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Bula Ltd. v. Crowley [1997] IEHC 98 (18th June, 1997)
THE
HIGH COURT
1986
No. 6624 P.
BETWEEN
BULA
LIMITED (IN RECEIVERSHIP), BULA HOLDINGS, THOMAS C. ROCHE,
THOMAS
J. ROCHE, RICHARD WOOD AND MICHAEL WYMES
PLAINTIFFS
AND
LAURENCE
C. CROWLEY, NORTHERN BANK FINANCE CORPORATION LIMITED, ULSTER INVESTMENT BANK
LIMITED, ALLIED IRISH INVESTMENT BANK LIMITED AND MACKAY AND SCHNELLMAN LIMITED
DEFENDANTS
Ruling
delivered by Mr. Justice Barr on the 18th day of June, 1997
1. When
this action resumed on Tuesday last, 10th June, 1997, two important matters
arose. First, Mr. Traynor, counsel for the plaintiffs, informed the court that
his clients had composed their differences with the fifth defendants, the
consultant mining engineers, MacKay and Schnellman Limited, and that the action
against them may be struck out with no further order. Mr. Clarke, counsel for
the latter, consented and I made the order requested.
2. Secondly,
Mr. Traynor stated that since my reserved decision delivered on the 29th April,
1997 regarding, inter alia, the status in this action of findings of fact and
law made by Lynch J. in his judgment in Bula I on matters pertinent to issues
raised in this action (Bula II), a detailed examination of the judgment of
Lynch J. had been carried out on behalf of the plaintiffs and the conclusion
has been reached, which is accepted by the plaintiffs, that the claims made in
Bula II (other than those introduced in January 1997 by leave of the court
relating to the Statute of Limitations which are still outstanding) cannot
succeed against the defendants or any of them (the banks and the receiver)
while certain findings of fact made by Lynch J. in his judgment retain their
present status and validity. In short, it was specifically conceded by Mr.
Traynor on behalf of his clients that all claims made by the plaintiffs against
the banks and the receiver (the primary claims), other than outstanding issues
relating to the Statute of Limitations, must fail unless Bula is successful on
its appeal to the Supreme Court in Bula I and relevant findings made by Lynch
J. are set aside by that court. Accordingly, Mr. Traynor sought an order
staying this action or, alternatively, adjourning it pending the outcome of the
plaintiffs' appeal to the Supreme Court in Bula I. The banks and the receiver
opposed the application.
3. Mr.
Traynor referred the court to a voluminous notice of appeal which has been
filed and served in Bula I. He informed the court that solicitors and counsel
have been instructed on the appeal; that significant progress has been made in
preparing the extensive documentation which the Supreme Court will require and
that his clients are prepared to do all in their power to expedite the hearing
of the appeal. However, taking an optimistic view, it is unlikely that the
Supreme Court will deliver final judgment on the appeal in less than two years
from now.
4. Mr.
Traynor carried out a detailed analysis of the judgment of Lynch J. and
established that there are many findings of fact and conclusions therein which
have a crucial bearing on the primary issues raised in this action. It is
evident from the notice of appeal that all are being challenged by Bula and it
would appear that the conclusion now stated on behalf of the plaintiffs is well
founded and that they cannot hope to succeed in this action on the primary
claims made by them and that it would be a pointless exercise to pursue any
such claims unless and until Bula is successful on its appeal to the Supreme
Court in Bula I and the relevant findings of Lynch J. are set aside.
5. Having
considered detailed submissions made over several days by counsel for the
parties, I have come to the following conclusions:-
1. This
application ought to have been made at the commencement of the trial. The
judgment of Lynch J. was delivered on 6th February, 1997, i.e. about ten weeks
before then. A perusal of it must have revealed that it contains findings
which are of crucial importance in the context of primary issues raised in this
action. I have no doubt that a conscious decision was made to proceed with the
preliminary issues arising out of the Statute of Limitations in the hope that
the plaintiffs might be successful thereon and to postpone the present
application to await the outcome of the preliminary issues. A manipulation of
litigation in that way is itself an abuse of the process of the court. In the
event, my ruling on 29th April, 1997, though it did not deal with all of the
limitation issues, did dispose of one of them and it also defined the status of
the relevant findings in the judgment of Lynch J., in consequence of which the
plaintiffs' strategy failed and they then had no alternative but to make the
present application as the only possible way of avoiding defeat in this action
on all of the primary claims made against the defendants.
