McAteer v Burke

 
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[2017] IEHC 247

THE HIGH COURT

Noonan J.

[2015 No. 8047 P.]

BETWEEN
DANIEL McATEER
PLAINTIFF
AND
SENAN BURKE, MARK REGAN

AND

MILAN SCHUSTER PRACTISING UNDER THE STYLE

AND

TITLE OF ADAMS CORPORATE SOLICITORS
DEFENDANTS

Practice & Procedures – Striking out of proceedings – Res judicata – Similarity of issues – Abuse of process of law.

JUDGMENT of Mr. Justice Noonan delivered on the 26th day of April, 2017.
1

The within application is brought by the defendants by way of motion seeking to have these proceedings (‘the 2015 proceedings’) struck out on various grounds amounting to abuse of process.

Background
2

The background to these proceedings is best summarised by the following extract from a judgment of the Court of Appeal in closely related proceedings (‘the 2009 proceedings’) McAteer v. Burke [2015] IECA 215:

‘[3.] These proceedings were commenced in the High Court by the plaintiff on 29th October 2009 in which he sued the defendant solicitors for damages for breach of contract and for negligence. While the background to the dispute is a complex one, it may, in essence, be summarised as follows: the plaintiff, Mr. McAteer, is a businessman and accountant residing in Co. Derry. The plaintiff claims that the defendant's (sic) solicitors were retained by him and his fellow investors in the summer of 2006 to draft and execute a share subscription and shareholder's agreement. He contends that this agreement envisaged that two new companies would be established and that the plaintiff (or his nominee) would be a director of the companies. He further contends that 12 new shares would be allotted to each company and that he in turn would receive three such shares in each company.

[4.] The plaintiff then says that although these two companies (Ballinorig Developments Ltd. (‘Developments’) and Ballinorig Properties Ltd. (‘Properties’)) were duly incorporated, he later discovered that he had not been in fact appointed a director of the companies, nor had his shareholding been allocated to him. He further contends that the assets of both Developments and Properties were transferred to two other companies controlled by the defendants. He further contends that the first and second defendants appointed themselves as directors of both Developments and Properties.

[5.] It appears that Developments and Properties were involved in a plan to develop certain lands at Tralee, Co. Kerry for the purposes of development of a medical centre. Although the lands were re-zoned from agricultural purposes by Kerry County Council in early 2007, the plan never came to fruition. This, the plaintiff says, was because the first and second defendants wrongfully involved themselves personally in these companies; wrongfully excluded him from these companies and then so mis-managed the affairs of both Developments and Properties that the plan failed. All of these events culminated in what the plaintiff claims was considerable financial loss.’

3

The 2009 proceedings were issued by way of plenary summons on the 29th October, 2009, and a statement of claim was delivered on the 29th April, 2010. The defendants raised a notice for particulars which they claimed was not properly or adequately replied to and they brought a motion seeking a stay of the proceedings pending the delivery of proper particulars. That motion was heard by McMenamin J. in the High Court and he delivered a reserved judgment on the 6th March, 2012, in which he formulated a number of questions which he considered had not been properly addressed by the plaintiff and he stayed the proceedings pending delivery of satisfactory replies and in that respect gave liberty to the plaintiff to apply to lift the stay following such delivery.

4

Such application was made by the plaintiff before O'Malley J. who delivered judgment on the 13th March, 2013, and lifted the stay. The defendants appealed against the judgment of O'Malley J. giving rise to the judgment of the Court of Appeal to which I have already referred. The effect of the latter judgment was to strike out substantial parts of the plaintiff's statement of claim and thereafter confine his claim to a narrow focused issue. In summary, Hogan J. delivering the judgment of the Court of Appeal held that a significant part of the plaintiff's claim represented an attempt by him as a shareholder in Ballinorig Developments Ltd and Ballinorig Properties Ltd (‘the Companies’) to make a claim on his own behalf in respect of losses allegedly suffered by the Companies which offended the rule in Foss v. Harbottle (1843) 2 Hare 461.

5

It should be noted that until June 2015, the plaintiff was at all times represented by solicitors and counsel until he discharged his legal team during the course of the hearing before the Court of Appeal.

6

It is also of relevance to note that throughout the course of the 2009 proceedings, which are ongoing, the plaintiff has maintained the position that he does not seek to recover any losses suffered by the Companies. In his replies to particulars of the 30th May, 2012, the plaintiff said:

‘For the avoidance of doubt, the plaintiff does not seek to recover losses that may or may not have been incurred by or on behalf of Ballinorig Properties Ltd or Ballinorig Developments Ltd.’

7

In the same replies, the plaintiff again said:

‘Further and again for the avoidance of doubt, the plaintiff does not seek to recover damages for any mischief or damage that may have been suffered by or on behalf of Ballinorig Properties Ltd and Ballinorig Developments Ltd.’

8

In her judgment of the 13th March, 2013, O'Malley J. noted (at para. 7):

‘It is now stated that the plaintiff claims a loss on his own account and does not (as it is contended he cannot) claim in his capacity as a shareholder.’

9

The plaintiff's position in this regard was clearly noted by the Court of Appeal with Hogan J. stating (at p. 5):

‘For the avoidance of doubt, the plaintiff does not seek to recover losses that may or may not have been incurred by or on behalf Ballinorig Properties Limited or Ballinorig Developments Limited.’

10

Hogan J. re-emphasised this statement at p. 6 of the judgment.

The 2015 Proceedings
11

The plaintiff issued a second plenary summons on the 7th October, 2015. It names precisely the same parties as the 2009 proceedings. The plaintiff, Mr. McAteer, is the sole plaintiff. The general endorsement of claim in the 2015 proceedings is identical to that in the 2009 proceedings with the exception that it omits a claim for damages for conspiracy and a claim for an injunction. In all other respects, it repeats the same claim verbatim. The summons was issued by the plaintiff as a litigant in person. He delivered a statement of claim on the 8th of December, 2015. Of note in relation to the statement of claim, it purports to add the Companies as co-plaintiffs to the proceedings, no order of the court having been made or applied for in that regard.

12

The statement of claim in the 2015 proceedings comprises 26 paragraphs followed by particulars of loss and the prayer for relief. The first 25 paragraphs are in substance identical to the 2009 statement of claim. The first part of paragraph 26 is also identical to the 2009 statement of claim despite the fact that this was struck out by the Court of Appeal. The same goes for the last part of para. 26.

13

Under the heading ‘Particulars of Loss’ the claim of negligence/fraud in relation to the Companies' shares is repeated save that the original claim of €45 million is substituted by a claim of €18 million. The second item of claim in the 2009 proceedings is a claim of negligence/fraud in relation to the hospital contract (the loss of potential profits) and the 2009 proceedings claim a sum of €17 million under this heading. The calculation of this claim is based on 25% of the profits the plaintiff says the Companies would have made from the venture being €68 million, the plaintiff being a 25% shareholder. This claim was struck out by the Court of Appeal clearly on the basis that it was in direct...

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