Kategrove Ltd [(in Receivership)] v Anglo Irish Bank

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice Clarke
• Judgment Date: 05 July 2006
• Neutral Citation: [2006] IEHC 210
• Date: 05 July 2006

[2006] IEHC 210

THE HIGH COURT

[No. 6889 P/1994]

KATEGROVE LTD (IN RECEIVERSHIP) & ORS v ANGLO IRISH BANK CORPORATION PLC & O'BRIEN

BETWEEN

KATEGROVE LIMITED (IN RECEIVERSHIP, HUGO MERRY AND PETER SCHOFIELD)

PLAINTIFFS

AND

ANGLO IRISH BANK CORPORATION PLC

DEFENDANT

AND

JOHN O'BRIEN

THIRD PARTY

STEPHENS v PAUL FLYNN LTD UNREP CLARKE 28.4.2005 2005/56/11682 2005 IEHC 148

ROGERS v MICHELIN TYRE PLC & MICHELIN PENSIONS TRUST (NO 2) LTD UNREP CLARKE 28.06.2005 2005/53/11045 2005 IEHC 294

PRIMOR PLC v STOKES KENNEDY CROWLEY 1996 2 IR 459

GILROY v FLYNN 2005 1 ILRM 290

WOLFE v WOLFE & ORS UNREP FINLAY-GEOGHEGAN 15.3.2006 2006/59/12482 2006 IEHC 106

PRACTICE AND PROCEDURE

Dismissal of action

Want of prosecution - Inordinate and inexcusable delay - Excuse - Balance of justice - Prejudice to defendant - Inaction on part of defendant - Proceedings dismissed(1994/6889P - Clarke J - 5/7/2006) [2006] IEHC 210 Kategrove Ltd v Anglo Irish Bank Corp plc

the plaintiff brought plenary proceedings claiming negligence and breach of contract as against the defendant. There was a nine year period where no progress had been made in the prosecution of the proceedings. The defendant brought an application to have the plaintiff’s claim dismissed for want of prosecution or on the grounds of inordinate and inexcusable delay.

Held by Mr Justice Clarke in dismissing the proceedings that the court should ascertain whether the delay in question was inordinate and inexcusable and if it was so established, the court had to decide where the balance of justice lay. That in coming to a conclusion as to what was just, the court also needed to give consideration, inter alia, to whether there were any measures, short of the striking out of the entirety of the plaintiff’s claim, which might meet the justice of the case; the degree of delay in question; the excuse tendered; whether the defendant suffered any prejudice as a result of the delay and; whether there was any inaction on the part of the defendant.

Reporter: P.C.

1. Introduction

2 1.1 The substantive proceedings arise out of the receivership of the first named plaintiffs ("Kategrove"). The second and third named plaintiffs are the directors and shareholders of Kategrove. The receivership arose out of a mortgage in favour of the defendant ("Anglo Irish") over a petrol filling station and other lands at Urlingford Co. Kilkenny owned by Kategrove. The mortgage was to provide security for a loan given to Kategrove by Anglo Irish. The second and third named plaintiffs guaranteed the loan. Furthermore the second plaintiff provided additional security by means of a mortgage or over a portion of his own lands at Kilshannig in Co. Cork.

3 1.2 On foot of arrears in relation to the loan facility, the notice party ("the receiver") was appointed as receiver and the premises were sold in August 1994 with the proceeds of sale being received and applied by the receiver. It would appear that the property was sold by Anglo Irish as mortgagee in possession but with the receiver acting as agent. The plaintiffs allege negligence and breach of duty together with breach of contract in relation to the application of the proceeds of sale of the property and also allege that representations were made which would have the effect of releasing the second named plaintiff from any liability.

4 1.3 In this application Anglo Irish seeks to have the plaintiff's claim dismissed for want of prosecution or on the grounds of inordinate and inexcusable delay. In that context it is therefore necessary to look at the chronology of the proceedings to date.

2. The Proceedings

2 2.1 The proceedings as between the plaintiffs and Anglo Irish followed the following course:-

