Corbett v LSREF III Achill Investments Ltd

CourtHigh Court
JudgeMs. Justice Costello
Judgment Date08 April 2016
Neutral Citation[2016] IEHC 176
Date08 April 2016
Docket Number[2015 No. 7740 P]

[2016] IEHC 176



Costello J.

[2015 No. 7740 P]

[2015 No. 136 COM]






Banking & Finance – Non-payment of loan – Summary Judgment – Plenary proceedings – Res judicata – S. 123 of the Land and Conveyancing Law Reform Act 2009 – Vacation of lis pendens – Abuse of process of law

Facts: Following the grant of summary judgment by the High Court in favour of the first named defendant against the plaintiffs for default in making payment of loan taken by the plaintiffs, the plaintiffs had now commenced plenary proceedings against the defendants seeking various reliefs to the effect of declaring that the relevant facilities letters on the basis of which loan facilities were granted to the plaintiffs, were void. The defendants sought an order under o. 19, r.28 of the Rules of the Superior Courts for the dismissal of the plenary proceedings. The defendants also sought an order for the vacation of lis pendens registered by the plaintiffs in the central office of the High Court.

Ms. Justice Costello granted an order for the dismissal of the plenary proceedings. The Court also granted an order for the vacation of lis pendens under s. 123 of the Land and Conveyancing Law Reform Act 2009. The Court held that since the issues raised by the plaintiffs in the present plenary proceedings had already been argued and the matter had attained finality in the summary judgment, the judgment of High Court in summary proceedings operated as res judicata. The Court observed that the rule of res judicata did not become inoperative merely because there was an appeal pending before the Court of Appeal or a stay had been granted on the operation of impugned judgment. The Court found that the present plenary proceedings did not disclose a cause of action and there were no new issues that emerged all of a sudden. The Court held that registration of plenary proceedings against the second and third named defendants/receivers were bound to fall as the receivers did not possess sufficient interest in the properties against which such a registration could properly be made. The Court held that it had discretion to vacate the lis pendens where it appeared to the Court that the underlying claim was bound to fall or it was not prosecuted bona fide.

JUDGMENT of Ms. Justice Costello delivered on 8th day of April, 2016.
Summary proceedings

On 2nd July, 2015, the first named defendant herein ('Achill') issued a summary summons seeking judgment against the plaintiffs herein ('the Corbetts') in the sum of €10,554,672.28 as against Mr. Michael Corbett and the sum of €47,257,679.21 as against Mr. Michael Corbett and Mr. Kevin Corbett on a joint and several basis. The proceedings arose from the Corbetts' default in relation to very considerable loan facilities advanced to them by Ulster Bank Ireland Limited ('Ulster Bank'). The rights of Ulster Bank in relation to two facility letters, one of 12th October, 2010, and the other of 7th June, 2011, and certain securities as more fully set out below were transferred by Ulster Bank to Achill by deed of transfer dated 17th November, 2014. On 4th March, 2015, Achill appointed the second and third named defendants as receivers over a number of properties charged by the Corbetts to Ulster Bank and which were assigned by Ulster Bank to Achill ('the Receivers').


The summary summons was heard before Barrett J. in the High Court on 6th October, 2015. Mr. Jeffrey Johnston swore three affidavits on behalf of Achill and Mr. Michael Corbett swore three affidavits on behalf of the Corbetts. In addition, the Corbetts' solicitor, Mr. Diarmuid O'Shea swore an affidavit in the proceedings. Barrett J. reserved judgment and delivered a written judgment on 22nd October, 2015.


It is clear from the affidavits of Mr. Corbett and the judgment of Barrett J. that the Corbetts defended the matter fully on a number of grounds, all of which were rejected by Barrett J. In his judgment, the learned High Court judge held:-

(i) Achill issued proper letters of demand in relation to the facilities of 12th October, 2010, and 7th June, 2011, on 2nd March, 2015.

(ii) A facility letter of 11th January, 2011, was cancelled and superseded by the express provisions of the June, 2011 facility letter. The facility of January, 2011 could not be resurrected and was of no avail to the Corbetts.

(iii) The facility letter of June, 2011 did not lapse or terminate simply because no funds were in fact drawn down pursuant to the terms of the facility agreement. The facility letter of June, 2011 contained a condition precedent to draw down which required the Corbetts to furnish certain security to Ulster Bank prior to Ulster Bank making available additional credit to the Corbetts. It was common case that the Corbetts did not comply with the condition precedent as to security in the June, 2011 facility letter. The Corbetts argued that as a result the terms of the June, 2011 facility letter were unenforceable by either Ulster Bank or Achill as assignee of the facility. Barrett J. rejected this argument and held at para. 22:-

'[t]he principal consequence of non-compliance with those conditions precedent is that no credit needs to be extended, no more; the facility letter remains extant.'

