Porterridge Trading Ltd and Others v First Active Plc and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 07 September 2007
• Neutral Citation: [2007] IEHC 313
• Court: High Court
• Date: 07 September 2007

Porterridge Trading Ltd & Ors v First Active PLC & Ors

JUDICIAL REVIEW

BETWEEN

PORTERRIDGE TRADING LIMITED

PLAINTIFFS

AND

FIRST ACTIVE PLC

DEFENDANT

AND

BETWEEN

PORTERRIDGE TRADING LIMITED

PLAINTIFFS

AND

BERNARD DUFFY

DEFENDANT

AND

BETWEEN

MOOREVIEW DEVELOPMENTS LIMITED, SALTHILL PROPERTIES LIMITED, VALEBROOK DEVELOPMENTS LIMITED, SPRINGSIDE PROPERTIES LIMITED, DRAKE S.C. LIMITED, MALLDRO S.C. LIMITED, THE POPPINTREE MALL LIMITED, AND VAN BLONDON PROPERTIES LIMITED

PLAINTIFFS

AND

FIRST ACTIVE PLC AND RAY JACKSON

DEFENDANT

[2007] IEHC 313

[No. 18785 P/2004]

[No. 1645 P/2006]

[No. 9018 P/2003]

THE HIGH COURT

PRACTICE AND PROCEDURE

Pleadings

Amendment - Application to amend pleadings - Whether amendments likely to cause prejudice - Whether reasonable excuse for failure to plead matters initially - Whether amended aspect of case bound to fail - Croke v Waterford Crystal [2005] 2 IR 382 considered; 3 Rivers DC v Bank of England [2003] 2 AC 1 distinguished - Amendment allowed (2004/18785P, 2006/1645P & 2003/9018P - Clarke J - 7/9/2007) [2007] IEHC 313

Potterridge Trading Ltd v First Active

The plaintiffs and his companies alleged wrongful action on the part of the defendant concerning a receivership. The plaintiffs further sought to challenge the manner in which certain property was sold. An application was made to amend the sets of proceedings. The amendment sought to include an allegation of fraudulent activities.

Held by Clarke J., in allowing the amendments subject to strict conditions as to procedural obligations and discovery that would apply to the plaintiffs.

Reporter: E.F.

MOORVIEW DEVELOPMENTS LTD & ORS v FIRST ACTIVE PLC & JACKSON UNREP CLARKE 20.10.2005 2005/39/8164 2005 IEHC 329

HENDERSON v HENDERSON 1874 3 HARE 100

PORTERRIDGE TRADING LTD v FIRST ACTIVE PLC UNREP CLARKE 4.10.2006 2006 IEHC 285

CROKE v WATERFORD CRYSTAL LTD & IRISH PENSIONS TRUST LTD 2005 2 IR 383

WOORI BANK & HANVIT LSP FINANCE LTD v KDB IRELAND LTD UNREP CLARKE 17.5.2006 2006/59/12499 2006 IEHC 156

CORNHILL v MIN FOR AGRICULTURE UNREP O'SULLIVAN 13.3.1998 1998/14/4976

CORK PLASTICS & HANIMEX (IRELAND) LTD v INEOS COMPOUNDS UK LTD & TIOXIDE EUROPE LTD UNREP CLARKE 26.7.2007 2007/11/2247 2007 IEHC 247

THREE RIVERS DISTRICT COUNCIL & ORS v GOVERNOR & CO OF THE BANK OF ENGLAND (NO 3) 2003 2 AC 1 2000 2 WLR 1220

1. Introduction

2 1.1 These three actions form part of a series of actions arising out of the collapse of the Cunningham Group of Companies on the appointment of the second named defendant in the third named above proceedings ("Mr. Jackson", "the Mooreview proceedings") as a receiver into a whole series of companies which were in the beneficial ownership of Mr. Brian Cunningham. These interconnected cases were directed to be case managed by me by the President of the High Court. There has, already, been a significant number of hearings some of which have resulted in written judgments. The general issues which arise in the various proceedings can be gleaned from those other judgments and it is unnecessary to repeat them here. See for example Mooreview Developments and Others v. First Active [2005] I.E.H.C. 329. At its very simplest Mr. Cunningham and his companies allege wrongful actions on the part of First Active plc ("First Active") and Mr. Jackson concerning the receivership and an alleged failure on the part of First Active to provide agreed support to the companies. Those allegations are strenuously denied. It would also be fair to describe the Mooreview proceedings as the main proceedings.

3 1.2 It is also necessary to say something about the role of Mr. Duffy.