8 November 1994 Plenary Summons issued

14 November 1994 Appearance entered

17 November 1994 Statement of Claim delivered

30 November 1994 Notice for Particulars delivered

14 February 1995 Replies to Particulars furnished

12 May 1995 Defence Delivered

6 June 1995 Notice of Trial served

2 May 1996 Letter from Plaintiff to Defendant seeking consent to Amended Statement of Claim

20 November 1996 Letter from Defendant to Plaintiff consenting to amendment to Statement of Claim

20 November 1996 Notice of Particulars arising from the Amended Statement of Claim furnished by Defendant

29 May 1997 Replies to Notice of Particulars by Plaintiff

22 January 1999 Notice of Intention to Proceed

18 February 1999 Notice of Trial Served

30 September 2005 Notice of Motion by Defendant to strike out proceedings for inordinate and inexcusable delay

3 2.2 As will be seen the case proceeded with reasonable expedition between the issuing of the plenary summons in November 1994 and the initial service of notice of trial in June 1995. Two complications then appear to have occurred. Firstly the plaintiffs proposed an amendment to the statement of claim which was ultimately consented to over six months later by Anglo Irish resulting in a further exchange of request for and replies to particulars which culminated on 29th May, 1997. Other than the service of a notice of intention to proceed and a subsequent notice of trial in the early part of 1999 no further formal steps occurred in relation to the case as between the plaintiffs and Anglo Irish between May 1997 and the issuing of the motion seeking to strike out the proceedings. That motion was issued at the end of September 2005. Thus a period of not far short of nine years was allowed to elapse. I will refer in due course to correspondence that passed during that period.

4 2.3 Secondly it is necessary to look at the parallel process which was followed in respect of the claim brought by Anglo Irish against the receiver as third party. The third party was joined to the proceedings by order of this court on 3rd July, 1995. It should be noted that that event occurred just after the original notice of trial in the substantive proceedings was served. As the existence of the third party issue is put forward, at least in part, as a cause of delay in this matter coming on for hearing, I should set out the chronology in respect of that aspect of the process.

5 2.4 The third party proceedings were persued as follows:-

21 September 1995 Third Party Notice Issued

21 September 1995 Appearance by Third Party

30 November 1995 Statement of Claim on behalf of Defendant as against Third Party

23 May 1996 Defence of Third Party delivered

16 May 1995 Notice of Motion by Defendants for Discovery against Third Party

27 June 1996 Order for Discovery against Third Party made by Master of this Court

22 October 1996 Notice of Motion by Defendant to strike out Defence for failure to comply with Order of Discovery

21 January 1997 Amended Defence of Third Party Issued. Order by O'Sullivan J. on 20 July 1998 granting liberty to amend such Defence

14 March 1997 Notice of Motion by Third Party for discovery against Defendant

1 July 1997 Order for Discovery against Defendant by Master of this Court

25 March 1998 Notice of Motion by Third Party seeking to strike out Defendant's Statement of Claim for failure to comply with order for Discovery

14 May 1998 Notice for Particulars by Third Party

30 October 1998 Defendant's Replies to Particulars

18 May 1999 Reply by Defendant to Amended Defence of Third Party

18 May 1999 Notice for Particulars by Defendant

26 July 1999 Order by Kelly J. directing Third Party to reply to Notice for Particulars

17 July 2000 Notice of Motion by Defendant seeking to strike out Amended Defence of Third Party for failure to comply with Order compelling Replies to Particulars

9 October 2000 Order by Barr J. striking out Amended Defence for failure to comply with Order compelling Replies to Particulars

4 December 2000 Notice of Motion by Third Party to reinstate the Amended Defence

13 December 2000 Notice for Further and Better Particulars by the Defendant

22 January 2001 Amended Defence reinstated by Carroll J.

14 February 2001 Replies to Notice for Further and Better Particulars by Third Party

13 November 2001 Notice of Motion by Third Party for Further and Better Discovery

15 February 2002 Order by O'Caoimh J. refusing application for Further and Better Discovery

6 2.5 It will be seen that the process as and between Anglo Irish and the receiver had a somewhat complicated history with both parties bringing, from time to time, applications seeking to have the other side's pleadings struck out for failure to comply with procedural obligations. Whatever may be the reason as to why it took so long for the third party aspect of the case to be ready for trial, it should be noted that no formal action had been taken in respect of that process for a period in excess of three and a half years prior to the issuing of the motion which I have to decide.

7 2.6 Finally so far as the formal process is concerned it should be noted that on the uncontested affidavit evidence of Pierce O'Donovan it would appear that the case was listed on numerous occasions between 1996 and 2000 in the uncertified Chancery List. On each such occasion there was an appearance on behalf of Anglo Irish but no appearance on behalf of the plaintiffs.

8 2.7 Against that background it is necessary to turn to the legal principles applicable.

3. The Law

2 3.1 In the recent cases of Stephens v. Flynn [2005] IEHC 148 and Rogers v. Michelin Tyre plc and Another [2005] IEHC 294, I had to consider the principles applicable to the exercise of the court's jurisdiction to strike out proceedings for inordinate and inexcusable delay. Having reviewed authorities from Primor plc v. Stokes Kennedy Crowley [1996] 2 I.R. 459 to Gilroy v. Flynn (Unreported, Supreme Court, Hardiman J., 3rd December, 2004) I expressed the following view in Stephens at p. 7:-

"Having considered...