2. The
trial is now in its seventeenth day. If I were satisfied in the light of the
concession belatedly made by the plaintiffs that they cannot succeed on any of
the primary issues raised against the defendants that there had been a total
waste of court time and resources, I would refuse the application and, in the
premises, would dismiss all of the plaintiffs' claims save only those relating
to the Statute of Limitations which remain outstanding. However, I am
satisfied that the hearing up to now has been productive and that although the
present application ought to have been made at the commencement of the trial,
perhaps allied to a submission that the preliminary issues should be allowed to
proceed, its postponement has not created the mischief to which I have referred.
3. The
court has a discretion as to whether or not it should accede to the plaintiffs'
application to stay or adjourn the trial pending the outcome of the appeal to
the Supreme Court in Bula I. That discretion should be exercised justly having
due regard to the interests of all parties to the action. The definitive
question which I must address is where does justice lie in all the circumstances?
4. The
plaintiffs concede that one of the options now open to the court is to dismiss
all of their primary claims against the defendants and that that is the only
logical course if their application for a stay or adjournment is refused.
However, it is submitted by Mr. Traynor that that would create an impossible
situation for the plaintiffs even if they were successful on appeal in Bula I
and relevant findings in the judgment of Lynch J. are overturned by the Supreme
Court. He argues that in such event he could not successfully challenge, on
appeal to the Supreme Court in this action, the dismissal of the plaintiffs'
primary claims herein because there is no error in law or fact on which he
might rely in opposing dismissal of such claims having regard to the specific
concession which the plaintiffs have been obliged to make on foot of the
findings made by Lynch J. in his judgment in Bula I. In short, he submits that
in the event of a dismissal of the plaintiffs' primary claims in this action in
the light of the concession made on their behalf, the Supreme Court probably
would not entertain a subsequent challenge to such dismissals in the event that
the plaintiffs succeeded on their appeal in Bula I, because a judgment
dismissing the plaintiffs' primary claims, if made in this action, would have
been good in law having regard to the status of the judgment of Lynch J. in
Bula I at the time of judgment in this action. Whether Mr. Traynor's
submission in that regard is well founded is a question which the Supreme Court
might have to address in due course and, strictly, is not one for me in this
action. Suffice to comment that I have some doubt as to the validity of the
argument on the ground that it does not take into account the possibility of an
alternative challenge on behalf of the plaintiffs based on a submission that in
such an event I would have been unjust in not exercising my discretion in
favour of an adjournment of the trial without any findings on the primary
issues raised therein, notwithstanding the concession made on behalf of the
plaintiffs. I do recognise, however, that, in the event of having to address
such an issue, the Supreme Court might decide the matter as envisaged by Mr.
Traynor and that in the end of the day the plaintiffs could possibly find
themselves in the situation of being successful on their appeal in Bula I but
unable to upset an order, if made in this action, dismissing the primary claims
made by the plaintiffs against each of the defendants - even though such an
order was based on the validity of findings made by Lynch J. in his judgment in
Bula I subsequently set aside by the Supreme Court.
5. Viewing
the application from the perspective of the defendants, the following points
emerged:-
(a) The
primary claims made by the plaintiffs against the defendants are enormous and
have been outstanding for in or about twelve years. This has created a
particular hardship for the receiver. He is a chartered accountant in private
practice of high repute who is widely regarded as having a distinguished
international reputation in his field, including major receiverships. Serious
allegations relating to his professional integrity and competence have been
made against him by the plaintiffs and he is anxious not to postpone defence of
his reputation for upwards of a further two years.
(b) In
practical terms, the only hope the banks have of recovering debts amounting to
millions of pounds reputedly owing to them by Bula is by sale of its ore body
at Navan. It is contended by counsel for the defendants that this is
impossible so long as Bula's primary claim remains in being that the receiver
was not lawfully appointed and that he has no authority to sell the ore body.
The price of lead and zinc fluctuates on the international market and the
existing value of the ore body may decline if there is a long and indeterminate
adjournment of this trial. Furthermore, it is submitted that Tara Mines
Limited is the buyer most likely to pay the best price for the Bula ore body,
but Tara may lose interest if when the Bula ore ultimately comes on the market
they have either completed mining at Navan or have completed that part of their
operation which is adjacent to the Bula ore body. However, no evidence was led
in support of these submissions.
(c) It
was urged on behalf of the defendants that if the court was disposed to grant
an adjournment of the trial, it should be on terms, inter alia, that, subject
to ultimate liability and, if relevant, assessment and award of consequential
damages for loss which might be suffered by Bula, the plaintiffs shall
specifically withdraw their opposition to the sale of the ore body by the
receiver.
(d) The
plaintiffs' application for adjournment of the trial has resulted in a
potential major practical advantage for the defendants. If it had not been
made, this action probably would have continued for at least six months of
court time and would have involved a great deal of further effort and expense.
