McDonagh and Others v Ulster Bank Ireland DAC and Others
| Jurisdiction | Ireland |
| Judge | Mr. Justice Quinn |
| Judgment Date | 12 May 2023 |
| Neutral Citation | [2023] IEHC 242 |
| Docket Number | [2021 850 P] |
| Court | High Court |
and
[2023] IEHC 242
[2021 850 P]
[2022 68 COM]
THE HIGH COURT
COMMERCIAL
Judgment of Mr. Justice Quinn delivered on the 12 th day of May 2023
. In July 2007, the plaintiffs purchased a 33 hectare site at Kilpeddar, Co. Wicklow where they planned to develop a data centre. They borrowed €21.5 million from Ulster Bank Limited (“the Bank”), the first defendant, and invested a further sum of €4.5 million.
. In these proceedings the plaintiffs allege that a valuation of the Kilpeddar property made by the fifth named defendant, CBRE, in July 2007 in connection with the acquisition and financing of that property was made negligently and in breach of contract. The fifth named defendant had valued the lands at €56 million.
. This judgment relates to an application by the fifth named defendant for a determination of a preliminary issue in the proceedings that the plaintiffs' claim is barred pursuant to the provisions of s. 11 of the Statute of Limitations 1957.
. In parts of this judgment, I shall refer to the Plaintiffs as the McDonaghs and to the fifth named defendant as CBRE.
. The procedural history is relevant to understanding the current state of the pleadings, and the information before the court on this application.
. The proceedings were commenced by the issue of a plenary summons on 12 February 2021.
. A statement of claim was delivered on 14 March 2022.
. On 10 June 2022, the defendants, with the exception of the fifth named defendant CBRE, issued an application returnable before this Court on 20 June 2022 for an order pursuant to O. 63 (A) r. 4 of the Rules of the Superior Courts 1986 as amended, directing the entry of these proceedings in the Commercial List of the High Court. No order was made on the return date, but on that day the plaintiffs issued and served a Notice of Discontinuance of the proceedings against all the defendants except the fifth named defendant. The Motion for entry was adjourned to 27 June 2022. On that day the court was informed that the entry motion was not proceeding and an order was made for the refund to the defendants of the stamp duty paid on the notice of motion.
. On 24 June 2022, the fifth named defendant issued an application for an order entering the proceedings in the Commercial List. This application was returnable for 4 July 2022 and on that day, McDonald J. made the order entering the proceedings in the Commercial List and approved a timetable for exchanges of pleadings.
. On 23 July 2022 the plaintiffs delivered an amended statement of claim, significantly amending the original statement of claim in light of the discontinuance of the proceedings against all defendants except the fifth named defendant.
. On 27 September 2022 the fifth named defendant delivered its Defence.
. Following exchanges of particulars and interrogatories, the fifth named defendant issued the application which is now before the court. On 5 December 2022, McDonald J. made an order approving a revised timetable in connection with the hearing of this application and fixed 21 March 2023 as the date for its hearing.
. The notice of motion now before the court is for orders in the following terms:-
(1) An order pursuant to O. 25, rr. 1 and 2 and/or O. 34, r. 2 and/or the inherent jurisdiction of this Honourable Court directing the trial of a preliminary issue on the Statute of Limitations 1957 as amended (“the Statute of Limitations”).
(2) Directions as to the hearing of a preliminary issue.
(3) A declaration that the plaintiffs' claim is statute barred pursuant to the provisions of the Statute of Limitations.
(4) An order dismissing the proceedings herein pursuant to O. 19, r. 28 of the Rules of the Superior Courts and their inherent jurisdiction, on the basis that the plaintiffs' claim is statute barred pursuant to the provisions of the Statute of Limitations.
. This was the application which McDonald J. listed for hearing on 21 March 2023. He also directed that the parties agree a Statement of Facts and exchange affidavits and legal submissions in advance of the hearing of the motion.
