Anglo Irish Bank Corporation Ltd v Collins & Kiernan
| Jurisdiction | Ireland |
| Judge | Ms. Justice Dunne |
| Judgment Date | 13 July 2011 |
| Neutral Citation | [2011] IEHC 385 |
| Court | High Court |
| Date | 13 July 2011 |
[2011] IEHC 385
THE HIGH COURT
BETWEEN
AND
AND
AND
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S2(2)(C)
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S30
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S30(1)
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S25
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S26
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S30(1)(A)
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S30(1)(B)
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S30(1)(C)
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S30(1)(D)
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S30(1)(E)
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S30(1)(F)
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S30(1)(G)
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S30(2)
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S25
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S26
BOWMAKERS LTD v BARNETT 1945 KB 65
STONE & ROLLS LTD (IN LIQUIDATION) v MOORE STEPHENS 2009 1 AC 1391
CRIMINAL JUSTICE (THEFT & FRAUD OFFENCES) ACT 2001 S2(2)(C)
RAIFFEINSEN ZENTRALBANK v CROSSSEAS SHIPPING LTD 2000 1 WLR 1135
NORTON DEEDS 2ED P46
GARDINER v WALSH 1855 5 E & B 83
KOCH v DICKS 1933 1 KB 307
SUFFELL v BANK OF ENGLAND 1882 9 QBD 555
CHITTY CONTRACTS 29ED P16-160
HOLMAN v JOHNSON 1775 1 COWP 342
BOWMAKERS LTD v BARNET INSTRUMENTS LTD 1945 1 KB 65
STONE & ROLLS LTD (IN LIQUIDATION) v MOORE STEPHENS 2009 1 AC 1391
TINSLEY v MILLIGAN 1994 1 AC 340
FORGERY & COUNTERFEITING ACT 1981
ARCHIBOLD CRIMINAL PLEADING EVIDENCE & PRACTICE 2005
STANDARD CHARTERED BANK v WALKER 1982 1 WLR 1410
HALSBURY'S LAWS OF ENGLAND VOL 77 2010 PARA 479
MOORVIEW DEVELOPMENTS LTD & ORS v FIRST ACTIVE PLC & ORS UNREP CLARKE 6.3.2009 2009 IEHC 214
IRISH OIL & CAKE MILLS LTD v DONNELLY UNREP COSTELLO 27.03.1983 1986/6/798
RUBY PROPERTY CO LTD & MCNALLY v KILTY & SUPERQUINN UNREP MCKECHNIE 31.1.2003 2003/46/11214
BANKING LAW
Guarantees
Forgery - Receiver - Duties - Alterations to guarantee post execution - Whether material alteration - Whether guarantee false instrument - Whether alterations amounted to forgery - Whether principle of ex turpi causa non oritur acitio applied - Duty of receiver to realise assets to best advantage - Whether receiver negligent - Whether defendants suffered loss - Standard Chartered Bank v Walker [1982] 1 WLR 1410 approved - Raiffeisen Zentralbank AG v Crossseas Shipping Ltd [2000] 1 WLR 1135; Holman v Johnson (1775) 1 Cowp 342; Bowmakers Ld v Barnet Instruments Ld [1945] 1 KB 65; Stone and Rolls Ltd v Moore Stephens [2009] UKHL 39, [2009] 1 AC 1391; Moorview Developments Ltd v First Active plc [2009] IEHC 214 (Unrep, Clarke J, 6/3/2009); The Irish Oil and Cake Mills Ltd v Donnelly (Unrep, Costello J, 27/3/1983); Ruby Property Company Ltd v Kilty (Unrep, McKechnie J, 31/1/2003) considered - Criminal Justice (Theft and Fraud) Offences Act 2001 (No 50), ss 2, 25, 26, 30 and 31 - Judgment entered (2010/142S - Dunne J - 13/7/2011) [2011] IEHC 385
Anglo Irish Bank Corporation Ltd v Collins
Facts The plaintiff brought an action for the repayment of a sum of monies which was allegedly owed on foot of non-recourse guarantees entered into by the defendants. The monies were in relation to a housing development carried out by the defendants. The defendants contended that the plaintiff was precluded from recovering the sums due by reason of the wrongful act of the plaintiff (principle of 'ex turpi causa non oritur actio'). It was submitted that guarantees entered into by the defendants had been altered by a solicitor acting on behalf of the plaintiff and therefore the documents could not be relied upon to recover the sum claimed. On behalf of plaintiff it was maintained that the alterations were minor in nature and the defendants had accepted that they reflect the nature of the transaction. There was also some dispute as to the capacity that the defendants had acted in when signing the guarantees. Furthermore in a counterclaim it was contended that the receiver who had been appointed in relation to disposal of the property in question had been negligent in his conduct of the receivership and as such the plaintiff Bank was vicariously liable for the negligence of the receiver.