In the event, it has been conceded by the plaintiffs that if their appeal in
Bula I is unsuccessful and they fail to have the relevant findings of Lynch J.
set aside by the Supreme Court, their primary claims in Bula II against all
defendants must fail and in that event they are willing to consent to judgment,
thus leaving only the remaining Statute of Limitations issues outstanding. On
its appeal in Bula I the plaintiffs are faced with the task of upsetting
findings of fact and conclusions thereon made by the trial judge and to succeed
must satisfy the Supreme Court that there was no evidence which might
reasonably support such findings. A perusal of the judgment indicates that, at
best, this will be for them a difficult task.
6. Reviewing
the remarkable and apparently unique situation which now exists in this case,
it seems to me that, balancing the interests of the parties, justice requires
that the trial shall be adjourned to await the outcome of the plaintiffs'
appeal to the Supreme Court in Bula I on the following terms:-
(i) The
plaintiffs (and each of them) undertake to perform diligently and expeditiously
all acts necessary to prosecute their appeal in
Bula
and Others -v- Tara Mines and Others
before the Supreme Court and they shall take all possible steps to expedite the
determination of the said appeal.
(ii) In
the event of the plaintiffs not prosecuting and/or expediting their said
appeal, the defendants shall be at liberty to apply to this court for an order
dismissing the primary claims made by the plaintiffs in this action but without
prejudice to remaining issues under the Statute of Limitations.
(iii) The
plaintiffs recognise and agree that in the event of the Supreme Court
determining the said appeal in
Bula
-v- Tara & Others
in favour of the respondents therein as against the appellants without
overturning any material findings of fact made by the learned trial judge, the
plaintiffs' primary claims in this action shall stand dismissed with costs
(including reserved costs) to be awarded to the defendants, such costs to be
taxed in default of agreement but without prejudice to the plaintiffs' said
claims on foot of the Statute of Limitations.
(iv) The
plaintiffs and each of them undertake that they will not mount further
proceedings against the defendants (or any of them, their servants or agents)
in respect of any alleged wrong-doing of which they are presently aware or in
the opinion of the court ought now to be aware.
(v) Any
such dismissal of claims in the said proceedings shall be without prejudice to
any counterclaim that the second, third and/or fourth defendants may be
permitted to advance and/or to the right of the said defendants to apply to the
court to amend their pleadings to include a counterclaim in the terms of the
counterclaim which is the subject-matter of the said defendants' outstanding
application to amend. The said application for leave to amend the pleadings
shall stand adjourned generally with liberty to re-enter and the right of the
plaintiffs to oppose any such application is reserved.
(vi) The
plaintiffs (and each of them) undertake to waive any claim to interest on any
award made in their favour in this action between the date of their application
for an adjournment and the re-commencement (if any) of the trial.
7. In
my opinion it would be unjust to spancel the plaintiffs by requiring as the
price of the adjournment sought that they withdraw opposition to the sale of
the Bula ore body by the receiver - even if their rights as to damages are
reserved in the event of ultimate success in challenging the status of the
receiver and his right to sell the ore body. The heart of the Bula case is
now, and always has been, that the receiver's appointment by the banks was
unlawful and that he has no right to sell the ore body. The plaintiffs still
retain the ambition that, with others, they will one day succeed in launching a
Bula lead and zinc mine at Navan. Whether that is a pipe-dream or a reasonable
possibility remains to be seen. Be that as it may, to deprive them of it as
the price of the adjournment of the action and the possible preservation of
their primary claims against the defendants would be an unfair and unreasonable
sacrifice to impose on them. The advantage derived by the defendants in having
all of the primary claims made against them by Bula, including the challenge to
the receiver's right to sell the ore body, dependant in the first instance on
the success of the plaintiffs' appeal to the Supreme Court in Bula I is an
equitable quid pro quo for allowing the plaintiffs to preserve their challenge
to the status of the receiver pending the outcome of that appeal.
8. The
remaining issues relate to the Statute of Limitations. If the plaintiffs'
appeal in Bula I fails, then such issues will become essentially points of law
and the hearing in that regard should be concluded in a matter of days. On the
other hand, if the plaintiffs' appeal is successful then matters of fact
relating to such issues will have to be investigated in conjunction with
disputed facts associated with primary issues raised in the action. They will
require to be investigated in full if the relevant findings made by Lynch J. in
Bula I are set aside by the Supreme Court. It follows, therefore, that the
remaining Statute of Limitations issues should be adjourned also to await the
outcome of the appeal in Bula I.
9. The
order will provide that all parties shall have liberty to apply.
© 1997 Irish High Court
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