The Kehoes owed Promontoria (Aran) Limited in excess of €3.2M by December 2020. They had borrowed money from Ulster Bank Ireland DAC in 2008, 2010 and 2011 and were unable to repay.
In February 2015 Ulster Bank transferred all of their interest and entitlements in the loans to Promontoria (Aran) Limited. In October 2015 Promontoria appointed a receiver over various properties belonging to the Kehoes.
The Kehoes challenged the appointment of the receiver in 2016 legal proceedings and claimed it was invalid.
These proceedings were struck out in 2017 but in 2020 Mr Kehoe’s solicitor wrote to Promontoria’s solicitors claiming that the strike out had been done without the knowledge or consent of Mr Kehoe and he did not accept the validity of the appointment in 2020.
The Kehoes registered a Lis Pendens in May 2018 in the Land Registry, and filed it in the High Court in 2019.
In this case Promontoria (Aran) Limited and Ken Fennell, the receiver, sought to have the legal proceedings brought by the Kehoes struck out on the grounds of inordinate and inexcusable delay. They also sought to have the lis pendens vacated or removed from the Land Registry folio which was affected.
The question the High Court had to address was whether there was inordinate and inexcusable delay by the Kehoes in progressing their legal proceedings. If so, would the High Court exercise its discretion to strike out Kehoes’ legal proceedings.
Decision
Section 123 of the Land and Conveyancing Law Reform Act 2009 allows the High Court to vacate a lis pendens if there has been unreasonable delay in prosecuting the action or the action is not being prosecuted bona fide.
Regarding striking out the legal proceedings the High Court has inherent jurisdiction to dismiss proceedings for want of prosecution on the grounds of delay.
As stated by Hamilton C.J. in Primor plc v. Stokes Kennedy Crowley [1996] 2 I.R. 459 at 475: “[T]he courts have an inherent jurisdiction to control their own procedure and to dismiss a claim when the interests of justice require them to do so.”
It is clear from Primor that in considering whether to strike out proceedings on the grounds of delay, a court should embark on a three step test. First, the court should consider whether the delay in question is inordinate. Secondly, if the delay is inordinate then the court should consider whether that inordinate delay is excusable. Thirdly and finally, if the delay is both inordinate and inexcusable, the court should then consider whether the balance of justice favours the dismissal of the proceedings.
Question 1: was the delay inordinate? The High Court found that the delay of 37 months in this case was inordinate.
Question 2: was the delay inexcusable? The High Court reviewed all the correspondence between the parties and determined that the delay was inexcusable for the Kehoes were called upon, on multiple occasions, to explain the significant delay but no real attempt was made to explain it.
Question 3: does the balance of justice favour dismissal of the Kehoes’ proceedings? The High Court decided that the balance of justice did lie in favour of striking out the proceedings.
The High Court also made an order vacating the lis pendens registered on the property folio at Land Registry.