The Court of Appeal has dismissed Joseph Delaney’s appeal against a High Court order striking out all his claims against Allied Irish Banks plc and two NAMA-appointed receivers. The appeal concerned whether those claims could proceed; the Court of Appeal upheld the strike-out and did not conduct a trial of the underlying allegations.
The High Court made the order on 13 January 2015, finding the claims either unstateable or bound to fail. In a judgment delivered on 28 January 2016, Mr Justice Michael Peart said the trial judge had identified and applied the correct test for a strike-out application.
The dispute arose after Delaney lent almost €350,000 to Ger Killaly in a series of withdrawals between 20 August and 15 September 2008. Delaney said he agreed to lend the money on the basis that it would be secured. Killaly then granted him a long lease of premises at 82 JKL Street, Edenderry, where Delaney took occupation in December 2008. The premises had been mortgaged to AIB, and the mortgage required the bank’s written consent before a lease could be granted. That consent was not obtained.
Delaney argued that AIB should have warned him about Killaly’s financial position and should have suspended Killaly’s accounts. He relied in part on a bank employee asking Delaney’s wife whether she was being pressured when she sought bank drafts. The Court of Appeal upheld the finding that the bank owed no duty of care of the kind Delaney proposed: it would require banks to investigate customers’ withdrawals and warn about recipients’ creditworthiness. The court described that proposed duty as too broad. It also noted that Delaney knew Killaly had financial difficulties and had not sought advice or a credit reference from the bank.
The appeal court also rejected the argument that a bank manager’s assurances about sorting out the lease created a constructive trust. It upheld the strike-out of the claims for unjust enrichment, alleged breaches of the National Asset Management Act 2009, deceit and other miscellaneous claims. It further agreed that the claims against the receivers were bound to fail.
The order striking out all claims therefore remained in place, and the appeal was dismissed. The judgment expressed regret at Delaney’s circumstances, while confirming that the pleaded claims could not proceed.