Danske Bank A/S (trading as Danske Bank) v Scanlan

JudgeMr. Justice Fullam
Judgment Date25 February 2016
Neutral Citation[2016] IEHC 118
Date25 February 2016
CourtHigh Court
Docket Number[2014/1456S] [2014/8950P]

[2016] IEHC 118


Fullam J.






Banking & Finance – Non–payment of loan – Summary judgment – Plenary proceedings – Damages for negligence & misrepresentation – Dismissal of plenary proceedings – O. 19, r. 28 of the Rules of the Superior Court – Inherent jurisdiction – Bona fide defence

Facts: In the first named proceedings, the plaintiff/Bank sought an order for summary judgment against the defendant for non-payment of a housing loan. The said defendant in the second proceedings had instituted the plenary proceedings for damages for misrepresentation and negligence. The said defendant made contentions in relation to the Bank's insolvency, compliance with Consumer Protection Code, and quick sale of mortgaged property by the receiver.

Mr. Justice Fullam dismissed the second named proceedings instituted by the said defendant under o. 19, r. 28 of the Rules of the Superior Court for failure to disclose any cause of action. The Court held that the Court had to determine whether there was an arguable defence. The Court observed that despite its discretion to strike out any pleading under o. 19, r. 28 of the Rules of the Superior Courts, the Court should be cautious in its approach to prevent misuse of the process of law by continuance of litigation on one hand and on the other hand, the right of the plaintiff to pursue a legitimate claim. The Court held that a borrower was obliged to pay his debt/loan notwithstanding non-compliance of statutory obligations by the lender. The Court found that in the present case, the fact of insolvency of the Bank had no effect upon the enforceability of the relevant loan facilities entered into between the plaintiff and the said defendant and thus, the defendant was obliged to repay the requisite amount.

JUDGMENT of Mr. Justice Fullam delivered on the 25th day of February, 2016.
Factual Background

By facility letter dated the 8th September, 2008, accepted by Ms. Scanlan on the 2nd October, 2008, Danske Bank A/S (‘the Bank’) provided Ms. Scanlan with a housing loan in the sum of €107,500. The principal security for the loan was a legal mortgage over the defendant's former residence at 19 Radharc Na Sleibhte, Churchtown, Mallow, Co. Cork. This was an extension of an existing all sums legal mortgage dated the 21st August, 2003.


Ms. Scanlan failed to comply with the terms of an Arrears Notice from the Bank dated the 17th July, 2013. By letter dated the 7th August, 2013, the Bank demanded repayment of the outstanding balance of the loan then standing at €84,599.44. Ms. Scanlan failed to discharge the amount due. Pursuant to the powers conferred by paragraph 6 (2) of the mortgage, the bank appointed Mr Stephen Tennant receiver over the property by Deed of Appointment dated the 15th August, 2013.


These events gave rise to two sets of proceedings. In the first on the 6th June, 2014, the Bank issued a summary summons seeking judgment in the sum of €84,439.80. In the second, Ms. Scanlan issued plenary proceedings on the 21st October, 2014 against the Bank and the Receiver Mr Tennant, claiming €600,000 damages on various grounds including gross negligence and misrepresentation. A statement of claim was delivered on the 23rd February, 2015 wherein she claims damages in the sum of €100,000.


The Bank's application is based on two motions:

(i) A motion seeking summary judgment dated the 9th September, 2014 in the sum of €84,439.80 against Ms. Scanlan (the defendant) relating to a loan made by the Bank to the defendant in September, 2008 repayment of which was demanded by letter dated the 25th April, 2014 from the Bank's solicitors.

(ii) A motion dated the 18th March, 2015, seeking dismissal of Ms. Scanlan's proceedings on two grounds:

(a) the inherent jurisdiction of the court to dismiss frivolous and vexatious cases and;

(b) the proceedings on their face disclose no reasonable cause of action pursuant to Order 19 Rule 28


Ms. Scanlan's claim is for damages arising out of a number of grounds including that the Bank: engaged in reckless lending practices, misled her as to the nature of the agreement, engaged in excessive securitisation, breached a number of regulatory requirements and was in breach of licensing requirements as it was insolvent at the relevant time. She further claims the behaviour of the appointed receiver caused her damage.


