Court of Appeal allows appeal dismissing proceedings for want of prosecution due to inordinate delay by respondents.

THE COURT OF APPEAL

CIVIL

Neutral Citation Number: [2018] IECA 31

[Appeal number 2017 227]

Ryan P.

Irvine J.

Whelan J.

BETWEEN

PATRICK BARRINGTON AND CARMEL BARRINGTON

AND ECO PLASTICS LIMITED

RESPONDENTS

AND

ACC LOAN MANAGEMENT DAC

APPELLANT

AND

DE LAGE LANDEN IRELAND COMPANY TRADING AS ACC ASSET FINANCE

SECOND DEFENDANT

JUDGMENT of Ms. Justice Máire Whelan delivered on the 7th day of February, 2018

1. This is an appeal against the ex tempore judgment and order of Gilligan J. in the High Court made on 27th April, 2017 and perfected

on 11th May, 2017 refusing the appellant’s application seeking to dismiss the within proceedings for want of prosecution. The

appellant relied on O. 36, r. 12 (b) and O. 122, r. 11 of the Rules of the Superior Courts and further invoked the inherent jurisdiction

of the High Court to dismiss the proceedings on the basis of the impossibility of the appellant now obtaining a fair trial by reason of

the lapse of time between the alleged events the subject matter of these proceedings and the time at which the case is likely to

come to trial. The appellant also invoked the principle of the balance of justice asserting prejudice arising from the delays that had

occurred. It was asserted that the delays arising breached the appellant’s rights pursuant to common law and its constitutional

entitlement to fair procedures and a fair trial. The appellant also invoked Article 6 of the European Convention on Human Rights.

2. The High Court judge was satisfied that the delays on the part of the respondents in prosecuting the within proceedings were both

inordinate and inexcusable. However, he considered that the balance of justice favoured permitting the respondents to continue with

the proceedings and accordingly he dismissed the application stating:

“17. I note what the authorities say, and I respect them as regards the level of fault that can be attached to a

defendant not actually taking any active part in the proceedings, but in this case the defendants are a major financial

institution and they did have an association with De Lage Landen Ireland Company. So, there is a connection there and it

had to be quite clear that at some stage in any event by inference from Mr Shaw’s averments he must have been in

contact because he obviously came to know that the case had been settled. So, effectively, he had to be conscious at

the same time of the existence of these proceedings.

18. I am quite prepared to accept that this is a marginal case. One could adopt a view, perhaps, either way but I have to

be satisfied on the balance of probabilities effectively with the claim that is made on the defendant’s behalf that

proceedings should be brought to an end and weighing both factors up, in my view the balance of justice favours the

respondents, so they should be allowed to continue with the proceedings despite the inordinate and inexcusable delay.”

3. The appellants assert that the High Court judge erred in law in determining that the balance of justice favoured the plaintiff and

further in failing to attach sufficient weight to the length of the delays which exceeded eight years in circumstances where no

statement of claim had been delivered by the respondents prior to the issue by the appellant of the motion to dismiss.

Procedural history

4. On 26th March, 2008 the respondents issued a plenary summons. It sought damages for breach of agreements, misrepresentation,

negligence, reckless infliction of financial loss, aggravated and/or exemplary damages. It also sought specific performance of the

defendant’s obligations on foot of agreements dated 21st April, 2006 and 31st May, 2006 in addition to or in lieu of damages (including

all consequential damages).

5. On 30th April, 2008 an appearance was entered on behalf of all of the defendants. By the time the appellant came to issue a

motion some eight years and three months later seeking to strike out the within proceedings by reason inter alia of the inordinate and

inexcusable delays, the respondents had not yet delivered a statement of claim.

Matters being relied on by appellant

6. The appellant’s motion to dismiss was issued on 19th July, 2016 approximately eight years and four months after the institution of

the proceedings. The deponent on behalf of the appellant, Conor O’Donnell, Solicitor, deposed on 19th July, 2016 to the following

matters:

(i) That the proceedings had not been progressed by the respondents in any respect since 18th September, 2008.

