Bank of Scotland Plc v Shovlin and Others
| Jurisdiction | Ireland |
| Judge | Mr. Justice Charleton |
| Judgment Date | 23 February 2012 |
| Neutral Citation | [2012] IEHC 35 |
| Court | High Court |
| Date | 23 February 2012 |
[2012] IEHC 35
THE HIGH COURT
Between
and
RSC O.37 r7
DANSKE BANK A/S (T/A NATIONAL IRISH BANK) v DURKAN NEW HOMES & ORS UNREP SUPREME 22.4.2010 2010/10/2392 2010 IESC 22
DUBLIN DOCKLANDS DEVELOPMENT AUTHORITY v JERMYN STREET LTD & BLACK TIE LTD UNREP CLARKE 1.6.2010 2010/13/3225 2010 IEHC 217
KIELY v MASSEY 1880 6 LRI 445
CAULFIELD v BOLGER & ROCHE 1927 IR 117
RSC O.28 r1
PRACTICE & PROCEDURE
Summary judgments
Real or bona fide defence - Arguable defence - Reasonable prospect of success - Power to amend summons - Defect in summons - Ambiguity - Whether defence had reasonable prospect of success - Whether very clear that defendants had no defence - Whether issues of fact required to be explored - Whether no issues or issues easily determined - Whether risk of injustice - Whether power to amend summons - Whether defect in summons - Whether ambiguity - Whether appropriate to allow amendment- Dublin Docklands Development Authority v Jermyn Street Ltd [2010] IEHC 217, (Unrep, Clarke J, 1/6/2010) and Kiely v Massey (1880) 6 LR Ir 445 followed - Danske Bank v Durkan New Homes Ltd [2010] IESC 22, (Unrep, SC, 22/4/2010); Bank of Ireland v Educational Building Society [1999] 1 IR 220; Aer Rianta cpt v Ryanair Ltd [2001] 4 IR 607; McGrath v O'Driscoll [2006] IEHC 195, [2007]1 ILRM 203; Stokes v Kerwick [1921] 56 ILTR 24; Gold Ores Reduction Company Ltd v Parr [1892] 2 QB 14; Caulfield v Bolger [1927] 1 IR 117considered - Rules of the Superior Courts 1986 (SI 15/1986), O 37, r 7 - Judgment granted (2011/3257S - Charleton J - 23/2/2012) [2012] IEHC 35
Bank of Scotland v Sholvin
Facts: Summary judgment was sought by the plaintiff bank against the defendants pursuant to a loan agreement for Eur180 million to purchase a bank building. The defendants purchased the building and it was leased back. It was argued by the defendants that there was an error in the summary summons relating to the interest on the principal sum due. A stay was sought on the entry of the judgment against the fifth and seventh named defendants. It was argued that there was a defect in the contract, where the bank was described as both principal and agent. The Court considered the "limited recourse" provisions in the contract.
Held by Charleton J. that the Court was required to enter judgment against the defendants, subject to a stay as against the fifth and seventh named defendants. The Court would make no order against any other defendant not mentioned in the judgment.
Reporter: E.F.
Mr. Justice Charleton delivered on the 23rd day of February 2012
1. This is an application for summary judgment by the plaintiff bank against such defendants as are later particularised in this judgment. It is made under a loan agreement dated the 28 th August, 2006. The loan was for €180 million and the purpose of the defendants in borrowing that sum was to buy the Bank of Ireland headquarters in Baggot Street in Dublin. From the papers, it appears that the defendants purchased that building and that, through various corporate vehicles, it was leased back to the Bank of Ireland. The borrowing was made in the expectation of substantial profits. These may not, for whatever reason, have materialised.
2. The matter is based on the Rules of the Superior Courts 1986. Order 37 rule 7 provides:-
"Upon the hearing of any such motion by the Court, the Court may give judgement for the relief to which the plaintiff may appear to be entitled or may dismiss the action or may adjourn the case for plenary hearing as if the proceedings had been originated by plenary summons, with such directions as to pleadings or discovery or settlement of issues or otherwise as may be appropriate, and generally may make such order for determination of the questions in issue in the action as may seem just."
3. The papers sworn to on affidavit properly prove the loan, the demand and the failure by the defendants to pay the sums now due. This loan was a partial recourse loan; one where the liability of the defendants was not to the full sum borrowed, but to the sum of €25 million only and whatever proportion of the interest on the principle in its entirety should fall into arrears. Substantial proportions of the recourse amount have been paid by several of the defendants and interest payments have also been made. The sum due at the date of hearing can be stated in respect of each defendant on this motion as follows:
· - Patrick Shovlin - recourse amount €6,250,000; interest up to 20 June 2011, the date of demand €1,162,741; additional sum up to hearing €516,706; total €7,929,447.
· - Patrick FitzPatrick - recourse amount €3,125,000; interest up to 20 June 2011, the date of demand €581,370; additional sum up to hearing €258,353; total €3,964,723.
· - Anthony FitzPatrick - recourse amount €3,125,000; interest up to 20 June 2011, the date of demand €581,370; additional sum up to hearing €258,353; total €3,964,723.
· - Ronan O'Caoimh - recourse amount €1,223,500; interest up to 20 June 2011, the date of demand €207,618; additional sum up to hearing €101,150; total €1,523,268.
· - Patrick Mooney- recourse amount €1,356,025; interest up to 20 June 2011, the date of demand €138,663; additional sum up to hearing €112,106; total €1,606,794.
· - Peter Lavelle - recourse amount €407,825; interest up to 20 June 2011, the date of demand €75,871; additional sum up to hearing €33,716; total €517,412.
4. The law as to entering judgment in a summary manner is clear. I am analysing whether I am required by the facts to enter judgment hereby or to instead remit the matter to a plenary hearing. To enter judgment now, it must be very clear that the defendants have no defence. Should an issue of law arise, I am entitled, but not bound, to decide that issue at this hearing. The mere statement of a defence in an affidavit is not necessarily enough to require a case to be sent to a full hearing; any defence must have sufficient credibility to have a reasonable prospect of success. Where a case is based on documents, a defendant must be in a position to show that the defence which they seek to make is not totally undermined by the contract in issue or by the correspondence between the parties. Denham J. summarised the relevant law in Danske Bank v. Durkan New Homes Ltd. (unreported, Supreme Court, 22 nd April, 2010) [2010] IESC 22 at paragraphs 14-16 in this way:-
14. Several cases were opened before the Court which have addressed this jurisdiction. These included Bank of Ireland v. Educational Building Society [1999] 1 I.R. 220 where Murphy J. emphasised that it was appropriate to remit a matter for plenary hearing to determine an issue which is primarily one of law where a defendant identified issues of fact which required to be explored and clarified before the issues of law could be dealt with properly. He stated at p.231:-
"Even if the position was otherwise, once the learned High Court Judge was satisfied that the defendant had "a real or bona fide defence", whether based on fact or on law, he was bound to afford them an opportunity of having the issued tried in the appropriate manner."
15. In Aer Rianta c.p.t. v. Ryanair Limited [2001] 4 I.R. 607, Hardiman J. reviewed Irish cases and concluded at p.623:-
"In my view, the fundamental questions to be posed on an application such as this remain: is it "very clear" that the defendant has no case? Is there either no issue to be tried or only issues which are simple and easily determined? Do the defendant's affidavits fail to disclose even an arguable defence?"
16. In McGrath v. O'Driscoll [2007] 1 ILRM 203, Clarke J. described the law as follows, at p.210:-
"So far as questions of law or construction are concerned the...
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