Stapleford Finance Ltd (as substituted) v Lavelle

• Jurisdiction: Ireland
• Judge: Ms. Justice Costello
• Judgment Date: 11 April 2016
• Neutral Citation: [2016] IECA 104
• Date: 11 April 2016
• Court: Court of Appeal (Ireland)
• Docket Number: [2015 No. 339] [Article 64 Transfer]

Irvine J.

Sheehan J.

Costello J.

BETWEEN

STAPLEFORD FINANCE LIMITED

(AS SUBTITUTED)

PLAINTIFF/RESPONDENT

AND

PETER LAVELLE

DEFENDANT/APPELLANT

AND

IRISH BANK RESOLUTION CORPORATION LIMITED

(IN SPECIAL LIQUIDATION)

NOTICE PARTY

[2016] IECA 104

Costello J.

[2015 No. 339]

[Article 64 Transfer]

THE COURT OF APPEAL

Substitution ? Jurisdiction ? Error in law ? Respondent seeking to be substituted as sole plaintiff in the proceedings ? Whether the High Court had a jurisdiction to substitute the respondent as plaintiff

Facts: The notice party, Irish Bank Resolution Corporation Ltd, instituted summary proceedings against the appellant, Mr Lavelle, in 2013. By deed of transfer made on 23rd May, 2014, the notice party, through its Special Liquidators, transferred loans to the Assignee (the respondent, Stapleford Finance Ltd). The respondent brought a motion to be substituted as sole plaintiff in the proceedings in place of the notice party. The notice party supported the application of the respondent and the appellant opposed the application for substitution. On the 21st May, 2015, Baker J granted the order of substitution holding that the court had jurisdiction pursuant to O. 17, r. 4 of the Rules of the Superior Courts to substitute the respondent as plaintiff in the proceedings. It was against that order that the appellant appealed to the Court of Appeal. The appellant argued that the transfer of the debt was not an event within the meaning of the rule. It was argued that an event within the meaning of the rule referred to an extraneous event such as death or bankruptcy. The respondent argued that, giving the words in the Order their ordinary and literal interpretation, quite clearly the assignment of the loans and chose in action was an event within the meaning of the rule, referring to Bank of Ireland Finance Ltd v Browne & Ors (Unreported, High Court, Laffoy J, 24th June 1996). The notice party observed that there was no reason in principle why an??event??within the meaning of the rule should mean an extraneous event, such as death, but not a private event, such as a contract for the sale of the loans. The appellant submitted that as the Rules had not been materially changed after the enactment of the Supreme Court of Judicature Act (Ireland) 1877, O. 17, r. 4 had the same limited application post the Judicature Act as it had prior to its enactment; it followed that the word??interest? in the rule should be confined to an interest in land. In failing so to confine the meaning of the word??interest??the appellant submitted that the High Court judge had erred in law. The respondent said that the word??interest??was not confined to cases of interest in real property. The respondent submitted that the assignment affected a change of interest within the meaning of the rule.

Held by Costello J that Baker J was correct in accepting that the assignment constituted an event within the meaning of O. 17, r. 4 for the reasons advanced by the respondent and the notice party. Costello J rejected the appellant?s argument that there was no event within the meaning of the rule. The Court held that the High Court judge was correct in her conclusion that the assignment amounted to a change in interest within the meaning of the rule as no compelling reason was advanced as to why the Rules should be given a narrow construction as contended by the appellant. Costello J held that the Rules were intended to be facilitative, citing?BUPA Ireland Ltd v Health Insurance Authority & Ors?[2005] IEHC 291. Having considered Industrie Chimiche Italia Centrale & Anor v Alexander G Tsavliris & Sons Maritime & Co & Ors?[1995] CLC 1461, Costello J held that the English courts had no difficulty in tracing the power to substitute a plaintiff back before the enactment of Judicature Acts in 1875. Costello J held that the appellant?s argument that there was no such power prior to the Judicature Acts and no amendment of the Rules post the Judicature Acts was of no avail; an amendment was not necessary as the power already existed. The Court concurred with Millet LJ in Yorkshire Regional Health Authority v Fairclough Building Ltd & Anor?[1996] 1 WLR 210 that any contention that the court has been deprived of the necessary jurisdiction must be jealously scrutinised.

Costello J held that she was satisfied that the High Court judge was correct in holding that she had power pursuant to O. 17, r. 4 to substitute the respondent as the sole plaintiff. Accordingly, Costello J dismissed the appeal.