Held by Dunne J in finding in favour of the plaintiff. It was accepted on behalf of the defendants that the guarantees received by the Bank were unlimited guarantees. The defendants understood that they were signing the guarantees as guarantors and not in any other capacity. The alterations made by the solicitor reflected the intention of the parties, were minor in nature and could not be described as material. The alterations did not affect the nature of the rights and obligations of the defendants. There was no evidence that the receiver had furnished a title which was unmarketable and/or unmortgageable. There was no basis upon which it could be suggested that the receiver was not entitled to appoint his own solicitor for the sale of the properties. It could not be said that the failure to sell more than a handful of the properties by the receiver was for any reason other than the extremely depressed state of the property market. There was no evidence that, were it not for the actions of the receiver the properties would have sold. The plaintiff was entitled to judgment for the sums claimed.
Reporter: R.F.
JUDGMENT of Ms. Justice Dunne delivered the 13th day of July 2011
This is a claim by the plaintiff ("Anglo") in respect of a number of sums claimed to be due by the defendants to the plaintiff. The overall sum claimed is a sum of €6,882,970.06. These sums are said to be due on foot of loan facilities provided to the defendants and one Richard Fitzgerald and on foot of guarantees signed by each of the defendants in respect of loan facilities advanced to M.D.Z. Limited. A further sum is claimed on foot of a performance bond but that issue has been postponed for the time being. There is no dispute between the parties that the sums in respect of the partnership are due. Further, there is no dispute as to the amount due on foot of the guarantees. However, it is submitted that the plaintiff is precluded from recovering the sums due in respect of the partnership monies and in respect of the sums due on foot of the guarantees by reference to the principle ex turpi causa non oritur actio" in respect of an issue arising on foot of the guarantees.
The issue raised related to the admitted alteration by the solicitor for Anglo of the guarantees signed by the defendants and as such whether the alterations made to the guarantees amount to a forgery such that Anglo cannot rely on the documents to recover the sum claimed on foot thereof against the defendants. Further, it as claimed that by virtue of the principle of ex turpi causa non oritur actio, the Bank could not rely on previous guarantees signed by the defendants.
The issue raised in respect of the counterclaim was the question as to whether or not the receiver was negligent in his conduct of the receivership and as such it was contended that Anglo was vicariously liable for the negligence of the receiver.
I propose to deal with matters by first considering the arguments made by and on behalf of the defendants in relation to the principle ex turpi causa non oritur actio, which is focused on the circumstances surrounding a guarantee entered into by the defendants on the 20 th August, 2008. It would be useful in the first instance to set out certain provisions of the Criminal Justice (Theft and Fraud Offences) Act 2001. Section 2(2)(c) provides:-
"For the purposes of this Act a person deceives if he or she -"
…
(c) fails to correct a false impression which the deceiver previously created or reinforced or which the deceiver knows to be influencing another to whom he or she stands in a fiduciary or confidential relationship,
and references to deception shall be construed accordingly."
Section 30 contains the meaning of false and making and I will refer to s. 30.
Section 30(1) provides:-
"An instrument is false for the purposes of this Part if it purports"
(a) to have been made in the form in which it is made by a person who did not in fact make it in that form,
…
(e) to have been altered in any respect by a person who did not in fact alter it in that respect,
…
(2) A person shall be treated for the purposes of this Part as making a false instrument if he or she alters an instrument so as to make it false in any respect (whether or not it is false in some other respect apart from that alteration)."
Section 25 is also relevant in that it deals with the offence of forgery. It provides as follows:-
2 "(1) A person is guilty of forgery if he or she makes a false instrument with the intention that it shall be used to induce another person to accept it as genuine and, by reason of so accepting it, to do some act, or to make some omission, to the prejudice of that person or any other person.
(2) A person guilty of forgery is liable on conviction on indictment to a fine or imprisonment for a term not exceeding 10 years or both."
Section 26 creates the offence of using a false instrument and s. 31 provides a definition of the meaning of the words "prejudice" and "induce".
It was admitted that certain alterations were made to the guarantees by Mr. O'Leary, the solicitor for Anglo, post execution. Mr....
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