High Court: €2.5m claim struck out for delay with judge criticising plaintiff for ‘invented facts’

About this case:

• Citation:
  [2021] IEHC 823
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Charles Meenan

The court determined that the most likely reason for the delay in the case arose from the plaintiff’s solicitors failing to take the “basic step” of obtaining a file from the plaintiff’s predecessor to the proceedings.

Background

The first defendant had bought commercial properties and had taken out loans with Ulster Bank Ireland Limited in the 2000s. The second defendant was the father of the first defendant. He had signed a guarantee with Ulster Bank in 2006 and had taken out a joint loan with his son in 2009.

The son’s property speculation was unsuccessful and the bank issued summary proceedings against both defendants in 2012 for the repayment of the loans. The bank sought approximately €2.5 million from the second defendant. In a replying affidavit in June 2013, the second defendant claimed to have been under duress by his son and that the bank was on constructive notice of this influence.

There was an exchange of further affidavits before the matter was listed for hearing in January 2015. The hearing was adjourned in January and further dates in April and July 2015 were also adjourned.

In January 2016, the bank sold the defendants’ loans and security to Cabot Asset Purchases (Ireland) Limited and CAPI was substituted as plaintiff. The motion for summary judgment was listed in February 2016 but was stuck out for non-attendance.

In March 2016, new solicitors came on record for the CAPI and, in June 2019, the Cabot Financial (Ireland) Limited was substituted as the plaintiff in the proceedings. In September 2019, the second defendant issued a notice of motion to dismiss the proceedings for inordinate and inexcusable delay.

In the course of written submissions, the plaintiff asserted that delays were “commonplace” within the legal system. Further, the plaintiff stated that it did not know why the previous hearings had been adjourned but that it was “likely that one or more of those adjournments was at the behest or with the consent of the Applicant”. It was argued that this undermined the second defendant’s position.

Further, the plaintiff submitted that the motion of judgment in February 2016 appeared to have been struck out for delay due to the non-attendance of either party. The plaintiff sought to excuse this due to the loan sale and the “practical impossibility” of the new solicitors to come on record sooner than March 2016. However, the plaintiff also blamed the second defendant, stating that there was no explanation for his failure to attend the February 2016 hearing.

The second defendant’s solicitor responded to these allegations by placing correspondence before the court which outlined the position between the plaintiff’s previous solicitors and his office. The correspondence showed that the plaintiff’s assessment of the second defendant’s culpability for the delay was wrong.

High Court

Giving judgment in the case, Mr Justice Charles Meenan began by outlining to the applicable principles to the motion. The court referred to the classic test in Primor Plc v. Stokes Kennedy Crowley [1996] 2 I.R. 459. The court also considered the recent decision in Gibbons v. N6 (Construction) Ltd and Galway County Council [2021] IEHC 138, where it was noted that the “balance of justice” test needed to be recalibrated in light of the court’s obligation to ensure that litigation was progressed with reasonable expedition.

The court held that the delay in the case was clearly inordinate. The transactions occurred up to seventeen years ago. Further, nine years had passed with the matter still being at the summary judgment stage and the case was not complex, the court said.

The court also held that the delay was the fault of the plaintiff and its predecessors. Considering the excuses provided by the plaintiff, the court stated that the correspondence from the second defendant’s solicitor established these to be based on incorrect assertions.

The court concluded that there was no basis for suggesting that the second defendant sought adjournments of the motion and that there was no failure by the second defendant to attend any hearing.

In light of these findings, the court stated: “The purpose of written legal submissions in an application such as this is to identify for the Court the relevant legal authorities and their application to the facts of the case. Groundless speculation and invented ‘facts’ have no place in written legal submissions”.

The court held that it was entitled to take these matters into account when considering the balance of justice. The court also noted that the plaintiff’s predecessor had previously applied for the matter to be entered into the Commercial List based on “commercial urgency”. This application was made in 2013, which was eight years prior to the present motion.

The court also had regard to the claim by the second defendant of undue influence, which would require evidence of conversations that happened long ago. Accordingly, the passage of time created difficulties for the evidence in the case. Further, the plaintiff was 78 years old, retired and likely to have been stressed from having the proceedings hanging over him for nine years.

Conclusion

The court decided that the balance of justice lay in granting the application and dismissing the proceedings against the second defendant.