Pepper Finance [Ireland] DAC v Roche & Anor (Approved)

Factual and Procedural Background

The Plaintiff initiated summary proceedings by summons dated 2 January 2014, with the relevant timeline more properly commencing from 23 February 2015 when a default judgment was set aside by consent. The Plaintiff claims €887,515.94, representing sums allegedly due under three separate loan facilities and an overdraft facility granted in March 2008 and July 2012. The Plaintiff's predecessor averred that the Defendants failed to make repayments in accordance with the terms, with no payments made since 25 March 2013. Interest accrued up to November 2013 is included in the claim, but no interest after that date is sought. The Defendants sought dismissal of the proceedings on grounds of want of prosecution and inordinate delay, also referencing the European Convention on Human Rights, though those arguments were subsumed under the delay and prejudice claims.

From 2015 to November 2018, the proceedings involved multiple affidavits and adjournments, partly due to the Defendants' lack of legal representation until March 2018. However, a significant delay occurred between November 2018 and April 2023, with limited active steps taken by the Plaintiff aside from an ex parte application in March 2022 to substitute the Plaintiff following a loan sale and a motion to amend the summons in April 2023 reflecting a 2019 Supreme Court decision.

The Defendants consistently asserted a defence and requested a plenary hearing, disputing the Plaintiff’s claim and raising issues regarding the circumstances of loan agreements, alleged breaches, and difficulties in obtaining documentation. The Plaintiff maintained the summary proceedings approach despite these contentions.

Legal Issues Presented

1. Whether the proceedings should be dismissed for want of prosecution pursuant to Order 122, rule 11 due to inordinate and inexcusable delay.
2. Whether the delay has caused such prejudice to the Defendants as to render a fair trial impossible, invoking the O'Domhnaill jurisdiction.
3. Whether the Plaintiff’s ex parte substitution application and numerous consent adjournments constitute "proceedings" sufficient to interrupt the running of the two-year period under Order 122, rule 11.
4. Whether the Defendants’ asserted prejudice arising from delay justifies dismissal of the proceedings.

Arguments of the Parties

Defendants' Arguments

• The Plaintiff’s failure to progress the summary proceedings expeditiously constitutes want of prosecution and inordinate delay, justifying dismissal under Order 122, rule 11.
• The Defendants maintain a substantive defence disputing indebtedness, alleging breach of contract, manipulation of repayment terms, and being "tricked" into signing loan documents.
• The ex parte substitution application by the Plaintiff does not amount to a "proceeding" interrupting the two-year period for want of prosecution.
• The delay has prejudiced their ability to present a full defence, including impaired recollection of witnesses and difficulties obtaining relevant documentation.
• They rely on the European Convention on Human Rights arguments, absorbed into their delay and prejudice claims.

Plaintiff's Arguments

• The delay from 2018 to 2023, although inordinate, is excused by the Defendants’ consent to numerous adjournments to facilitate negotiations and the substitution application.
• The ex parte substitution order is a "proceeding" for the purposes of Order 122, rule 11, interrupting the running of the two-year period.
• The Defendants’ alleged prejudice mostly predates the inordinate delay period and does not establish a causal connection to the delay between 2018 and 2023.
• The summary proceedings are appropriate given the contractual issues primarily involve interpretation of loan agreements, and any issues arising from delay can be addressed by the trial judge.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Bank of Ireland Mortgage Bank v. O'Malley [2019] IESC 84	Requirements for amendment of summons to reflect Supreme Court guidance in mortgage enforcement cases.	The Plaintiff issued a motion to amend summons in line with this decision, which influenced timing of proceedings.
Bank of Ireland v. Wilson [2020] IEHC 646	Expectation that summary proceedings be pursued expeditiously.	Supported the Court’s finding that the Plaintiff’s delay was inordinate given the summary nature of the proceedings.
O'Dwyer v. Boyd [2002] IESC 54	Definition of what constitutes a "step" or "proceeding" for the purposes of procedural rules.	Considered by the Court in assessing whether ex parte substitution application and adjournments count as proceedings under Order 122, rule 11.
O'Flynn v. Board Gáis Éireann [1982] ILRM 324	Clarification on what constitutes a "step" in litigation affecting procedural rights.	Endorsed as guiding principle for determining what interrupts the running of time for want of prosecution.
Danske Bank v. Walsh [2018] IEHC 799	Whether service of summons amounts to a "proceeding" under Order 122, rule 11.	Supported the Court’s conclusion that ex parte substitution order is a proceeding interrupting the two-year period.
Cave Projects Ltd v. Kelly [2022] IECA 245	Requirement of causal connection between delay and prejudice for dismissal.	Applied to assess Defendants’ prejudice claims, concluding most prejudice preceded the inordinate delay.
Sullivan v. HSE [2021] IECA 287	Assessment of risk of unfair trial due to delay.	Supported the Court’s view that no real risk of unfair trial had been established by the Defendants.

Court's Reasoning and Analysis

The Court examined the nature and length of delay, noting that the Plaintiff’s choice of summary proceedings entails an expectation of expeditious progression. The delay between 2018 and 2023 was found to be inordinate. However, the Court considered the Defendants’ consent to multiple adjournments for negotiation purposes and the substitution application, which excused the delay in part. The Court analyzed the procedural concept of "proceedings" under Order 122, rule 11, concluding that the ex parte substitution order constitutes a proceeding interrupting the two-year period for want of prosecution. The Defendants’ claims of prejudice due to delay were scrutinized, with the Court finding that most prejudice existed prior to the inordinate delay period and that the Defendants failed to establish a causal connection between delay and prejudice sufficient to warrant dismissal. The Court also assessed the balance of convenience, finding that dismissal would unfairly deprive the Plaintiff of the opportunity to recover substantial debts. The Court relied on precedent to reinforce these principles and concluded that issues arising from delay could be managed by the trial judge in due course.

Holding and Implications

The Court DISMISSED the Defendants' applications to dismiss the proceedings for want of prosecution and inordinate delay.

The decision allows the Plaintiff to continue pursuing summary judgment on the substantial debt claim. It confirms that ex parte substitution orders interrupt the running of time for dismissal under Order 122, rule 11 and that consent adjournments may excuse delay. The ruling does not establish new precedent but applies existing principles to the facts, emphasizing the importance of balancing procedural fairness with the need to progress litigation expeditiously. The Court indicated it will consider further directions to prevent unnecessary delay. Costs were awarded to the Plaintiff, subject to adjudication and a stay pending final outcome.