In the two separate proceedings in which Porterridge Trading ("Porterridge") are plaintiffs, that company (which is again controlled by Mr. Cunningham) seeks to challenge the manner in which a sale took place of certain property at Bailey Point, Salthill Road in Galway. The sale in question was to Mr. Duffy. I had previously formed the view that the issues which arose in those proceedings ("the Porterridge proceedings") were distinct and stand alone and had, therefore, provisionally directed that those proceedings could be brought to trial as soon as possible, independent of the other litigation.

2 1.3 The current set of applications on which I have to deliver judgment, concern applications to amend each of the three proceedings referred to above. It should be noted that there are other proceedings connected with this process which are under case management but in respect of which no application to amend was considered necessary.

3 1.4 In order to understand the issues which arise on the amendment applications it is necessary to say something about the procedural history of the cases insofar as it may be relevant to the issues which have now arisen.

2. Procedural History

2 2.1 As indicated earlier, all of the above proceedings together with the other connected cases, have been under management for some time. The Mooreview proceedings have reached a stage where the pleadings are complete and where discovery has been directed and, so far as a I understand it, to a large extent complied with. There are some outstanding issues as to the adequacy of compliance with the discovery orders concerned, but it can be anticipated that those outstanding matters ought to be capable of resolution in relatively early course. In those circumstances it would be expected that directions for trial might be anticipated during the forthcoming term, in anticipation of a possible trial date some time after Easter next year. It should also be noted that, up to now, I have acceded to an application on behalf of Mr. Cunningham and his interests, which extended a somewhat larger time scale to those parties to comply with procedural obligations, having regard to what was asserted to be an inequality in the resources available to Mr. Cunningham's side in comparison to those available to First Active and to Mr. Jackson.

3 2.2 As also indicated earlier, the Porterridge proceedings were, it seemed, at an advanced stage of readiness for trial. Amongst other things I have previously ruled that, on the existing pleadings in those proceedings, all issues with the exception of one, were no longer maintainable by Porterridge on the basis of the application of the so called rule in Henderson v. Henderson. The reasons for coming to that view are set out in a judgment in the proceedings between Porterridge v. First Active [2006] I.E.H.C. 285 delivered on the 4th October, 2006. Mr. Duffy sought a similar order on the basis of a contention that Porterridge were likewise confined in their proceedings against him. The logic of his position was that he was a purchaser from First Active and that Porterridge could have no larger claim against him, than it did against First Active. Indeed, in the course of arguing in favour of that proposition counsel for Mr. Duffy, correctly in my view, suggested that certain of the claims which were sought to be maintained against Mr. Duffy, amounted to a collateral attack on the receivership.

4 2.3 I should also note in passing that I had permitted, in the hope that it would expedite matters, some of the issues which emerged in the course of the Porterridge proceedings to be raised by way of Reply rather than by amendment to the original Statement of Claim. In retrospect this was an error. It is perhaps yet another example of the old adage that the longest way around is often the quickest way home.

5 2.4 In any event the current issues first emerged when Porterridge sought to amend its proceedings against both First Active and Mr. Jackson and the separate proceedings against Mr. Duffy.

6 2.5 The principle amendment sought involved the inclusion of an allegation that First Active had fraudulently procured the putting in place of certain additional, and it is contended necessary, securities by Mr. Cunningham and his companies on assurances that further facilities would be made available but then proceeded, in early course, to enforce the securities by means of the appointment of Mr. Jackson as receiver and, in the case of the Bailey Point property, purportedly going into possession and selling as a mortgagee in possession. There is little doubt but that the amendment, if allowed, would radically alter the nature of the proceedings. I will turn to the merits or otherwise of allowing that amendment in due course. However, in the course of the argument in respect of that application for amendment it was indicated by counsel on behalf of Porterridge that it was the intention of Mr. Cunningham's advisors to seek to also amend the Mooreview proceedings. The reason why that question arose at all was that the Mooreview proceedings did not contain any allegation (save for one highly tangential reference) of fraud and also did not seek at all to question the formal validity of the appointment of Mr. Jackson as receiver. In that context it seemed initially strange that fraud issues touching upon the validity of the receivership and, indeed, any other enforcement of First Active's security, should be raised in the Porterridge proceedings when they were not raised in the Mooreview proceedings. In reply an indication was given that it was intended to seek to amend the Mooreview proceedings as well.

7 2.6 When I came to consider the appropriateness or otherwise of allowing the amendment sought in respect of the Porterridge proceedings, I came to the view that there was a significant link between the amendment sought to the Porterridge proceedings on the one hand and the intended application to amend the Mooreview proceedings on the other hand. In those circumstances I directed that, if it was intended to apply to amend the Mooreview proceedings, an application in that regard should immediately be brought. This was, in...