The High Court refused an application by Anglo Irish Bank Corporation plc to dismiss Kategrove Limited’s proceedings for delay, but ruled that the plaintiffs could not pursue a proposed claim about alleged representations. The remaining case was allowed to continue only under strict conditions, including a deadline to certify it as ready for hearing by 30 October 2006.
In a judgment delivered on 5 July 2006, Mr Justice Clarke found that the plaintiffs had allowed an inordinate and inexcusable delay. Almost nine years passed after the pleadings in the claim against the bank had closed, with no significant formal steps taken to advance it. The judge said correspondence about discovery and links with a separate third-party claim explained some delay but could not excuse the period as a whole.
The underlying proceedings arose from Kategrove’s receivership. The company owned a petrol station and other lands at Urlingford, Co Kilkenny, which secured a loan from the bank. The company’s second and third named plaintiffs guaranteed the loan; the second plaintiff also provided security over part of his lands at Kilshannig, Co Cork. After arrears arose, a receiver was appointed and the premises were sold in August 1994.
The plaintiffs allege that the proceeds of sale were not properly applied and that representations were made which would release the second named plaintiff from liability. Those allegations were not decided in this application. The proposed amended claim included alleged representations made on 18 April 1994. The judge considered that this part could depend on witnesses’ recollections of events 12 or 13 years earlier, creating significant prejudice to the bank. He therefore ruled that the proposed amendment could not proceed.
The judge considered that the original claim about the application of the sale proceeds would largely turn on legal issues and documented facts, and that the bank would not suffer significant prejudice in defending that aspect. He ordered the case to proceed on the original statement of claim, without the proposed amendment.
The plaintiffs were required to take the necessary procedural steps to resolve outstanding discovery and clarify sums the bank had received from other parties in reduction of its losses. The deadline could be extended only if the bank’s delay prevented the case being made ready, and the plaintiffs had to apply for an extension before the deadline expired. Unless the case was certified as ready by 30 October 2006, or an extension was granted, the proceedings would stand dismissed. The judge proposed dismissing the bank’s application on those conditions and gave either party liberty to apply within the stated terms.