McAteer as Personal Representative of the late Hugh McFadden Deceased & anor -V- The Tanyard Development Company & anor

APPROVED NO REDACTION NEEDED THE COURT OF APPEAL CIVIL Neutral Citation Number: [2026] IECA 38 Court of Appeal Record No.: 2024/160 High Court Record No.: 2013/13649P Whelan J. Hyland J. Collins J. BETWEEN/ AINE MCATEER as Personal Representative of the late HUGH MCFADDEN Deceased and MARGARET MCFADDEN PLAINTIFFS/ RESPONDENT - AND - THE TANYARD DEVELOPMENT COMPANY AND SEAMUS GUNN APPELLANTS/ APPELLANTS JUDGMENT of Ms. Justice Hyland delivered ex tempore on the 9th day of March, 2026 INTRODUCTION 1. This is an appeal against the decision of the High Court (Mulcahy J.) refusing to strike out the within proceedings for delay. That decision was given on an ex tempore basis on 30 May 2024. The ruling is appealed by the defendants (hereafter the “appellants”) in these proceedings. 2. The proceedings concern a conveyance of lands in Donegal. The plaintiffs were a husband and wife who sold a portion of the land attaching to their family home to the first appellant. The plaintiffs are now unfortunately both deceased. The respondent to this appeal is therefore Ms McAteer, who is the personal representative of her father, the first plaintiff, who was the registered owner of the lands. For ease of reference, I will refer to the respondent to this appeal as the “plaintiffs” for the remainder of the judgment. NATURE OF THE PLAINTIFFS’ CLAIM 3. The property is at Ballyboe, Ramelton, County Donegal. It is unregistered land. The first appellant is a limited company and is the owner of dwelling units known as the Tanyard situated at Green Lane. Those properties are immediately adjacent to the plaintiffs’ lands. The second appellant is a director and principal shareholder of the first appellant and is also a solicitor practising under the style and title of McCloughan, Gunn & Co. in Ramelton. He is of course an officer of the court. 4. In their Statement of Claim, the plaintiffs plead that in 1999, the first plaintiff agreed with the second appellant to sell a strip of ground approximately 15 feet in width along the southern boundary of the plaintiffs’ family home to the first appellant for development purposes in consideration of the sum of IR£6,000. The second appellant was the solicitor for the plaintiffs. However, he was also the solicitor for the first appellant and acted for both sides in the conveyance. This has long held to be an inadvisable practice and is now prohibited by S.I. No. 375/2012 - Solicitors (Professional Practice, Conduct and Discipline - Conveyancing Conflict of Interest) Regulation 2012. Significantly, the second appellant had his own pecuniary interest in the transaction being a director and shareholder of the first appellant. I will return to the consequences of this later in this decision. 5. It is pleaded that the first plaintiff was not given a copy of the indenture of 12 February 1999 transferring the lands, and he says he did not discover the extent of what the first appellant claimed to have bought until 2011, when on 1 March 2011, the Property Registration Authority (the “PRA”) notified the first plaintiff of applications that had been made to it by the first appellant for first registration as owner of five parcels of lands. It is pleaded that those parcels consisted of the lands and gardens of the plaintiffs’ family home, which they had been in exclusive occupation of for some 32 years. 6. The first plaintiff pleads that it was only when he collected the documentation from the first appellant’s office at that point in time that he realised that the indenture of 12 February 1999 purported to convey to the first appellant a more extensive area of land than that which the first plaintiff had understood had been conveyed, being significantly larger and including, in particular, parcels A2 and A3. It was also pleaded that the consideration of IR£6000 was not a fair value for the additional parcels and was an undervalue of the said land and that the indenture did not give effect to the agreement that was in fact made. 7. It is pleaded that the agreement was procured by reason of the undue influence of the second appellant over the first plaintiff. It is further pleaded that the second appellant, in his capacity as solicitor for the plaintiffs, was in breach of his duty of care and in breach of his fiduciary duty to the plaintiffs in various respects. The particulars are set out at paragraph 21 in the Statement of Claim. I will not read them all out but they are extensive particulars running from (i) to (xxiii), and they include: acting in a manner adverse to the interests of the plaintiffs; obtaining a personal benefit for himself and/or the first appellant from his fiduciary position as the plaintiffs’ solicitor; acting for the plaintiffs where there was a conflict between his fiduciary duties and his own personal interests; failing to advise the first plaintiff that he should have the land subject of the purported conveyance surveyed and independently valued; and other associated particulars. 