(ii) The continued delay on the part of the respondents in prosecuting the action was unfair and prejudicial to ACC.

(iii) That the litigation had been extant against the appellant for an inordinate period of time.

(iv) That the recollection of any witnesses would no doubt have diminished during that time.

(v) That ACC’s capacity to properly defend the action had been seriously prejudiced by the conduct of the respondents.

(vi) That the appellant was unaware of any good reason for the inordinate and inexcusable delays.

7. The second named respondent in affidavits sworn on behalf of the respondents on 13th January 2017, 27th February 2017 and

21st March 2017 opposed the motion to strike out the proceedings in the manner and on the grounds hereinafter set out.

Position of the respondents

8. In her first affidavit of 13th January, 2017 Carmel Barrington recounts details of a recycling plant development project operated by

the first and second respondents in 2004 and 2005. She recalls the occurrence of events around the proposed establishment of a

washing plant for contaminated plastics. She outlines grievances arising from the respondents’ course of dealings with the defendants

and each of them and the contemplated restructuring of loans in a manner and on terms that did not ultimately transpire. Briefly

stated, she asserts that due to the egregious acts of the appellant and the irreparable loss and damage occasioned by their actions,

the respondents have been unable to fully and properly prosecute the proceedings and she stated she was at the time of swearing of

the affidavit preparing a statement of claim.

9. In his replying affidavits sworn 6th February, 2017, 10th and 23d March 2017 Paul Shaw on behalf of the appellant sets forth

reasons why ACC contended that the balance of justice favoured the dismissal of the within proceedings. The central grounds being

relied upon were as follows:

(i) That the respondents disclosed no reasonable explanation for the delays in prosecuting the proceedings.

(ii) That there were no genuine or real reasons for the delays nor was any additional evidence made available by way of

justification.

(iii) That the non-delivery of the statement of claim visited exceptional prejudice on the appellant as it deprived ACC of

any specific details or particularised information concerning the claim.

(iv) That none of the personnel who worked on the respondents’ file on behalf of the bank continue now to be in its

employment. In particular, none of the bank’s personnel named in Carmel Barrington’s affidavit as being relevant persons

involved in the connection continued in the appellant’s employment.

(v) The bank anticipates that it will encounter difficulty in tracing the relevant personnel to enable them to prepare a

defence or to be available for trial.

(vi) That it appears from Carmel Barrington’s affidavits that a substantial aspect of the claim is based on alleged

conversations held with the former employees of the bank rather than documentary evidence. This results in a significant

risk of prejudice being suffered by the appellant in circumstances where such witnesses may not be available or

contactable to assist in the preparation of the defence or to provide testimony at trial.

(vii) That the passage of time and sheer length of delay in delivering a statement of claim favoured dismissing the action.

(viii) Since the respondents’ claim was primarily based on oral testimony and recollections of conversations primarily in and

around the period 2005 – 2008 vis-à-vis the appellant it was contended that this would necessarily result in severe actual

prejudice being suffered in the presentation of the appellant’s defence.

(ix) On the particular facts of the instant case it was further contended that the appellant established in October, 2011

that the respondents had concluded a compromise of the claim as against the second defendant. Thereafter the appellant

reasonably understood that they had abandoned their claim as against them and this understanding was reinforced by the

failure on the part of the respondents over the ensuing years to give any indication of an intention to pursue the

proceedings.

(x) The appellant objected that significant elements of Carmel Barrington’s affidavits pertained to allegations in relation to

the appointment of a receiver which could not have formed the basis of a complaint resulting in the institution of the

proceedings in the first place since it occurred in April, 2011, over three years after the writ had issued.

