Elliott v ACC Bank Plc

JudgeMs Justice Faherty
Judgment Date13 October 2020
Neutral Citation[2020] IECA 278
CourtCourt of Appeal (Ireland)
Docket NumberAppeal Number: 2017/589
Date13 October 2020





[2020] IECA 278

Costello J.

Faherty J.

Power J.

Appeal Number: 2017/589


Negligence – Breach of duty – Breach of contract – Plaintiffs appealing from the order dismissing their case against the second and third defendants and awarding the second and third defendants their costs – Whether the trial judge erred in directing a preliminary hearing on the Statute of Limitations 1957

Facts: The plaintiffs, Mr and Ms Elliott, pleaded that, due to the negligence, breach of duty, breach of fiduciary duty, and breach of contract of the defendants, ACC Bank Plc, Mr Condon and Mr Halley, they had obtained a “home savings plan” rather than an “endowment policy” and that the home savings plan was not a suitable vehicle for the purchase of their business. The plaintiffs’ claim against the first defendant was struck out on 1 February 2016. The plaintiffs appealed to the Court of Appeal from the order of the High Court (Ní Raifeartaigh J) dated 30 November 2017 (perfected 8th December 2017) dismissing their case against the second and third defendants and awarding the second and third defendants their costs. Arising from the Notice of Appeal and the parties’ submissions, the following issues arose for consideration in the appeal: (1) whether the trial judge erred in directing a preliminary hearing on the Statute of Limitations 1957, as amended; (2) whether the trial judge erred in concluding that the plaintiffs’ claim was statute barred as against the second and third defendants; (3) whether the trial judge erred in determining that no prima facie case in negligence was made out against the third defendant.

Held by Faherty J that the trial judge had the jurisdiction to and was not in error in directing a preliminary hearing on the Statute and that the plaintiffs were not prejudiced by that ruling; nor was the decision to conduct a preliminary trial flawed by the absence of a motion in that regard. Faherty J was satisfied that the trial judge properly applied the law in determining that the plaintiffs were statute barred pursuant to s. 11 of the Statute and that the trial judge had credible evidence to conclude that the first plaintiff knew before the expiry of the six-year limitation period that he had an endowment policy. Faherty J was of the view that the trial judge was wrong to determine the third defendant’s application to non-suit/dismiss the plaintiffs’ claim in circumstances where she herself had stated in her ruling on 13 October 2017 that the preliminary hearing would be directed solely to the issue of the Statue. In Faherty J’s view, this frailty in the judgment was not a sufficient basis for a remittal of the matter to the High Court since the views expressed by the trial judge were obiter and where Faherty J had in any event upheld the trial judge’s finding that the plaintiffs’ claim against the third defendant was statute barred.

Faherty J held that the appeal would be dismissed. As the second and third defendants could provisionally be deemed to be entirely successful, Faherty J held that a costs award in their favour should follow.

Appeal dismissed.

Judgment of Ms Justice Faherty delivered on the 13 th day of October 2020

This is the plaintiffs' appeal of the Order of the High Court (Ní Raifeartaigh J.) dated 30 November 2017 (perfected 8 th December 2017) dismissing their case against the second and third named defendants and awarding the second and third defendants their costs.


The background is as follows.


In or about June 2002, the plaintiffs purchased from third party vendors a residential mini supermarket known as 59 Griffith Place, Waterford City. The purchase was funded by €222,335 borrowed from the first defendant and secured by way of a mortgage and charge on that property and “an assignment of a suitable Endowment Mortgage Policy which provided for a death benefit and an estimated Maturity Value in the amount of €222,000 on the lives of the Borrowers”, as set out in the “Letter of Loan Sanction & Agreement” dated 13 May 2002.


On or about 16 May 2002, Friends First issued Policy No. 50157489 to the plaintiffs entitled “Friends First Home Savings Plan”. The sum assured was €222,000 payable on the death of one of the “Lives assured” (the plaintiffs). The premium was €753.74 per month payable by direct debit throughout the mortgage term of 20 years. As provided for in the Policy, the Friends First Home Savings Plan was to be invested in 50% managed funds and 50% “With Profit Gross Series 3”.