8. I have considered the very full defence filed by the appellants which denies the allegations in full. 9. It is indisputable that the progress of these proceedings has been extremely slow. In 2023, the appellants brought a motion seeking to strike out the proceedings for want of prosecution and/or inordinate and inexcusable delay pursuant to the inherent jurisdiction of the court. Before considering the decision of the trial judge, I will set out the relevant chronology and the periods of delay. CHRONOLOGY 10. The first period of delay is that between the date of conveyance in 1999 and the date upon which the PRA contacted the plaintiffs. The plaintiffs received the letter from the PRA on 1 March 2011. Even allowing for the plaintiffs’ claim that they could not have known of their cause of action until 2011, the proceedings were not issued until 12 December 2013. And again, even allowing for a reasonable period of time for them to instruct a solicitor and for the plenary summons to be formulated, given the very long period between the date of the conveyance and 2011, it was necessary for them to move with expedition at that point. In my view, there is a 2 year delay at that point in time. 11. The Statement of Claim was issued on 16 May 2014, the Defence on 13 Feb 2015. Then, unfortunately, matters ground to a halt. In December 2017, there was a notice of change of solicitors. That happened 2 ½ years after the delivery of the defence. But of course, a change of solicitors is not a step in the proceedings, it is simply activity of some sort. 12. In 2018, the second plaintiff sadly died. On 14 July 2021, the Law Centre came on record. And again, even allowing for the death of the second plaintiff, and the delay that occasioned, there was certainly very significant delay, approaching 3 years, between December 2017 and July 2021. There was some activity from the Law Centre in 2022 inviting the appellants to participate in mediation. On 2 March 2023, another set of solicitors came on record. In August 2023, this motion, along with two other motions, were issued. That was the first step taken to actually progress the proceedings by way of pleadings or motions since 2015. 13. The trial judge concluded that the delay was inordinate. I agree. He also concluded that it was the plaintiff's obligation to move matters on and to progress the matter and that the delay was inexcusable up until 2021 i.e. when the Law Centre came on record. I agree with that finding also. 14. Turning to the reasoning of the trial judge in respect of the balance of justice, one can see why he concluded that the balance of justice favoured refusing the relief sought. Starting at page 4 of the transcript, he refers to the decision in Cave Projects Ltd. v. Kelly [2022] IECA 245 and identifies as follows: “It seems to be that the allegations of prejudice suffered by the defendants in this case fit very much into the case of generalised prejudice, and having regard to what is said on affidavit or what isn’t said on affidavit, the extent of the prejudice contended for by the plaintiff or by the defendants is simply not such as to compel a conclusion that these proceedings should be struck out as being in the interests of justice. Two affidavits have been sworn by the second appellant; the first of those affidavits simply says that he has been prejudiced by having a title action hanging over the property, that the defendant has been prejudiced by having a title action hanging over the property for an excessive period of time. That is a classic assertion of generalised prejudice. The only specific prejudice suggested is that set out in paragraph 12 of the second affidavit, which is that the Property Registration Authority has treated applications to register the title for five different plots as abandoned in light of the delay. That would appear to be the delay in dealing with the Property Registration Authority, but even if it is the delay caused by these proceedings, it is not a prejudice of any particular significance or not such a delay which would justify the dismissal of what is, on its face a serious cause of action. The appellants haven’t relied, as the second defendant in particular might have done, on the seriousness of the allegation hanging over him and the caselaw does suggest that an allegation of professional misconduct, which on one view, this claim is a claim which is so serious that it requires to be progressed with a degree of expedition or a greater degree expedition than might be the ordinary course. But notwithstanding that, the second defendant hasn’t sought to rely on that or expressly sought to rely on that is something which I am mindful of. I also, in determining the question of the balance of justice, have regard to the fact that in February and March 2022, the plaintiff suggested mediating this dispute. It’s suggested by counsel for the defendant that this isn’t a dispute which is appropriate for mediation because of the nature of the allegations which are made. I am not satisfied that is so. Experience for all of us reveals that there is no dispute, no matter how intransigent the parties are, which is incapable of being mediated. It may be there that there are many disputes which can’t be successfully mediated - or sorry, which won’t result in a successful mediation, but there are no disputes I think which simply because of the nature of the allegation prevent them from being mediated. And in any event, the evidence is that the appellant simply ignored or failed to engage with the request for mediation and moreover failed to take any step in response to the request for mediation notwithstanding that it must’ve been apparent at that time if it hadn’t been before, that the plaintiff intended to progress the action. And