Keaney v Sullivan and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Feeney,Ms. Justice Finlay Geoghegan
• Judgment Date: 19 December 2008
• Neutral Citation: [2008] IEHC 372,[2007] IEHC 8
• Court: High Court
• Docket Number: No. 593 P/2006,[No. 593P/2006]
• Date: 19 December 2008

KEANEY v SULLIVAN

BETWEEN

VINCENT KEANEY

PLAINTIFF

AND

JAMES SULLIVAN (FIRST DEFENDANT), JOAN SULLIVAN (SECOND DEFENDANT), ST. JOHN CULLIGAN (THIRD DEFENDANT), MICHAEL NOLAN (FOURTH DEFENDANT), TITANIC QUEENSTOWN TRADING COMPANY LIMITED, (IN LIQUIDATION) (FIFTH DEFENDANT), MAGPIE INTERNATIONAL HOLDING COMPANY LIMITED (IN LIQUIDATION) (SIXTH DEFENDANT), TITANIC QUEENSTOWN MEMORABILA LIMITED, (IN LIQUIDATION) (SEVENTH DEFENDANT), ALLIED IRISH BANKS PLC, (EIGHTH DEFENDANT), Q.E.F. GLOBAL LIMITED (NINTH DEFENDANT), ROGER DUNCAN, GEOFFREY LEWIS, DAVID MARSH, TOM MOORE, DECLAN O'LUANAIGH, NEIL PAYNE, DAVID ISAACSON (CARRYING ON PRACTICE UNDER THE STYLE AND TITLE OF ORMSBY RHODES AND BKR ORMSBY RHODES (TENTH TO SIXTEENTH DEFENDANTS), TREGAN PROPERTIES LIMITED (SEVENTEENTH DEFENDANT) AND JULIA NOLAN (EIGHTEENTH DEFENDANT)

DEFENDANTS

[2007] IEHC 8

[No. 593P/2006]

[No. 40 COM/2006]

THE HIGH COURT

COMPANY LAW

corporate personality

Lifting corporate veil - Whether court should lift veil - Rule in Foss v Harbottle - Directors - Director's duties - Fiduciary duty - Whether director owed fiduciary duty to shareholder - Whether plaintiff has standing to seek order for rectification of share register - Whether plaintiff has standing to bring proceedings for oppression - Relief granted to defendants (2006/593P - Finlay Geoghegan J - 16/1/2007) [2007] IEHC 8Keaney v Sullivan

Statement of claim

Application to strike out statement of claim - Whether allegations of fraud and misrepresentation pleaded with sufficient particularity - Inherent jurisdiction to strike out plaintiff's claim - Whether plaintiff's claim amounts to abuse of process - Whether plaintiff's claim must fail or is unsustainable - Rules of the Superior Courts 1986 (SI 15/1986), O19, rr 5 (2), 27 and 28 - Relief granted (2006/593P - Finlay Geoghegan J - 16/1/2007) [2007] IEHC 8Keaney v Sullivan

RSC O. 19 r27

RSC O. 19 r28

RSC O. 19 r5(2)

DELANEY & MCGRATH CIVIL PROCEDURE IN THE SUPERIOR COURTS 2 ED 2005 145 5.38

BULLEN & LEAKE PRECEDENTS OF PLEADINGS 12TH ED 1975 452

DELANEY & MCGRATH CIVIL PROCEDURE IN THE SUPERIOR COURTS 2 ED 2005 158 5.74

DELANEY & MCGRATH CIVIL PROCEDURE IN THE SUPERIOR COURTS 2 ED 2005 159 5.75

BULLEN & LEAKE PRECEDENTS OF PLEADINGS 12TH ED 1975 450

SUN FAT CHAN v OSSEOUS LTD 1992 1 IR 425

O'NEILL v RYAN 1993 ILRM 557

COMPANIES ACT 1963 S122

COMPANIES ACT 1963 S116

FOSS v HARBOTTLE 1843 2 HARE 461

YUKONG LINE LTD OF KOREA v RENDS BURG INVESTMENTS CORP OF LIBERIA & ORS 1998 2 BCLC 485

SNOOK v LONDON & WEST RIDING INVESTMENTS LD 1967 1 AER 518

SALOMON v SALOMON 1897 AC 22

MACAURA v NORTHERN ASSURANCE CO LTD 1925 AC 619

O'NEILL v RYAN 1993 ILRM 557

COMPANIES ACT 1963 S205

CRINDLE INVESTMENTS v WYMES 1998 4 IR 567 1998 14 5119

PRUDENTIAL ASSURANCE CO LTD v NEWMAN INDUSTRIES LTD & ORS 1982 1CH 204

RSC O. 19 r3

MCMAHON & BINCHY IRISH LAW OF TORTS 3 ED 2000 1092

Ms. Justice Finlay Geoghegan

1 The plaintiff won a significant sum of money in the Lotto in the 1990's. In 1996, he acquired a premises known as Scotts Building in Cobh, Co. Cork and decided to establish and run a theme bar to be known as the Titanic Bar. In 2000, he retained the services of the first defendant a chartered accountant as financial advisor and to seek an investment partner. The fourth defendant Michael Nolan was identified as such a person, in relation to a joint venture for the premises acquired and the pub to be run therein. In 2000, the plaintiff and the fourth defendant entered into a "Heads of Agreement" and subsequent transactions pursuant thereto. These included a deed of assignment of the 20th October, 2000, by the plaintiff to himself and the fourth named defendant as tenants in common in equal shares of the premises known as Scotts Building; the incorporation of Titanic Queenstown Trading Company Limited ("TQT Company") on the 11th August, 2000 and the granting to it of a lease of the said premises. It was agreed that the proposed pub, the Titanic Bar was to be operated and run by TQT Company which was owned as to 49% by the plaintiff and 51% by the fourth defendant. The publican's licence originally obtained in July, 2000, in the name of the plaintiff was transferred to TQT Company in September, 2001.