On 17 December 2002, the first defendant made a further loan facility available to the plaintiffs in the amount of €120.000 to finance the renovation and refurbishment of 59 Griffith Place. The term of this loan was again 20 years. The required security was a first legal mortgage on the premises. Repayment was to be by monthly instalments of interest with full repayment of the principal sum upon expiration of the mortgage term “or earlier on maturity of the Endowment Mortgage Policy…”. This advance was accepted by the plaintiffs on 18 December 2002.


On 13 September 2004 the facilities offered by the first defendant to the plaintiffs were rearranged by the advance of a sum of €388,000 for the purposes of repaying the two existing loans and to finance improvements to the mini market at 59 Griffith Place. The term of this loan facility was 20 years. The security provided to the first defendant was: -

“1. An extension of the Bank's existing First Fixed Legal Mortgage Charge over supermarket at 59 Griffith Place, Waterford.

2. Assignment of suitable Endowments Policies for Anthony and Anne Elliott.

3. An Assignment of Life Cover on the Lives of Anthony and Anne Elliot to the value of €388,000 for the full term of the Loan Facility.”

The facility letter provided that the loan facility was to be repayable on demand. Until demand was made or the loan facility repaid, repayments were to be by monthly instalments of interest repayments in the sum of €1,336.40. It was further provided that until demand was made or the loan facility repaid in full, repayment of the principal sum “shall be immediately upon the expiration of the term of the Loan Facility or earlier on maturity of the Endowment Mortgage Policy…” It was provided that the proceeds of the Endowment Policy -

“shall first be used to repay sums secured on foot of the Loan Facility and any surplus shall be paid to the person entitled to any surplus under the Policy. Any deficit in the Policy shall be the responsibility of the Borrower who shall make good any such deficiency to the Bank.”


It is common case that the plaintiffs retained the second defendant (an accountant by profession and who was their accountant) to assist them in arranging the mortgages, life assurance and endowment policies. The third defendant (a solicitor) was retained by the plaintiffs in his capacity as a solicitor in the years 2002-2004 in the context of the purchase of 59 Griffith Place. Waterford.


Unfortunately for the plaintiffs, they ran into difficulties and were unable to pay the endowment and other annuity mortgages and, ultimately, the mini-market at 59 Griffith Place was repossessed.


The within proceedings were commenced by way of plenary summons on 24 July 2013 by the plaintiffs in person. Two statements of claim were delivered on 11 November 2014 and 12 November 2014, directed against firstly the first and second named defendants and secondly the third named defendant. These statements of claim were largely identical. In the statement of claim dated 11 November 2014, it is pleaded that on or about 14 June 2002, “on the trusted professional advice” of the defendants the plaintiff “did enter into a financial agreement to purchase a retail business, trading as ‘Lynn's Shop’ … The Plaintiff was subject to the professional negligence, breach of duty and breach of fiduciary duty as he was erroneously advised to enter into a financial situation that did not meet his requirements and the terms of which were misrepresented to him”. It is pleaded that the plaintiff contacted the second defendant for advice regarding the purchase of the retail business and that the second defendant originally advised the plaintiff to take a mortgage with Bank of Scotland “but then revised his financial advice and advised to enter into an endowment agreement with Friends First with the aligned bank being the first named Defendant.”


It is asserted that in or about March 2008 the plaintiff received a letter from Friends First “regarding what he thought was his endowment policy” and that when he contacted the second defendant he was told to disregard the letter. It is further pleaded that “the plaintiff then discovered that it was not in fact an endowment policy he had obtained but that of a home savings plan that was not a suitable vehicle through which to purchase a business” and that the policy “was not geared to pay off the cost of the business”. The letter referred to in the pleadings comprised advice to the plaintiffs that a review as of 8 April 2008 of their Home Savings Plan showed an estimated value at the mortgage repayment date of €157, 930.81 and, therefore, “a potential shortfall” in achieving the targeted cash sum of €222,000.


Upon the direction of the High Court, the plaintiffs delivered a consolidated statement of claim on 8 May 2015. Therein it is again pleaded that the plaintiffs engaged the services of the second defendant to arrange finance for the purchase of the mini market and that upon the recommendation of the second defendant, the plaintiffs retained the third defendant to act on their behalf in the purchase of the business. It is further pleaded that the second defendant ultimately organised the finances for the purchase of the...

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    ...parties to agree a set of assumed facts. At this juncture, I think it is appropriate to point to the case Elliot v. ACC Bank plc & Anor [2020] IECA 278, which was opened to the court and in which the Court of Appeal did not criticise the High Court's entitlement to set down a preliminary is......

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