Bussoleno Ltd v Patrick Kelly, John McCabe and John Walsh

• Jurisdiction: Ireland
• Judge: Ms. Justice Finlay Geoghegan
• Judgment Date: 31 May 2011
• Neutral Citation: [2011] IEHC 220
• Court: High Court
• Date: 31 May 2011

Bussoleno Ltd v Kelly & Ors

COMMERCIAL

BETWEEN

BUSSOLENO LIMITED

PLAINTIFF

AND

PATRICK KELLY, JOHN McCABE AND JOHN WALSH

DEFENDANTS

[2011] IEHC 220

[No. 2065 S/2009]

[No. 191 COM/2009]

THE HIGH COURT

PRACTICE & PROCEDURE

Summary judgment

Foreign judgment - Enforcement and recognition - Common law rules - Judgment granted pursuant to mediated settlement against all defendants jointly and severally - Application for enforcement - Remittal to plenary hearing - Test to be applied - Whether arguable defence - Judgment in personam for definite sum - Whether plaintiff obtained Floridian judgment - Whether Foridian judgment final and conclusive - No further challenge to judgment - Commencement of fresh proceedings - Whether enforcement of judgment contrary to public policy - Whether credible factual basis for claim payment expose defendants to US revenue sanction - Whether settlement upon which judgment entered obtained by fraud - Whether defendant estopped from raising argument from unsuccessful challenge in Floridian court - Whether abuse of process - Aer Rianta v Ryanair [2001] IESC 6, [2001] 4 IR 607, Danske Bank A/S t/a National Irish Bank v Durkan New Homes [2010] IESC 22 (Unrep, SC, 22/4/2010), Harrisrange Limited v Duncan [2002] IEHC 14, [2003] 4 IR 1 applied; Nouvion v Freeman [1889] 15 App Cas 1, Buchanan v McVey [1954] IR 89, Bank of Ireland v Meeneghan [1994] 3 IR 111, Abuoloff v Oppenheimer & Co [1882] 10 QBD 295, Vadala v Lawes [1890] 25 QBD 310, Jet Holdings Inc v Patel[1990] 1 QB 335 considered; Spring Gardens Ltd v Waite [1991] 1 QB 241distinguished - Limited leave to defend granted (2009/2065S - Finlay Geoghegan J - 31/5/2011) [2011] IEHC 220

Bussoleno Ltd v Kelly and Ors

RSC O. 37 r7

AER RIANTA CPT v RYANAIR LTD 2001 4 IR 607 2002 1 ILRM 381 2001/1/68

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

HARRISRANGE LTD v DUNCAN 2003 4 IR 1 2002/12/2982

MCGRATH v O'DRISCOLL & ORS 2007 1 ILRM 203 2006/35/7529 2006 IEHC 195

CONSTITUTION ART 50

BINCHY IRISH CONFLICTS OF LAW 1988 CHAP 33

COLLINS & ORS DICEY MORRIS & COLLINS ON THE CONFLICT OF LAWS 14ED 2006 RULE 35

COLLINS & ORS DICEY MORRIS & COLLINS ON THE CONFLICT OF LAWS 14ED 2006 RULE 43

COLLINS & ORS DICEY MORRIS & COLLINS ON THE CONFLICT OF LAWS 14ED 2006 RULE 44

NOUVION v FREEMAN & ANOR 1890 15 APP CAS 1

PETER BUCHANAN LTD & ANOR v MCVEY 1954 IR 89 1955 AC 516 (NOTE)

BANK OF IRELAND v MEENAGHAN & CMRS OF CUSTOMS & EXCISE 1994 3 IR 111 1995 1 ILRM 96 1996 ITR 58 1994/8/2144

HALSBURYS LAWS OF ENGLAND 4ED VOL 8(3) 151

ABOULOFF v OPPENHEIMER & CO 1882-83 10 QBD 295

VADALA v LAWES 1890 25 QBD 310

JET HOLDINGS INC & ORS v PATEL 1990 1 QB 335 1988 3 WLR 295 1989 2 AER 648

OWENS BANK LTD v BRACCO & ANOR 1992 2 AC 443 1992 2 WLR 621 1992 2 AER 193

HOUSE OF SPRING GARDENS LTD v WAITE & ORS (NO 2) 1991 1 QB 241 1990 3 WLR 347 1990 2 AER 990

MCGHEE & ORS SNELLS EQUITY 32ED 2010 175

RSC O. 37 r10

RSC O. 63A

1 1. The plaintiff ("Bussoleno"), a company incorporated under the laws of the British Virgin Islands, seeks summary judgment against the defendants in the sum of US$5,775,000.00 plus interest, pursuant to a judgment obtained on 24 ^th April, 2009, in the 12 ^th Judicial Circuit of the State of Florida ("Floridian judgment"), ordering that the plaintiff therein, Bussoleno, should, inter alia, recover the said sum from the defendants herein, jointly and severally. The Floridian judgment was granted, pursuant to a mediated settlement agreement dated 13 ^th August, 2008, between, inter alia, the parties to these proceedings and signed by them or on their behalf. Mr. McCabe and Mr. Walsh, the second and third named defendants, oppose the application for summary judgment and seek orders, pursuant to O. 37, r. 7 of the Rules of the Superior Courts, giving them leave to defend the proceedings and that the matter be remitted to plenary hearing. Mr. Kelly, the first named defendant, does not oppose the application for summary judgment.