2 TQT Company traded as Titanic Bar until December 2002. In July, 2003, the plaintiff and the fourth defendant entered into "heads of agreement legally binding" on 2nd July, 2003 and pursuant thereto entered into a further series of agreements, deeds and share transfers. These included a contract for sale of the plaintiff's interest in the Titanic Bar premises dated the 24th July, 2003; a deed of assignment between the plaintiff and the fourth and eighteenth defendants of the plaintiff's interests in the premises; a transfer of the plaintiff's 49% shareholding in TQT Company to the fourth defendant and a deed of release and other documents referred to in paragraph 62 of the statement of claim. The intended effect of these transactions appears to have been to separate the business and property interests of the plaintiff and fourth defendant.

3 The plaintiff in these proceedings by plenary summons issued in 2006, has brought multiple claims and made many allegations against the 18 defendants arising out of the transactions entered into in 2000, the running of the pub between 2000 and 2003 and the transactions in 2003. He seeksinter alia to set aside all the transactions, deeds and property transfers entered into and effected both in 2000 and2003.

4 Following commencement of the proceedings the fourth defendant, Michael Nolan, the seventeenth named defendant, Tregan Properties Limited and the eighteenth defendant Julia Nolan, his wife made application for admission to the Commercial List. On the 3rd April, 2006, Kelly J. entered the proceedings into the Commercial List and treated the motion as the initial directions hearing. He further ordered that the plaintiff deliver a statement of claim on or before the 13th April, 2006.

5 On the 24th April, 2006, at a further hearing of the directions motion on complaint from a number of the defendants in relation to the form of the statement of claim delivered Kelly J. ordered that: "the plaintiff be at liberty to deliver an amended statement of claim herein by close of business on Monday 8th May, 2006, the said statement of claim to be properly drafted, in the proper form and properly particularised."

6 An amended statement of claim was delivered on the 8th May, 2006.

7 The defendants were further given liberty on the 24th April, 2006, to bring notices of motion for orders dismissing or striking out the proceedings within a period of two weeks from receipt of the amended statement of claim.

8 Pursuant to this liberty four separate notices of motion were issued on behalf of:

(1) The third, fourth, ninth, seventeenth and eighteenth defendants

(2) The eighth defendant

(3) The first defendant

9 (4) The tenth to sixteenth defendants.

10 In each of those notices of motion applications are made for orders striking out all or part of the plaintiff's pleadings and/or proceedings against the applicant defendants pursuant to O. 19, rr. 27, 28 and/or the inherent jurisdiction of the court. The precise relief and grounds relied upon differ slightly between the notices of motion and to the extent necessary will be referred to below. All the notices of motion seek orders striking out all or part of the proceedings pursuant to the inherent jurisdiction of the court. Affidavits were sworn in support of those applications and replying affidavits from the plaintiff.

11 On the 3rd July, 2006, at the hearing of the directions motion Kelly J. being satisfied that the relevant affidavit evidence on the motions of the defendants was complete and that the relevant written legal submissions had been exchanged, fixed the hearing of the motions for the 25th July, 2006.

12 On the 24th July, 2006, the plaintiff, without leave of the court purported to deliver a further amended statement of claim. At the hearing on the 25th July, as these were motions to strike out all or part of the proceedings against the relevant defendants, it was accepted that the court should take into account the further proposed amendments in the statement of claim dated the 24th July, 2006, in determining the applications to strike out all or part of the pleadings. It is therefore by reference to that document hereinafter referred to as "the statement of claim" that these applications will be determined.

Application of Third, Fourth, Ninth, Seventeenth and Eighteenth Defendants

13 The third, fourth, ninth, seventeenth and eighteenth defendants are jointly represented and in their notice of motion seek orders striking out all or part of the amended statement of claim delivered on the 8th May, 2006, as against those defendants. They advance a number of distinct grounds relating to the multiple and differing claims. It is proposed firstly to consider the application for an order pursuant to the inherent jurisdiction of the court striking out almost all claims of fraud, deceit, misrepresentation and/or undue influence against those defendants by reason of the failure of the statement of claim to particularise the allegations as required by O. 19, r. 5(2).

Breach of Order 19 Rule 5(2)

14 Of these defendants, the primary defendant is the fourth defendant, Michael Nolan. Further the core of the plaintiff's claim against Mr. Nolan appears to be based upon allegations of fraud, deceit, misrepresentation and/or undue influence.

15 It is on the basis of such allegations that the plaintiff seeks to set aside all agreements and deeds entered into both in 2000 and 2003 with the fourth named defendant.

16 O. 19, r. 5(2) of the Rules of the Superior Courts provides:

" (2) In all cases alleging...