Promontoria (Aran) Ltd v O'Connor

JurisdictionIreland
JudgeMr Justice Max Barrett
Judgment Date21 December 2017
Neutral Citation[2017] IEHC 780
Docket Number2011 No. 1052 S
CourtHigh Court
Date21 December 2017

[2017] IEHC 780

THE HIGH COURT

Barrett J.

2011 No. 1052 S

BETWEEN:
PROMONTORIA (ARAN) LIMITED
Plaintiff
- and -
PATRICK (OTHERWISE PADDY) O'CONNOR

and

DAVID O'CONNOR
Defendants

Practice and Procedure - Banking & Finance - Loan transfer - Mortgage loan - Successor in title - Basic fairness of procedures - Delay

Facts: The plaintiff/company sought judgment against the second named defendant on foot of a personal guarantee executed by the second named defendant in favour of the bank/predecessor-in-title of the plaintiff. The plaintiff contended that the base of the case was the occurrence of the loan transfer from the bank to the plaintiff/ company. The second named defendant contended that his brother/first named defendant was acting as an agent for the bank and that the second named defendant was not aware of a second facility letter to which the guarantee purportedly extended. The second named defendant had now filed an application for the dismissal of the plaintiff's claim. The second named defendant contended that there was delay by the plaintiff in instituting the present proceedings.

Mr. Justice Max Barrett held that the present proceedings should be dealt by way of case management to avoid further delay. The Court held that there was nothing wrong in the fact that the second named defendant proceeded after two years to bring the within application, which the second named defendant was perfectly entitled to bring. The Court granted an order for costs against the plaintiff for the delay caused by the plaintiff in prosecuting the case.

JUDGMENT of Mr Justice Max Barrett delivered on 21st December, 2017.
1

The plaintiff company seeks judgment against Mr David O'Connor (hereafter "Mr O'Connor") on foot of a personal guarantee dated 10th February, 2005. In consideration of an advance made to Melbury Developments Ltd, a development company owned by his brother, Mr O'Connor agreed to, and did, provide a guarantee to the amount of €1.5m. He also agreed to provide a mortgage over certain lands as security for the said advance. The defence delivered by Mr O'Connor raises four issues, viz. (i) that his brother, acting as agent for Ulster Bank, represented that the guarantee and mortgage would be extant for 1½-2 years only, (ii) that Mr O'Connor was not aware of a second facility letter to which the guarantee purportedly extends, (iii) that Ulster Bank released its mortgages over certain properties without reducing Melbury's obligations, and (iv) that Ulster Bank was made aware that the number of units being constructed exceeded that allowed by the applicable planning permission. In 2015, the relevant loans and related security were sold by Ulster Bank to the plaintiff.

2

The proceedings commenced on 14th March, 2011, and proceeded pretty much apace until 30th June, 2015. A delay then arose until 22nd May, 2017, when successful application was made to have the plaintiff substituted as the plaintiff in the within proceedings. It appears that the reason for this hiatus was the occurrence of the loan transfer, that the "ball" represented by the loans and security was dropped as it was passed from Ulster Bank to the plaintiff company in 2015 and was only picked up again sometime in 2017. That might be a good excuse if the "ball" was being passed from one small entity to another. It is no excuse when one is dealing, as here, with well-resourced, well-advised financial service entities.

3

On 29th May, 2017, a notice of motion issued seeking a strike-out of the within proceedings, under O.122, r.11 of the Rules of the Superior Courts (1986), as amended, and/or pursuant to the inherent jurisdiction of the court. It is clear since at least the time of the decision in Tesco Ireland Ltd v. McNeill [2014] IEHC 367 that the same principles fall to be applied regardless of which of these two avenues is the approach used by the court in adjudicating on the application. There are two lines of applicable authority, the Primor line of authorities (following on Primor plc v. Stokes Kennedy Crowley [1996] 2 I.R. 459) and the O'Domhnaill line of authorities (following on O'Domhnaill v. Merrick [1984] I.R. 151). There is no dispute between the parties but that the Primor line of authorities is the correct line of authorities to apply in the context of the within application.

4

As is clear from the decision of the Court of Appeal in Cassidy v. The Provincialate [2015] IECA 74, the Primor test requires the court to assess whether the delay presenting is inordinate, whether the delay presenting is inexcusable, and whether the balance of justice requires the dismissal of the proceedings. Cases on the inordinacy of delay, to which the court has had regard, include NC v. PMcG [2009] IEHC 438, ...

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1 firm's commentaries
  • A Warning To Credit Servicing Firms
    • Ireland
    • Mondaq Ireland
    • 19 Marzo 2018
    ...failure to expeditiously prosecute their case. The case (Promontoria (Aran) Limited v Patrick (orse Paddy) O'Connor and David O'Connor [2017 IEHC 780]) concerned the plaintiff seeking judgment against the second named defendant in respect of a personal guarantee given in February 2005. The ......

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