Small v The Governor and Company of The Bank of Ireland
| Jurisdiction | Ireland |
| Judge | Ms. Justice Máire Whelan |
| Judgment Date | 19 December 2018 |
| Neutral Citation | [2018] IECA 394 |
| Docket Number | Neutral Citation Number: [2018] IECA 394 |
| Court | Court of Appeal (Ireland) |
| Date | 19 December 2018 |
[2018] IECA 394
THE COURT OF APPEAL
Whelan J.
Peart J.
Whelan J.
McGovern J.
Neutral Citation Number: [2018] IECA 394
Record Number: 2016 315
Fraud – Unfairness – Motion to amend – Appellant seeking to appeal against High Court judgment and order – Whether the judge erred in striking out the proceedings against the respondent
Facts: The appellant, Mr Small, instituted proceedings on 16th January 2014 as against the fourth respondent, Mr Harlow (the solicitor), seeking, inter alia, damages for loss, damage, inconvenience and expense arising from alleged breach of contract, professional negligence, breach of duty, breach of statutory duty, fraud, misrepresentation, breach of trust and breach of fiduciary duty together with damages for the loss of opportunity caused by the alleged breaches of duty including breach of statutory duty. Punitive damages were sought. On 22nd July 2014 the solicitor issued a notice of motion seeking inter alia: (i) an order pursuant to O. 19, r. 27 of the Rules of the Superior Courts striking out the proceedings against the solicitor on the basis that they constituted an abuse of process; (ii) in the alternative an order pursuant to O. 19, r. 28 striking out the proceedings against the solicitor on the grounds that the statement of claim disclosed no reasonable cause of action against the solicitor and on the basis that the statement of claim was frivolous or vexatious and bound to fail; (iii) there was an alternative claim for an order pursuant to O. 19, r. 27 striking out the proceedings against the solicitor on the grounds that same were unnecessary and scandalous or tended to prejudice or embarrass the solicitor; and (iv) a further alternative plea for an order pursuant to the inherent jurisdiction of the court dismissing the proceedings against the solicitor in the interests of justice. The High Court (Mac Eochaidh J), on 2nd June 2016, ordered that the proceedings brought by the appellant as against the solicitor be dismissed. The appellant appealed to the Court of Appeal against that judgment and order. The grounds of appeal relied upon were, firstly, that the judge erred in striking out the proceedings against the solicitor on the basis of the rule in Henderson v Henderson and secondly, that he was in error in making the order on the alternative basis that the compromise reached between the appellant and the third respondent, Ms Raftery, in earlier litigation in 2013, on the basis that neither would issue proceedings in respect of matters raised in those settled proceedings, meant that if these proceedings were permitted to proceed it was likely that Ms Raftery would become a party to the litigation which would be a breach of the terms of the 2013 compromise.
Held by Whelan J that all allegations claiming collusion or conspiracy must be struck out irrespective of when same were alleged to have occurred. Whelan J held that all other allegations that pre-date the month of August 2007 must also properly be the subject of an order that same be dismissed in the exercise of the inherent jurisdiction of the Court, inter alia, to protect the first respondent, Bank of Ireland, and Ms Raftery from a collateral attack on the 2013 compromises. However, Whelan J held that any allegation pleaded pertaining and confined to events particularly between the months of August 2007 and December 2007 with regard to the solicitor was maintainable subject to the appellant amending the statement of claim in such a manner as to exclude and excise all other pleas, claims and allegations including of collusion, conspiracy or impropriety as implicate the bank, Mr Raftery or Ms Raftery.
Whelan J held that she would allow the motion to amend the statement of claim on the limited basis that, without exception, all claims and all proposed amendments pertaining to matters pre-dating August 2007 be refused and all such claims be struck out; further, that so much of the statement of claim as pertained to conspiracy or collusion be struck out. Whelan J held that the statement of claim was to be confined to claims for breach of contract, negligence and fraud only as post-date 1st August 2007.
Appeal allowed in part.
This is an appeal against the judgment and order of Mr. Justice Mac Eochaidh made on 2nd June 2016 wherein he ordered that the within proceedings brought by the plaintiff/appellant as against the fourth named defendant/respondent be dismissed.
