The High Court has refused an application by two solicitors to strike out parts of Ulster Bank Ireland Limited’s claim over undertakings given in connection with a 2004 loan for the purchase of the Grove Hotel in Dunleer.
The ruling allows the bank to pursue an expanded alternative damages claim in the plenary proceedings. It does not decide whether the solicitors breached their undertakings or whether the bank is entitled to damages. The court said the new formulation’s possible weaknesses, including that it was not included in the original affidavits, would be examined at trial.
The bank’s special summons, issued in July 2013, sought an order requiring Sean Sheehan and Maria Howley, practising as Aaron Kelly & Company, to comply with undertakings given in September and October 2004. Alternatively, it sought compensation for alleged losses arising from non-compliance.
The bank initially alleged that defects in title had reduced the property’s market value by €100,000. The solicitors denied breaching the undertakings. They argued that any fall in value resulted from declining property prices and the building’s poor condition. An affidavit from a purchaser said the property required €150,000 in remediation work and that the purchase price was not driven by fundamental title, licence or planning problems.
The Master of the High Court struck out the summons in March 2014, but the High Court discharged that order in May. In July, Mr Justice Gilligan adjourned the action to plenary hearing as if it had begun by plenary summons, and set a timetable for pleadings. The bank’s Points of Claim later put its alleged loss at €1.22 million plus interest and included an alternative case that it would not have advanced the loan had the title been properly investigated and explained.
The solicitors applied to strike out all of that alternative pleading and any claim above €100,000. They argued that the bank’s earlier affidavits fixed the claim at that amount, that the expanded case was an impermissible change, and that they had been prejudiced. The bank said further investigation after a purchaser’s affidavit revealed information that led it to change the basis of its damages claim.
Mr Justice Tony Hunt held that, after the case was converted to plenary proceedings, the pleadings—not the earlier affidavits—defined the issues for trial. He found the affidavits did not amount to an admission that the bank would permanently limit its claim to €100,000. The solicitors’ asserted lost opportunity to settle did not establish the concrete detriment needed for an estoppel, he said.
The judge refused the strike-out application and reserved the bank’s costs to the trial judge. The solicitors were given eight weeks to lodge any amended defence or lodgement, with the bank allowed two weeks to reply.