Curran and Others v Ulster Bank Ireland DAC and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Dignam
• Judgment Date: 01 August 2023
• Neutral Citation: [2023] IEHC 513
• Court: High Court
• Docket Number: 2018 6632 P

Wesley Curran & Graham O'Donnell

Plaintiff

and

Ulster Bank Ireland DAC, Royal Bank of Scotland Group Plc, Richardson Eamonn & Kieran Wallace

Defendant

[2023] IEHC 513

2018 6632 P

THE HIGH COURT

Abuse of process – Estoppel – Res judicata – Defendants seeking an order striking out or dismissing the plaintiffs’ proceedings – Whether the plaintiffs’ claim was an abuse of process

Facts: The plaintiffs, Mr Curran and Mr O’Donnell, sought declarations that the first defendant, Ulster Bank Ireland DAC, unlawfully caused damage to the plaintiffs and unjustly enriched itself at the expense of the plaintiffs and that the first defendant and the second defendant, Royal Bank of Scotland Group plc, conspired together with the purpose of causing damage to the plaintiffs. They also sought damages for breach of contract, negligence, misrepresentation, negligent misstatement, deceit, breach of duty, including breach of statutory and fiduciary duty, intentional interference in and with the economic interests of the plaintiffs, conspiracy, and loss of opportunity. There were previous proceedings between the parties in which the first defendant sought summary judgment against the plaintiffs (the 2013 Proceedings). The defendants applied to the High Court seeking an order striking out or dismissing the plaintiffs’ proceedings on the grounds that: (i) they disclosed no reasonable cause of action and/or were unsustainable and/or frivolous and vexatious and/or bound to fail; (ii) they were res judicata; (iii) they constituted an abuse of process; (iv) the plaintiffs were estopped from maintaining the proceedings; and (v) the proceedings were statute barred. The bases for the defendants’ application were that: (i) the plaintiffs’ claim was an abuse of process on the grounds that it was res judicata or that an issue estoppel arose as it was an attempt to re-litigate matters which had already been decided against them or was an attempt to litigate matters which could have been raised in previous proceedings; (ii) the plaintiffs were not entitled to maintain the proceedings due to having been adjudicated bankrupt in England; (iii) the proceedings were bound to fail on the merits; and (iv) the claim was statute-barred.

Held by Dignam J that the evidence of English law was to the effect that as things stood, the plaintiffs were not entitled to maintain the proceedings. Rather than dismiss the proceedings on that basis, Dignam J held that the proceedings should be stayed to provide an opportunity for that difficulty to be resolved. Dignam J held that an issue estoppel did not arise such as to justify the dismissal of the proceedings. Dignam J found that while the 2013 proceedings did determine an issue which was sought to be raised in these proceedings, that issue did not determine all of the plaintiffs’ claims. In any event, the parties were not the same and Dignam J could not be satisfied in the context of a motion of this type, that the parties were privies for each other. Dignam J was satisfied that insofar as these proceedings raised or sought to raise points which were raised in the 2013 proceedings – the construction of a facility letter and a supplemental facility letter and the existence and effect of the alleged collateral contract – they were an abuse of process and should to that extent be dismissed or the plaintiffs were estopped from raising them. Dignam J was not satisfied that the defendants had established that those aspects of the claim which were not raised in the 2013 proceedings (i.e. the issues which were not an abuse of process on Henderson v Henderson [1843] 3 Hare 100 grounds) were bound to fail.

Dignam J would hear from the parties at a suitable time in relation to the precise terms of the Court’s order and in relation to costs.

Application granted in part.

Judgment of Mr. Justice Dignam delivered on the 1 ^st day of August 2023 .

INTRODUCTION

1 The defendants seek an Order striking out or dismissing the plaintiffs' proceedings on the grounds that (i) they disclose no reasonable cause of action and/or are unsustainable and/or frivolous and vexatious and/or bound to fail; (ii) they are res judicata; (iii) they constitute an abuse of process; (iv) the plaintiffs are estopped from maintaining the proceedings; and (v) the proceedings are statute barred.

2 The bases for the defendants' application can be summarised (in no particular order) as (i) the plaintiffs' claim is an abuse of process on the grounds that it is res judicata or that an issue estoppel arises as it is an attempt to re-litigate matters which have already been decided against them or is an attempt to litigate matters which could have been raised in previous proceedings; (ii) the plaintiffs are not entitled to maintain the proceedings due to having been adjudicated bankrupt in England; (iii) the proceedings are bound to fail on the merits; and (iv) the claim is statute-barred.