The appellant is a businessman and resides in Roscommon. From about the year 2003 he operated partnerships with Fionan Raftery. The latter fell ill in 2007 having been diagnosed with cancer. Fionan Raftery died on or about 18th April 2011.
The first partnership was established in 2003 to carry out a development in Knockcroghery, Co. Roscommon. The appellant and the deceased had a 50:50 interest in its development project. A second partnership was established subsequently, on a 60:40 basis in favour of Fionan Raftery, which involved the acquisition of certain lands at Golf Links Road, Roscommon, financed with a loan from Bank of Ireland (‘the bank’) in the sum of €3,150,000 which was advanced in or about the month of December 2004.
It appears that at all material times the respondent Conleth Harlow (hereinafter ‘the solicitor’) acted as solicitor for the partnership. He was also the personal solicitor for Fionan Raftery and his wife Helen Raftery. He was never Mr. Small's personal solicitor. These partnerships involved the acquisition of sites and the carrying out of development work and subsequent disposition of dwelling units. It would appear that the development work on the partnership sites was carried out by a limited liability company, Raftery and Small Developments Limited. As with virtually all such development enterprises, the economic crash that engulfed the State had a significant deleterious impact on the business of the partnerships and company. The appellant is clearly greatly aggrieved at the reversal of fortunes experienced by him in the economic downturn.
On 27th February 2012 the appellant issued two sets of proceedings out of the Central Office of the High Court. The first proceedings were against his deceased partner's legal personal representative, Helen Raftery, and Bank of Ireland and the second against the solicitor. The first set of proceedings were litigated by way of an application for interlocutory injunctions and ultimately were the subject of compromises made in the High Court on foot of orders in the months of May and June 2013 respectively. With regard to the second proceedings brought against the solicitor alone, though issued, same were never served. The plenary summons was never the subject of an application for leave to renew. It appears that the solicitor only discovered the existence of the said proceedings an appreciable period of time after they issued. This application is concerned solely with the latter proceedings.
The 2012 general endorsement of claim seeks damages against the solicitor for loss, damage, inconvenience and expense arising from alleged breach of contract, professional negligence, breach of duty and breach of statutory duty. The pleadings were settled by counsel. They have remained in abeyance, never served.
On 16th January 2014 the within proceedings were instituted. As against the solicitor, in addition to the reliefs claimed in the 2012 writ, the appellant seeks, inter alia, damages for fraud, misrepresentation, breach of trust, breach of fiduciary duty together with damages for the loss of opportunity caused by the alleged breaches of duty including breach of statutory duty. Punitive damages are sought.
A statement of claim in the within second proceedings was delivered on 18th June 2014. At para. 8 of the statement of claim it is pleaded:
‘The fourth named Defendant [the solicitor] acted at all material times for the following parties to these transactions, the Plaintiff, the first named Defendant, the third named Defendant, her late husband Fionan Raftery and many legal entities which the Plaintiff and the late Fionan Raftery had, together with arrangements the third named Defendant had with her late husband to give legal affect to these and other ancillary transactions. In acting for over seven parties to these transactions, the fourth named Defendant acted in a wholly conflicted manner, to the detriment of the interests of the Plaintiff thereby occasioning the Plaintiff irreparable financial loss and damage together with catastrophic psychological trauma and stress arising from the matters in suit.’
What precisely is encompassed within the words ‘these transactions’ twice referenced in para. 8 of the statement of claim is unclear. Details of a loan agreement entered into over nine and a half years previously on 16th December 2004 are pleaded at para. 9. At para. 13 the appellant pleads that he and his deceased partner agreed to sell four acres of their partnership site at Golf Links Road, Roscommon to the OPW for €3m. He pleads that the defendants entered an agreement without his knowledge or consent to discharge a mere €1m. out of the sale proceeds of €3m. towards the partners' loan agreement with the first named defendant bank.
At para. 15 of the statement of claim the appellant pleads:
‘As a result of the manner in which the Defendants permitted the late Fionan Raftery to organise his affairs, the Plaintiff encountered...
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