Promontoria v. Walsh [2019] IEHC 650 (01 October 2019)

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JUDGMENT of Mr. Justice Allen delivered on the 1st day of October, 2019

1. This is an application on behalf of the defendants for an order pursuant to the inherent

jurisdiction of the court dismissing the proceedings on the grounds of inordinate and

2. The notice of motion seeks, in the alternative, an order pursuant to O. 122, r. 11 of the

Rules of the Superior Courts dismissing the action for want of prosecution but the case

3. The action was commenced by plenary summons issued on 19th September, 2014, by

which the then plaintiff, National Asset Loan Management Limited, claimed orders

pursuant to s. 10 of the Conveyancing Act (Ireland) 1634 setting aside as fraudulent a

deed of conveyance and assignment dated 23rd September, 2008, by which the first

defendant assured to the second defendant his interest in a property described as “part of

the lands attached to the premises known as ‘Tinnahich’, Plunkett Avenue, Westminster

Road, Foxrock, Co. Dublin”, as well as a deed of mortgage of the same date between the

4. The defendants were at all times resident at the property the subject of these proceedings

but for whatever reason, or none - none was given - the summons was not served until

15th September, 2015, just four days before it was due to expire.

5. On 18th September, 2015, an appearance was entered on behalf of both defendants.

Shortly afterwards, a separate firm of solicitors came on record for the second defendant.

6. The plaintiff, having taken an assignment from National Asset Loan Management Limited

of certain loans to the defendants and the security held for them, was substituted as

plaintiff by order of the High Court made ex parte on 14th March, 2016.

7. Apart from the order substituting the plaintiff, nothing whatsoever was done with the

proceedings until 3rd September, 2018, when the defendants’ present firm of solicitors

gave notice of change of solicitor and on 5th October, 2018 the defendants’ new solicitors

8. The application was grounded on a short affidavit of Mr. Walsh which gave the dates of

issue and service of the summons, dealt with the changes of the defendants’ solicitors,

and protested the plaintiff’s failure to deliver a statement of claim. The summons, he

said, set out the relief claimed but did not disclose the basis of the claim. Without

knowing the basis of the claim, he said, the defendants could not know what witnesses

they might need to defend the case. The proceedings, he said, had caused him and Mrs.

Walsh distress, anxiety and reputational harm and Mrs. Walsh was, and had been, unable

to deal with her property. The case was made that the plaintiff had been guilty of

inordinate and inexcusable delay and the court was asked, in the interests of justice, to

9. In the replying affidavit filed on behalf of the plaintiff, Mr. Alastair Gracey, a senior asset

manager employed by a company engaged by the plaintiff to provide loan administration

and asset management services, explained that on 24th September, 2008, the

defendants borrowed substantial money from Anglo Irish Bank Corporation plc on the

security of a first charge over “a three thousand square feet property at Plunkett Avenue,

Foxrock” in favour of Anglo, and suggested that the gravamen of the plaintiff’s claim was

that in or about the same time as accepting the Anglo facility, the defendants engaged in

“a series of transactions which were devised to put assets beyond the reach of their

creditors, in particular Anglo”. Mr. Gracey exhibited the facility letter and the Registry of

Deeds Form 1 showing the registration of the impugned conveyance.

10. Mr. Walsh in his grounding affidavit, had averred that apart from a letter from the

plaintiff’s solicitors of 7th March, 2016 advising that an application would be made to

substitute Promontoria (Arrow) Limited as plaintiff, and a letter of 14th April, 2016

advising of the making of the order of 14th March, 2016, he and his wife had had no

communication from the plaintiff. This, suggested Mr. Gracey, was inaccurate and

misleading in equal measure. There had been, said Mr. Gracey, extensive without

prejudice negotiations between National Asset Loan Management Limited and the

defendants, and between the plaintiff and the defendants, “to resolve the issues in

dispute between the parties to these proceedings” the fact of which, he said, Mr. Walsh

11. Mr. Walsh indignantly rejected the allegation of abuse of privilege and countered that Mr.

Gracey’s evidence was misleading, presumably, said Mr. Walsh, by reason of his lack of

12. In his second affidavit Mr. Walsh gave a summary of his dealings with Anglo, with

National Asset Loan Management Limited, and with the plaintiff. From this account,

which was not contested, I think that it was not quite accurate to say that the object of

the negotiations had been “to resolve the issues in dispute between the parties to the

proceedings”. Neither, I think, was it entirely accurate that there had been “absolutely

no activity at all in the litigation since the plenary summons issued bar the substitution of

