Liam Madden v Anglo Irish Bank Corporation Plc and William Lacey
| Jurisdiction | Ireland |
| Judge | Denham J. |
| Judgment Date | 17 December 2005 |
| Neutral Citation | [2004] IESC 108 |
| Docket Number | RECORD NO. 322 of 2003 |
| Court | Supreme Court |
| Date | 17 December 2005 |
DENHAM J.
McCRACKEN J.
KEARNS J.
RECORD NO. 322 of 2003
THE SUPREME COURT
Practice and procedure - Dismissal of claim for want of prosecution - Whether no reasonable cause of action disclosed - Whether claim frivolous and vexatious - Company law - Distinction between public company and private company - Shareholder suing personally for loss and damage - Companies Act, 1963
Appellant claimed first respondent had acted ultra vires and in breach of section 60 of the Companies Act, 1963 in entering into an agreement with the second respondent in relation to a company of which he was a shareholder and creditor by accepting liability for the indebtedness of a third party. The second respondent was receiver of the company’s assets appointed by the bank. The appellant’s only outstanding claim was against the first respondent for damages. His claim was dismissed for want of prosecution and that it was frivolous and vexatious. He appealed to the Supreme Court.
Held by the Supreme Court (Denham J; McCracken and Kearns JJ) in allowing the appeal that there was no relevant distinction between a public and private company established for a joint venture in regard to their entitlement to sue. The courts have an obligation to ensure that rights and liabilities are determined within a reasonable time and the assumption that even grave delay will not lead to the dismissal of the action if not on the part of a plaintiff personally is not to be relied upon. The court allowed the appeal and allowed the appellant one further week to deliver the statement of claim.
Reporter: F.McE.
Judgment delivered on the 17th day of December, 2004 by Denham J.
1. Liam Madden, the plaintiff/appellant, hereinafter referred to as ‘the appellant’, has brought an appeal to this Court from the judgment of the High Court (Ó Caoimh J.) delivered on the 23rd day of July, 2003.
2. Anglo Irish Corporation PLC and William Lacy are the named defendants/respondents. The first named defendant/respondent is referred to hereinafter as ‘the bank’.
3. On 23rd July, 2003, the High Court held:
“Mr. Madden has instituted a claim against Anglo Irish Bank Plc. The Bank seeks an Order from this Court dismissing the claim on the basis that it is one that is bound to fail, and that it is one that the plaintiff simply cannot succeed on.
The Court approaches this matter with the guidance of a number of authorities that have been opened to the Court by Counsel on behalf of the Bank, by looking at the Statement of Claim itself, and the evidence put before this Court in relation to the history of the matter, both by reference to the affidavit of Mr. Spillane, and the affidavit of Mr. Madden himself. The nature of the claim brought by Mr. Madden is that set forth in the Statement of Claim. Mr. Madden seemed to express some surprise in relation to the terms of it, but the existence of the Statement of Claim as having been served I think is clearly denoted by the terms of the affidavit of Mr. Spillane, who makes specific reference to it. In it, it can be seen that the Plaintiff, Mr. Madden, has advanced this
claim as against the Bank in his capacity as a shareholder and creditor of the Company.
His complaint, as pleaded in the Statement of Claim, is one in which he contends that the Company acted ultra vires and in breach of Section 60 of the Companies Act in entering into an agreement on or about the10th September 1992, which is the subject matter of the action.
The Court has had the benefit of the evidence put before the Court of Mr. Spillane in relation to the history of this case and the history of the various applications to this Court and on appeal therefrom to the Supreme Court, indicating the limits to which the Court permitted the matters to be advanced. It is quite clear on the basis of the history and the number of Orders that have been made to date by the Supreme Court, that the only issue really that survives is whether Mr. Madden is entitled to maintain his claim for damages as against the Bank.
The submissions that have been advanced by Counsel, have been made on the basis of an assumption that the plaintiff can prove the matters pleaded by him in the Statement of Claim, served on the Bank, and that if there is any dispute raised on the affidavit put before the Court by Mr. Spillane, that I should prefer the version of events put forward before the Court by Mr. Madden in his replying affidavit. This is the precise basis upon which I assess this matter.