(iv) Barrett J. rejected the argument that the facility letter of 20th June, 2011, did not bind the Corbetts on the basis of a want of consideration as no new draw down of funds occurred. At para. 25 of his judgment he identified the consideration offered by Ulster Bank for the June, 2011 facility letter and held that there was a binding fresh agreement between the parties 'the validity of which was unaffected by any want of fresh drawdown'.

(v) He rejected the argument that the facility letter of June, 2011 was not binding as the term provided for in the January, 2011 facility letter had not yet expired. At para. 27 he stated:-

'[t]here is nothing in law to stop parties to a term loan agreement agreeing, for good consideration, to cancel an existing term loan agreement and replace it with some other arrangement or simply to part ways. That is all that happened here. The notion that, in such circumstances, the new loan agreement cannot properly cancel and replace one or more previous loans is mis-founded in logic and mistaken in law.'

(vi) He rejected the Corbetts' argument that Ulster Bank had repudiated the loan agreement by not allowing a draw down of part of the facility. The facility letter provided that Ulster Bank was under no obligation to provide the facility unless the conditions precedent were met.

(vii) Similar arguments were advanced by the Corbetts in relation to the October, 2010 facility letter which were rejected for like reasons by Barrett J.

(viii) The Corbetts argued that Ulster Bank represented that repayment or refinancing of their facilities with Ulster Bank would occur by the extension on a rolling basis of funding so that new funding would immediately replace the old funding upon its expiration. The Corbetts specifically sought to rely on certain loan amortisation schedules attached to the January, 2011 facility agreement. This argument was rejected as the January, 2011 agreement was cancelled. The extant facilities, the June, 2011 facility letter and the October, 2010 facility letter, stated that the facilities that they govern were to be repaid or refinanced by 20th August, 2011. Barrett J. stated at para. 31 of his judgment:-

'[t]he court has had careful regard to the form and substance of those agreements and, in fairness to the bank that drafted them, they could not be any clearer in what they provide.'

He continued at paras. 32-33 as follows:-

'[i]t is incumbent on all of us to approach written agreements with great caution and to seek independent legal advice when and as appropriate before signing agreements that, as here, have the potential to be financially ruinous in the event of default. A critical provision in the two facility letters appears in the closing section, close to the signature blocks. It provides that "This Facility Letter supersedes all prior agreements, arrangements or correspondence between the Bank and the Borrower in relation to the Facilities." Yet the defendants come to court arguing that there were overarching representations on the part of Ulster Bank, when executing the facility letters, that survived the execution of same. If there were overarching representations, and there is no evidence of same, nor even, e.g., a suggestion that if Mr "X" or Ms "Y" of Ulster Bank's lending team were to be called to give evidence, he or she would testify to the existence of same, they cannot have survived the clause just quoted...

However, the insurmountable difficulty which the defendants face in the within proceedings is that when it comes to that "clear and unambiguous promise" referred to by Griffin J. in Doran, or the equities referenced in s.28(6) of the Act of 1877, there is absolutely no evidence of same before the court, nor is there even, to borrow from the wording of Clarke J. in McCaughey, "a credible basis for believing that [such] evidence may be forthcoming". There is therefore no basis in this regard for refusing the summary judgment sought.'

The claims in plenary proceedings

These proceedings were commenced by the Corbetts against Achill and the Receivers on 24th September, 2015. The indorsement of claim seeks reliefs (A) to (Y) as follows:-

(A) 'A declaration that the Plaintiffs have no liability to the First Defendant on foot of one, each and/or all of the facility letters set out in the First Schedule hereto (hereinafter the 'Facility Letters') by reason of the fact that the said Facility Letters did not come into operation and/or the...

To continue reading

Request your trial
1 cases
  • George v AVA Trade (EU) Ltd
    • Ireland
    • High Court
    • 29 March 2019
    ...Barton J. in O'Driscoll v. McDonald [2015] IEHC 100, the recent decision of Costello J. in Corbett v. LSREF III Achill Investments Ltd [2016] IEHC 176 and the very recent decision of Ní Raifeartaigh J. in Cronin v. Dublin City Sheriff [2017] IEHC 685. Counsel also drew attention to the d......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT