High Court: Man can pursue negligence proceedings against ex-wife’s solicitor

About this case:

• Judgment:
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The dispute arose after the solicitor held the €50,000 owed to the man in a client account, and Justice Keane found that despite the fact that the man was the solicitor’s client’s adversary – this did not necessarily mean that there was no duty of care arising.

Background

JO’C, a litigant in person, brought several applications to the High Court in relation to judicial separation proceedings which were subject to a Circuit Family Court Order in 2012.

The defendants in the first action (‘the 6262P action’) were JO’C’s solicitors (hereafter “the husband’s solicitors”) in the judicial separation proceedings; and the defendants in the second action (‘the 6263P action’) were “the wife’s solicitors”.

One of the terms of that Order was that the family home was to be transferred into the sole name of the wife on foot of a payment to the husband of €50,000 that was to have been made on or before 1 February 2012. The wife was to take over the mortgage loan on the property and indemnify the husband in respect of it.

The husband’s solicitors plead that the wife’s solicitor forwarded both a deed of conveyance and a family home declaration for signature by the husband on 14 February 2012, which was executed and returned on 17 May 2012.

Notably, the payment of €50,000 that the wife was required to make to the husband under both the separation agreement and the Order of the Circuit Court was not made but, rather, was retained by the wife’s solicitor in his client account.

A controversy arose about whether that payment represented a free-standing obligation under that agreement and Order; or one subject to a condition precedent that the husband first comply with all of his obligations – particularly his obligation to execute a deed of waiver and to put in place a life insurance policy.

Sitting in the High Court, Justice David Keane explained that the parties had brought “a raft of different interlocutory applications before the court” and that the litigation had “reached a level of procedural complication out of all proportion to the relative simplicity of the underlying dispute”.

The applications considered by the court concerned:

The strike out application

The wife’s solicitor applied for an order dismissing or staying JO’C’s action against him on one or more of seven separate grounds.

JO’C relied upon a letter that he received from his solicitors, dated 2 May 2014, in which it was stated:

‘In relation to the payment of the €50,000 sum to you…I confirm that we have raised the issue with that client is in breach of the Court Order terms by not releasing the funds and it is open to you to instruct us to write a similar letter to that received from stating that you reserve your right to apply to the High Court to bring this matter to a conclusion.’

JO’C contended that this amounted to credible evidence or reasonable grounds (in the form of the opinion of the solicitors retained by him at the material time) that the wife’s solicitor was in breach of the Circuit Court order that the relevant monies be paid and, by necessary implication, in breach of the duty to JO’C, which he had assumed, to take reasonable care to see that effect was given to the wife’s agreement to make that payment.

Endorsing Al-Kandari v J. R. Brown & Co 1 Q.B. 665, Justice Keane was satisfied that duty of care arose in relation to the payment to the husband of the €50,000 in the client account of the wife’s solicitor; as such, the plea of negligence and breach of duty arising from what was alleged in the statement of claim must survive an application to strike it out as one that was bound to fail.

Giving JO’C a limited degree of latitude as a litigant in person, Justice Keane concluded “not without some hesitation”, that it would not be appropriate to dismiss as an abuse of process JO’C’s remaining claims in negligence against the wife’s solicitor.

The in camera rule application

JO’C sought an order in the 6263P action against the wife’s solicitor, seeking various reliefs including a declaration that the wife’s solicitor was in breach of the in camera rule.

Gilligan J had adjourned JO’C’s application against the husband’s solicitors for various reliefs in respect of alleged breaches of the in camera rule in the 6262P action to the trial of that action – as such Justice Keane stated that the necessary and appropriate respect for the ruling of Gilligan J in those proceedings dictated that he make a similar order adjourning that application to the trial of the 6263P action.

The consolidation application

JO’C sought an order in the 6262P action, consolidating those proceedings with the 6263P action.

The wife’s solicitor opposed the husband’s consolidation application – citing that any commonality of questions of law was absent between the two actions because the 6262P action was about breach of contract, whereas the 6263P action was about breach of an undertaking.

Applying the well settled principles in Duffy v News Group Newspapers 2 I.R. 369, and considering Lismore Homes Ltd (In receivership) v Bank of Ireland Finance Ltd IEHC 212 (Unreported, High Court, 30th June 2006) – Justice Keane was satisfied that there was “no evidence before the court that consolidating the two actions concerned at this stage will effect a substantial saving of expense”.

As such, Justice Keane held that these were not causes that should be consolidated in exercise of the jurisdiction under O. 49, 6 of the Rules of the Superior Courts.