The essential issue that comes before the Court is whether the claim is maintainable. Mr. Madden suggests that the Statement of Claim might be amended in some fashion, but he has failed to indicate in any clear fashion how it could be amended to sustain a claim that is made on the Pleadings. Reference has been made to fraud today, but even in that regard, it is quite clear that any fraud alleged by Mr. Madden would itself be wrongdoing alleged to have occurred well in excess of six years, the relevant statutory period and could not be maintained by him, but as indicated by Mr. Madden, he was not precise in any manner in relation to these matters, and it is quite clear that he has failed to indicate any precise amendment that might be made to the claim such as to overcome the submissions that have been made on behalf of the Bank by Counsel.
The Court has been assisted by reference to a number of
authorities which indicate that on an application such as this, the Court may consider what amendments could be made to a Statement of Claim to overcome a submission that a claim is unsustainable in one form or another, but this is something that the plaintiff clearly is unable to do, to show in any substantive manner how this Statement of Claim could be amended to overcome the essential submissions that have been advanced by Counsel on behalf of the Bank.
The essential situation that is faced by Mr. Madden, is that he seeks to advance, in his capacity as a shareholder and creditor of the Company, a claim which in fact can only be maintained by the Company itself or someone acting in its shoes, such as the Liquidator of the Company, and I fully accept the submissions of Counsel in this regard. He has advanced to this Court a number of authorities, including authorities of Courts in England which have been followed in this jurisdiction. I think the most notable authority advanced was thePrudential Assurance v Newman Industries case and this indicates the essential difficulty faced by Mr. Madden and the fact that as a creditor and shareholder of the Company, he cannot maintain the claim in question which he seeks to maintain. As has been indicated by Counsel on behalf of the Bank, this authority has been approved in this jurisdiction by the Supreme Court in the case of O’Neill v Ryan [1993] 11 L.R.Y. 557.
In light of these matters, I am quite satisfied that the Bank is entitled to succeed on its motion. I accept fully the submissions that have been made by Counsel on behalf of the Bank. Mr. Madden is left in a situation where he simply cannot succeed in resisting the claim assuming that he could establish, as a matter of fact, everything set forth in the Statement of Claim. He would find himself in a situation where, as a matter of law, he would not and cannot succeed in any claim for damages and it is in those circumstances that I will make an Order granting to the Bank the relief which it seeks at this stage and I will dismiss this claim.
I should say that were this matter allowed to proceed, it could only result in a huge increase in costs with no better prospect ultimately to Mr. Madden of succeeding, because it could only give rise to a situation of proving facts which have been assumed to be capable of proof on the basis of a claim which has been noted and which is addressed by the Court as a claim, which in relation to
he facts in one that could be proved but which as a matter of law could never succeed.”
4. The High Court ordered, pursuant to Order 122 Rule 11 of the Rules of the Superior Courts, that the appellant’s claim be dismissed for want of prosecution on the ground that there had been no proceedings for a period in excess of two years from the last proceedings, and it was ordered pursuant to Order 19 Rule 28 of the Rules of the Superior Courts, that the appellant’s claim for damages be struck out on the ground that it disclosed no reasonable cause of action and was frivolous and vexatious.
5. The applicant has appealed against the judgment of the High Court. The applicant filed seventeen grounds of appeal, as follows:
3. The granting of this Order is a Tort in Law
4. The Honourable High Court Judge failed to exercise the discretion available to him in the pursuit of Justice
5. The Honourable High Court Judge failed to strike out these proceedings which were intentionally and positively grounded on the premeditated, fraudulent misstatement and misrepresentation of the facts in Anglo’s pleadings in order to pervert the course of justice
6. The Honourable High Court Judge failed to give weight to the fact that Anglo Irish Bank CORP. as a matter of form intentionally grounded it’s pleadings on the premeditated, fraudulent misstatement and misrepresentation of the facts at issue
7. The Honourable High Court Judge failed to ensure my Right to Fair Procedures
8. The Honourable High Court Judge entertained proceedings which were intentionally and positively grounded on the premeditated, fraudulent misstatement and misrepresentation of the facts by Anglo in it’s pleadings in order to pervert the course of justice
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