The Court of Appeal has dismissed an appeal by Peter Costigan and others practising as Bloxham, leaving in place a High Court ruling that proceedings could be re-entered to enforce a settlement with Solicitors Mutual Defence Fund Limited (SMDF).
The appeal concerned the meaning of a 2011 order that struck out proceedings against the defendants “with liberty to re-enter”. The Court of Appeal held that the order allowed the proceedings to be re-entered for the limited purpose set out in the parties’ written settlement, including an application for judgment following missed instalments. It did not decide that SMDF was entitled to judgment for the amount it claimed.
SMDF had invested €8.4 million in a bond on advice from Bloxham in 2005. The bond later lost 97% of its value, and SMDF began proceedings in 2009, alleging breach of contract, negligence, breach of duty, breach of fiduciary duty and negligent misrepresentation. Those were allegations in the original case, not findings made in this appeal.
The parties settled in January 2011. Under the agreement, payments were due in instalments through March 2016. The first three were paid, but no payment was made on 1 March 2013 or afterwards. The agreement said that, after a payment default, SMDF could apply to re-enter the proceedings and seek judgment for €8.4 million less payments made. The 2011 court order did not refer to the settlement agreement.
In June 2019, SMDF applied to re-enter the proceedings and sought €4,921,276.59, which it said remained due. The defendants opposing that application argued that striking out the case had left the court without jurisdiction, so SMDF would have to bring fresh proceedings. In May 2020, McDonald J. decided the court could hear the application. The defendants appealed that preliminary ruling.
The Court of Appeal said the words “liberty to re-enter” should not be treated as ineffective. It concluded that the order, read alongside the settlement terms, permitted re-entry to enforce the agreed remedies. The court stressed that its conclusion relied on the circumstances of this case, including the written terms and the absence of prejudice from re-entry.
On limitation, SMDF accepted that the Statute of Limitations applies in the ordinary way and cannot be avoided by bringing the application within the existing proceedings. The court said SMDF could not rely on the date the original proceedings were issued to defeat a limitation defence; the earliest relevant date it could rely on was 25 June 2019, when it issued its re-entry motion. The court left for another day the question of when time began to run on the instalment obligations.
The appeal was dismissed. The Court of Appeal’s provisional view was that SMDF should receive its costs in the appeal and High Court. The defendants were given 14 days to seek a brief further hearing on costs; absent such an application, the proposed costs order would be made.