Osborne v KBC Bank Ireland Plc

• Jurisdiction: Ireland
• Judge: Mr. Justice Brian J. McGovern
• Judgment Date: 28 April 2016
• Neutral Citation: [2016] IEHC 220
• Docket Number: [2015 No. 10665 P]
• Court: High Court
• Date: 28 April 2016

BETWEEN

JAMES OSBORNE

PLAINTIFF

AND

KBC BANK IRELAND PLC, KEN TYRELL,

PRICEWATERHOUSECOOPERS,

CHARTERED ASSETS PROPERTY LIMITED

AND

CBRE

DEFENDANTS

[2016] IEHC 220

McGovern J.

[2015 No. 10665 P]

THE HIGH COURT

COMMERCIAL

Practice & Procedures – O. 19, r. 28 of the Rules of the Superior Courts – Dismissal of claim – Want of cause of action – Factual analysis

Facts: The first named defendant sought an order for dismissal of the plaintiff's claim under o. 19, r. 28 of the Rules of the Superior Courts for want of cause of action. The first named defendant alleged since the plaintiff had commenced the said claim for negligence and breach of duty against the first named defendant subsequent to the grant of an order for summary judgment in favour of the first named defendant in relation to the same loan facility, which was the subject of the said summary judgment proceedings, the plaintiff's claim was bound to fail. The plaintiff alleged that the first named defendant was negligent in lending loan facilities to him without insistence upon the fire safety certificate in relation to the concerned premises and the default in loan repayments arose as the plaintiff had to incur heavy expenses in order to make the said premises compliant with fire safety regulations.

Mr. Justice Brian J. McGovern granted an order for the dismissal of the plaintiff's claim. The Court held that the power to dismiss a claim must be exercised sparingly and the Court could look at the factual basis of the plaintiff's claim while exercise its inherent jurisdiction for dismissal of a claim. The Court found that the primary responsibility for ensuring that the premises complied with all the relevant regulations was of the owner and not the bank, and thus, the bank could not be held negligible even if the bank decided to advance monies despite on notice of such irregularities. The Court held that the plaintiff had made an abuse of process of law as he had raised the same contention at the summary judgment proceedings. The Court held that since the plaintiff failed to disclose a real, substantive cause of action, his case was bound to fail under o. 19, r. 28 of the Rules of the Superior Courts.

JUDGMENT of Mr. Justice Brian J. McGovern delivered on the 28th day of April, 2016.

1 This is an application by the first named defendant for the following relief:-

(i) An order pursuant to O. 19, r. 28 of the Rules of the Superior Courts and/or pursuant to the inherent jurisdiction of the court dismissing the plaintiff's claim as against the first named defendant as being frivolous, vexatious and/or as disclosing no reasonable cause of action;

(ii) An order pursuant to the inherent jurisdiction of the court dismissing the plaintiff's claim by reason of it being an abuse of process, contrary to public policy and/or by reason of the rule in Henderson v. Henderson; and,

(iii) An order dismissing the plaintiff's claim by reason that same is barred by the provisions of s. 11 of the Statute of Limitations 1957, as amended.

2 By order of Barrett J., dated the 21st December, 2015, judgment was entered against James Osborne (the plaintiff in these proceedings) in the sum of €6,217,162.27, together with costs in proceedings bearing High Court record number [2015 1856 S] entitled KBC Bank Ireland plc v. James Osborne('the earlier proceedings'). The order followed the delivery of a judgment by Barrett J. on 15th December, 2015, bearing neutral citation [2015] IEHC 795. On that same day, the plaintiff issued the plenary summons in this action. A statement of claim was delivered on 11th February, 2016, and an amended statement of claim was delivered on 4th March, 2016. In that amended statement of claim, the plaintiff acknowledged that he was not proceeding with his action against the second, third, fourth and fifth named defendants. Accordingly, the claim against these defendants was dismissed by order of this Court on 7th March, 2016. It is important to note that the 'loan facility' referred to in the amended statement of claim is the same loan which was the subject matter of the earlier proceedings.

3 The plaintiff's claim is based on allegations of negligence, breaches of statutory duty and breaches of contract. It is clear from the particulars of negligence, breach of statutory duty and breach of contract that, in effect, the allegation on which the plaintiff bases his claim is that the defendant completed the loan facility and lent the plaintiff monies without taking the appropriate steps to check whether there existed a fire safety certificate which, he claims, the defendant was obliged to do prior to completing the loan agreement. That is the gist of the plaintiff's claim. It is clear that the loan referred to is one and the same as that which was the subject matter of the proceedings in which the defendant obtained judgment against the plaintiff in December, 2015.

4 The plaintiff has not appealed against the order of Barrett J. dated 21st December, 2015.

The Law

5 The jurisdiction to strike out proceedings in limine is one which must be exercised sparingly. This principle applies to applications brought pursuant to O. 19, r. 28 of the Rules of the Superior Courts or under the inherent jurisdiction of the court. Where an application is brought to dismiss proceedings as disclosing no reasonable cause of action under the provisions of O. 19, r. 28, the court must accept the facts as asserted in the pleadings setting out the plaintiff's claim. The difference between applications under the inherent jurisdiction of the court and applications to dismiss under O. 19, r. 28, is that the court can look at the factual basis of the plaintiff's claim in the former category of application: see, Salthill Properties Limited and Cunningham v. Royal Bank of Scotland plc and Ors. [2009] IEHC 207; and, Manning v. The National House Building Guarantee Company Limited and Anor. [2011] IEHC 98, which both followed Barry v. Buckley [1981] 1 I.R. 306.

6 In Salthill Properties Limited, Clarke J. addressed the fact that applications to dismiss proceedings as being bound to fail may be of particular relevance to cases involving the existence or construction of documents. But they are not solely confined to such matters. In this case, there is no dispute on the facts. Both parties agree that, at the time the monies were lent to the plaintiff, both the plaintiff, as borrower, and the defendant, as lender, knew that there was no fire safety certificate in place. So, on the issue which is alleged to constitute negligence and/or breach of statutory duty and/or breach of contract, there is no dispute. There is, in reality, only one issue in this case; namely, whether the failure on the part of the defendant to ensure that the premises were covered by a fire safety certificate at the time when the loan was made gives rise to a cause of action.

7 Although the amended statement of claim purports to furnish particulars of breach of statutory duty, it does not, in fact, do so. Nowhere in the statement of claim is any statutory duty referred to. While para. 5 of the statement of claim refers to the Building Control Act 1990, it is simply in the context of a requisition to furnish a fire safety certificate. At a minimum, one would expect the plaintiff to assert a statutory duty that is imposed on the defendant and then set out in what way and by reference to what part of the statute the breach has occurred.

8 Insofar as particulars of breach of contract are concerned, they state it in terms that the defendant completed the loan facility without appropriately checking and establishing the existence of a fire safety certificate '...which they were obligated (sic) to do prior to completion...'. No contractual clause is set out anywhere in the statement of claim, let alone the particulars, to indicate where the term existed. When one refers back to the reference to the contract at para. 4 of the statement of claim, it is clear that this refers to the loan agreements. There is no reference to any other contract. The liability of the plaintiff to the defendant under that contract has already been determined in the earlier proceedings by Barrett J. and is res judicata.

9 Insofar as requisitions on title were raised by the defendants' predecessor in title as vendor, it was purely a matter for that party as to whether it wished to complete the contract of loan on the basis of the answers...