Sean Harris v Promontoria (Aran) Ltd and Stephen Tennant

• Jurisdiction: Ireland
• Judge: Ms. Justice Faherty
• Judgment Date: 15 June 2021
• Neutral Citation: [2021] IECA 174
• Date: 15 June 2021
• Docket Number: Appeal Number: 2019/107
• Court: Court of Appeal (Ireland)

Between/

Sean Harris

Appellant/Plaintiff

and

Promontoria (Aran) Limited and Stephen Tennant

Receiver Respondents/Defendants

[2021] IECA 174

Faherty J.

Murray J.

Collins J.

Appeal Number: 2019/107

THE COURT OF APPEAL

Strike out – Cause of action – Jurisdiction – Appellant appealing from the successful application of the respondents to have his proceedings struck out as disclosing no cause of action – Whether the threshold for the High Court to exercise its jurisdiction to strike out the proceedings was met

Facts: The plaintiff/appellant, Mr Harris, appealed to the Court of Appeal from the successful application of the defendants/respondents, Promontoria (Aran) Ltd and Mr Tennant, to have his proceedings struck out as disclosing no cause of action pursuant to Order 19, r. 28 of the Rules of the Superior Courts (RSC) and the inherent jurisdiction of the court. Firstly, it was contended that the trial judge erred in deciding the case on a summary basis where issues of fact as to whether or not an agreement to extend time had been agreed were in contention and where the plaintiff’s contention was that he had a concluded agreement as of 26 April 2018 with the defendants which he was entitled to enforce. Secondly, it was argued that the trial judge wrongly concluded that there was no basis for the plaintiff’s claim for damages for intimidation and harassment including elder abuse. Thirdly, it was said that the trial judge fell into error in concluding that there was no legal basis underlying the plaintiff’s assertions since she failed to consider the plaintiff’s entitlement to rely on the principle of estoppel by convention. The overarching complaint was that the threshold for the High Court to exercise its jurisdiction to strike out the proceedings was not met in this case. It was confirmed at the hearing of the appeal that the plaintiff’s claim lay solely in damages, the lands which comprised the security for the plaintiff’s loans having been sold post the judgment of the High Court and where no stay had been sought pending the appeal.

Held by Faherty J that the trial judge did not err in striking out the proceedings pursuant to the inherent jurisdiction of the court. Faherty J held that this case was not one where the pleadings and the affidavit evidence disclosed that “the legal issues or questions of construction arising are themselves complex and such as would require the type of careful analyses which can only be carried out safely at a full trial and in circumstances where the facts can be fully explored” as per Clarke J in Moylist Construction v Doheny [2016] IESC 9. Faherty J comprehended no circumstance where it could be said that the plaintiff had a legitimate basis for commencing the proceedings. Faherty J held that neither the pleadings nor the affidavit evidence met the legitimate basis threshold and, accordingly, the defendants had established that the proceedings were bound to fail.

Faherty J upheld the decision of the trial judge and dismissed the appeal. Faherty J held that as the plaintiff had not succeeded in his appeal, the defendants should be entitled to their costs.

Appeal dismissed.

UNAPPROVED

Judgment ofMs. Justice Fahertydated the 15 ^th day of June 2021

1 . This is the plaintiff's appeal from the defendants' successful application to have his proceedings struck out as disclosing no cause of action pursuant to Order 19, r.28 of the Rules of the Superior Courts (RSC) and the inherent jurisdiction of the court.

Background

2 . The first defendant is the successor in title to a debt of €5,203,082.96 which originally became due and owing by the plaintiff pursuant to a Facility Letter entered into between the plaintiff and Ulster Bank Ireland (“Ulster Bank”) dated 4 February 2010. By way of security for part of the debt, the plaintiff granted Ulster Bank a legal charge dated 6 October 2008 in respect of 60 acres of land at Straffan comprised in Folio KE3258F, a legal charge dated 6 October 2008 in respect of 48 acres of land at Straffan comprised in Folio KE3527 and a mortgage/charge dated 10 November 2006 granted in respect of approximately 61 acres of land at Ardclough comprised in Folio KE7991F.

3 . By way of Mortgage Deed Sale dated 16 December 2014 between Ulster Bank and Promontoria Holding 128 B.V., Promontoria Holding acquired Ulster Bank's rights under the Facility Letter, the security documents and the debt.

4 . On 12 February 2015, by Deed of Novation, Promontoria Holding transferred all its rights and title in the Facility Letter, the security documents and the debt to the first defendant.