. There is no order of the court directing the trial of a preliminary issue. The Court pointed this fact out to the parties at the opening of the application and all of the parties submitted that in circumstances where affidavits had been exchanged, a Statement of Facts agreed, the parties had exchanged written legal submissions on the substantive question of the application of the Statute of Limitations, and the court had fixed two days for the matter, they were ready to address the substantive question and requested that the court treat the hearing of this motion as the trial of the preliminary issue. This state of affairs goes some way to explaining why the affidavits exchanged on this application and now before the court were so concise. In light of the position adopted by both sides, I acceded to their request to treat this application as the substantive hearing of the preliminary issue as to whether the claim is statute barred.
. Before the court on this application was a Statement of Agreed Facts which had been submitted to the court on 20 March 2023, together with appendices. The parties confirmed to the court that this was the final and agreed version of the Statement of Agreed Facts.
. Also before the court on this application were an affidavit grounding the application sworn by the defendant's solicitor, Mr. Casey, on 29 November 2022 and a replying affidavit of Mr. Maurice McDonagh apparently received by the defendants on 30 January 2023 in unsworn form which the defendants confirm had been sworn and was in the course of being filed. I accepted an undertaking by the plaintiffs' counsel to file that affidavit. Before the court were the pleadings which include the plenary summons, statement of claim, an amended statement of claim, and a defence, and a Notice for Particulars delivered by the defendants on 9 July 2022 and replies to that notice for particulars dated 16 September 2022 together with 18 attachments referred to therein.
. The Statement of Facts referred also to proceedings, which I refer to as the ‘Judgment Proceedings’, in Ulster Bank Ireland Limited and Others v. McDonagh and Others [2018] 5922. In those proceedings the Bank sought recovery of a debt €22,090,302.64 from the plaintiffs. On 6 th April 2020 Twomey J. [ 2020 IEHC 185] held that the Bank was entitled to judgment. The court also held that the Bank was entitled to appoint receivers over the property when it did so on 1 st October 2014. The judgment of Twomey J. was upheld on those matters by the Court of Appeal. (6 th April 2022: 2022 IECA 87) Since those proceedings, and the fact of the judgment of Twomey J. were referenced in the Agreed Statement of Facts, a number of important events cited and found in the judgments are incorporated into my description of the facts.
. On the determination of a preliminary issue the court is required to take the plaintiffs' case at its height. In that context, the defendant makes a number of concessions only for the purpose of this application. For example, in its Defence the fifth named defendant denies that it was engaged by the plaintiffs for the purpose of valuing the property and asserts that it was engaged by Ulster Bank Ireland Limited alone to provide a valuation and appraisal of the property.
. Similarly, the fifth named defendant denies that it owed or assumed any duty of care to the plaintiffs. It asserts that the valuation report was correctly carried out and that it fully discharged its duties. It also asserts that if there was any breach of duty and if the plaintiff suffered loss, no causal connection existed between the breach and any loss suffered by the plaintiffs.
. These issues are not in contention for the purpose of determining this application. The question of the application of the Statute of Limitations turns firstly on identifying the date on which the cause of action accrued and secondly a submission by the plaintiffs of fraudulent concealment of their right of action. Similarly, my recital of certain facts is not a finding such as would determine the question of liability, which would be a matter for trial if this application were to fail.
. The defendants say that if any cause of action accrued arising from their valuation, whether in contract or in court, it accrued in 2007 when the valuation was issued and when the plaintiffs entered into the transactions for the acquisition and financing of the property in July and August 2007. They therefore submit that proceedings commenced on 12 February 2021 are statute barred.
. The plaintiffs assert that the cause of action in negligence only accrued when they suffered loss as a consequence of the valuation. They say that their losses accrued on a number of possible dates, all within six years prior to the commencement of the proceedings. They say they suffered loss on 6 April 2020, when the High Court (Twomey J.) declared that the Bank was entitled to judgment against them jointly and severally for a sum of €22,947,207.85. They cite also the date of 1 February 2021, when the Kilpeddar property was sold for a sum of €3 million.
. My conclusion is that the plaintiffs suffered loss and the cause of action accrued at the latest on 1 October 2014 when the Bank appointed receivers over the property. That finding is sufficient to dispose of the preliminary issue and the action. I conclude, as detailed later in this judgment, that the plaintiffs incurred loss on dates earlier than this,...
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