indeed, in circumstances where the appellant had received a notice of change of solicitors in July 2021, it must’ve been apparent from that time that the plaintiff intended to proceed with the action. So, in those circumstances where little prejudice other than the most generalised type of prejudice has been asserted on behalf of the defendant, where an opportunity to mediate was not embraced or engaged with by the defendant in any meaningful way, and no steps were taken by the defendant in 2021 or 2022 when they knew that these proceedings, that the plaintiff intended to maintain the proceedings, it seems to me that the balance of justice favours the refusal of this motion at this point in time.” KIRWAN 15. The decision of the trial judge was delivered on 30 May 2024. Exactly one year later, on 30 May 2025, the Supreme Court gave an important judgment in the case of Kirwan v. Connors [2025] IESC 21. In fact, four different judgments were delivered in respect to the correct test to be applied to striking out proceedings for delay and the correct test to be applied, having regard to the previous test in Primor v. Stokes Kennedy Crowley [1996] 2 IR 459. There was also discussion of the basis for the jurisdiction of the court to strike out proceedings, and, in particular, whether it derived from R.S.C. Ord. 122, r. 11 or the inherent jurisdiction of the court. However, I do not need to concern myself with that latter issue today. 16. Somewhat surprisingly, although counsel for the appellants gave various reasons as to why the trial judge should be overturned, she did not identify as one of those reasons that there had been a change in the legal approach to motions to strike out for delay and that the new approach identified in Kirwan meant this Court should overturn the trial judge. However, I must decide this appeal on the basis of the existing law and therefore, despite the absence of submissions on this point from the appellants, I will consider the impact of Kirwan on the arguments made. 17. As I said, there are four judgments in Kirwan of significant length. Helpfully, the Chief Justice, O’Donnell C.J., has drawn together the core conclusions – and, indeed, disagreements – in his judgment. For the purposes of this appeal, the following points in his judgment appear to be significant. • The law should recognise the passage of time is important and can justify dismissal of a claim without more. • If there is total inactivity for 2 years, the case should only be dismissed if the claim is an abuse of process or there is prejudice to the defendant such as would ground an application under the O’Domhnaill v. Merrick [1984] IR 151 jurisdiction. • After 2 years of total inactivity, a claim may be dismissed for want of prosecution, but it is only likely to be if a defendant can point to some additional prejudice or other factor pointing towards dismissal. • If there is 4 years of total inactivity, the claim should be dismissed if it is dependent on oral evidence unless the plaintiff can show compelling reasons why it should not be dismissed. There is no need to point to specific prejudice: the plaintiff bears the burden of showing why the case can proceed. • If there is 5 years plus of cumulative and unexplained delay, including a block of 2 years of complete procedural inactivity (as per paragraph 54 of the judgment of Murray J.), it should be dismissed unless there is a pressing exigency of justice that requires the case goes to trial. 18. That is important in this case because it is fair to say, given what I identified earlier in respect of the delay, there has been 5 years of cumulative and unexplained lack of activity, including blocks of complete procedural inactivity for over 2 years. Accordingly, this case certainly falls into the category of cases where there has been a very serious delay. 19. In that context, I must consider an issue that is of considerable importance here: can the nature of the case be taken into account when looking at the exigencies of justice? One sees from O’Donnell C.J.’s decision that even where there is this long period of delay, if there is a pressing exigency of justice that requires a case to go to trial, then it may do so. That, in fact, is also reiterated at paragraph 27 of his judgment where it is said that the test is not mechanical and remains a matter for judgment and that it remains conceivable that individual judges may take different views in borderline cases. So, this is not some kind of automatic test. 20. Returning to the question of the nature of the case. Murray J. identifies at paragraph 55 of his judgment that the court is not usually concerned with the merits of the case and refers to the decision of Power J. in the Court of Appeal in Kirwan to the effect that the law does not require the motion judge to hear and determine the merits as if it were a trial. But Murray J. does go on to say that if a case was so strong that it was unanswerable, those factors, i.e. the substance of the case, might exceptionally be taken into account in the exercise of the discretion. 