A recent High Court decision of Mr Justice Meenan in Shanley v ACC Loan Management Designated Activity Company [2022 IEH653] arising out of an application by the Defendant to dismiss the Plaintiff's defamation proceedings reiterated the guiding principles to be considered in any application to dismiss civil proceedings on the grounds of delay.
The above proceedings and related proceedings entitled ACC Loan Management Limited v Barry, Cummins & Shanley [2015 IECA224] had an extraordinary and bitter background which is worth reciting before considering the principles to be applied by the Court in any such application.
The original ACC v Barry & Others proceedings arose from an alleged breach of undertakings by a solicitor in relation to secured loan transactions between ACC and the solicitor's client. The charge which was ultimately executed to secure those borrowings extended to a number of apartments and not the common areas of an apartment development. ACC sought Orders from the High Court that the Defendants were guilty of misconduct by reason of their alleged failure to comply with the undertakings and sought an Order directing that the Defendants comply with those undertakings.
This misguided relief was refused by Mr Justice McGovern in the High Court who described the application as an abuse of process. This decision was initially appealed by ACC to the Supreme Court and the appeal was then transferred to the Court of Appeal which dismissed it. In the Court of Appeal judgment Mr Justice Hogan outlined the events of 28 September 2012 in some detail and described them as "quite remarkable".
- On 27 September 2012, the Deputy Head of Retail at ACC wrote to the Second Named Defendant stating that she had wrongfully retained the title deeds to the property and that two bank officials would be attending her office and that the title deeds were to be provided to these representatives. The following day two representatives arrived unannounced to the Second Named Defendant's office. On being informed that the Second Named Defendant was not in the office, they insisted that the relevant title deeds be produced to them and that they would not leave the office until this had occurred and they would "wait all weekend" if necessary. Ultimately the Gardaí were called to remove the Bank's representatives who stated that they were going to report the Second Named Defendant for "theft". The Bank then made a formal complaint to the Law Society of Ireland regarding the Second Named Defendant's conduct in contacting the Gardaí and requested the Law Society to treat the failure to hand over the title deeds as misconduct. That complaint was ultimately withdrawn but the Bank then instituted proceedings seeking the declarations set out above.
The actions of the Bank were described by Mr Justice Hogan in the Court of Appeal judgment as "quite inappropriate" and the Law Society complaint as being "completely without substance" and to be "entirely removed from the reality of what in fact had occurred". Mr Justice Meenan in the High Court application to dismiss for want of prosecution described these events as "unlawful and fell well below the basic standards that one would expect from a financial institution like the Defendant".
The Third Named Defendant in the ACC case issued her own proceedings against the bank in January 2014 and a Statement of Claim was delivered in February 2019 with Replies to Particulars being eventually provided in October 2021.
The three-stage test
The three-stage test which developed from the Supreme Court decision of Primor Plc v Stokes Kennedy Crowley [1996 2IR459] in any application to dismiss proceedings on the grounds of delay requires the Court to determine:
- Was the litigant guilty of inordinate delay in prosecuting or defending proceedings?
- If the delay was inordinate, was it excusable?
- If the delay was both inordinate and inexcusable, does the balance of justice lie in favour of dismissing the proceedings?
In practice, the answers to 1 and 2 above will generally be self-evident and applications to dismiss for want of prosecution generally fail at 3 above.
In the Shanley v ACC case the Court could not identify any action on the part of the Bank that had caused or contributed to the delay in prosecuting the defamation proceedings. A delay of five years in the delivery of a Statement of Claim was deemed to be inordinate. No reason for the delay was given by the Plaintiff and the Court therefore concluded that the delay was both inordinate and inexcusable. The Court further concluded that the balance of justice lay in dismissing the Plaintiff's proceedings given that the Bank had effectively closed down and that all key personnel had left its employment. As the Bank's personnel involved would be required to give evidence, the Court determined that there was sufficient evidence of prejudice to dismiss the proceedings and that the balance of justice lay in favour of such a decision.
Mr Justice Meenan stated that it was understandable that the Plaintiff would react to the Bank's behaviour which had been criticised in both the High Court and Court of Appeal by instituting defamation proceedings. In the circumstances, Mr Justice Meenan provisionally determined that the Plaintiff would be entitled to recover the costs of drafting and serving the High Court proceedings and that no further Order of Costs would be made.
The above decision shows that a Court must have regard to all relevant circumstances in determining where the balance of justice lies, including the conduct of the parties and acquiescence by a Plaintiff or a Defendant in any delay and whether all relevant witnesses and documents will be available at the trial.
Finally, the dispute between the Bank and solicitors in question was characterised in the Court of Appeal as being a relatively minor one which, with a modicum of good sense and goodwill on all sides, could and should have been resolved. Quite often the issues and strong emotions which led to proceedings being instituted, can fade somewhat once the litigation process has been ongoing for some time. The Bank's completely disproportionate reaction led to eight years of litigation with very little to show for it.