10. In her later affidavit sworn on 27th February, 2017, Carmel Barrington disputed the appellant’s contentions. She deposed that in

2008, for the reasons she sets out in detail, she was anxious to protect the respondents’ position and so she issued the proceedings.

She confirms that a settlement agreement was concluded with the second defendant in August, 2011. She contends that the failure

of the appellant to engage in the negotiations which led to that settlement with the second defendant and further its conduct in

appointing a receiver “is an act of acquiescence by them in delaying the instant proceedings”. She alludes to serious health issues

including concerning the respondents’ daughter: “We were unable to apply our minds fully to these proceedings”. Subsequent to the

appellant issuing the motion to dismiss a statement of claim was delivered on the 8th day of March, 2017 .

The law

11. The decision of the Supreme Court in Primor Plc. v. Stokes Kennedy Crowley [1996] 2 IR 459 brought clarity to the principles to

be applied for an application seeking to dismiss proceedings for want of prosecution. It is necessary to demonstrate that the delay

had been inordinate and also inexcusable. Even where the delay had been both inordinate and inexcusable the Court is obliged to

exercise a judgment on whether, in its discretion, on the facts the balance of justice was in favour of or against the case proceeding.

12. The relevant legal principles have been followed ever since, including by this Court in Millerick v. the Minister for Finance [2016]

IECA 206 where Irvine J. succinctly outlines the procedure whereby the Court is obliged to address its mind to three issues namely

whether the delay was inordinate, whether it was inexcusable and further whether the Court is satisfied that the balance of justice

favours dismissing the proceedings.

Inordinate and inexcusable delay

13. In the instant case there has been no cross-appeal by the respondents against the trial judge’s determination that the delays on

their part were both inordinate and inexcusable. Any such appeal would have been unstateable.

The balance of justice

14. In the Millerick decision of this Court Irvine J. stated in relation to the balance of justice:

“In considering where the balance of justice lies the Court is entitled to have regard to all of the relevant circumstances

pertaining to the proceedings including matters such as delay or acquiescence on the part of the defendant and the

potential prejudice resulting from the delay.”

The balance of justice in the instant case

15. The assessment of the balance of justice in a given case calls for the calibration of a range of material factors which will vary

from to case to case depending on the facts and conduct of the parties. In the instant case the key material factors include the

following :

(i) Equitable relief

16. In the plenary summons, which issued over eight years prior to the motion to dismiss, a key relief being sought is specific

performance of two agreements dated 21st April, 2006 and 31st May, 2006. It is well established that where a plaintiff seeks

equitable relief and in particular specific performance he is required to act expeditiously; Spry “The Principles of Equitable Remedies”

(5th Ed.),. 1997, pp. 227-8 states:

“The general rule is that in order to establish that the delay of the plaintiff has been excessive it must appear that, in all

the material circumstances, a reasonably assiduous person would have proceeded with substantially greater speed or

diligence.”

In the case Guerin v. Heffernan [1925] 1 IR 57 O’Connor J. stated that where a plaintiff intends to seek relief in the form of specific

performance he is bound to proceed without delay, concluding:

“A man who sleeps on his rights does not find favour in a court of equity.”

Hilary Biehler in the text “Equity and the Law of Trusts in Ireland”, sixth edition, 2016 states: “It is difficult to lay down reliable

guidelines about the length of delay which may disentitle a plaintiff to relief as the question is often governed by other factors such

as the conduct of the parties. However, Spry has stated that “the general rule is that in order to establish that the delay of the

Plaintiff has been excessive it must appear that, in all the material circumstances, a reasonable assiduous person would have

proceeded with substantially greater speed or diligence.”

17. The other important ingredient in laches is that circumstances must exist which would make it inequitable to permit the

respondents to seek to enforce their claim. The sustained inertia on the part of these respondents in prosecuting their claims do

amount in the instant case to laches. It appears that the third plaintiff was dissolved on or about 25th February, 2011. In August of

that year the respondents compromised their claims with the second named defendant and thereafter took no step whatsoever to

prosecute their claims against the appellant.

