EBS Building Society v Leahy and Others (T/A Leahy & Partners)

• Jurisdiction: Ireland
• Judge: Mr. Justice Hogan
• Judgment Date: 06 December 2010
• Neutral Citation: [2010] IEHC 456
• Judgment citation (vLex): [2010] 12 JIC 0601
• Court: High Court
• Date: 06 December 2010

[2010] IEHC 456

THE HIGH COURT

[No. 1784 P/2009]

EBS Building Society v Leahy & Ors (T/A Leahy & Partners)

BETWEEN

EBS BUILDING SOCIETY

PLAINTIFF

AND

WILLIAM E. LEAHY & OTHERS (PRACTISING UNDER THE STYLE AND TITLE OF LEAHY AND PARTNERS)

DEFENDANTS

AND

PATRICK McMAHON JUNIOR, PATRICK McMAHON SENIOR AND KEVIN McMAHON

THIRD PARTIES

CIVIL LIABILITY ACT 1961 S27(1)(B)

RSC O.12 r26

BOARD OF GOVERNORS OF ST LAURENCES HOSPITAL v STAUNTON 1990 2 IR 31 1989 ILRM 877 1989/6/1838

CONNOLLY v CASEY & MURPHY T/A CASEY & MURPHY SOLICITORS 2000 1 IR 345 2000 2 ILRM 226 2000/3/1120

ROBINS v COLEMAN & ORS UNREP MCMAHON 6.11.2009 2009/49/12307 2009 IEHC 486

MOLLOY v DUBLIN CORP 2001 4 IR 52 2002 2 ILRM 22 2003/38/9025

PRACTICE & PROCEDURE

Third party notice

Set aside - Delay - Loan - Legal charge over properties - Solicitors - Certificate of title - Claim for negligence, misrepresentation and negligent misstatement - Order granting defendants liberty to issue and serve third party notice - Whether reasonable for defendants to wait for period in question before applying to join third party - Whether defendants proceeded with all deliberate speed prior to making decision regarding issue of third party notice - Board of Governors of St Laurence's Hospital v Staunton [1990] 2 IR 31; Connolly v Casey [2000] 1 IR 345; Robins v Coleman [2009] IEHC 486 (Unrep, HC, McMahon J, 06/11/2009); Mulloy v Dublin Corporation [2001] 4 IR 52 considered - Civil Liability Act 1961 (No 41), s 27(1)(b) - Rules of the Superior Courts 1986 (SI 15/1986), O 12, r 26 - Application dismissed (2009/1784P - Hogan J - 06/12/2010) [2010] IEHC 456

EBS Building Society v Leahy

Facts The third parties sought to have an application to dismiss third party notice against them. The first named third party had bought property with a loan given by the EBS. The property and another property had a first legal charge on them as security to the EBS. The defendants issued a certificate of title and the EBS released the funds to purchase the property. The first named third party then defaulted on the loan. It emerged then that one of the secured properties was owned by the second named third party thereby depriving the ESB of one of its securities. The defendant solicitors issued proceedings for professional negligence against the third parties. Patrick McMahon Jr sought the present application pursuant to RSC Order 12, r. 26.

Held by Hogan J in dismissing the application and the submission that the defendants did not comply with the Civil Liability Act, 1961 s. 27 citing Governor of St. Laurence’s Hospital v Staunton [1990] 2 IR 31; Connolly v Casey [2003] 1 IR 345 and Robins v Coleman [2009] IEHC 486 and Mulloy v Dublin Corporation [2001] 4 IR 52. That the defendant solicitors acted with all deliberate speed.

Reporter: BD

1 1. This is an application by the third parties to have a third party notice dated 23 ^rd December, 2009 - in which the defendants (who are a firm of solicitors)("the solicitors") seek an indemnity in respect of the claims brought against them by the plaintiff building society ("EBS") - set aside for non-compliance with the requirements of s. 27(1)(b) of the Civil Liability Act 1961. In essence, the contention of the third parties is that the notice was not served "as soon as is reasonably possible" within the meaning of this statutory provision.

2 2. The present proceedings arise in this way. The EBS claims that in January, 2007 it offered loan facilities in the sum of €1.45m to Patrick McMahon Junior, one of the third parties. The object of this loan was to allow Mr. McMahon Junior to purchase a 3.36 acre site at Sixmilebridge, Co. Clare and to re-finance a loan held with Bank of Scotland Ireland. While the security offered included a first legal charge over property situate at Mungret, Co. Limerick comprised in Folio 3949 for County Limerick, it also comprised a first legal charge over the 3.36 acre site at Six Mile Bridge, Co. Clare and a first legal charge over properly at Monaleen Road, Castletroy, Limerick. One of the loan conditions was that Mr. McMahon's then solicitors, Messrs. Leahy and Partners, should certify title to these lands.

3 3. The EBS further claims that the defendant solicitors duly furnished a certificate of title on 29 ^th January, 2007, and that on foot of this it duly advanced the loan facilities. As it happens, Mr. Patrick McMahon Junior defaulted on this loan and an order for possession in respect of the Six Mile Bridge and Monaleen Road properties was duly made in favour of the plaintiff building society by this Court (McGovern J.) on 24 ^th November, 2008.

4 4. The plaintiff contends that it then emerged that the lands in question were in fact owned by Patrick McMahon Senior, the father of Patrick McMahon Junior. If this is correct, then, of course, one of the parcels of land held by the EBS as collateral for the loan is worthless for this purpose and it has thereby been deprived of one of its items of security.

5 5. The EBS commenced these present proceedings on 24 ^th February, 2009, and a statement of claim was delivered on 31 ^st March, 2009. It claims damages as against the defendant solicitors for negligence, misrepresentation and negligent misstatement. As it happens, the solicitors had already issued separate proceedings on 27 ^th January, 2009 (bearing record number 2009 No. 714 P) by which they claimed damages as the third parties in the present proceedings. In those proceedings the solicitors (as plaintiffs) seek damages for deceit, conspiracy, negligence and misrepresentation as against the McMahons as defendants.

6 6. Returning to the present proceedings, the solicitors filed a defence on 22 ^nd June, 2009. The EBS replied to a notice for particulars on 3 ^rd September, 2009. On 23 ^rd November,...