Rayan Restaurant Ltd v Kean Practising as Kean Solicitors

• Jurisdiction: Ireland
• Judge: Mr Justice Michael White
• Judgment Date: 17 January 2012
• Neutral Citation: [2012] IEHC 29
• Court: High Court
• Date: 17 January 2012

[2012] IEHC 29

THE HIGH COURT

[No. 4539 P./2010]

Rayan Restaurant Ltd v Kean t/a Kean Solicitors & McGagh

BETWEEN

RAYAN RESTAURANT LIMITED

PLAINTIFF

AND

GERALD KEAN PRACTISING AS KEAN SOLICITORS AND FRANCIS MCGAGH

DEFENDANTS

RSC O.19 r28

RSC O.19 r27

RSC O.19 r29

COMPANIES ACT 1963 S390

RSC O.49 r6

MENNAD & AZIZI v KEAN

RSC O.99 r7

JACK O'TOOLE LTD v MCKEOWN KELLY ASSOCIATES & WICKLOW CO COUNCIL 1986 IR 277

S.E.E. COMPANY LTD v PUBLIC LIGHTING SERVICES LTD & PETIT JEAN (UK) LTD 1987 ILRM 255

CAMPBELL SEAFOODS LTD & ANOR v BRODRENE GRAM A/S UNREP COSTELLO 21.7.1994 1994/8/2243

AER RIANTA CPT v RYANAIR LTD 2004 1 IR 506

FARLEY v IRELAND UNREP SUPREME 1.5.1997 1998/6/1512

FAY v TEGRAL PIPES LTD 2005 2 IR 266

BARRY v BUCKLEY 1981 IR 308

RIORDAN v AN TAOISEACH 2001 4 IR 465

DYKUN v ODISHAW ALBERTA COURT OF QUEENS BENCH 3.8.2000

LANG & MICHENER & FABIAN, IN RE 1987 37 DLR (4TH) 685

RSC O.29 r1

RSC O.29 r6

USK DISTRICT RESIDENTS ASSOCIATION LTD v ENVIRONMENTAL PROTECTION AGENCY 2006 1 ILRM 363

CONVEYANCING ACT 1881 S14

CONVEYANCING ACT 1881 S14(8)

ERRIS INVESTMENTS LTD, IN RE 1991 ILRM 381

CAMPUS & STADIUM IRELAND DEVELOPMENT LTD v DUBLIN WATERWORLD LTD UNREP GILLIGAN 21.3.2006 2006/10/1845 2006 IEHC 200

BEHAN v MCGINLEY 2011 IR 47

ROCHE v PEILOW 1985 IR 246

ARTHUR JS HALL & CO v SIMONS 2002 1 AC 615

MURRAY v BUDD & ORS UNREP CLARKE 22.11.2010

RAYAN RESTAURANT LTD & ORS v MURPHY-FLYNN & ORS UNREP SUPREME 27.3.2009 2009/48/12010 2009 IESC 28

BULLEN & LEAKE & JACOBS PRECEDENTS OF PLEADINGS 13ED 1990

NEGLIGENCE

Solicitors

Application to strike out - Inherent jurisdiction - Frivolous and vexatious - Security for costs - Onus of proof - Claim for breach of contract, misrepresentation and negligence - Professional negligence - Barrister - Immunity against suit - Forfeiture of leasehold interest - Non payment of rent - Equitable relief against forfeiture - Public policy against re-litigation - Whether claim disclosed reasonable cause of action - Whether frivolous or vexatious - Whether prima facie defence to claim - Whether unable to pay costs if unsuccessful - Whether negligence - Whether pleadings defective - Jack O'Toole Ltd v McKeown Kelly Assiciates [1986] IR 277; SEE Company Ltd v Public Lighting Services Ltd [1987] ILRM 255; Campbell Seafoods Ltd v Brodrene Gram (Unrep, HC, Costello J, 21/7/1994); Aer Rianta cpt v Ryanair Ltd [2004] IESC 23, [2004] 1 IR 506; Farley v Ireland (Unrep, SC, ex tempore, 1/5/1997); Fay v Tegral Pipes Ltd [2005] IESC 34, [2004] 2 IR 261; Barry v Buckley [1981] IR 306; Riordan v An Taoiseach (No 5) [2001] 4 IR 463; Dykun v Odishaw [2000] ABCA 528 (Unrep, Alberta QB, 3/8/2000); Re Lang, Michener & Fabian [1987] 37 DLR (4th) 685; Usk District Residents Association Ltd v EPA [2006] IESC 1, [2006] 1 ILRM 363; Interfinance Group Ltd v KPMG Peat Mar Wick (Unrep, HC, Morris, 29/6/1998); Re Erris Investments Ltd [1991] ILRM 377; Campus & Stadium Ireland Developments Ltd v Dublin Waterworld Ltd [2006] IEHC 200 (Unrep, HC, Gilligan J, 21/3/2006); Behan v McGinley [2008] IEHC 18, [2011] 1 IR 47; Roche v Peilow [1986] ILRM 189; Arthur JS Hall v Simons [2002] 1 AC 615 and Murray v Budd (Unrep, HC, Clarke J, 22/11/2010) considered - Companies Act 1963 (No 33), s 390 - Conveyancing Act 1881 (44 & 45Vic c 41), s 14 - Rules of the Superior Courts 1986 (SI 15/1986), O 19, rr 27 and 28, O 29, O 49, r 6 and O 99, r 7 - Motions adjourned (2010/4539 - White J - 17/1/2012) [2012] IEHC 29

Rayan Restaurant Ltd v Kean

Facts: The second named defendant sought inter alia to strike out the action of the plaintiff for failing to disclose a reasonable cause of action on the basis that it was scandalous and vexatious. An order for security for costs was also sought pursuant to O. 29 Rules of the Superior Courts and s. 390 Companies Act 1963, as amended. The plaintiff pleaded breach of contract, negligence and breach of duty in the substantive Circuit Court proceedings arising from inter alia negligent advices of the defendant relating to a lease, its assignment, an agreement to re-rent.

