Irish Supreme Court returns Byrne Wallace negligence case to High Court

Irish firm Byrne Wallace has won an appeal to the country’s Supreme Court, exonerating it of intentional dishonesty in a negligence claim brought against legacy firm BCM Hanby Wallace by KBC Bank.

In a judgment handed down yesterday (25 June) following a hearing in March (11 March 2013), the Supreme Court decided that High Court judge Mr Justice McGovern’s finding of deception by BCM Hanby Wallace “cannot and should not be read as attributing any intentional dishonesty or deliberate misleading to any partners or officers of the appellant firm”. 

The case was brought by KBC after it suffered losses in property transactions in 2005 and 2006. BCM Hanby Wallace was retained to investigate title and ensure security over loans made to two individuals, John Kelly and Thomas Byrne, worth a total of €23.9m.

KBC claimed that the firm failed to obtain security in respect of 27 properties, and as a result, the bank said it had suffered “very substantial losses due to its inability to realise its security coupled with the substantial devaluation of the properties”.

Last year McGovern J found BCM Hanby Wallace had breached its duty to its client, and disposed of the firm’s claim that the bank was guilty of contributory negligence. He awarded damages of €17.7m against the firm.

Yesterday, the Supreme Court ruled that McGovern J erred in the way he considered the issue of contributory negligence, and referred the case back to the High Court.

“[McGovern J’s] decision turned on his determination that any contributory negligence of the bank was merely causa sine qua non and was not a proximate cause of the loss. He reached no conclusion as to whether there had actually been contributory negligence on the part of the bank,” said Mr Justice Fennelly, giving the lead judgment.

Fennelly J said it remained a matter for the High Court to decide on the “relative blameworthiness and causative contribution of the respective faults of the appellant and the bank respectively”.

In a statement, Byrne Wallace said it welcomed the Supreme Court’s findings. “Byrne Wallace is committed to ensuring the highest standards of advice and performance for all its clients,” it added.