Appeal dismissed.

JUDGMENT of Ms. Justice Costello delivered on 11th day of April, 2016.

1 The issue for decision in this appeal is whether the High Court had a jurisdiction under the Rules of the Superior Courts to substitute the respondent as plaintiff in the proceedings and whether the High Court erred in law in ordering that the proceedings be amended to substitute Stapleford Finance Ltd. as plaintiff in place of the notice party, the original plaintiff, pursuant to O. 17, r. 4 of the Rules of Superior Courts.

Background

2 The notice party instituted summary proceedings against the appellant in 2013. By deed of transfer made on 23rd May, 2014, the notice party, through its Special Liquidators:-

?unconditionally, irrevocably, and absolutely transferr[ed], convey[ed] and assign[ed] to the Assignee all such rights, title, interests, benefits, liabilities, duties and obligations as the Assignor may have in and to the Assets (subject to and with the benefit in each case of the related Finance Agreement) with effect from the Completion Date, but excluding the Specified Assets.?

3 The Assignee was the respondent. It was accepted that the Deed operated to transfer the loans the subject matters of these proceedings from the notice party to the respondent.

4 The respondent brought a motion to be substituted as sole plaintiff in the proceedings in place of the notice party. The notice party supported the application of the respondent and the appellant opposed the application for substitution.

5 In her judgment of 21st May, 2015, Baker J. granted the order of substitution. In so doing, she held that the Court had jurisdiction pursuant to O. 17, r. 4 of the Rules to substitute the respondent as plaintiff in the proceedings and she made her order accordingly. It is against this order that the appellant appealed.

Order 17, r. 4 of the Rules of the Superior Courts

6 Order 17, r. 4 provides as follows:-

?[w]here by reason of death or bankruptcy, or any other event occurring after the commencement of a cause or matter and causing a change or transmission of interest or liability, or by reason of any person interested coming into existence after the commencement of the cause or matter, it becomes necessary or desirable that any person not already a party should be made a party, or that any person already a party should be made a party in another capacity, an order that the proceedings shall be carried on between the continuing parties, and such new party or parties, may be obtained ex parte on application to the Court upon an allegation of such change, or transmission of interest or liability, or of such person interested having come into existence.?

The arguments on appeal turned on whether there was an event causing a change of interest in this case within the meaning of the rule.

Event

7 The first issue for consideration is whether or not an ?event? occurred after the commencement of these proceedings. The appellant argued that the transfer of the debt was not an event within the meaning of the rule. It was argued that an event within the meaning of the rule referred to an extraneous event such as death or bankruptcy. Reliance was placed upon the Rules of 1905 which referred to lunacy or absconsion of an administrator.

8 The respondent argued that, giving the words in the Order their ordinary and literal interpretation, quite clearly the assignment of the loans and chose in action was an event within the meaning of the rule. It referred to two cases. In Bank of Ireland Finance Ltd. v. Browne & Ors (Unreported, High Court, Laffoy J., 24th June 1996), Laffoy J. dealt with a motion brought pursuant to O. 17, r. 4 for the substitution of the applicant as plaintiff in the proceedings in lieu of the plaintiff bank. At p. 2 of her judgment, she noted that ?the Defendants did not and could not seriously contend that an Order should not be made under Order 17, Rule 4? in circumstances where the charge, the subject of the proceedings, had been transferred to the applicant and it was the registered owner of the charge in question.

9 The second case relied on was the decision of Peart J. in IBRC v. O'Driscoll (Unreported, High Court, Peart J., 6th February 2015) where the learned High Court judge (as he then was) was dealing with an identical application pursuant to O. 17, r. 4 and he stated at para. 9:-

?[t]he event is clearly the purchase by it of the loan book referred to?.

10 The notice party observed that there was no reason in principle why an ?event? within the meaning of the rule should mean an extraneous event, such as death, but not a private event, such as a contract for the sale of the loans. There was no valid reason advanced by the appellant why ?event? in O. 17, r. 4 should be given a restricted meaning. It was merely argued that as a matter of law it could not be done.

11 It would appear from the judgment of Baker J. that she accepted that the assignment which occurred in this case constituted an event within the meaning of O. 17, r. 4. This Court accepts that she was correct in so doing for the reasons advanced by the respondent and the notice party and rejects the appellant's argument that there was no event within the meaning of the rule in this case.

Interest ? submissions by the parties

12 The learned High Court judge went on to...