The High Court struck out Daniel Coleman’s proceedings against 11 fellow directors of Balinrobe Credit Union, finding that his pleaded claims could not succeed. It also said it would dismiss the claim under the court’s inherent jurisdiction on the basis that the action constituted an abuse of process.
The judgment, delivered by Mr Justice Roderick Murphy on 8 March 2012, followed an application by the directors under Order 19, rule 28 of the Rules of the Superior Courts. They argued that the pleadings disclosed no reasonable cause of action and, alternatively, that the proceedings were an abuse of process.
Coleman, a solicitor practising as Coleman and Company, had alleged negligence, breach of duty and breach of fiduciary duty concerning loan facilities granted to Eamon Kenny and his brothers Darragh and Sean. He also pleaded fraud and misfeasance of public office. The loans involved written undertakings from his firm. Coleman disputed the directors’ account of events and denied knowing about earlier undertakings. He said he had signed a composite undertaking in February 2008 after it was requested by the credit union’s chief executive.
The court considered affidavits and material from related proceedings, including conflicting accounts about whether staff at Coleman’s practice routinely signed undertakings. It reviewed the professional rules governing solicitors’ undertakings and concluded that undertakings signed by Sean Kenny on behalf of the firm bound Coleman. The court found, on the balance of probabilities, that Coleman should have known, and did know, of the undertakings. It also noted that he was acting as solicitor for the Kenny brothers and had attended board meetings where their loans were discussed.
The court said Coleman had not set out particularised claims against the individual directors. It was not satisfied that they owed him a duty of care, acted outside their powers or breached fiduciary duties. Fraud had not been pleaded with the required particulars or against any of the 11 directors. The court also observed that the credit union was not a party despite the pleaded allegation that the directors acted outside their powers.
The court was satisfied that the claim could not succeed even if further evidence emerged through discovery or at trial. It therefore ordered the proceedings struck out under Order 19, rule 28. Alternatively, based on the affidavit evidence, it said it would dismiss the claim as an abuse of process. The judgment records no separate trial on the underlying loan disputes.