Flynn v Allied Irish Bank Plc
| Jurisdiction | Ireland |
| Judge | Mr. Justice McMahon |
| Judgment Date | 27 June 2008 |
| Neutral Citation | [2008] IEHC 199 |
| Court | High Court |
| Date | 27 June 2008 |
[2008] IEHC 199
THE HIGH COURT
BETWEEN
AND
AND
BETWEEN
AND
AND
AND
RSC O.122 r7
RSC O.49 r6
PRIMOR PLC v STOKES KENNEDY CROWLEY 1996 2 IR 459
MANNING v BENSON & BENSON HEDGES LTD 2004 3 IR 556 2005 1 ILRM 190
RSC O.27 r1A
GILROY v FLYNN 2005 1 ILRM 290 2004/19/4269 2004 IESC 98
STEPHENS v PAUL FLYNN LTD UNREP CLARKE 28.4.2005 2005/56/11682 2005 IEHC 148
FAHERTY v MIN DEFENCE & ORS UNREP FEENEY 22.10.2007 2007 IEHC 371
RSC O.27
RAINSFORD v LIMERICK CORPORATION 1995 2 ILRM 56
O DOMHNNAILL v MERRICK 1984 1 IR 151
PRACTICE AND PROCEDURE
Dismissal of action
Want of prosecution - Delay - Inherent jurisdiction of court to dismiss claim for inordinate and inexcusable delay - Application to enlarge time for delivery of statement of claim - Whether delay inordinate and inexcusable - Whether balance of justice in favour of allowing claim to proceed - Principles to be applied - Prejudice to defendant - Inherent jurisdiction of court - Rules of the Superior Courts 1986 (SI 15/1986), O 122, r 7 - Primor plc v Stokes Kennedy Crowley [1996] 2 IR 459 and Manning v Benson and Hedges Ltd [2004] 3 IR 556 applied; O'Domhnaill v Merrick [1984] 1 IR 151, Gilroy v Flynn [2005] 1 ILRM 290 and Flaherty v Minister for Defence [2007] IEHC 371 (Unrep, Feeney J, 22/10/2007) considered - Time for delivery of statements of claim in proceedings instituted on company's behalf extended and claim in proceedings instituted by plaintiff in his personal capacity dismissed (2000/2765P - McMahon J - 27/6/2008) [2008] IEHC 199
Flynn v AIB
Facts: the plaintiff was the director and shareholder of a company which was dissolved, the plaintiff alleged, as a result of the defendant’s breach of fiduciary duty and deceit in failing to lodge cheques to its account. The plaintiff brought three actions on behalf of the company arising therefrom and a plenary action on his own behalf against the defendant, alleging personal injuries as a result of his company’s liquidation. The company was subsequently reinstated and the liquidator assigned to the plaintiff all the causes of action that the company had against the defendant.
Held by Mr Justice McMahon in extending the period of time for delivery of the three statements of claim in the proceedings instituted on the company’s behalf and consolidating them and in dismissing the claim in the proceedings instituted by the plaintiff in his personal capacity that the delay in delivering statements of claim was inordinate and inexcusable. In exercising its inherent discretion as to whether the balance of justice was in favour of allowing the cases proceeding, the court took into account: i) the fact that defendant had contributed to the lapse of time; ii) the nature of the plaintiff’s claims, which raised serious concerns for the court, based on allegations of deceit and breach of fiduciary duty where the defendant had control of the relevant documentation; iii) that much of the relevant evidence would probably be documentary; iv) that all relevant witnesses were able to give evidence, and; v) the length of lapse of time. All of those factors indicated that there would be little prejudice to the defendant in allowing the cases instituted on behalf of the company to proceed. However, in the claim brought on the plaintiff’s own behalf, as the delay had not been dependant on any assignment of a cause of action from the liquidator, the balance of justice was not in favour of allowing that case to proceed.
Reporter: P.C.
JUDGMENT delivered by Mr. Justice McMahon on th 27th day of June, 2008
Mr. Patrick Joseph Flynn the plaintiff in the first proceedings is a master pastry chef, who was born in Kilrush, Co. Clare, on the 1 st March, 1943. In 1979 the plaintiff commenced a confectionary business which was carried on by Flynn's Confectionary Limited ("the Confectionary Company") of which the plaintiff was a shareholder and director. The Confectionary Company successfully produced a broad range of confectionary products and in due course became a major supplier of confectionary to Aer Rianta at Shannon Airport which resulted in confectionary being sold not only in the restaurants at Shannon Airport, but also being supplied for in-flight catering to Aer Lingus and also to all major international airlines using Shannon Airport.
