Challenges Faced when Seeking to Strike Out Potentially Unmeritorious Claims

A recent Court of Appeal1 judgment highlights the difficulties facing a defendant who seeks to have proceedings struck out which he/she considers to be unmeritorious.

Background

The plaintiff and her former husband ("MH") were the joint owners of two properties; known as "Brooklawns" and "Rutland".

In 2002, the plaintiff and MH re-mortgaged Brooklawns and gave irrevocable written authority to the second defendant, their solicitor (the "Solicitor"), to register a first legal charge on the property in favour of the first defendant, Ulster Bank Ireland Limited (then, First Active) (the "Bank").

In 2004, the mortgage on Brooklawns was redeemed.

In 2008, the Solicitor, acting solely for MH (whose relationship with the plaintiff had, by that time, broken down), advised the Bank that the Brooklawns mortgage had been redeemed in error and that it had been intended to redeem the Rutland mortgage. The Solicitor asked the Bank to correct the error.

The Bank warned the Solicitor that the reactivation of the Brooklawns mortgage would leave his clients with a larger mortgage debt than that which they then owed, as well as substantial arrears (as no payments had been made since 2004). The Bank also insisted that the Solicitor register the first legal charge on Brooklawns in its favour, which he had not done in 2002. The Solicitor duly complied.

The Brooklawns arrears were not met and the Bank commenced possession proceedings against the Plaintiff and MH in 2013.

In March 2014, the plaintiff issued proceedings against the Bank and the Solicitor, alleging that the discharge of the Brooklawns loan account in 2004 had not been an error but a deliberate act arising from an agreement between her and MH that, upon their separation, she could have Brooklawns clear of debt. She further alleged that the Solicitor had acted without her consent when he reactivated the Brooklawns loan in 2008.

Application to Strike Out the Proceedings

The Solicitor applied to have the plaintiff's case struck out on the bases, first, that it disclosed no cause of action against him and, in the alternative, that it was bound to fail.

The High Court (Ms Justice Murphy) held that the plaintiff's claim was prima facie valid and dismissed the application.

Court of Appeal Decision

The Court of Appeal upheld the High Court decision and examined the requisite proofs for a defendant seeking to strike out what they perceive to be a hopeless case against them:

Failure to disclose a cause of...