Supreme Court: Danske Bank able to proceed with unjust enrichment claim against man who lodged bad cheque

Ms Justice Elizabeth Dunne

Ms Justice Elizabeth Dunne

A man who lodged a cheque to Danske Bank, which was dishonoured after he obtained a draft of €63,000 from the account in which he had lodged it, has lost an appeal against an order permitting the planitiff to amend their statement of claim to include an affidavit supporting damages for unjust enrichment.

Finding that there was no bar to including the cause of action which could not have been included in a summary summons from the outset, Ms Justice Dunne added that the amendment was based on the same facts as were already contained in the pleadings up to the date of amendment.

Background

In May 2003, Simon Mangan delivered a cheque payable to him for €62,600 to Danske Bank, trading as National Irish Bank. He lodged it to the account for a company of which he was director, Newtown Grain Limited. A few days later he obtained a draft of €63,000 in favour of Newtown.

The cheque he had lodged previously was from a company called Kingswood Plant Hire Limited, and was ultimately “dishonoured by non-payment and returned marked “Payment stopped”. Notice of dishonour was duly given to Mr. Mangan”.

In relation to this issue, Danske Bank made a complaint to Gardaí, and Mr Mangan was prosecuted before the Dublin Circuit Criminal Court. However, at the conclusion of evidence, the trial judge directed that the jury find Mr Mangan not guilty.

Subsequently, in July 2009, Danske Bank commence proceedings by way of summary summons seeking the amount of the said cheque being €62,600. In the High Court, judgment was given against Mr Mangan in the sum of €62,600 together with interest thereon.

This was successfully appealed to the Supreme Court, and in October 2009 the order of the High Court was discharged. The matter was adjourned for plenary hearing in accordance with Order 37, Rule 7 of the Rules of the Superior Courts. The order of the Supreme Court provided for the exchange of a statement of claim and a defence

Amending the summons

Following the delivery of the statement of claim and the defence and counterclaim and an exchange in relation to particulars, a notice of motion was issued on behalf of the Bank seeking leave to amend the summary summons.

Justice Dunne explained that, when the matter came on for hearing in November 2011, a Bank manager swore an affidavit which explained that in the statement of claim as delivered, the Bank claimed damages for money had and received as restitution for unjust enrichment.

Mr Mangan specifically denied the entitlement of the Bank to maintain a claim for unjust enrichment as well as denying that he had been unjustly enriched.

Making an order amending the summons, the High Court held “that the amendments appeared to be in order and that there was no valid reason not to amend the summons at this time and that if the defendant wished to object to this cause of action he could do so at the trial of the matter”.

Appeal to the Supreme Court

Appealing the order of the High Court, Mr Mangan contended that the judge erred:

  1. In failing to appreciate that permitting the amendment of the summary summons, that Mr Mangan would be deprived of a statute of limitations defence.
  2. In permitting Danske Bank to add a new cause of action which had first been pleaded in 2009, at which point it was already statute barred.

Danske Bank contended that:

  1. that there is no procedural bar on the Bank expanding a summary procedure case which has been adjourned to plenary hearing;
  2. no authority has been cited to support such a contention; and no basis has been made out for the creation of such a rule;
  3. as a matter of procedure, it is open to this Court to decide that the application to amend is unnecessary.

Dankse Bank also placed reliance on the provisions of Order 20, rule 6 of the Rules of the Superior Courts and the provisions of Order 37, rule 7 of the Rules of the Superior Courts.

Justice Dunne found that in permitting the amendment in this case, the High Court judge applied the wrong test, and was mistaken that the question raised by the defence in relation to the Statute of Limitations could be considered at a later stage.

On the facts of the case, the amendment of the summons to include a claim for unjust enrichment was based on the same facts as were already contained in the pleadings up to the date of amendment save for the additional facts pleaded in the statement of claim.

Furthermore, Justice Dunne added that no authority was produced to support a proposition that a summary summons could not be amended to include a claim that could not have been included in a summary summons from the outset.

Order 37, rule 7 of the Rules of the Superior Courts provides that where a case is adjourned to plenary hearing, it proceeds as if the proceedings were commenced by plenary summons.

In those circumstances, Justice Dunne was satisfied that there “could not be a bar to including a cause of action and seeking a remedy which would not have been available in summary proceedings once the case has been adjourned to plenary hearing”.

Justice Dunne said that she had concern in relation to some of the pleadings in paragraphs 14-16 of the Statement of Claim, and said that if Danske Bank sought to rely on the amendment then the offending paragraphs should be excised from the Statement of Claim.

Subject to Danske Bank removing the offending parts of the Statement of claim, Justice Dunne dismissed the appeal.

  • by Seosamh Gráinséir for Irish Legal News