13. The property the subject of these proceedings is, as I have said, a house called Tinnahich,

on Plunkett Avenue, Westminster Road, Foxrock, Co. Dublin. It is described in the

Registry of Deeds Form 1 and in the endorsement of claim as “part of the lands attached

to the premises known as ‘Tinnahich’, Plunkett Avenue, Westminster Road, Foxrock,

County Dublin shown edged on the map attached hereto together with the right of way

described in the Lease described as on the south side of Plunkett Avenue, part of the

lands of Foxrock”. The property offered as security for the Anglo borrowings was

described in the facility letter (which was addressed to the defendants at Tinnahich) as “a

three thousand square feet property at Plunkett Avenue, Foxrock”.

14. It did not become clear until Mr. Walsh swore his second affidavit that he and his wife

owned two houses at Plunkett Avenue, Foxrock: one, called Silverstream, which was

mortgaged to Anglo, and the other, Tinnahich, which was mortgaged to First Active plc.

By reference to the description of the property in the summons (part of the lands

attached to Tinnahich) and in the Anglo facility letter (a three thousand square feet

property, without a name) and, indeed, from Mr. Gracey’s first affidavit, it might have

been thought that the impugned deeds related to the same property that had been

mortgaged to Anglo. In fact, it appears that the security given to Anglo was a mortgage

of Silverstream, and the impugned conveyance was a conveyance of Tinnahich, which was

15. Mr. Walsh vehemently rejected the suggestion that there was anything surreptitious

about the transfer of his interest in Tinnahich or that there was any attempt or intention

16. The Form 1 is branded 17th September, 2014, but it clearly shows that the deed of

conveyance was registered on 29th October, 2008. There is no indication as to when

the plaintiff, or National Asset Loan Management Limited before it, or Anglo before that

again, came to know of the conveyance by the first defendant to the second defendant, or

the mortgage by the defendants to First Active plc, save that it was prior to August, 2014

when Mr. Walsh was first asked by National Asset Loan Management Limited to reverse it.

17. The first affidavit of Alastair Gracey, filed in answer to the motion, dealt very briefly, and

a second affidavit in considerable detail, with a protracted engagement between the

parties between February 2016 and November 2017, but did not attempt to explain or

excuse the absence of a statement of claim in the eighteen months or so before that

engagement commenced, or in the twenty months which have elapsed since the

18. The engagement was a protracted negotiation the object of which, on the defendants’

side, was to persuade the plaintiff to take the proceeds of a voluntary sale of Silverstream

in settlement of the Anglo loan. To that extent the negotiations were not directed to

resolving the issue the subject of the proceedings. On the other hand, while the parties’

object generally was to try to settle the Anglo loan, it was specifically envisaged that if

everything else could be agreed, these proceedings would be discontinued: so, to that

extent, these proceedings were in the mix. Between about February, 2016, when a

proposal was first made, and November, 2017 when the Anglo loan was called up and a

receiver appointed, there were a number of failed attempts to find a buyer for

19. Ms. Anna Shanley, for the defendant, submitted that even if allowance were to be made

for the period of the engagement between the parties (which she said should not count

either in justifying or excusing the absence of a statement of claim) there were still thirty

20. I am unconvinced that the approach urged on behalf of the defendants is entirely correct.

Ms. Shanley is quite correct that the court will look at the cumulative periods of culpable

delay, but I do not think that it is a matter of simple arithmetic. There was a gap of

about 18 months between the date of issue of the summons and the start of the

engagement between the plaintiff and the defendants, most of which is attributable to the

long unexplained delay in serving the summons. Thereafter there was a protracted

engagement which accounted for about 20 months, and then eleven months between 9th

November, 2017, when the plaintiff issued a final demand, and 5th October, 2018, when

21. It seems to me that the first 18 months cannot simply be added to the last year or so, to

get a delay of two and a half years. As I see it, there was, for so long as the

negotiations were proceeding at least an unspoken armistice. During that time, and

possibly in the time during which the loan was held by National Asset Loan Management

Limited, the defendants hoped to achieve a settlement and it seems to me that for so

long as the engagement continued, the defendants acquiesced in the fact that the action

was not progressing. When the negotiations broke down, however, I think that the fact

that the action had lain dormant for years added to the urgency with which it needed to

be progressed. In the first period of 18 months or so the summons was relatively fresh,

but in the second period it was rather stale, and I think that the court would likely take a

more serious view of any failure to progress in the later, than in the earlier period.

