Superwood Holdings Plc v Sun Alliance

• Jurisdiction: Ireland
• Judge: Mr. Justice McDermott
• Judgment Date: 01 March 2017
• Neutral Citation: [2017] IECA 76
• Date: 01 March 2017
• Court: Court of Appeal (Ireland)
• Docket Number: Neutral Citation Number: [2017] IECA 76

BETWEEN

SUPERWOOD HOLDINGS PLC, SUPERWOOD LIMITED, SUPERWOOD EXPORTS LIMITED, SUPERSCHIP LIMITED, SUPERWOOD INTERNATIONAL LIMITED

AND

SUPERWOOD (U.U.K.) LIMITED

PLAINTIFFS/APPELLANTS

AND

SUN ALLIANCE AND LONDAN INSURANCE PLC TRADING AS SUN ALLIANCE INSURANCE GROUP/RSA INSURANCE IRELAND LIMITED CREDENTIAL ASSURANCE COMPANY LIMITED, CHURCH AND GENERAL INSURANCE COMPANY LIMITED/ALLIANCE INSURANCE GROUP

DEFENDANTS/RESPONDENTS

[2017] IECA 76

McDermott J.

Irvine J.

Edwards J.

McDermott J.

Neutral Citation Number: [2017] IECA 76

[Record No. 2015 000134]

THE COURT OF APPEAL

CIVIL

Cause of action – Abuse of process – Vexatious proceedings – Appellants seeking to appeal against the judgment and order of the High Court dismissing their proceedings on the grounds that they disclosed no cause of action, were frivolous and vexatious and an abuse of process – Whether the grounds of appeal advanced by the appellants were without substance

Facts: The plaintiffs/appellants, Superwood Holdings Plc, Superwood Ltd, Superwood Exports Ltd, Superschip Ltd, Superwood International Ltd and Superwood (UUK) Ltd, appealed by notice of appeal dated the 15th May, 2015, to the Court of Appeal against the judgment and order of the High Court (McGovern J) on 27th January, 2015 dismissing their proceedings on the grounds that they disclosed no cause of action, were frivolous and vexatious and an abuse of process. The court also ordered, having regard to the history of events between the parties, that the plaintiffs be restrained from bringing any further proceedings before the court against the defendants/respondents, Sun Alliance and London Insurance Plc trading as Sun Alliance Insurance Group/RSA Insurance Ireland Ltd, Credential Assurance Company Ltd, Church and General Insurance Company Ltd/Alliance Insurance Group, without the leave of the court. The original 61 grounds of appeal were reduced by direction of the court to 10 grounds.

Held by McDermott J that Ground 1, a general allegation of unfairness under Article 6 of the European Convention on Human Rights, could not be seriously pursued. McDermott J held that there was no basis for the claim set out in Ground 2 which alleged objective and/or subjective bias in the conduct of proceedings by the trial judge. McDermott J held that Ground 3, which complained that the judge erred in adopting unfair procedures concerning the interrogatories motion, had already been addressed. McDermott J held that Ground 4 was without any substance. McDermott J held that Ground 8, which contended that the trial judge erred in publishing a draft ex-tempore judgment in transcript form informally thereby bypassing formal structure, was meaningless and unsustainable. McDermott J held that Grounds 9 and 10 concerned matters which were entirely irrelevant to any issue to be determined in the proceedings, namely, alleged financial irregularities in an insurance company. McDermott J held that Ground 5, which contended that the trial judge erred in ignoring the Supreme Court guidance to take a case on fraud and the issue of statutory accounts, was a reference to para. 27 of the judgment of Fennelly J in Superwood Holdings Plc & Others v Sun Alliance and London Insurance Plc T/A Sun Alliance Insurance Group and Others [2014] IESC 14. McDermott J did not consider that there is anything in the quoted passage that could or should be interpreted as an encouragement by the Supreme Court or as guidance to initiate a case based on fraud against the defendants by alleging that the judgment of the High Court (Smyth J) or the Supreme Court had been procured by fraud. McDermott J held that the plaintiffs wrongfully advanced the Supreme Court judgment as a badge of legitimacy for an otherwise meritless case. McDermott J noted that in Grounds 6 and 7 the appellants addressed issues in respect of matters concerning the transcript of the original judgment of Smyth J delivered between the 4th and 7th April, 2001. McDermott J was satisfied that the pleadings which set out these allegations were scandalous and vexatious.

