The Supreme Court dismissed Liam Madden’s appeal against the High Court’s decision to strike out his damages claim against Anglo Irish Bank Corporation Plc and William Lacey. In a judgment delivered by Denham J. on 17 December 2004, the Court concluded that the loss pleaded by Madden reflected loss to Edenfell Construction Limited, and that the company was the proper party to sue.
Madden brought the appeal after the High Court struck out his claim. The High Court had dismissed it for want of prosecution, citing a period of more than two years without proceedings, and struck out the damages claim as disclosing no reasonable cause of action and being frivolous and vexatious.
The statement of claim said Madden was a substantial shareholder in and creditor of Edenfell, which was in liquidation and receivership. It alleged that the company had improperly taken on debts connected with Denis and Maeve O’Brien and granted security to the bank, and that the bank later appointed William Lacy as receiver. Madden claimed that the arrangements and subsequent actions were unlawful and sought, among other relief, damages. These were pleaded allegations; the Supreme Court assessed the appeal on the assumption that the pleaded facts could be proved, despite the bank disputing them.
Madden argued that company-law rules should not apply in the same way because Edenfell was a private company established for a joint venture. He also said a shareholder could sue personally in some circumstances, and raised allegations of fraud and deception and arguments about the charge. The Court rejected the proposed distinction between public and private companies for the relevant company-law principle. It said a shareholder may sometimes sue for a separate personal loss, but Madden’s pleaded loss was a reflection of loss suffered by the company. The company, rather than Madden, was entitled to pursue that claim.
The Court said the fraud and deception allegations were not pleaded and found no basis for them in the appeal papers. It also held that arguments about the charge did not answer the central question of whether Madden had a reasonable personal cause of action. The Court dismissed his other grounds as well.
During the appeal, the Court refused motions seeking production of documents and declaratory relief concerning letters and land in County Cork, finding them inappropriate or irrelevant to the appeal. It said there was nothing before it raising concern about the conduct of the bank’s legal advisers. The judgment dismissed the appeal; it did not determine the pleaded allegations at a trial.