21. It appears to me that this is one of those highly unusual and exceptional cases. I do not think it can be said that the plaintiffs’ case is unanswerable, since the case remains to be tried and there are many disputed issues. But there are a number of uncontroverted facts that suggest the balance of justice tends against striking out these proceedings despite the very significant delays in the case. 22. First, and overwhelmingly, the second appellant acted both for the plaintiffs and for the first named appellant in the conveyancing transaction. However, the facts of this case disclose an even more unusual factor: the second appellant was a director and shareholder of the first appellant, so he had his own commercial interest in the transaction. He was therefore acting as solicitor for the purchaser, solicitor for the vendors and had a separate pecuniary interest in the sale in his capacity as director and shareholder of the purchaser. 23. A second factor, although of significantly less significance, is that there has never been any attempt by the appellants to fence off or separate the property subject of the conveyance and the plaintiffs continue to enjoy uninterrupted access to their garden. Nor does any step appear to have been taken in relation to the lands since the communication from the PRA in 2011. 24. Finally, although this is again of considerably less significance, when a letter seeking discovery of the conveyancing file was sent in 2023 by the plaintiffs’ solicitor, the file was not produced, and a motion for discovery was required to be brought. That motion has been adjourned pending the hearing of a motion seeking mediation, but I am struck by the fact that the second appellant has chosen not to furnish the plaintiffs with the conveyancing file relating to the sale of their lands. I readily acknowledge there is litigation between the parties but nonetheless, given that the second appellant acted as their conveyancing solicitor, it is unsatisfactory he has not thought it appropriate to provide them with the file. 25. In all these circumstances, I consider that the plaintiffs must be taken – in the limited context of this motion – to have, if not an unanswerable claim, nonetheless a very strong claim against the second appellant, an officer of the court, in relation to the claims of breach of fiduciary duty, breach of trust, and other associated claims, although of course that does not necessarily mean that they will be able to prove that any such breaches, if established, caused them loss. 26. However, that is not the end of the inquiry. When considering the balance of justice, it is necessary to consider how the delay will impact upon the running of the trial, and whether the appellants can get a fair trial. If the appellants could not get a fair trial, the matter would almost inevitably require to be struck out. 27. This necessitates a consideration of the prejudice caused to the appellants because of the delay. As observed by the trial judge, no affidavit evidence asserting specific prejudice was put before the court, (except in respect of the PRA point) including in relation to the impact of the delay upon the professional reputation of the second appellant. 28. At the hearing before us, counsel sought to argue that the death of the brother of the first plaintiff in 2012, who apparently advised the first plaintiff as to the price payable for the land, the death of the second plaintiff, Margaret McFadden in 2018, and the death of the first plaintiff, Hugh McFadden, in 2024, had prejudiced the appellants and that I should take this into account despite the lack of affidavit evidence in this respect. 29. In relation to the brother of the first plaintiff, he died in 2012 and therefore the delay in moving the proceedings on was irrelevant to his presence at the trial. Therefore, I discount his death and his potential presence as a witness as a relevant factor in determining the question of prejudice caused by delay. 30. In relation to the two plaintiffs, their evidence would potentially have been disadvantageous to the appellants and therefore, it is not surprising there is no averment to the effect that their unavailability at trial would disadvantage the appellants. In other words, it is a difficulty the plaintiffs will have to contend with rather than the appellants. 31. Moreover, this is a case which, if not exclusively a documents case, is certainly a case where documents will play a significant role, and the appellants will be able to rely on documents to support the pleas outlined in their defence. 32. I also consider that the appellants have not demonstrated that the trial judge went beyond his discretion in taking into account as part of the balance of justice the appellants’ refusal to engage with mediation in any meaningful way. CONCLUSION 33. In those circumstances, I consider that, despite the very great delay in this case, given (a) the very stark and unusual nature of the allegations (b) the undisputed facts identified above (c) my conclusion that the appellants have failed to demonstrate that they are so prejudiced by the delay that they cannot defend themselves and (d) the appellants’ refusal to engage in mediation, the balance of justice dictates that I uphold the trial judge in deciding that these proceedings ought not be struck out. I would accordingly dismiss the appeal. MS. JUSTICE WHELAN: I have carefully listened to the judgment just now delivered by Ms. Justice Hyland, and I am in entire agreement with her analysis and conclusions on the orders that should follow. MR. JUSTICE COLLINS: I have also heard the judgment delivered upon my colleague Ms. Justice Hyland and I also agree with the reasoning contained therein in the orders she proposes to make in context of this appeal.