedings be stayed or dismissed pursuant to O. 19, r. 28 on the grounds that the action is frivolous or vexatious. The court is further asked to exercise its inherent jurisdiction to stay or dismiss the action on the basis that the proceedings amount to an abuse of process. Finally, the court is requested to make an order prohibiting the plaintiff from issuing any further proceedings against the first named defendant without leave of the court.

8

The second notice of motion in the 2002 proceedings is one dated the 26th of January, 2007 and is brought on behalf of the second, third and fourth named defendants. In that notice of motion the court is asked to invoke its inherent jurisdiction and/or the provisions of O. 19, r. 28 of the Rules of the Superior Courts to strike out the plaintiff's proceedings as being an abuse of process and/or on the basis that the proceedings are frivolous or vexatious. Alternatively, the court is asked to strike out the proceedings on the grounds that the allegations of fraud and/or collusion and/or conspiracy and/or deception are made without any or any sufficient evidence. Finally, the court is asked to dismiss the plaintiff's claim for negligence on the basis that such a claim is statute barred.

9

The facts which underlie the within application, are set out in the pleadings and affidavits delivered in the actions to which the three motions relate. In essence, both actions relate to the dealings between the plaintiff and his bank over the period 1981 to 1985 and also his dealings with the lawyers who represented him in his litigation against his bank in the proceedings which are referred to below.

Background to earlier litigation
10

In proceedings bearing Record No. 1990/9665P ("The 1990 Proceedings") the plaintiff sued the Governor and Company of the Bank of Ireland with a view to establishing a breach by his bank of a concluded enforceable agreement allegedly made at a meeting with his bank Manager, Mr. Vincent Power on the 18th May, 1981. The plaintiff contended that, notwithstanding his increasingly substantial liabilities, his bank agreed that it would continue to fund his farming activities so as to permit him to trade out of his financial indebtedness.

11

In the 1990 proceedings the plaintiff further asserted that he was given negligent advice by Mr. Power. He alleged that Mr. Power convinced him not to sell certain lands which he wished to sell to reduce his indebtness. The plaintiff claimed that but for the bank's negligence in this respect he would have sold such lands, reduced his indebtness and ultimately avoided the losses occasioned to him when the bank called in all his outstanding liabilities in 1984. The plaintiff alleged that this negligence in addition to causing him financial loss caused him to sustain serious ill health. This claim for negligence and consequential personal injuries was held to be statute barred at a preliminary hearing in June 1997 at which time the court concluded that the plaintiff's claim for breach of contract was not statute barred.

12

Finally, incorporated within the 1990 proceedings was a claim which was made by the plaintiff late in the day as a result of the emergence of evidence in the course of the trial before Morris J. The court permitted the plaintiff to amend his pleadings to maintain a claim against his bank arising from the manner in which he was treated in relation to a scheme introduced by the Government in 1982 to assist farmers who were in difficulties having regard to increased interest rates at that time. For the purposes of this judgment it is sufficient to state that the "Reduced Interest Scheme for farmers in severe financial distress" ("the Scheme") was introduced by the Minister for Agriculture on the 1st April, 1982. The objective of the scheme was to provide relief from high interest rates for certain classes of farmers. The Scheme operated for three years from the 1st April, 1982 and provided for substantially reduced interest rates to those who qualified for admission into the Scheme. In turn the bank who provided the reduced interest rates received a corporation tax credit in respect of the reduced interest received by them from the farmers whom they admitted to the Scheme.

13

In the course of the evidence in the 1990 proceedings the court became appraised of the fact that after the bank had called in payment from the plaintiff of all sums outstanding and had reached a compromise with him regarding his indebtness, in the sum of £165,000 that it had thereafter credited his account with three sums totalling £18,455.18 so that it could offset such sums against its own corporation tax liabilities, something it was only entitled to do, if it had admitted the plaintiff to the Scheme. In this respect the judgment of Morris J. in the 1990 proceedings sets out all of the material facts referable to the banks management of the plaintiff's application for entry into the scheme.

14

To qualify for entry into the Scheme the farmer was required to produce a report on the viability of their farm. In the instant case, the plaintiff produced a supportive report from ACOT on 28th July, 1983. On 17th January, 1984 the plaintiff's bank in Carlow was given authority to admit the plaintiff to the Scheme, he having completed the necessary forms for admission thereto on the 28th May, 1982. Notwithstanding the authorisation to admit the plaintiff to the Scheme, the benefit of the Scheme had not been passed on to him at the time the Scheme was being wound up by the Government. Further, the reduced interest rates had not been passed on to the plaintiff at the time when the bank ultimately called in all sums due by the plaintiff, which then amounted to £213,891.43.

15

The judgment of Morris J. dated 15th August, 1997 in the 1990 proceedings recites that he determined the plaintiff's claim, including his claim arising from any wrongdoing on the part of the bank in relation to the Scheme in the course of the hearing of the proceedings in July and August 1997. The plaintiff made the case at the trial that he had suffered consequential loss...

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