High Court: IBRC loses application for trial of preliminary issue in alleged negligence case
The Irish Bank Resolution Corporation (IBRC) has had its application for the trial of a preliminary issue of law refused in the High Court.
IBRC contended that a woman’s claim for damages in relation to alleged negligent investment advice was statute-barred. However, Mr Justice Senan Allen said the start date of the investment was a mixed issue of fact and law and was not appropriate to be tried as a preliminary issue of law.
In early 2006, Ms Caroline Campbell went to Anglo Irish Bank Corporation plc, now IBRC (in special liquidation), for investment advice. She was assessed as having a low to medium attitude to risk, and her investment objectives were to protect her capital and fund her income in the short term and upon her retirement.
At a date “in or about December 2006”, Ms Campbell met with a representative of IBRC and, on an unspecified date following that meeting, invested €500,000 in a unit-linked life assurance fund, managed by IBRC Assurance Company Limited (then Anglo Irish Assurance Company Limited) called the AIAC European Geared Property Fund (EGPF). The money Ms Campbell invested was part of a €2 million award of damages for personal injuries.
The €500,000 investment was high-risk, and Ms Campbell lost most of her money – the actual loss was put at €406,617, which together with interest, was put at €563,320.
Claim for damages
On 21 December 2012, Ms Campbell commenced her claim for damages for negligence, breach of contract, and breach of fiduciary duty – her case being that she was not properly advised and was sold a financial product that was unsuitable for her.
IBRC has pleaded that the action is statute-barred – that the date of accrual of any cause of action was the date on which Ms Campbell made her investment, which was prior to 21 December 2006.
Ms Campbell argues that the date of her investment is a contested issue of fact, but IBRC counters that the date of accrual of the cause of action is a matter of law.
Precise dates sought
IBRC sought particulars “of virtually every plea in the statement of claim”, including the precise dates:
- Of the alleged meeting in December 2006;
- Upon which Ms Campbell alleges she made her investment;
- On which Ms Campbell alleges that she had suffered loss and damage.
In her reply, Ms Campbell said that the meeting was on 12 December 2006, although the precise date of the recommendation that she invest in the fund was said to be “in or around December 2006”.
The answer given as to the precise date of the investment was:
“The plaintiff received policy documentation – on the 16th January 2007 – which was essential to the formation of the contract and which contained a cooling off period the effect of which [was that] the plaintiff had an option of rescinding the investment within 30 days from the date of the letter of the 16th January 2007. The plaintiff’s assent to the policy documents and the expiry of the cooling off period were necessary prerequisites to the formation of the contract between the plaintiff and defendant. The funds for the investment were received on the 10th January 2007.”
The answer given as to the precise date that the alleged loss was suffered was that this information was with IBRC.
Statute of Limitations
IBRC was not satisfied with the replies and applied for an order directing Ms Campbell to give further and better particulars. The date of Ms Campbell’s investment was identified as central to the date of accrual of the cause of action, as IBRC was considering bringing a preliminary application under the Statute of Limitations.
Counsel for Ms Campbell gave further particulars – but did not put a specific date on her alleged loss.
IBRC delivered their defence in March 2017, and the first plea was that Ms Campbell’s claim was statute barred. IBRC stated that Ms Campbell signed a letter dated 12 December 2006 which set out that her investment choice would be high risk and that the “start date” of the investment bond was 13 December 2006.
Application for the trial as a preliminary issue of law
IBRC applied for an order pursuant to Order 25, rule 1 of the Rules of the Superior Courts for the trial as a preliminary issue of law of the issue as to whether Ms Campbell’s claim was statute barred by operation of the Statute of Limitations 1957, as amended.
IBRC suggested that while the legal issues might be contested, the factual issues were net, readily identifiable by reference to the pleadings and proceedings, and unlikely to be in controversy. The proposed table of facts submitted by IBRC identified 18 December 2006 as the date on which Ms Campbell had first attempted to transfer the money for the investment, 10 January 2007 as the date the monies were received, and 16 January 2007 as the date Ms Campbell had received the transactional documents.
Mr Justice Allen explained that the decision as to whether Ms Campbell’s action is statute barred would turn upon the date on which her cause of action accrued – i.e. the date on which she suffered loss.
It was IBRC’s position that the cause of action arose on the date at which Ms Campbell entered the transaction – a date prior to 21 December 2006.
It was Ms Campbell’s position that the date of transaction was not a relevant date, and although not definitively identifying the date on which Ms Campbell suffered loss, it was suggested that this might have been:
- When she was provided with the transactional documents on 16 January 2007;
- The expiration of the 30-day cooling off period provided in those documents; or
- The date on which the investment began losing money.
Mr Justice Allen said the essential question was whether the loss was suffered upwards of six years prior to the date of the issue of the summons.
Mr Justice Allen identified the “critical date for the purposes of this application” as 13 December 2006 – the date provided in the transactional documents received by Ms Campbell on 16 January 2007 as the “start date”. This was over three weeks before Ms Campbell paid over her money and over a month before she was told that her proposal was accepted. Mr Justice Allen said that the “start date” gave rise to contested issues of fact, and perhaps “issues of law, not least fundamental questions of offer and acceptance”.
Mr Justice Allen noted that the Investment Bond said the first contribution was due on the “Commencement Date” of the bond, that details of contributions paid will be shown on the Contract Schedule, and that the Valuation Date for the allocation of units is the Valuation Date immediately following the date on which value is received for the contribution.
Mr Justice Allen said it seemed that the issue as to whether the date, or the effective date, of Ms Campbell’s investment was 13 December 2006 was a mixed issue of fact and law – not appropriate to be tried as a preliminary issue of law.
- by Seosamh Gráinséir for Irish Legal News
© Irish Legal News Ltd 2021