Abbey International Finance Ltd v Point Ireland Helicopters Ltd and Another

• Jurisdiction: Ireland
• Judge: Mr. Justice Kelly
• Judgment Date: 27 July 2012
• Neutral Citation: [2012] IEHC 374
• Court: High Court
• Date: 27 July 2012

Abbey International Finance Ltd v Point Ireland Helicopters Ltd & Elitaliana SPA

COMMERCIAL

BETWEEN

ABBEY INTERNATIONAL FINANCE LIMITED

PLAINTIFF

AND

POINT IRELAND HELICOPTERS LIMITED AND ELITALIANA S.p.A.

DEFENDANTS

[2012] IEHC 374

[No. 5845 P/2012]

THE HIGH COURT

COURTS

Commercial Court

Plenary proceedings - Summary judgment - Jurisdiction - Inherent jurisdiction of court - Whether court had jurisdiction to grant summary judgment in plenary proceedings -Whether wide powers of Commercial Court permitted granting of summary judgment in plenary proceedings - Test to be applied - Whether test of probability of real or bona fide defence applied - Barry v Buckley [1981] IR 306, Dome Telecom Ltd v Eircom Ltd [2007] IESC 59, [2008] 2 IR 726 and Dolan v Neligan [1967] IR 247 considered; IBB Internet Services Ltd v Motorola Ltd [2011] IEHC 253, [2011] 2 ILRM 321, PJ Carroll & Co Ltd v Minister for Health and Children [2005] IESC 26, [2005] 1 IR 294, McCann v Desmond [2010] IEHC 164, [2010] 4 IR 554, Kalix Fund Ltd v HSBC Institutional Trust Services (Ireland) Ltd [2009] IEHC 457, [2010] 2 IR 581 and Sweetman v An Bord Pleanála [2009] IEHC 174, (Unrep, Kelly J, 3/4/2009) considered; Aer Rianta cpt v Ryanair Ltd [2001] 4 IR 607 and First National Commercial Bank plc v Anglin [1996] 1 IR 75 applied - Rules of the Superior Courts 1986 (SI 15/1986), O 63A - Summary judgment granted for liquidated sum (2012/5845P - Kelly J - 27/7/2012) [2012] IEHC 374

Abbey International Finance Ltd v Point Ireland Helicopters Ltd

Facts: The plaintiff had been formed to facilitate the leasing of aircraft. The plaintiff had agreed to lease three helicopters and a medical kit ("the items") to the first defendant. The first defendant in turn had sub-leased the items to the second defendant. The plaintiff alleged that there had been substantial default in the payment of rent under the leases, totalling €3,195,000. The plaintiff now sought liquidated damages and relief in respect of the items, and applied for summary judgment or in the alternative injunctive relief.

Held by Kelly J, that the first issue to be determined was whether the plaintiff could seek summary judgment for non-liquidated sums. In the Court's view, there was no reason why a defendant without any defence could not be subject to summary judgment for non-liquidated sums, given that that remedy existed for liquidated sums. This power was derived from the inherent jurisdiction of the Court, notwithstanding any express provision in the Rules of the Superior Court.

The Court considered that plaintiffs should have the ability to seek summary judgment regardless of the type of proceedings where it could be shown that the defence lacked any reasonable prospect of success. This view was supported by the fact the instant case was in the Commercial List and the powers available to judges hearing cases in that list.

Having established that summary judgment was available as a remedy in the instant case, the Court granted summary judgment in respect of the liquidated damages aspect, and allowed conditional leave to defend the remainder of the claim.

BARRY v BUCKLEY 1981 IR 306

SUN FAT CHAN v OSSEUS LTD 1992 1 IR 425

DOME TELECOM LTD v EIRCOM LTD 2008 2 IR 726

IBB INTERNET SERVICES LTD v MOTOROLA LTD 2011 2 ILRM 326

RSC O.63(A) r 5

RSC O.63 r6(1)

PJ CARROLL & CO LTD v MIN FOR HEALTH 2005 1 IR 294

MCCANN v DESMOND 2010 4 IR 554

KALAX FUND LTD v HSBC INTERNATIONAL TRUST SERVICES (IRELAND) LTD 2009 2 IR 581

SWEETMAN v BORD PLEANALA UNREP KELLY 3.4.2009 2009/54/13599 2009 IEHC 174

AER RIANTA CPT v RYANAIR LTD 2001 4 IR 607

FIRST NATIONAL BANK v ANGLIN 1996 1 IR 75

Foreword

1 1. This is a note of a judgment which I delivered ex tempore. As the judgment dealt with a number of important procedural issues, I indicated to the parties that I would reproduce that part of it in the form of a written judgment. This I now do.