When the matter came before O'Malley J. on the 2nd March, 2015, the Bank indicated that it proposed to issue a motion pursuant to Order 19 Rule 28 seeking dismissal of Ms. Scanlan's claim on the basis that it failed to disclose any reasonable cause of action and/or under the court's inherent jurisdiction that the claim was frivolous and vexatious.


O'Malley J. directed that the two motions be listed and heard together. On the 18th March the Bank issued its motion for dismissal grounded on the affidavit of Ms. Sharon Keenan, manager in the Asset Recovery Team of the Irish registered branch of the Bank.


The principles applicable to an application by a plaintiff for summary judgment and a defendant seeking dismissal of a plaintiff's claim based on the courts inherent jurisdiction under Order 19 Rule 28 are similar. The court's exercise of its jurisdiction in either situation amounts to a restriction on a party's right of access to the courts. In an application for summary judgment the court must be satisfied that it is clear that there is no reasonable or fair probability of the Defendant having a real or bona fide defence. Hardiman J in Aer Rianta cpt v. Ryanair Limited [2001] 4 I.R. 607 stated at paragraph 623:

‘In my view, the fundamental questions to be posed on an application such as this remain: is it “very clear” that the defendant has no case? Is there either no issue to be tried or only issues which are simple and easily determined? Do the defendant's affidavits fail to disclose even an arguable defence?’


In a dismissal application the onus lies on the defendant concerned to establish that the plaintiffs claim is bound to fail. The defendant must demonstrate that any factual assertion on the part of the plaintiff could not be established at trial.


Kearns P. considered the court's jurisdiction to dismiss under Order 19 Rule 28 and under its inherent jurisdiction at pages 2 and 3 of his judgment in Patrick Harrold v Nua Mortgages Limited [2015] IEHC 15 stating:

‘Order 19 Rule 28 of the Rules of the Superior Courts provides-

‘The court may order any pleading to be struck out, on the ground that it discloses no reasonable cause of action or answer and in any such case or in case of the action or the defence being shown by the pleadings to be frivolous or vexatious, the court may order the action to be stayed or dismissed, or judgment to be entered accordingly, as may be just.’

The court also possesses an inherent jurisdiction to strike out proceedings. This well established position was confirmed in Barry v. Buckley [1981] IR 306 where Costello J. stated that the ‘jurisdiction exists to ensure that an abuse of the process of the courts does not take place’ and where a claim is bound to fail it would be a proper exercise of its discretion to strike out proceedings whose continued existence cannot be justified and is manifestly causing irrevocable damage to the defendant.’

It is well established that this jurisdiction is one which should be used sparingly and right of access to the courts should be preserved wherever possible. In Lawlor v. Ross (unreported Supreme Court 22nd November, 2001) Fennelly J. stated that ‘the court should be willing to assume in favour of the plaintiff that an appropriate amendment of the pleadings might save his case.’


Furthermore, in O'N v. McD & Others [2013] IEHC 135 Kearns P. emphasised that with cases involving litigants in person, the courts are obliged to be ‘particularly cautious’.


Clarke J. considered the power to strike out proceedings in Salthill Properties Ltd and another v. Royal Bank of Scotland plc and others [2009] IEHC 207 stating:–

‘… it seems to me that counsel for Salthill and Mr. Cunningham is correct when he says that the court need not and should not require a plaintiff to be in a position to show a prima facie case at the stage of an application to dismiss, in order that that application should fail. There have been many cases where the crucial evidence which allowed a plaintiff to succeed only emerged in the course of the proceedings. At the level of principle, this is likely to be particularly so in cases alleging fraud or other similar wrongdoing which is likely to be clandestine, if present, and where a plaintiff may only be able to come across admissible evidence sufficient to prove his case by virtue of the use of procedural devices such as discovery and interrogatories. That is not to say that it is legitimate for a party to instigate such proceedings when the party concerned has no basis for so doing. However there is, in my view, a significant difference between circumstances where a plaintiff has a legitimate basis for considering that it may have a claim at the time of commencing proceedings, on the one hand, and a situation where that party has, at that time, available to it, admissible evidence which it can put before the court to establish a prima facie claim, on the other hand.

It is clear from all of the authorities that the onus lies on the defendant concerned to establish that the plaintiff's claim is bound to fail. It seems to me to follow that the defendant must demonstrate that any factual assertion on the part of the plaintiff could not be...

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