Inordinate delay by Plaintiff results in dismissal of proceedings

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  • Commercial Litigation

Inordinate delay by Plaintiff results in dismissal of proceedings

Published 28 February 2022

In the recent High Court decision in Cabot Financial (Ireland) Limited v Heffernan & Ors1, the Second Named Defendant, Mr Heffernan Snr, successfully applied to the Court to have the proceedings against him dismissed for want of prosecution and inordinate delay.

Background

In May 2006, Mr Heffernan Snr provided Ulster Bank Ireland Limited (“Ulster Bank”) with a written guarantee in relation to the liabilities of his son, Mr Heffernan Jnr (the First Named Defendant in the proceedings), to a sum not in excess of €2.25m.

In January 2009, Ulster Bank also provided a loan facility to both Mr Heffernan Snr and Jnr in the amount of €2.38m for the purposes of restructuring the existing facility. It was alleged that Mr Heffernan Snr and Jnr failed to make repayments on this loan facility and in 2012 Ulster Bank sought to recover a sum of approximately €2.5m from Mr Heffernan Snr.

The Proceedings

Proceedings were commenced by Ulster Bank by way of summary summons issued in November 2012. A motion for judgment was issued in February 2013 and in the same month Ulster Bank’s application to admit the proceedings to the Commercial Court was refused. The matter was subsequently transferred to the Common Law list and from 2013 to 2015 a number of hearing dates were adjourned. In 2016 the loan transferred to Cabot Asset Purchases (Ireland) Limited and new solicitors came on record for the Plaintiff. Nothing appears to have happened in the proceedings for a three year period until May 2019 when the loan transferred to Cabot Financial (Ireland) Limited and it was substituted as the Plaintiff in the proceedings. Shortly thereafter, Mr Heffernan Snr applied to the High Court seeking to have the proceedings dismissed as against him for want of prosecution and/or inordinate and inexcusable delay on the part of the Plaintiff.

Legal Principles

The Court referred to a number of authorities and acknowledged the well-established three step test that grounds an application for strike out for delay, as set out in Primor plc v. Stokes Kennedy Crowley2:

  1. Has there been inordinate delay in the prosecution of the proceedings?;
  2. If there has been inordinate delay, is such delay excusable?; and
  3. If the delay has been both inordinate and inexcusable, does the “balance of justice” lie in favour of dismissing the proceedings?

A court also has to look at the actions of the defendant bringing the application. If the defendant acquiesced in the delay, then this would be a factor that would weigh in the balance against granting the order sought.

(i) Was the Delay Inordinate

The Court noted that (i) the financial transactions had taken place between 2004 and 2009; (ii) the proceedings were for the recovery of a debt; and (iii) the issues as between the parties were not complex. The Court found that it was therefore “hard to conclude that the delay in prosecuting these proceedings is anything other than inordinate.”

(ii) Is the Inordinate Delay Excusable

By way of submission to the Court the Plaintiff asserted that some of the delay could be attributed to Mr Heffernan Snr on the basis that he had sought various adjournments and had also failed to attend at earlier hearings. The Court however was not satisfied with these arguments and concluded that there was no basis for the Plaintiff’s assertions. In a stinging rebuke the Court noted that “speculation and invented “facts” have no place in written legal submissions”. The Court noted that the delay arose because of the Plaintiff's solicitor’s “failure to take the basic step of obtaining from its predecessor's the file on this litigation” and therefore concluded that the inordinate delay on the part of the Plaintiff was inexcusable.

(iii) Balance of Justice

The Court considered a number of factors including the Plaintiff's attempt to excuse the delay and also the fact that the certificate signed by the solicitor acting for the Plaintiff's predecessor in relation to the application to the Commercial Court certified the proceedings as having "a commercial urgency" which would benefit from the Commercial Court procedures.

The Court however noted that as Mr Heffernan Snr was relying on a defence of undue influence, it would involve adducing evidence of conversations that took place many years ago. Given that Mr Heffernan Snr was 78 years of age and had undergone heart surgery, the Court was of the view that having the proceedings hang over him must have been a great deal of stress and upset. The Court therefore concluded that the balance of justice lay in favour of granting the reliefs sought by the Second Named Defendant.

Conclusion

This judgment highlights the importance of Plaintiffs progressing proceedings in a timely fashion. It also follows on from other recent decisions of the Court and the recent implementation of SI 490/2021 which highlights the priority the Court is now placing on addressing the costly issue of delay in Irish litigation. This issue would of course also be substantially addressed, should the recommendations of the Review of the Administration of Civil Justice in relation to automatic discontinuance after 30 months, be adopted.

1[2021] IEHC 823
2[1996] 2 I.R. 459

Authors

Lisa Broderick

Lisa Broderick

Dublin

+353 (0) 1 231 9683

Rowena McCormack

Rowena McCormack

Dublin

+353 (0)1 231 9628

Julie-Anne Binchy

Julie-Anne Binchy

Dublin

+353 (0) 123 19636

Charlotte Burke

Charlotte Burke

Dublin

+353 (0)1 2319679

David Freeman

David Freeman

Dublin

+353 1588 2558

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