Following the first Gulf War in 1991, international air traffic into Shannon was dramatically reduced and this had a direct effect on the volume of business which the Confectionary Company did with Aer Rianta. To address these business difficulties, the plaintiff sought other avenues for his confectionary business which culminated in the incorporation of Flynn's Irish Gateaux Limited ("the Gateaux Company") on the 25 th February, 1992, the issue share capital of which was owned as to 52% by the plaintiff and 48% by the plaintiff's spouse. The Gateaux Company developed a business in frozen confectionary and prior to the commencement of this business, the company incurred a capital expenditure amounting to the equivalent of somewhere in the region of IR£470, 000.00 On the 18 th December, 1992, Mr. Flynn successfully applied to Rural Resource Development Limited ("RRD Limited") for a Leader Programme development grant for this business. On the 23 rd December, 1993, a cheque (as part of the grant) in the amount of IR£62, 848.76 was lodged by Mr. Flynn to the Gateaux Company's bank account with the defendant bank in Kilrush and on the 11 th April, 1994, a further RRD Limited cheque for IR£17, 098.00 and payable to the Gateaux Company was also lodged by the plaintiff at the same branch. The essence of Mr. Flynn's complaint is that IR£45, 000.00 of the first cheque in the amount of IR£62, 848.76 was not lodged to the account of the Gateaux Company but was lodged instead to Allied Irish Leasing Company, a wholly owned subsidiary of the defendant, with whom Mr. Flynn had leasing agreements for some of the equipment used in the manufacturing process. The second tranche of the RRD Trust Funds in the amount of IR£17, 098, 00 was not lodged to the Gateaux Company and the use to which these funds were put was not known to the plaintiff at the time these proceedings were commenced in 2000.
As a result of this, Mr. Flynn alleges that a train of events was set in motion which ultimately ended with the Gateaux Company being put into creditor's insolvent liquidation on the 14 th September, 1995, and the Gateaux Company being dissolved on the 14 th December, 2001. The dissolution was, on the 8 th December, 2003, on the petition of Mr. Flynn as a shareholder in the Gateaux Company, declared void by order of the High Court. On the 21 st June, 2004, the liquidator assigned absolutely to Mr. Flynn all the causes of action that the Gateaux Company had against the defendant.
There are two sets of proceedings. Mr. Flynn in his personal capacity sues AIB plc claiming damages for breach of contract, negligence and deceit, including damages for personal injuries, stress, inconvenience and disturbance. The second set of proceedings is comprised of three separate actions:
1. An action by Mr. Flynn as absolute assignee of all causes of action that the Gateaux Company had against the AIB;
2. An action by Mr. Flynn suing in his capacity as a shareholder in the Gateaux Company;
3. A similar action by Mrs. Mary Flynn (wife of Patrick Joseph Flynn) who also sues in her capacity as a shareholder in the Gateaux Company.
Each of these claims is for damages for breach of contract, breach of duty, negligence, deceit and misrepresentation.
Applications in these proceedings are now made by the plaintiff for orders pursuant to O. 122, r. 7 of the Rules of the Superior Courts to enlarge a time for delivering statements of claim in all of these proceedings. The applications issued on the 12 th September, 2007. In relation to the second set of proceedings ("the related proceedings") there is also an application for an order pursuant to O. 49, r. 6 of the Rules of the Superior Courts to consolidate the latter three actions.
I propose to deal with"the related proceedings" first. Before I consider the entitlement of the plaintiffs to an extension, it is important first that I set out the dates and the sequence of events as they relate to these proceedings:-
(a) The plaintiffs' solicitors wrote to the defendant's solicitor on the 12 th September, 2003, requesting that the defendant consent to the joinder of Flynn's Irish Gateaux Company Limited as plaintiffs to the personal action commenced by Mr. Flynn in the year 2000.
(b) By letter dated the 23 rd October, 2003, consent was refused by the defendant's solicitors.
(c) The three plenary summons in the related proceedings were issued on the 25 th June, 2004; 16 th August, 2004; and the 15 thNovember, 2004. ("the 2004 proceedings").
(d) The plaintiffs' solicitors wrote to the defendant's solicitors on the 12 th May, 2005, enclosing the 2004 summonses and asserting an intention to transfer proceedings to the commercial court.
(e) The 2004 summonses were served and service was accepted on the 10 th...
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