(ii) no statement of claim delivered prior to issue of motion

18. The failure to serve a statement of claim which would enable the plaintiff to ascertain what precisely was being alleged against it

and the material facts which the respondents were purporting to rely upon and the specific reliefs or remedies which they were

claiming for such an appreciable number of years is a material factor favouring the appellant in the calibration of the balance of

justice.

19. The delivery of the statement of claim in a timely manner would have enabled the appellant to identify the nature of the cause of

action claimed and to preserve evidence, interview witnesses, particularly staff and employees and to assemble data, information and

records pertinent to establishing the actual facts and relevant to the delivery of a defence. As with many lending institutions it is

clear that the appellant underwent significant upheavals during the great economic crisis including downsizing, changes in personnel

and employees. The affidavits sworn by the second-named respondent advance no cogent reason why the statement of claim

ultimately proffered in March 2017 could not have been delivered years before.

(iii) Delays of over 8 years

20. From a perusal of the statement of claim it appears that it was readily within the remit of the respondents to deliver same at any

time after the plenary summons issued. In fact they seek specific performance in the statement of claim of unspecified obligations

pleaded as arising on foot of agreements dated the 21st April, 2006 and 31st May, 2006. This demonstrates that the events in issue

reached back to almost two years prior to the institution of the proceedings.

21. In evaluating the balance of justice, regard must be had to the duration of the delay. The only step taken by the respondents in

these proceedings prior to the issuing by the Respondent of its motion to dismiss was the issuance of the plenary summons in March

2008. The existence of a writ against any defendant for such an extensive period without any meaningful step being taken at all to

prosecute the claim calls for a coherent explanation from the delaying party that extends to all aspects of the period of time in

question.

(iv) Explanations

22. In the instant case, whilst illness of a family member of the appellants is alluded to, no medical reports are exhibited and no

explanation offered as to why on a sustained basis from March 2008 onward family illnesses or other exigencies presented an ongoing

insuperable obstacle to the delivery of a statement of claim. Sustained inertia for such a excessive period of time during which a

defendant is deprived of even the basic information that would enable it to know the essential substance of the claim being made

against it calls for cogent explanation. The respondents were deprived of reasonable and timely opportunity to go about procuring

witness statements, assembling and preserving evidence, and this , on the facts of this case, must be viewed as a significant element

in the calibration of the weight to be attached to the sundry factors when the Court is carrying out an assessment of the balance of

justice.

(v) Prejudice to this particular defendant

23. Deponents on behalf of the appellant have outlined in significant detail the obstacles and challenges that the conduct of the

respondents has brought about vis-à-vis witnesses and evidence. It has been acknowledged by the courts on a number of occasions

that the effluxion of time in and of itself inevitably diminishes memory and recollection which must in turn lead to significant risks of

prejudice in a case where it is clear that the claim is framed and will be pursued based on oral testimony and the recollection and

rendition of conversations and encounters that will have occurred at least a decade before the action could come to trial.

24. The Supreme Court in Gilroy v. Flynn [2004] IESC 98 emphasised that there have been significant developments in the

jurisprudence since the decision of the High Court in Rainsfort and in Primor plc. v. Stokes Kennedy Crowley [1996] 2 IR 459:

“. . . the Courts have become ever more conscious of the unfairness and increased possibility of injustice which attach to

allowing an action which depends on witness testimony to proceed a considerable time after the cause of action

accrued.”

The judgement continues:

“Following such cases as McMullen v. Ireland [ECHR 422 97/98 29 July, 2004] and to the European Convention on Human

Rights Act 2003 the Courts, quite independently of the action or inaction of the parties, have an obligation to ensure that

rights and liabilities, civil or criminal, are determined within a reasonable time.

These changes, and others, mean that comfortable assumptions on the part of a minority of litigants of almost endless indulgence

must end.”

