The High Court has refused a contractor’s application to dismiss an insurer’s claim over flood damage to a clothing shop, finding that disputed facts and unresolved legal questions must be dealt with at trial.
The claim followed flooding at the Sasha shop in Liffey Valley Shopping Centre on 3 May 2005. Aviva Insurance Europe S.E., which had insured the shop’s owner, Denholme, paid out on the insurance claim and later brought recovery proceedings against the shopping centre’s owners and McLaughlin and Harvey Limited, a contractor carrying out work above the shop.
McLaughlin applied to dismiss Aviva’s claim, arguing that Aviva had no valid assignment of Denholme’s right to sue when proceedings were issued on 29 April 2011. It said the assignment was not executed until 3 May, after proceedings began, and that it had not received notice of an assignment before then. It also argued that there had been no concluded agreement by 29 April, pointing to a clause removed from the later executed deed, and disputed that an equitable assignment could take effect before payment of the nominal consideration.
Aviva said the liquidator had agreed to assign the claim on 29 April and that notice had been sent to the defendants. It argued that the written correspondence could satisfy the statutory requirements for a legal assignment, including through electronic writing or an agent’s signature. In the alternative, it relied on an equitable assignment and said Denholme’s absence as a co-plaintiff was a procedural issue.
Mr Justice Noonan said the application fell under the court’s inherent jurisdiction to dismiss claims that are bound to fail, rather than Order 19, rule 28. That power should be used sparingly and only in clear cases. The test was whether there was no realistic basis on which the claim could succeed, not whether it appeared weak or likely to fail.
The judge identified disputes over whether a binding agreement existed by 29 April and whether McLaughlin had received notice before proceedings were issued. He also noted unresolved legal questions, including whether electronic writing or an agent’s signature could meet the statutory assignment requirements, and whether proceedings based on an equitable assignment could continue without Denholme as a co-plaintiff.
The court did not decide whether the assignment was valid or whether Aviva would ultimately succeed. It dismissed McLaughlin’s application to dismiss the claim, leaving the disputed issues for further determination.