Under Order 19, Rule 28 of the Rules of the Superior Courts, the
courts have jurisdiction, among other things, to strike out
proceedings where the plaintiff has no reasonable cause of action.
They also have an inherent jurisdiction to dismiss proceedings
where they constitute an abuse of process. Both jurisdictions were
addressed recently by Justice Murphy in Coleman v
O'Neill 1, although the focus was on the
former.
Facts
The plaintiff, a solicitor, sued the defendants, directors of a
credit union, for alleged negligence, breach of duty and/or breach
of fiduciary duty, in and about the granting of loan facilities to
certain individuals. The plaintiff had also made allegations of
fraud and misfeasance of public office and breach of duty against
the defendants. The plaintiff claimed that the defendants had
wrongfully accepted various written undertakings given on behalf of
his firm.
The defendants applied for an order, pursuant to Order 19, Rule 28
of the Rules of the Superior Courts, to strike out the proceedings
on the grounds that the plaintiff had no reasonable cause of
action. In the alternative, they sought an order, pursuant to the
inherent jurisdiction of the court, dismissing the plaintiff's
claim on the ground that his action constituted an abuse of
process.
Jurisdiction of the court
Order 19, Rule 28 of the Rules of the Superior Courts provides
as follows:
"The Court may order any pleading to be struck out, on the
ground that it discloses no reasonable cause of action or answer
and in any such case or in case of the action or defence being
shown by the pleadings to be frivolous or vexatious, the Court may
order the action to be stayed or dismissed, or judgement to be
entered accordingly, as may be just."
The court acknowledged that case law provides that the
jurisdiction to dismiss an action on the basis that, on admitted
facts, it cannot succeed is one which the court should be slow to
exercise 2. However, it did acknowledge that where the
statement of claim permits an amendment which might save the
action, the proceedings should not be dismissed. It further noted
that in dealing with such an application, the court must be
confident that, no matter what might arise in discovery or at
trial, the proceedings would be resolved in a manner that would be
fatal to the plaintiff's claim. Notwithstanding those
precautions, however, it was well established that the court should
dismiss the claim where convinced that the plaintiff's claim
must fail 3. However, in considering whether the court
might be so convinced, it was noted that the court is not limited
to considering the pleadings of the parties, but is free to hear
evidence on affidavit relating to the issues in the case
4. This is precisely the basis on which the application
here proceeded.
Undertakings
Undertakings had been given on behalf of the plaintiff's
firm to the relevant credit union with regard to borrowings
advanced to certain individuals, including an employee of the
plaintiff's firm. That employee appears to have given several
of the initial undertakings on behalf of the firm in support of the
relevant borrowings. The loans involved were approved by the credit
union's board of directors, which at all material times
included the plaintiff who had, over time, gradually become more
active in the affairs of the credit union and who was elected to
the board of directors in 2001.
When the question of security for the relevant loans was raised in
January 2008, the plaintiff assured the board of directors that
there would be compliance with the letters of undertaking. Indeed,
he provided a further letter of undertaking dated February 6 2008,
reaffirming the undertakings previously furnished to the credit
union. However, he claimed in the proceedings that the composite
undertaking of February 6 2008 was procured by the chief executive
of the credit union, allegedly on foot of a request from the
auditors, and that he had been unaware of the undertakings
previously given. The plaintiff claimed that as a result he had
suffered substantial loss, while the individuals in respect of
whose borrowings the undertakings were given still retained their
assets. He also averred that no members of his staff were permitted
to give undertakings on behalf of the firm, although affidavit
evidence to the contrary was considered by the court.
The court cited The Guide to Professional Conduct of Solicitors
in Ireland, which states that an 'undertaking':
"is any unequivocal declaration of intention addressed to someone who reasonably places reliance on it which is made by a solicitor in the course of his practice, either personally or by a member of the solicitor's staff, whereby the solicitor, or in the case of a member of his staff, his employer, becomes personally bound."
It goes on to state that: "the solicitor is responsible for
honouring an undertaking given by a member of the solicitor's
staff, whether such staff member is admitted to the Roll of
Solicitors or not".
The court commented that a solicitor will be required to honour the
terms of a professional undertaking as a matter of conduct, and
opined that the plaintiff was apparently aware of his requirement
to honour the terms of such a professional undertaking by virtue of
his agreeing to execute a composite undertaking. It citedIPLG v
Fry 5 on the nature of the solicitor's
undertaking:
Ultimately, the court noted that the plaintiff, as solicitor,
signed the undertaking of February 6 2008, but sought to challenge
it on the basis of the credit union chief executive requiring him
to do so, although there was no pleading or evidence of coercion or
undue influence. The court further found that, on the balance of
probabilities, the plaintiff should have been aware, and was aware,
of the original undertakings, which awareness led to the provision
of the composite undertaking in February 2008.
Comment
The court felt that irrespective of what would arise on discovery
or in the course of the trial, and since no particulars supported
the plaintiff's claim, the proceedings could not succeed.
Therefore, it held that the plaintiff's claim must fail. On
that basis, it granted an order striking out the plaintiff's
proceedings on the grounds that the pleadings did not show a cause
of action pursuant to Order 19, Rule 28 of the Rules of the
Superior Courts. Furthermore, based on the affidavit evidence
before it, the court dismissed the plaintiff's claim as an
abuse of process. Although both jurisdictions are only sparingly
used by the courts, there are instances where the courts will
dismiss an unmeritorious claim and the decision represents a useful
restatement of applicable principles.
Footnotes
1. [2012] IEHC 112.
2. Sun Fat Chan v Osseous Limited [1992] 1 IR 25.
3. Tassan Din v Banco Ambrosiano [1991] 1 IR 569.
4. Barry v Buckley [1981] IR 306.
5. Unreported, High Court, March 1992, per Lardner J.
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