Striking Out Third Party Claims

The appropriate test for determining whether to dismiss and / or strike out a third party claim was examined recently by the High Court in IBRC and INBS v John S. Purcell, David Brophy, Terence Cooney, Cornelius P. Power and Michael P. Walsh and Central Bank of Ireland and KPMG [2012] No. 3279P. Proceedings were initially instituted by the Plaintiffs against the former directors of Irish Nationwide Building Society ("INBS") on foot of an allegation that those directors had unlawfully and improperly delegated their powers to the Chief Executive of INBS, Michael Fingleton. The Central Bank had been joined to the proceedings by the first Named Defendant on the basis that the delegation was carried out with the full knowledge and approval of the Central Bank and, furthermore, that the Defendants relied on the Central Bank's guidance and approval. The application before the High Court was the Central Bank's motion to strike out the third party statement of claim. Cregan J. considered the decision of Keane J in Lac Minerals v Chevron Corporation which determined that the relevant test is whether the Court is confident that the plaintiff's claim cannot succeed no matter what might arise on discovery or at the trial of action. Justice Cregan also considered Salthill Properties Limited v Royal Bank of Scotland in which Clarke J. held that the Court should not require a plaintiff to be in a position to show a prima facie case, merely a stateable case. Cregan J. noted that while the legal principles to be considered in an application to strike out a third party statement of claim were broadly similar to the principles the Court has to consider in an application to strike out a plaintiff's statement of claim, there was an important point of distinction. A plaintiff maintains that it has suffered a wrong by virtue of the actions of the defendant. By contrast, in a third party claim for indemnity and / or contribution the defendant is not claiming that he has suffered a wrong but rather that the third party owes a duty to the plaintiff and that the defendant and the third party are concurrent wrongdoers in respect of the plaintiff. Cregan J. also...