The High Court dismissed Patrick Gallagher’s claim against ACC Bank plc, trading as ACC Bank, over an investment in Solid World Bond 4, but stayed the dismissal order for four weeks to allow him to consider seeking leave to amend his pleadings to allege fraud.
Mr Justice Charleton delivered the judgment on 11 October 2012. The dispute returned to the High Court after the Supreme Court held that the plaintiff’s claim in misrepresentation was time-barred unless fraud was alleged. The Supreme Court had ruled that the elements of the alleged tort were present when the bond was purchased. The High Court’s earlier decision had allowed the claim to proceed on the basis that the loss crystallised later.
In the High Court, the plaintiff’s fraud allegation appeared only in a reply to the bank’s defence. His counsel accepted that this pleading was inadequate. The bank argued that the case should be struck out because fraud was not properly pleaded and the Supreme Court’s order allowed the case to proceed only insofar as it alleged fraud.
The plaintiff asked to wait for the outcome of a separate trial involving five other cases making similar allegations. Those cases were listed for trial on 5 November, and the plaintiff argued that he could decide what to do after that estimated 24-day trial. The judge rejected that request, saying the serious fraud allegation should not remain unpleaded while the parties awaited proceedings involving different plaintiffs and bank personnel.
The judge also rejected the alternative of allowing the claim to remain pending while possible evidence emerged in another case. He said the plaintiff had lost in the Supreme Court and it would be unfair to leave the case unresolved for about two years pending appeals or possible future developments.
The order dismissed the claim but stayed that order for four weeks. If the plaintiff brought a motion to amend the pleadings to allege fraud, the stay would continue until that motion was decided. If leave to plead fraud were granted, the dismissal order would remain stayed pending trial of the action. The judgment did not decide whether the proposed amendment would be allowed or the fraud allegation proved.