The High Court has refused most of a businessman’s application to expand his defence in a bank debt action, finding that the proposed counterclaims involved new claims based on new facts and would be better dealt with separately.
Mr Justice David Keane delivered the judgment on 16 November 2016 in proceedings brought by Danske Bank A/S trading as National Irish Bank against George Beggan and solicitors Michael Keaveny and James Walsh, trading as Keaveny Walsh & Co. The application concerned amendments sought by Mr Beggan, the first-named defendant. It was made in May 2015, more than four years after the action began and almost four years after the pleadings closed.
The bank alleges that Mr Beggan defaulted on three loan facilities and sought €4,295,645.09 in its statement of claim. Those allegations were not decided in this application. The bank’s separate claim against the solicitors had been compromised in October 2014, with €650,000 lodged to Mr Beggan’s account, reducing the alleged debt by that amount.
Mr Beggan sought to add extensive claims against the bank, the solicitors, former accountants Farrelly & Scully and financial services company Philip Farrelly Financial Services Limited. The proposed claims included allegations about the Carrick-on-Shannon property, its valuation and rental prospects, loan conditions and professional advice. These were proposed allegations, not findings by the court. The judgment noted that the intended counterclaim defendants who were not already parties had not yet had an opportunity to respond to them.
The judge allowed amendments that further particularised Mr Beggan’s defence to the bank’s claim, after the bank said it did not object to those changes. He also allowed Mr Beggan to remove the conspiracy allegation against the bank and Farrelly & Scully. He refused a proposed amendment that would have allowed Mr Beggan to serve a counterclaim later, if he were found liable, because the rules did not provide for that procedure.
The court refused leave for the new counterclaims. The judge said they substantially changed the nature of the case originally pleaded and relied on new facts. The parties agreed that the claims would be out of time if brought as separate proceedings; adding them as counterclaims could have avoided that limitation defence. The judge held that counterclaim procedure was not intended to revive otherwise time-barred claims.
He also concluded that the proposed claims were distinct from the bank’s remaining debt action, involved different parties and issues, and were likely to require substantially more preparation and a longer trial. The court therefore considered they should be pursued, if at all, in separate proceedings. The judgment did not decide the merits of the proposed allegations or the bank’s underlying debt claim.
The application was refused except for the limited amendments and deletion of the conspiracy plea. The judge did not address the other objections to the application and declined to address the requested leave for a notice of indemnity or contribution, which he considered misconceived.