The High Court has dismissed James Osborne’s claim against KBC Bank Ireland plc over loans advanced without a fire safety certificate for premises used as security. Mr Justice Brian J. McGovern ruled on 28 April 2016 that the claim was bound to fail and granted the relief KBC sought.
Mr Osborne alleged negligence, breach of statutory duty and breach of contract. The court described the substance of his case as an allegation that KBC advanced the loans without checking whether the premises had a fire safety certificate, although both borrower and lender knew no certificate was in place when the money was lent.
KBC had already obtained judgment against Mr Osborne for €6,217,162.27, plus costs, in separate proceedings before Mr Justice Barrett in December 2015. Mr Osborne did not appeal that order. He issued the present proceedings on the same day as the earlier judgment was delivered. The court noted that both cases concerned the same loan.
Mr Osborne said that later requirements to bring the premises into compliance caused him expense and financial hardship, leading to missed loan repayments. He accepted that he would have had to meet the cost of obtaining a certificate regardless of whether KBC required one before releasing the funds.
The judge found that the amended claim identified no statutory duty imposed on KBC and no contractual term requiring it to obtain a certificate. Any obligation to obtain one rested with the premises’ owner, the court said. Under KBC’s standard terms, the bank could waive the requirement for a certificate; the judge found it had advanced the loans in circumstances where both parties knew the certificate was absent. The judgment also stated that Irish law did not recognise a tort of reckless lending and rejected the proposed distinction between reckless and negligent lending.
The court said Mr Barrett’s earlier comments about possible negligence in obtaining the certificate had not decided whether Mr Osborne had a viable negligence claim. The comments addressed whether such a claim, even if established, would provide a defence to KBC’s claim for the outstanding loans.
Mr Justice McGovern dismissed the claim on several grounds. He held that it disclosed no reasonable cause of action and was frivolous and vexatious under Order 19, rule 28 of the Rules of the Superior Courts. He also found it an abuse of process and a collateral attack on the earlier judgment, and held that the issue should have been raised in those proceedings under the rule in Henderson v. Henderson.
The judge further ruled that the claim was time barred. He found the alleged breach was manifest or readily detectable in December 2004. Even if later loan restructuring created a relevant obligation, the last disbursement was on 28 September 2009, more than six years before these proceedings began on 15 December 2015. Claims against the four other named defendants had already been dismissed by order on 7 March 2016 after Mr Osborne said he was no longer proceeding against them.