Held by White J. that the Court would adjourn the motion to a specific date. The Court lacked substantial information which would be available on discovery. It was not appropriate to deal with the Statute of Limitations questions or to consolidate High Court plenary proceedings. The Court could rely on all evidence put before it provided it could make a determination that the facts were undisputed. The burden rested on the defendants to establish the appropriate grounds to strike out the pleadings or any part thereof.

Reporter: E.F.

1 Judgment of Mr Justice Michael White delivered the 17th of January 2012

2 1. This matter comes before the court by way of three separate notices of motion.

3 (1) A notice of motion issued on 19 ^th April, 2011, returnable for 30 ^th May, 2011, on behalf of the second named defendant, Francis McGagh, seeking an order pursuant to O. 19 r. 28 of the Superior Court Rules striking out the plaintiff's action for failing to disclose a reasonable cause of action and/or is frivolous and/or is vexatious. An order pursuant to O. 19, r. 27 striking out such parts of the plaintiff's claim as the court deems fit on the basis that such parts are unnecessary and/or scandalous and/or tend to prejudice and to embarrass and/or delay the fair trial of the action. Further orders as deemed appropriate.

4 (2) A separate notice of motion on behalf of the second named defendant, Francis McGagh, issued on 24 ^th May, 2011, returnable for 11 ^th July, 2011, seeking an order pursuant to O. 29 of the Superior court rules, and s. 390 of the Companies Act 1963, for security for costs.

5 (3) A notice of motion issued on behalf of the first named defendant, Gerald Kean, seeking a dismiss of the plaintiff's claim, an order pursuant to O. 49, r. 6 seeking consolidation with proceedings Record No. 2006/1249P Djemal Mennad & Fatima Zohra Azizi .v. Kean, an order pursuant to O. 29 for security for costs, an order pursuant to O. 99, r. 7 for costs improperly incurred, and further and other relief.

6 2. The matter was heard before this Court on 8 ^th, 10 ^th and 29 ^th November, 2011. A notice to cross examine a director of the plaintiff company Fatima Zohra Azizi was served, and her oral evidence was heard on 10 ^th November, 2011. Judgment was reserved on 29 ^th November, 2011.

7 3. The court received the following written submissions.

8 (1) Submissions on behalf of the second named defendant on motion to strike out.

9 (2) Submissions on behalf of the second named defendant seeking security for costs.

10 (3) Submissions on behalf of the first named defendant in relation to the motion for security for costs and consolidation of proceedings.

11 (4) Submissions on behalf of the plaintiff resisting an application for security for costs.

12 4. The court heard detailed oral submissions from all the parties.

The Substantive Proceedings

13 5. The Proceedings were issued by plenary summons on 12 ^th May, 2010, seeking damages for breach of contract, misrepresentation, negligence, breach of duty including negligent mis-statement.

14 6. The statement of claim was delivered on 23 ^rd December, 2010. The claim relates to the conduct of Circuit Court proceedings, finalised by court order on 17 ^th November, 2004, an appeal to the High Court, when an order on 18 ^th April, 2005, for security for costs, was not complied with, which resulted in the appeal being struck out on 23 ^rd January, 2006.

15 7. The plaintiff in these proceedings the plaintiff also in the Circuit Court proceedings has alleged, the following particulars of breach of contract negligence and breach of duty.

16 (1) Wrong advice by the second named defendant in a letter of advice of 16 ^th October, 2003.

17 (2) Failing to plead relief against forfeiture of the lease, and failing to advance the argument at the court hearing, that there had been no valid forfeiture of the company's leasehold interest, and that the taking over of the exclusive running of the restaurant by Claudia Puscas to the exclusion of the plaintiff could not be used by the landlord as a means of forfeiture.

18 (3) Advising the plaintiff not to proceed with interlocutory relief, and not applying for interlocutory relief.

19 (4) Failing to advise on the appropriate claim for damages and unlawful retention and use of the plaintiff's possessions and equipment.

20 (5) Failing to prepare the case for the Circuit Court and failing or neglecting to follow the instructions of the plaintiff in the conduct and presentation of the case.

21 (6) Failing to apply to Judge Reynolds-Buckley to excuse herself from the proceedings on the grounds of apparent bias.

22 (7) Failing to advise the plaintiff on the material and evidence and defences open to it necessary to resist an application for security for costs, and to argue it effectively at the High Court hearing.

23 (8) Failing to procure appropriate accounting or other financial evidence or documentation with a view to establishing the causal connection between the plaintiff's inability to pay costs and the defendants' alleged wrongdoing and permitting the motion to proceed without this documentation.

24 (9) Failing to appear and represent the company's interests when the quantum of security was fixed before the County Registrar for the County of Westmeath on 27 ^th June, 2005.

History of Lease, Assignment, Agreement Re Rent and Business Arrangement with Julia's Company Restaurant Limited and Claudia Puscas

25 8. Rayan Restaurant Limited the plaintiff by indenture of 1 ^st August, 2002, took an assignment of a lease of premises at High Street, Athlone, Co. Westmeath. The original lease dated 20 ^th December, 1996, was for a term of...