3 I propose to address each of these in turn, though in a different order. First it might be helpful to set out some of the background. I have carefully considered all of the papers for the purpose of this motion but it is sufficient to summarise the background. I will then set out the well-established principles in relation to dismissing proceedings in limine and will then consider the specific grounds.

4 There were previous proceedings between the parties in which Ulster Bank was the plaintiff and Mr. Curran and Mr. O'Donnell were the defendants. For ease of reference I will refer to Mr. Curran and Mr. O'Donnell as “the plaintiffs” (their status in these proceedings) and to the first-named defendant as “the Bank”. I will refer to the second-named defendant, Royal Bank of Scotland, as “RBS”, and to the third and fourth-named defendants as “the receivers” or “the joint receivers”.

BACKGROUND

5 On the 19 ^th October 2005 the parties entered a loan facility in respect of the construction of a development at Annaville, Windy Arbour, in Dublin (“ the Annaville Loan”). The facility letter provided for a term to the 31 ^st October 2025 and also stated that it was repayable on demand. This letter (“the Facility Letter”) stated, inter alia:

“The Facility is repayable upon demand and unless demand is made interest is to be serviced monthly by direct debit for a period of 5 years to 31 October 2010, with the balance to be reduced to €14,390,000 by monthly payments of capital and interest by expiry, using 100% of rental proceeds derived from units within the Property.”

6 The conditions to the facility included that any sale proceeds received from the development were to be used in full reduction of the debt and that the loan to valuation ratio was not to exceed 80%.

7 Following interactions between the parties about a number of issues, including that the 80% loan to value ratio was being exceeded, this facility was amended by a supplemental facility letter (“the Supplemental Facility Letter”) dated 1 ^st February 2011. It provided, inter alia:

“This letter is supplemental to the terms and conditions set out in the Facility Letter. The Facility Letter is hereby varied and amended by the inclusion of the following condition:

1. That the borrower shall repay the sum of €3 million in permanent reduction of the monies under the terms of the Facility Letter no later than 31 December 2012.

The above amendment notwithstanding, a condition of the Facility Letter is as follows “Loan to Valuation (“LTV”) ratio is not to exceed 80%. The Bank reserves the right to call for a further valuation at any point during the currency of the Facility at the expense of the Borrower.

The Bank received a valuation of the Property from CBRE dated 18 December 2009, valuing the Property at €13,500,000 which indicates an LTV ratio of 149% resulting in an event of default.

We write to confirm that the Bank reserves any of its rights and remedies under the Agreement and any security which may arise as a result of any Default, notwithstanding that the Bank may be aware of the circumstances giving rise to it or may agree to either:

(i) enter into discussions with you or any security provider and/or any other person in respect of one or more amendments to the terms of any such documents; or

(ii) provide financial accommodation to you or any security provider,

in each case, at any time before a demand for repayment of the Facility (as defined in the Agreement) (together with any accrued and unpaid interest thereon) is made.

In all other respects, the Facility Letter is hereby ratified and confirmed.”

8 The plaintiffs signed a statement at the bottom of the letter which stated:

“ We hereby, Wesley Curran and Graham O'Donnell confirm that we accept the above amendment and variation to the terms of the Facility Letter as varied and amended is hereby ratified and confirmed in full. We confirm that we have taken independent legal advice into the nature and effect of the obligations contained therein.”

9 There was also a facility letter dated the 23 ^rd June 2011 in respect of a development at Castlepark Road, Dalkey, County Dublin (“ the Castlepark Loan”) which provided for three separate facilities which were to expire and be paid in full on the 31 ^st January 2012 (two of the facilities) and the 31 ^st October 2011 (the third facility). The purpose of the first two of these facilities was the continuation of previous facilities for development funding in respect of Castlepark.

10 On the 25 ^th October 2012 the Bank demanded repayment of the Annaville Loan (and the Castlepark Loan) and appointed receivers to the Annaville Property (and the Castlepark Property) the following day, the 26 ^th October 2012. These appointments were withdrawn on the 2 ^nd November 2012 on the basis that demand had been made that repayment must occur on the same day as the letters of demand. On the 2 ^nd November 2012 fresh letters of demand were issued demanding...