The Court of Appeal has dismissed Vincent Kelly’s appeals against orders striking out two proceedings against Bank of Ireland and individuals associated with it. The court held that the claims had no prospect of success, including because Kelly had suffered no personal loss from the investment made through a pension scheme.
The appeals concerned proceedings against the bank and its chief executive, Richie Boucher, and a separate case against the bank and receiver Michael Cotter. The High Court had struck out both cases under Order 19, rule 28 of the Rules of the Superior Courts and its inherent jurisdiction. The appeals were heard by Mr Justice Michael Peart, with Ms Justice Caroline Whelan and Mr Justice Garrett McGovern also named on the court heading. Peart delivered the judgment on 13 August 2018.
Kelly had established a self-administered pension scheme through Vincent Kelly Limited, a company that later went into liquidation. He and a corporate trustee were the scheme’s trustees, and Kelly was its sole beneficiary. The trustees borrowed €800,000 from the bank to help the scheme buy an investment property. Vincent Kelly Limited contributed a further €350,000. The property was bought in the scheme’s name and mortgaged to secure the loan. Repayments stopped in January 2012. The bank appointed a receiver, who obtained vacant possession in October 2013 after tenants were served with notices to quit.
Kelly alleged that a senior bank manager, Peter Walley, had advised him to establish the scheme and buy the property, and that the bank had negligently or deceitfully promoted the investment despite its knowledge of the property market and its own financial position. He also alleged that he relied on the advice and claimed the bank owed him a heightened duty of care. These were Kelly’s allegations; the appeal judgment did not establish them as facts.
The Court of Appeal agreed with the High Court that Kelly could not pursue claims in his personal capacity for losses belonging to the scheme. The loan facility had been signed by him as a trustee, not personally. The court also noted that the other trustee had refused consent to bring a claim for the scheme, and could not be added to the proceedings to try to save them. The court concluded that the scheme had lost its asset and Vincent Kelly Limited had lost its contribution, while Kelly himself had suffered no personal loss as a beneficiary.
Peart J. also agreed that there was no basis for claims that Boucher owed Kelly a duty or that the receiver owed him a personal duty in relation to property belonging to the scheme. The court upheld the strike-out orders and dismissed both appeals. It did not make a finding that the alleged negligent or deceitful advice had occurred; it held that the proceedings were bound to fail.