(vi) European Convention on Human Rights

25. The appellant asserts rights pursuant to article 6 of the European Convention on Human Rights. Article 6 provides, so far as

relevant, as follows:

“In the determination of his civil rights and obligations . . . everyone is entitled to a . . . hearing within a reasonable time

by [a] tribunal . . .”

26. Ireland has a dualist system under which international agreements, to which Ireland becomes a party, are not automatically

incorporated into domestic law. Article 29.3 of the Constitution provides that “Ireland accepts the generally recognised principles of

international law as its rule of conduct in its relations with other States”. Further, Article 29.6 of the Constitution states that “no

international agreement shall be part of the domestic law of the State save as may be determined by the Oireachtas”.

27. It is clear from the terms of the European Convention on Human Rights Act, 2005 and the jurisprudence of the Supreme Court

that the Convention does not have direct effect in Irish domestic law: see, e.g., McD v. L. [2009] IESC 81, [2010] 2 I.R. 199, MD v.

Ireland [2012] IESC 10, [2012] 1 I.R. 167. Section 4 of the 2003 Act requires the courts to take “due account of the principles laid

down by these….judgments” of the European Court of Human Rights. Judgments of the ECtHR do not bind domestic courts.

28. The Strasbourg jurisprudence including the case of Price & Lowe v. UK (43185-98) suggests that the reasonableness of the length

of proceedings must be evaluated in the light of the circumstances of the case and that it is incumbent upon the State to ensure

that the article 6 rights of litigants are protected and vindicated. The European Court of Human Rights has reiterated that the

reasonableness of the length of the proceedings must be addressed in the light of all of the material circumstances of the case

including, inter alia;-

(i) the complexity of the action;

(ii) the conduct of the applicant;

(iii) the conduct of the relevant authorities; and

(iv) the importance of what is at stake for the applicant in the litigation.

29. The entitlement of litigants to seek relief pursuant O. 36, r. 12 (b) and O. 122, r. 11 of the Rules of the Superior Courts and to

invoked the inherent jurisdiction of the High Court provides an effective domestic remedy for any litigant who asserts prejudice by

reason of unreasonable delay.

(vii). Risk to a fair trial

30. The practical application of the balance of justice principle in an application to dismiss for delay was described by Laffoy J. in

Dunne v. ESB [1999] IEHC 199 at p. 16 as follows:

“Essentially, in applying the criteria identified by Hamilton C.J. by reference to which the Court should exercise its

discretion, two questions arise in this case, namely, whether the defendant is prejudiced by the delay and, in particular,

whether there is a substantial risk that it is not possible to have a fair trial because of the delay, and whether there was

anything in the conduct of the defendant which militates against granting the relief sought.”

31. As was stated by the Supreme Court in Comcast International Holdings Inc. & Ors. v. Minister for Enterprise & Ors.: Persona

Digital Telephony Limited & Anor. v. Minister for Public Enterprise & Ors. [2012] IESC 50, the primary relevant law continues to be

that set forth in the Primor decision.

32. In Stevens v. Paul Flynn Limited [2008] IESC 4 the Supreme Court confirmed that where a judge of the High Court makes a

discretionary order a court on appeal should not interfere with such order unless it is clear that the discretion has not been exercised

within the parameters of a reasonable exercise of that discretion. In reaching that conclusion, the Supreme Court approved the views

of Lynch J. in Martin v. Moy Contractors (unreported, Supreme Court, 11 February 1999) where it was held:

“The High Court has a measure of discretion in these applications to dismiss actions for want of prosecution. Provided

that the High Court decision is within the limits of reasonable discretion this court should not interfere with it. In this case

the learned President gave a reasoned judgment and his reasoning is clearly valid. His decision naturally follows from such

reasoning and is also therefore clearly valid. There is, accordingly, no basis on which this court should interfere with the

judgment of the learned President save that I would order that the plaintiff’s action against G. . . should be dismissed for

want of prosecution and not merely struck out.”

