Burke v Anglo Irish Bank Corporation Public Ltd & Anglo Irish Bank Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Birmingham
• Judgment Date: 15 December 2011
• Neutral Citation: [2011] IEHC 478
• Date: 15 December 2011
• Court: High Court
• Docket Number: [10842P/2008]

[2011] IEHC 478

THE HIGH COURT

[10842P/2008]

Burke v Anglo Irish Bank Corporation Public Ltd & Anglo Irish Bank Ltd

BETWEEN

FRANK BURKE AND LORNA BURKE

PLAINTIFFS

AND

ANGLO IRISH BANK CORPORATION PUBLIC LIMITED

AND

ANGLO IRISH BANK LIMITED

DEFENDANTS

RSC O.19 r 28

MILLSTREAM RECYCLING LTD v TIERNEY UNREP CHARLETON 9.3.2010 2010/34/8547 2010 IEHC 55

RUBY PROPERTY COMPANY LTD v KILTY UNREP MCKECHNIE 31.1.2003 2003/46/11214

COMPANIES ACT 1963 S37(2)

PRACTICE & PROCEDURE

Strike out

Inherent jurisdiction - Preliminary issue - Dispute on facts - Whether claim discloses no reasonable cause of action or is frivolous or vexatious - Whether appropriate to strike out - Whether privity of contract - Whether proceedings cannot succeed - Whether conflict in relation to facts - Millstream Recycling Ltd v Tierney [2010] IEHC 55, (Unrep, Charleton J, 9/3/2010) followed - Ruby Property Company Ltd v Kilty (Unrep, McKechnie J, 31/1/2003) considered - Rules of the Superior Courts 1986 (SI 15/1986), O 19, r 28 - Companies Act 1963 (No 33), s 37 - Application refused (2008/10842P - Birmingham J - 15/12/2011) [2011] IEHC 478

Burke v Anglo Irish Bank

Mr. Justice Birmingham

1 The plaintiffs in this case are husband and wife and are both solicitors by profession. The matter before the Court arises from a notice of motion brought by the defendants dated the 5^th January, 2011. Three reliefs were sought in the notice of motion namely:-

1 An order directing the trial of a preliminary issue as to whether the plaintiffs have privity of contract or any sufficient interest with regard to the contracts.

2 An order pursuant to O. 19, r. 28 of the Rules of the Superior Courts, 1986 striking out the plaintiffs' claim on the grounds that it discloses no reasonable cause of action and is frivolous or vexatious.

3 An order striking out the plaintiffs' action for the reasons as set out in para.2 pursuant to the inherent jurisdiction of the Court. In the event only the relief at para.3 has been pursued.

2 In summary, the plaintiffs' claim as set out in the statement of claim is that in December, 2002 they entered into a contract with the defendants, pursuant to which the defendants would lend them €546,000. The plaintiffs' intention in seeking to borrow this sum was so as to purchase six sites situated at Kinvara, County Galway. The plaintiffs contend that of the agreed €546,000, only €54,000 was advanced, which was linked to the payment of a deposit, that the defendants wrongfully, in breach of contract and breach of duty, failed to advance the balance, and that as a result of this the plaintiffs were unable to complete the purchase of the site and so suffered loss and damage. Of note is that the statement of claim refers to proceedings initiated by the defendants in which the bank sought possession of the plaintiffs' family home and it is said that there will be an attempt to consolidate these proceedings commenced by the bank with the present proceedings. In fact the proceedings were not consolidated, and an order for possession was made by McGovern J., that order is under appeal. It may be noted that the possession proceedings initiated by the bank were commenced on the 18^th June, 2008, and the plenary summons in the present proceedings issued on the 17^th December, 2008.

3 Two arguments have been advanced by counsel on behalf of the moving party in seeking to have the proceedings dismissed. First of all, it is said that the plaintiffs, Frank and Lorna Burke never had contracts with the bank and secondly it is said, that even if the plaintiffs had a contract, which is strongly denied, a condition precedent for the drawdown of the second tranche of funding was that the bank had to receive net proceeds of approximately €700,000 from the sale of a property, No. 6 Averard, Taylors Hill and this has never been complied with.

4 The background to the contention that the plaintiffs did not have a contract with the bank is that in December, 2002 sites in Kinvara were about to go to auction. The plaintiffs, and more particularly the first named plaintiff was anxious to acquire the sites and approached the defendant bank, dealing with an associate director of the bank, Mr. Stephen Mackey, who was the area manager in the West for the bank. A loan of €54,000 was advanced, and in that regard a bank draft was made out in favour of Keane Mahony Smith, the auctioneers who are acting for the vendors. A promissory note was signed by Frank Burke on the 17^th December, December, 2002, which was stated to be signed for and on behalf of Burdale Limited.

5 While the loan of €54,000 was actually paid on the 17^th December, 2002, the formal loan offer letter did not issue until the 7^th January, 2003. That letter was addressed to the Directors of Burdale Limited. It stated that Anglo was confirming its willingness to make a loan facility to available to Burdale Limited. Of note is that in relation to the repayment date, the facility was stated to be repayable on demand, and without prejudice to the demand nature of the facility, was to be repaid on or before the 30th April, 2003. The section of the letter dealing with acceptance required a duplicate copy of the facility letter to be returned signed within seven days, together with a resolution of the board of directors approving the terms and also the letter certificate of incorporation.

6 The borrowers' acceptance which was stated to be an acceptance for and on behalf of Burdale Limited states the signatories have read the facility letter of the 7^th January, 2003, to Burdale Limited and the bank's General Conditions and agreed to be bound by them. This was signed by Mr. Frank Burke.

7 There is sharp disagreement in relation to the role of Burdale Limited. The first named plaintiff has sworn that neither he, nor the second named plaintiff initiated the setting up of that company, acted as directors of it, or had any involvement with it in any capacity in the day to day running of the company. Attention is drawn to a Company...