McDermott J held that the appeal should be dismissed and the judgment of the High Court judge affirmed.

Appeal dismissed.

JUDGMENT of Mr. Justice McDermott delivered on the 1st day of March, 2017.

1 This is an appeal against the judgment and order of the High Court (McGovern J.) on 27th January, 2015 dismissing the plaintiffs'(Superwood) proceedings on the grounds that they disclosed no cause of action, were frivolous and vexatious and an abuse of process. The court also ordered, having regard to the history of events between the parties, that the plaintiffs be restrained from bringing any further proceedings before the court against the defendants without the leave of the court. The plaintiffs appealed this order and judgment by notice of appeal dated the 15th May, 2015. The original 61 grounds of appeal were reduced by direction of the court to 10 grounds.

The law

2 The defendants seek orders pursuant to O. 19, r. 27 or r. 28 of the Rules of the Superior Courts striking out the plaintiffs' claim on the ground that it discloses no cause of action and/or is frivolous, vexatious or scandalous. In the alternative, an order is sought pursuant to the inherent jurisdiction of the court to strike out the claim because it is an abuse of process or otherwise offends the rule in Henderson v. Henderson (1843) 3 Hare 100. Under O. 19, r. 27 the court may at any stage order the striking out of any pleading or element of a claim which is 'unnecessary or scandalous'. Under O. 19, r. 28 the court may order any pleading to be dismissed or struck out on the ground that it 'discloses no reasonable cause of action' or is shown on the pleadings to be frivolous and vexatious.

3 Proceedings will be regarded as scandalous if they seek to introduce materials for a purpose and motive which is not connected with the subject matter of the proceedings. In Riordan v. Hamilton [2000] IEHC 189 the plaintiff initiated proceedings against the defendants who were members of the Supreme Court. Smyth J. considered the allegations made and determined that they should be struck out as scandalous:-

'The purpose of pleading is to convey what the nature of the action is. Pleadings should not be used as an opportunity of placing unnecessary or scandalous matters on the record of the court, or as an opportunity of disseminating such matters when they have nothing to do with any dispute between the parties... In the pleadings here there are allegations which are totally unnecessary to any reasonably balanced or strongly held views of a plaintiff as against a defendant. The imputations of character made here would leave a person open to litigation in defamation had they not been accorded the protection of privilege of the court. The pleadings here, it seems to me, are of that character...It is perfectly in order for a litigant to say that a defendant has acted in a particular way. However, what has been imputed here is not only over the top but is being deliberately used for the purpose of trying (to) advance some view which does not accord with fairness, common sense, justice, constitutional right or with any modicum of decency.'

4 Order 19, r. 28 empowers the court to strike out, dismiss or stay proceedings in their entirety. If it is sought to strike out only part of a pleading as unnecessary or scandalous, O. 19, r. 27 should be invoked. In considering the issue the court must examine the pleadings. It must also proceed on the basis that any statement of fact contained in the pleadings is true and can be proved by the party. The case will be regarded as frivolous or vexatious if there is no reasonable chance of success.

5 In addition to the power conferred by O. 19, the court has an inherent jurisdiction to strike out or dismiss proceedings which are frivolous or vexatious or bound to fail in order to ensure that an abuse of process does not take place. In determining that issue the court is not limited to the pleadings exchanged between the parties but may consider evidence submitted on affidavit concerning the issues in the case. In this case there has been a considerable body of evidence concerning a number of matters including the alleged unavailability to the plaintiffs of the transcript of proceedings which occurred before the learned trial judge (Smyth J.) on the 7th April, 2001. There is very little dispute between the parties as to what actually transpired before the learned trial judge. The plaintiffs' case, if any, is focussed on the allegation that the defendants' solicitors fraudulently concealed or prevented the plaintiffs' solicitors from gaining access to a full transcript or whether such access was available to the plaintiffs' solicitors on the exercise of due diligence. Furthermore, if the plaintiffs did not have access to the transcript in issue the question arises whether they suffered any prejudice arising therefrom.

6 The rule concerning abuse of process was stated in Henderson v. Henderson ( 3 Hare) 114 by Wigram V.C.:-

'...I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which...