Dormer v Allied Irish Bank Plc

• Jurisdiction: Ireland
• Judge: Mr. Justice Brian J. McGovern
• Judgment Date: 05 February 2016
• Neutral Citation: [2016] IEHC 109
• Docket Number: [2014 No. 10198 P.]
• Court: High Court
• Date: 05 February 2016

BETWEEN

PAUL DORMER

AND

GERARD DORMER

PLAINTIFFS

AND

ALLIED IRISH BANK PLC, LUKE CHARLETON

AND

MARCUS PURCELL

DEFENDANTS

[2016] IEHC 109

[2014 No. 10198 P.]

THE HIGH COURT

COMMERCIAL

Banking & Finance – Practice & Procedures – Leave to amend pleadings – New evidence – Dismissal of proceedings – O. 19, r. 28 of the Rules of the Superior Courts – Inherent jurisdiction of Court – Abuse of process of law

Facts: Following the withdrawal of appeal by the plaintiffs before the Court on Appeal for setting aside the order of the High Court for granting summary judgment in favour of the defendants, and refusal of the application for an interlocutory injunction, the plaintiffs now sought leave to amend their statement of claim. The defendants sought an order under o. 19, r. 28 of the Rules of the Superior Courts (RSC) and also under inherent jurisdiction of the Court for dismissal of the plaintiffs' claim. The plaintiffs claimed that due to the fraudulent misrepresentation of the first named defendant/bank, they needed to add a new claim, namely, rescission of settlement agreement in its entirety and or damages.

Mr. Justice Brian J. McGovern refused to grant an order for amendment of statement of claim to the plaintiffs. The Court granted an order for striking out the proceedings of the plaintiffs under o. 19, r. 28 of the RSC and inherent jurisdiction of the Court as well. The Court held that the Court had a wide discretion to grant leave to amend pleadings; however, the Court was required to inquire whether the new claim that was sought to be introduced by way of an amendment would succeed or not by either referring to the test laid down under o. 19, r. 28 of the Rules of the Superior Courts or by invoking the inherent jurisdiction of the Court or both. The Court found that the claim as asserted by the plaintiffs was not new and had already been dealt by the summary judgment granted earlier. The Court observed that since the plaintiffs did not challenge the said summary judgment, they were bound by the findings made in that judgment. The Court held that since the plaintiffs wanted to assert the same facts as already been decided, the plaintiffs was making an abuse of process of law and thus, it was appropriate for the Court to exercise its inherent jurisdiction to make an order for striking out the proceedings.

JUDGMENT of Mr. Justice Brian J. McGovern delivered on the 5th day of February, 2016

1 There are two motions before the court. The first in time is the defendants' motion issued on 31st March, 2015, to strike out the plaintiffs' claim. The other motion, issued on 20th November, 2015, is brought by the plaintiffs for leave to amend their statement of claim.

History of these Proceedings to Date

2 The proceedings were issued on 3rd December, 2014, by plenary summons in which the plaintiffs sought various reliefs against the defendants including an order setting aside a judgment of the Commercial Division of the High Court, Kelly J. in the sum of €17,663,876 delivered on 4th March, 2014. On the same date, the plaintiffs sought and obtained an interim injunction restraining the defendants from taking steps to enforce the judgment (including any judgment mortgages registered against the plaintiffs). The proceedings were admitted into the Commercial Court on 8th December, 2014, and in the course of directions made by the court on 15th December, 2014, the application for an interlocutory injunction was fixed for hearing on 11th February, 2015. That application was heard on 11th and 12th February, 2015, and on 26th February, 2015, judgment was delivered (McGovern J.). The plaintiffs' application for an injunction was refused and the interim injunction was vacated. The plaintiffs appealed that decision and the procedural directions of this Court were suspended pending the outcome of the appeal and the motion to strike out the proceedings returnable for 20th April, 2015 was also adjourned.

3 The appeal was listed for hearing on 23rd November, 2015, and legal submissions were exchanged in advance. On 13th November, 2015, the Court of Appeal was notified that the plaintiffs wished to withdraw their appeal and the appeal was formally withdrawn. On 20th November, 2015, the plaintiffs issued the motion to amend the statement of claim. That motion and the defendants' motion to strike out the proceedings were listed together for hearing before the court.

The motions before the Court

4 The plaintiffs seek leave of the court to amend their pleadings in the light of what they describe as ‘ new evidence’ concerning the attitude of the first named defendant (‘ the bank’) at a time leading up to the settlement agreement of 30th January, 2014, which is in issue in these proceedings. In the written and oral submissions, made to the court at the hearing of the interlocutory injunction application, the plaintiffs were at pains to point out that they were not alleging fraud against the defendants. They now seek permission from the court to deliver an amended statement of claim which deletes many sections of the original and seeks to add a new claim, namely for rescission of the settlement agreement in its entirety and/or damages in lieu of rescission and/or damages for deceit on the grounds that the bank, in entering into that agreement, was guilty of a fraudulent misrepresentation. It is immediately apparent that this claim is completely at variance with the position adopted by the plaintiffs at the hearing of the interlocutory injunction.

5 The plaintiffs state that the new evidence was not available when the original statement of claim was delivered. They do not deny that it was available by the time the interlocutory injunction was heard. Indeed, para. 27 of the amended statement of claim states that the documentation comprising the ‘ new evidence’ came to the plaintiffs' attention in January 2015. No satisfactory reason has been offered to the court as to why the plaintiffs did not rely on this evidence at the interlocutory injunction hearing. The defence was not delivered until 2nd February, 2015 and the plaintiffs could have delivered an amended statement of claim without leave of the court under Order 28 Rule (2) of the RSC had they chosen to do so.

6 The court enjoys a wide discretion to grant leave to amend pleadings. The primary consideration of the court must be whether the amendments are necessary for the purpose of determining the real questions of controversy in the litigation. See Croke v. Waterford Crystal Limited [2005] 2 I.R. 383, per Geoghegan J. at p. 401 and Cuttle v. ACC Bank Plc [2012] IEHC 105, Kelly J. If an opposing party cannot show prejudice the court will allow an amendment if it is necessary to determine the real issues in the litigation. In Citywide Leisure Limited v. IBRC [2012] IEHC 220, this Court summarised the factors to which the court should have regard when considering an application for leave to amend as follows:-

‘1. A party who applies for an order...