22. Mr. Stephen B. Byrne, for the plaintiff, sought to justify the failure to deliver a statement

of claim by reference to the decisions of the High Court in ACC Bank v. McEllin

[2013] IEHC 454 and Bank of Ireland Mortgage Bank v. Neary [2019] IEHC 169, which spell out

that a secured creditor is not obliged to exercise his enforcement options in any particular

order or at any particular speed. He contended that the plaintiff could not be charged

with delay for as long as it was endeavouring to realise the security it had over

Silverstream. In argument, however, Mr. Byrne conceded, as he had to, that the plaintiff

23. Although at the time the motion issued upwards of four years had elapsed since the date

the summons was issued and upwards of three years since it was served, no statement of

claim had been delivered. By the time the motion was heard, nearly five years had

elapsed since the date of issue of the summons and nearly four years since it was served.

Mr. Byrne declared that his client was prepared to abide any directions the court might

make but did not apply for an extension of time to deliver a statement of claim or give

any indication as to when, or even whether, the plaintiff proposed to do so.

24. The case was argued, on both sides, by reference to the well-established progressive test

as to whether there had been inordinate delay; whether if there had been inordinate

delay, it was inexcusable; and, if there had been delay which was both inordinate and

25. The arguments, on both sides, were clear, focussed and succinct but did not address what

appears to me to be the central issue in the case and which, although not argued, I do

26. The premise of any argument that the plaintiff has been guilty of inordinate and

inexcusable delay, or of any delay, must be that the plaintiff has failed to do something

27. As I have said, on 18th September, 2015 an appearance was entered on behalf of the

defendants. Mr. Gracey, in his first affidavit, observed that the notice of entry of

appearance did not require delivery of a statement of claim. That was correct but the

significance of the omission to require delivery of a statement of claim appears not to

28. Order 12, r. 5 (1) of the Rules of the Superior Courts provides:-

“5. (1) A defendant shall, on the day he enters an appearance to an originating

summons, give notice of his appearance to the plaintiff’s solicitor, or, if the plaintiff

sues in person, to the plaintiff himself by serving the marked duplicate

memorandum. … In the case of a plenary summons, the memorandum shall include

a notice stating whether the defendant requires delivery of a statement of claim or

“3. Where the defendant enters an appearance to a plenary summons and, at the time

of entering such appearance or within eight days thereafter, gives notice in writing

to the plaintiff or his solicitor, that he requires a statement of claim to be delivered,

the plaintiff, if he has not already done so, shall deliver a statement of claim within

4. Subject to the provisions of Order 13, rule 17 as to filing a statement of claim when

there is no appearance, no statement of claim need be delivered when the

defendant fails to appear or fails to serve such notice as is mentioned in rule 3.

Where the plaintiff delivers a statement of claim without being required to do so, or

the defendant unnecessarily requires such statement, the Court may make such

order as to the costs occasioned thereby as shall be just, if it appears that the

“1. Where a defendant enters an appearance to a plenary summons he shall deliver his

(a) In case he does not by notice require a statement of claim, within twenty

(b) In any other case within twenty eight days from the date of delivery of the

statement of claim or from the time limited for appearance, whichever shall

31. It seems to me that these rules are dispositive of this application. The defendants

having failed to call for a statement of claim, the plaintiff was never under any obligation

to deliver one. Since the plaintiff was never obliged to deliver a statement of claim, it

32. I should say that I would not necessarily, in an appropriate case, strictly apply the eight

day time limit in O. 20, r. 3, so that if a defendant did not at the time of entry of

appearance or within eight days thereafter, but did later, call for delivery of a statement

of claim, time might run against the plaintiff from the time such a request might be

made: but this is not such a case. The defendants never called for a statement of claim

and did not, before issuing this motion, make any complaint that the plaintiff had not

33. For completeness, with the caveat that it is obiter, I do not believe that I could have

accepted the argument that the plaintiff would have been entitled to deal with its claim

against Tinnahich on the basis that it was part of the range of remedies available to it as

a secured creditor. That property was not, and never was to have been, held as security

for the loans since acquired by the plaintiff and I see no reason why, for the purposes of

any claim against it, the plaintiff would have been in any different position to any other

34. Absent a requirement for delivery of a statement of claim the plaintiff was not obliged to

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