Cantrell v AIB Plc

JurisdictionIreland
CourtHigh Court
JudgeMr. Justice Robert Haughton
Judgment Date28 April 2017
Neutral Citation[2017] IEHC 254
Date28 April 2017
Docket Number[2014 No. 6901 P] [2014 No. 6899 P] [2014 No. 6898 P] [2014 No. 6913 P] [2014 No. 6812 P] [2014 No. 6979 P] [2015 No. 4218 P] [2014 No. 7166 P]

[2017] IEHC 254

THE HIGH COURT

COMMERCIAL

Haughton Robert J.

[2014 No. 6901 P]

[2014 No. 6899 P]

[2014 No. 6898 P]

[2014 No. 6913 P]

[2014 No. 6812 P]

[2014 No. 6979 P]

[2015 No. 4218 P]

[2014 No. 7166 P]

BETWEEN
GERALDINE CANTRELL
PLAINTIFF
AND
ALLIED IRISH BANKS PLC, THE SECOND BELFRY PROPERTIES (U.K.) PLC, TULLAMONA LIMITED, THE FOURTH BELFRY PROPERTIES (U.K.) PLC, LEYALLY LIMITED, THE FIFTH BELFRY PROPERTIES (U.K.) PLC, MONSAL LIMITED, B.D.O. (A FIRM), SEAN HENNEBERRY, TONY KILDUFF, WILLIAM LEDWIDGE, JOHN ROCKET, JOHN ROGER WILKINSON, ANN BLACKMORE

AND

ESSEX TRUST LIMITED
DEFENDANTS
BETWEEN
LAURENCE McMULLIN
PLAINTIFF
AND
ALLIED IRISH BANKS PLC

AND

OTHERS
DEFENDANTS
BETWEEN
BERNADETTE GOODWIN
PLAINTIFF
AND
ALLIED IRISH BANKS PLC

AND

OTHERS
DEFENDANTS
BETWEEN
MARY HONOHAN
PLAINTIFF
AND
ALLIED IRISH BANKS PLC

AND

OTHERS
DEFENDANTS
BETWEEN
PETER TIERNEY
PLAINTIFF
AND
ALLIED IRISH BANKS PLC

AND

OTHERS
DEFENDANTS
BETWEEN
BRIAN SPIERIN
PLAINTIFF
AND
ALLIED IRISH BANKS PLC

AND

OTHERS
DEFENDANTS
BETWEEN
BRIAN O'REILLY
PLAINTIFF
AND
ALLIED IRISH BANKS PLC

AND

OTHERS
DEFENDANTS
BETWEEN
EDWARD SHEEHAN

AND

EVELYN SHEEHAN
PLAINTIFFS
AND
ALLIED IRISH BANKS PLC

AND

OTHERS
DEFENDANTS

Contract – Breach of contract – Tort – Damages – The Courts Act, 1981 – Plea of limitation – Statute of Limitations 1957 – Date of accrual of a cause of action in financial loss.

Facts: The plaintiffs in the present eight set of proceedings sought an order for damages for the breach of contract, breach of statutory duty and damages for negligent misrepresentations against the defendants. The plaintiffs claimed that the defendants induced them to make certain investments, which caused financial losses to the plaintiffs. The defendants had raised the plea of limitation and asked the Court to determine as to whether the plaintiffs' claims were barred by the Statute of Limitation. The plaintiffs stated that by the virtue of s. 44 of the Statute of Limitations 1957, limitation would not apply as the defendants acted as the trustees of those properties. The plaintiffs also asserted that the fraudulent concealment of the Loan to Value (‘LTV’) covenants would extend the period of limitation to the date when that fraud was discovered.

Mr. Justice Robert Haughton held that the plaintiffs' claims, which were founded on the breach of contract, were statute barred as the cause of action accrued on the date on which the investments were entered into by the plaintiffs and more than six years had lapsed before any proceedings were commenced. The Court held that the commission paid to the Bank on entry into the investment did not constitute actual loss as the commission was a form of remuneration and not an item of loss or damage as falsely alleged by the plaintiffs. The Court, however, held that the claims in tort did not accrue until the actual loss was caused to the plaintiffs and thus, those were not barred. The Court held that in relation to the named plaintiffs in relation to their respective investments, their causes of actions in torts were not barred as the alleged torts were not completed. The Court held that the cause of action in relation to the LTV covenant claims occurred on the date on which the value of shareholder investment in each fund was written down to nil subject to the extent of which those covenants caused the loss in value. The Court held that the plaintiffs were not entitled to rely on s. 44 of the Act of 1957 as the defendants were not the true trustees of any properties of the plaintiffs. The Court opined that the purpose of determination of the preliminary issue was to save costs and resources of the Courts for which all the facts needed to be agreed upon by the parties. The Court held that in the present case, there was no agreement between the parties in relation to all the facts or inferences relevant for the determination under s. 71 of the 1957 Act, including the acts/omissions and state of mind of the relevant parties and thus, it was not appropriate to determine those issues at the preliminary hearing.

Judgment of Mr. Justice Robert Haughton delivered on the 28th day of April, 2017
Introduction
1.1

This judgment relates to preliminary issues as to whether the plaintiffs' claims are barred by the Statute of Limitations.