(viii). Factors specific to this case

33. Elements considered relevant by the trial judge in tipping the balance of justice against making the order to dismiss the

proceedings in this case included that;

- the first defendant was “a major financial institution”

-that “the plaintiffs effectively have brought a serious claim for damages that amounts to a very substantial sum of

money”

However, there was uncontroverted evidence before the Court that most, if not all, of the employees of the appellant who had dealt

with the respondents had left its employment and further that ACC had outsourced all loan management to Capita Asset Services

(Ireland) Limited and it had by 2017 significantly fewer employees than at any other point during the existence of the proceedings.

34. In the instant case the appellant is demonstrably wholly blameless with regard to these delays which the respondents do not

contest to be both inordinate and inexcusable. An appearance was entered on 30th April, 2008 just over four weeks after the plenary

summons had issued. In the context of the circumstances of this case it is apparent having regard to the nature of the claim that the

appellant is significantly prejudiced by the delays that have occurred heretofore. Whilst the adjudication by the trial judge on the

question of the balance of justice involves a broad assessment of all the material circumstances of the case under consideration to

determine where the interests on the balance of justice lies, it follows that an appellate court is equally well positioned to review the

decision of the trial judge to determine whether the conclusion arrived at falls within the ambit of conclusions available having due

regard to the jurisprudence when applied to the facts so as to sustain the conclusions reached.

35. Having regard to the material elements outlined above, in the instant case I am satisfied that the following factors when

considered cumulatively call for a recalibration of the trial judges conclusions and tip the balance of justice decisively in favour of the

appellant;

(a) The sustained failure over the years from 26th March, 2008 to deliver a statement of claim.

(b) The omission to take any or any reasonable step on the part of the plaintiff to communicate with appropriate

particularity to the appellant the specific parameters of the orders for specific performance that were being sought by the

plaintiff.

(c) The very significant restructuring that has occurred within the appellant including the loss of a significant number of

employees including, it would appear, all the key employees who were involved in dealing with the respondents in

connection with the matters at issue.

(d) The fact that in large measure the claims appeared to pertain to representations and statements that occurred at

meetings and in encounters between former personnel of the bank and the respondents.

(e) The respondents have failed to offer any cogent reason why for a sustained period of time in excess of eight years

they failed to deliver a statement of claim.

(f) There was no obvious reason why the proceedings once issued could not have been prosecuted by the respondents,

particularly in light of the fact that it appears a compromise was achieved with the second named defendant in relation to

aspects of the litigation as long ago as July or August of 2011.

36. I am satisfied on the facts that the appellant is significantly prejudiced by this want of prosecution of the proceedings on the part

of the respondents. Litigation is not intended to be a prolonged test of endurance. Where a plaintiff’s key tactic in pursuance of

justice before the courts amounts to a quasi-sempiternal “wait-and–see” approach, the constitutional obligation to ensure fairness as

between the parties to litigation requires the courts to be solicitous that a stratagem of almost total impassivity is to be actively

discouraged. No adequate countervailing factors have been advanced by the respondents to negative the appellant’s contentions as

set out in detail in the affidavits sworn on its behalf that the prejudice which will be suffered by it if the litigation is allowed to

proceed at this stage will in effect be irredeemable. In all the circumstances and having due regard to the constitutional principles of

justice which have been expressly invoked by the appellant to be afforded fair procedures and a fair trial the balance of justice

warrants that the within proceedings be dismissed for want of prosecution.

37. At no time did the appellant acquiesce in the delay and the respondents at no time from the summer of 2011 onward took any

step whatsoever to disabuse the appellant of its reasonable understanding that the compromise of the plaintiffs’ action with the

second defendant had resulted in effect in the abandonment of their action against the appellant.

38. Accordingly, for the reasons outlined above I would allow this appeal and dismiss the within proceedings for want of prosecution.