2 2. The immediate background to the Floridian judgment is not in dispute. Proceedings were initiated in the Florida court on 28 ^th January, 2009, by Bussoleno, which sought to enforce a right under five promissory notes held by it and guaranteed by each of the three defendants. Four of the promissory notes were given by Irish American Management Services Ltd. I, LP ("IAMSI") and one was given by Irish American Management Services LP ("IAMS"). Following pleadings and certain procedural steps, including the joinder, on the application of the defendants herein of Mr. Rene Gareau, as a third party, a mediated settlement was reached between all the parties to the Floridian proceedings, including Mr. Gareau and other members of his family. Pursuant to the settlement agreement, the defendants therein agreed to pay to Bussoleno a total sum of US$3,750,000.00 in specified instalments over eight years. It further provided:

"In the event of a default hereunder by the Defendants, Plaintiff, on its sole affidavit of non-payment, will be entitled to a judgment against Defendants, jointly and severally, in the amount of US$6,000,000.00 less payment already made."

3 3. The defendants made payments in the amount of US$225,000.00 and, thereafter, defaulted. On 24 ^th April, 2009, judgment in the sum of US$5,775,000.00 was given against all five defendants, jointly and severally.

4 4. On 21 ^st May, 2009, following letters of demand from solicitors for the plaintiff in this jurisdiction, the summary summons issued. On 3 ^rd July, 2009, on a combined application for entry into the Commercial List and for summary judgment by order of the High Court (Kelly J.), the proceedings were entered into the Commercial List and directions given in relation to the application for summary judgment.

5 5. A motion was brought by Mr. McCabe to the courts in Florida to set aside the judgment in favour of the plaintiff. Upon the hearing of the plaintiff's application for summary judgment, the High Court (Kelly J.) by order of 24 ^th July, 2009, adjourned, generally, the plaintiff's application for summary judgment against the defendants in these proceedings and granted liberty to re-enter upon the determination of the then pending application before the courts in Florida.

6 6. By order of 20 ^th November, 2009, the Circuit Court of the 12 ^th Judicial Circuit in and for Sarasota County, Florida (Judge Berlin) denied Mr. McCabe's motion to set aside the final judgment and request for an evidentiary hearing. On 20 ^th August, 2010, the Second District Court of Appeal in the State of Florida affirmed Judge Berlin's order, and on 7 ^th September, 2010, issued a "Mandate", the effect of which is stated to be that Mr. McCabe has no right to file any further motions or other challenges to the order of the Second District Court of Appeal.

7 7. By motion issued on 9 ^th December, 2010, in these proceedings, Bussoleno sought liberty to re-enter the proceedings and summary judgment in the principal amount claimed, together with interest, pursuant to the Floridian judgment. Liberty to re-enter was granted, further affidavits filed on behalf of Bussoleno, Mr. McCabe and Mr. Walsh, and an application to cross-examine certain deponents refused. Legal submissions were exchanged and the application for summary judgment came on for hearing.

Summary Judgment

8 8. There is no dispute between the parties as to the test to be applied by the Court in determining the application for summary judgment and Mr. McCabe and Mr. Walsh's applications for leave to defend. It is in accordance with the principles set out by the Supreme Court in Aer Rianta v. Ryanair [2001] 4 I.R. 607, and Danske Bank A/S trading as National Irish Bank v. Durkan New Homes [2010] IESC 22, in reliance upon earlier decisions and as applied and expanded upon by the High Court in Harrisrange Limited v. Duncan [2003] 4 I.R. 1. In Aer Rianta v. Ryanair, Hardiman J., at p. 623, summarised the test in the following terms:

"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?"

In Danske Bank v. Durkan, the defence contended for included a question of law being the construction of a document and Denham J., at p. 8, in setting out the law and having referred to the above extract from the judgment of Hardiman J. in Aer Rianta v. Ryanair, also cited with approval the following statement by Clarke J. in McGrath v. O'Driscoll [2007] 1 ILRM 203, at p. 210:

"So far as questions of law or construction are concerned the court can, on a motion for summary judgment, resolve such questions (including, where appropriate, questions of the construction of documents), but should only do so where the issues which arise are relatively straightforward and where there is no real risk of an injustice being done by determining those questions within the somewhat limited framework of a motion for summary judgment."

9 9. Insofar as a defence contended for is reliant upon the establishment of facts, the mere assertion of a given situation alone is not sufficient to provide leave to defend. Harrisrange Ltd. v. Duncan at p.7 and Aer Rianta v. Ryanair at p. 623.

10 10. In summary, the issue is whether a defendant has satisfied the court that he has an arguable defence in the sense explained by the judgments referred to. This is the test which I propose applying herein.

Enforcement of Floridian Judgment

11 11. Again, the main applicable principles are not seriously in dispute. The parties emphasised different...