1.2

The claims made by the various plaintiffs in these related proceedings arise from investments in a number of property investment schemes in respect of which Allied Irish Banks Plc (‘AIB’) acted as promoter and placing agent. The property investment schemes were undertaken by the Second Belfry Properties (U.K.) Plc (‘Belfry 2’), the Third Belfry Properties (U.K.) Plc (‘Belfry 3’), the Fourth Belfry Properties (U.K.) Plc (‘Belfry 4’), the Fifth Belfry Properties (U.K.) Plc (‘Belfry 5’), and the Sixth Belfry Properties (U.K.) Plc (‘Belfry 6’). In each case the plaintiffs' monies, together with monies of other investors, were invested through trustee/nominee companies. Thus investments in Belfry 2 by the first named plaintiff Mrs. Geraldine Cantrell were made through Tullamona Ltd as trustee/nominee, and that company held shares in Belfry 2 as her nominee. The investments relating to Belfry 3 were made through Selenga Ltd which held the shares as nominee for the investors. Investments in Belfry 4 were made through Leyally Ltd as nominee. In relation to Belfry 5 the investments were made through Monsal Ltd as nominee and in relation to Belfry 6 the investment of Mr. O'Reilly was made through Akshar Ltd as nominee.

1.3

The plaintiffs claim that, based upon representations and marketing material/prospectuses provided to them by the defendants, they invested sums ranging from €75,000 to €440,000 which were resourced variously from savings, pension funds or loans secured by mortgages.

1.4

The plaintiffs seek inter alia damages for breach of contract; damages for negligence and breach of duty including breach of statutory duty; damages for breach of fiduciary duty; damages for negligent misstatement, damages for misrepresentations; accounts and enquiries; interest pursuant to the Courts Act, 1981 and costs.

1.5

These eight sets of proceedings were chosen from a large number of related cases (in excess of 300) and are said to act as ‘pathway cases’ for proceedings yet to come before the courts. They are not test cases in the formal sense that findings or conclusions of this court will automatically apply to proceedings in other cases, but it would seem that they will have precedent value and in effect will determine similar issues arising in cases with similar facts. The court was informed that they were selected to cover all the Belfry funds 2-6 inclusive (Belfry 1 did not give rise to proceedings), and to include plaintiffs who invested savings or pension monies, plaintiffs who borrowed to invest, and plaintiffs who were employees of AIB.

1.6

While there is one set of legal representation for the eight plaintiffs, there is separate legal representation for:-

(1) AIB.

(2) The defendants Sean Henneberry, Sean Rockett, and John Roger Wilkinson. Mr. Henneberry is a defendant in seven of the eight cases, but is not named as a defendant in Mr. O'Reilly's case.

(3) Mr. Kilduff.

(4) Mr. Ledgwidge.

These personal defendants, collectively called ‘the Director Defendants’, were at all material times directors of Belfry 2 – Belfry 6 inclusive, save that (1) Mr. Hennebry is not now and was never a director of Belfry 6, and (2) Mr. Wilkinson only became a director of Belfry 2 and Belfry 3 after the issuance of the relevant Prospectuses. The proceedings against the named defendants ‘BDO (a firm)’ and ‘Ann Blackmore’ were on consent struck out by orders of the court made on 9th November, 2015 and 14th December, 2015 respectively.

1.7

In late 2015 applications were made by the various defendants seeking orders for the trial of preliminary issues concerning the applicability of the Statute of Limitations, and as to whether the plaintiffs have any entitlement to maintain any claim for damages or other relief by reference to loss suffered by the relevant Belfry companies having regard to the rule in ‘ Foss v. Harbottle’. By order dated 1st February, 2016, McGovern J. directed ‘the trial of a preliminary issue be on the Statute of Limitations only’ and gave directions as to the filing of affidavits and written submissions.

1. Preliminary trial – Pleadings and Affidavit evidence
2.1

The preliminary issues in all eight cases were heard together before this court over seven days commencing on 26th April 2016 and ending on 27th May 2016. No oral evidence was heard. The trial of the issues was based primarily on the pleadings. However grounding affidavits on behalf of the defendants who were represented were before the court, and in addition there were replying affidavits from Mr. Peter Tierney sworn on 22nd February 2016, and Mr. Tom Casey, solicitor, also sworn on 22nd February 2016. Mr. Casey is solicitor for the plaintiffs and made his affidavit on behalf of the plaintiffs in all eight proceedings. While Mr. Tierney's affidavit contains matters that are specific to his investment in Belfry 3 it has some application to other plaintiffs namely Mrs. Goodwin and Ms. Honohan, who also invested in Belfry 3.

2.2

The court also considered supplemental/replying affidavits filed on behalf of the defendants, and in particular an affidavit sworn by Mr. Conal Regan, AIB Manager, on 14th March, 2016, wherein inter alia he exhibits copies of Property Updates and audited financial statements of each Belfry company from inception up to 2015 and all correspondence between the relevant Belfry company and the relevant plaintiff.

Mr. Regan's affidavit was sworn in response to the affidavits of Mr. Tierney and Mr. Casey, both of which he assumes are sworn ‘by reference to all the litigation and for each and...

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