Background

2 2. The plaintiff is a limited company registered in Ireland. It is engaged in the leasing of aircraft. The profits derived from that activity are used by it to support various charities.

3 3. The first defendant is an Irish company and is described as a special purpose vehicle which was established in order to effect the leasing transactions the subject of this litigation. The second defendant is an Italian company and is a member of the Point Aircraft group of companies.

4 4. This litigation concerns three aircraft and a medical kit. All three aircraft are helicopters. Lease agreements were entered into in respect of them between the plaintiff and the first defendant on 25 ^th August, 2008, 25 ^th March, 2009 and 29 ^th September, 2009. The medical kit lease is dated 21 ^st October, 2008. There were then subleases entered into as between the defendants in respect of the helicopters and the medical equipment. Two of the helicopters are, at present, in Kosovo and the other is in Italy.

Plaintiff's Case

5 5. It is the plaintiff's case that there has been default in respect of rental obligations under the leases and subleases. That much was conceded by counsel on behalf of the defendants who accepted that arrears of €3,195,000 are owing. That is a remarkable situation, given the importance which the lease attributes to the payment of rent. For example, clause 4.5 says:-

"The lessee's obligation to pay rent and other amounts due hereunder shall be absolute and unconditional."

6 6. The lease goes on to say:-

"The lessee acknowledges and agrees that its obligation to pay all amounts to rent due and owing under the terms hereof for so long as this lease is continuing shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including without limitation, any set off or counterclaim or defence or other right which the lessee may have, any lack or invalidity or defect in title, condition, design or operation of the aircraft, any charge or lien on the aircraft, any invalidity or unenforceability or lack of power of the lessee to enter into this lease, or any insolvency event against the lessor, the lessee or any other person."

7 7. Clause 4.6 of the lease contains an express proviso that:-

"The lessee shall pay the rent and other amounts without set off or counterclaim and free of any deductions or withholdings other than those required by law."

8 8. The lease also contains a "hell and high water" clause at para. 4.13 which is in the following terms:-

"The lessee's obligation to pay rent and make other payments in accordance with this agreement shall be absolute and unconditional irrespective of any contingency whatsoever, including, but not limited to:

(a) any right of set off, counterclaim, recoupment, defence or other right.

(b) any unavailability of the aircraft for any reason.

(c) any failure or delay on the part of either party hereto, whether with or without fault on its part in performing or complying with any of the terms or conditions of this agreement.

(d) any insolvency, bankruptcy, administration, reorganisation, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against the lessor or lender.

(e) any lack of due authorisation of, or other defect in this agreement."

9 9. It is difficult to conceive more watertight obligations to pay rent in accordance with the terms of the lease. Yet it is a fact that almost from the very beginning there has been default on the part of the first defendant in respect of the discharge of those obligations.

10 10. Given that situation, it is hardly surprising that on 11 ^th June of this year, the plaintiff served notice of termination of the leases and subleases and went about exercising its rights under the security assignments. Shortly thereafter, on 14 ^th June, 2012, it commenced these proceedings.

11 11. In this action, the plaintiff seeks both liquidated amounts and substantive relief in respect of the aircraft. In particular, it seeks an order for specific delivery up of the aircraft and the medical kit to the plaintiff. Given that mix of reliefs, the plaintiff opted to proceed by way of plenary summons.

12 12. The plaintiff contends that there is no defence to any aspect of this claim and it has brought the present motion seeking judgment for the entire of its claim. It thus seeks summary judgment for the monies due and delivery up of the aircraft. Alternatively, it seeks injunctive relief.

13 13. The first issue which arises is whether or not it is open to the plaintiff to bring a claim for summary judgment in respect of non-liquidated sums.

Jurisdiction

14 14. This court is all too familiar with the situation where a liquidated sum of money is the subject of an action commenced by summary summons. The rules of court specifically provide for judgment being marked in the Central Office of this court in default of appearance in such a case. An application can be made to the Master or the Court for summary judgment in respect of that type of claim when an appearance is entered. It is equally clear that if one brings a claim for a liquidated sum on a plenary summons, judgment for that sum can be obtained in the Central Office in the absence of any appearance being entered. In the event of there being an appearance, an application can be made to the Court for summary judgment in respect of...