5 . On 8 February 2016, an agreement (“the Settlement Agreement”) was reached between the plaintiff and the first defendant under which the first defendant agreed to forebear from taking any enforcement action in respect of the debt of €5,203,082.96 provided certain payments were made by the plaintiff and certain conditions precedent complied with in full.

6 . Pursuant to clause 2.3 of the Settlement Agreement, the plaintiff agreed to pay the first defendant the sum of the full encashment of four investment bonds, as described in the Settlement Agreement, and €1,350,000 within twelve months of the date of the Agreement.

7 . Clause 2.2 provided that should the plaintiff fail to make the payments set out at clause 2.3:

“(a) This Agreement shall immediately terminate and the full amount of the Debt, together with any interest which may have accrued thereon, shall become immediately payable in accordance with the terms of the Facility Letter; and

(b) [the first defendant] shall be at liberty to take such enforcement action as it deems fit, without further notice to the Borrower.”

8 . Pursuant to clause 2.4, the plaintiff agreed that he had no claim whatsoever against the first defendant howsoever arising in relation to the said agreement and he irrevocably agreed to waive any such claim he may have against the first defendant.

9 . Clause 6.1 provided:

“No modification, amendment, variation or waiver of any of the provisions of this Agreement shall be effective unless made in writing and signed on behalf of each of the Parties”.

10 . Pursuant to clause 8.1, it was agreed that the Settlement Agreement constituted the entire understanding and agreement between the parties and that [a]ny variation to this Agreement shall take effect only if agreed to by the Parties and made in writing”.

11 . Clause 9 provided that the Settlement Agreement would binding on and enure for the benefit of each party's successors and assigns and that unless terminated “may be relied on and/or pleaded as a full and complete bar to any proceedings, or other legal action commenced or brought in breach of, or contrary to, the terms of this Agreement.”

12 . In this appeal, no issue is taken by either side with the terms of the Settlement Agreement which are clear and unambiguous as to their meaning and effect. At the time of entering the agreement, the plaintiff had legal advice and his signature was witnessed.

Events post the Settlement Agreement

13 . The terms of clause 2.3 (a) were complied with by the plaintiff. He duly encashed the four investment bonds and the proceeds were paid over to the first defendant. It had also been agreed that the plaintiff would pay legal fees of €3,850 plus VAT to the first defendant and this was complied with.

14 . It is common case, however, that by 7 February 2017-the expiry of the twelve months provided for in clause 2.3(b)- the plaintiff had not paid the €1,350,000.

15 . By email dated 9 February 2017 to Mr. Alan Bailey, the plaintiff's financial representative, the first defendant, through its agent Mr. David Geraghty of Capital Asset Services, agreed to extend the date for payment of the €1,350,000, subject to the following terms:

“(1) €10,000 penalty to apply per month until settlement funds are received in full.

(2) Minimum payment of €350,000 in cleared funds to [the first defendant] by 28/02/2017.

(3) Minimum payment of €600,000 in cleared funds to [the first defendant] by 31/03/2017.

(4) Minimum payment of €130,000 in cleared funds to [the first defendant] by 28/04/2017.

(5) Remaining settlement funds + accrued penalty by no later than 31/07/2017.”

16 . While this extension agreement was in writing insofar as it was contained in an email, it was not signed by each of the parties, contrary to the requirements of clause 6.1 of the Settlement Agreement. The defendants do not dispute that an extension of time was agreed. Counsel for the defendants described it as an “indulgence” given to the plaintiff.

17 . By the time the extended period expired on 31 July 2017, the €1,350,000 had not been discharged by the plaintiff. No demand, however, for payment was made by the first defendant at that time.

18 . By 10 November 2017, Mr. Bailey was communicating with Mr. Tomás Treacy of Link Asset Services (a service provider to the first defendant) advising him that the plaintiff had discharged €300,000 of the sum outstanding and that he would repay a further €100,000 from the proceeds of sale of cattle by year end. Mr. Baily also advised that the plaintiff had four sites sale agreed at €150,000 per site albeit no contracts had been exchanged with the purchasers. Mr. Bailey was, however, going to liaise with the plaintiff's then solicitors to have them confirm the timelines for the completion of the sale of the sites. Once the €100,000 from the sale of cattle and the site proceeds was paid over, Mr. Bailey anticipated that the balance of the sum due to the first defendant would be discharged from “cash reserves from liquidation of stock and machinery to clear”.

19 . On 20 November 2017, Mr. Treacy emailed Mr. Bailey confirming the first defendant's consent to the extension of the settlement date to 15 February 2018 subject to the plaintiff providing, before 30 November 2017, a letter...