Irish Bank Resolution Corporation v Noel Comer and Another

• Jurisdiction: Ireland
• Judge: Mr. Justice Kelly
• Judgment Date: 30 July 2014
• Neutral Citation: [2014] IEHC 671
• Court: High Court
• Date: 30 July 2014

Irish Bank Resolution Corp v Comer

COMMERCIAL

BETWEEN

IRISH BANK RESOLUTION CORPORATION

PLAINTIFF

AND

NOEL COMER AND DEIRDRE COMER

DEFENDANTS

[2014] IEHC 671

[No. 544 S./2014]

THE HIGH COURT

Notice of Motion – Practice and Procedures – Substitution – Rules of the Superior Court – Procedural Issues – Practice and Procedures – Assets - Notice

Facts: This case concerned an application brought by Launceston Property Finance Limited and the notice of motion which grounds the application sought, pursuant to O. 15 of the Rules of the Superior Courts, an order substituting that entity as plaintiff in these proceedings. In essence the Court was asked to consider a procedural application which, if it was granted, would have the effect of bringing to an end the entitlement of IBRC to further prosecute these proceedings. It would substitute for that entity, Launceston, who would take over the entitlement to prosecute the proceedings, subject to all of the imperfections that may have been present when the action was constituted as between IBRC and the defendants and subject also to proving at trial, that there had been a valid sale of the underlying assets, a valid assignment of the chose in action which was this action, and a valid notice given.

Held by Justice Kelly in light of the available evidence and submissions presented that the Court would grant the order. Reasoning that the rule could be applicable in the current case, although it did not mention substitution, it was determined that it did contemplate the application being made ex parte, which according to Justice Kelly, demonstrated the form of proof required to justify the Court in making the order sought. In the circumstances, Justice Kelly was of the opinion that there had been made out a sufficient case to warrant the application succeeding. Thus, the Court, therefore substituted, Launceston Property Finance Limited as plaintiff in the proceedings in lieu of Irish Bank Resolution Corporation Limited in special liquidation.

RSC O.15

SUPREME COURT JUDICATURE (IRELAND) ACT 1877 S28(6)

WALDRON v HERRING & ORS 2014 1 ILRM 62 2013/51/14550 2013 IEHC 294

RSC O.15 r14

RSC O.17 r4

1 1. I have before me an application which is brought by a company called Launceston Property Finance Limited and the notice of motion which grounds the application seeks, pursuant to O. 15 of the Rules of the Superior Courts, an order substituting that entity as plaintiff in these proceedings.

2 2. The proceedings began with Irish Bank Resolution Corporation Limited in special liquidation as plaintiff and Noel Comer and Deirdre Comer as defendants.

3 3. They began by way of summary summons which was transferred to the Commercial List and in due course an application for summary judgment came on before me. The claim is for just short of €10m.

4 4. At the hearing of the application for summary judgment, I declined to grant that order and instead adjourned the matter for plenary hearing and gave the usual directions.

5 5. This application is brought on foot of two affidavits which I will turn to in a moment. But before I consider the factual evidence which is placed before the court, it is, I think, important to indicate what this application is not and what it is. First of all, this is not the trial of these proceedings. Second, on this application I am not called upon nor do I purport to in any way make any adjudication upon either the validity or efficacy of either the sale agreement which underpins this application nor indeed of the notice which was given to the defendants and which is put in evidence before me.

6 6. Those matters, if they are in issue in the proceedings, will have to be dealt with at trial.

7 7. What is this application? It is an application brought pursuant to the relevant rules of court in which, as a result of circumstances which have occurred subsequent to the institution of the proceedings, it is sought to substitute one plaintiff for another. These are applications which occur on a fairly regular basis.

8 8. This particular case has given rise to a great deal of submissions both written and oral but before one gets to the legal submissions, one has to look at the facts. In this regard, it is important to point out that the evidence on this application is all one way because, although an opportunity was given to the defendants to file replying affidavits, they opted not to do so.

9 9. The evidence comes in the form of two affidavits, the first of which is sworn by Mr. Jonathan Hanley. This is what he says:-

"I am a director of Launceston Property Finance Limited and I make this affidavit on behalf of Launceston and with its authority and consent. I make this affidavit from facts within my own knowledge save where otherwise appears and where so otherwise appears, I believe the same to be true. I make this affidavit to ground an application to substitute Launceston as the plaintiff in the within proceedings"

And he refers to the pleadings when produced.

10 10. He then says under the heading "The Facilities":-

"In these proceedings, the plaintiff has sought payment in the sum of €9,912,929.03 on foot of a facility letter dated 25 ^th November, 2008, in which the plaintiff granted the defendants six facilities."

I am advised that on 8 ^th May, 2014, on the application for summary judgment, Mr. Justice Kelly remitted the matter for plenary hearing and gave consequential directions in respect of the pleadings. Those directions were complied with up to 5 ^th June, 2014, when Mr. Justice Kelly agreed to suspend the directions and granted leave to bring an application to substitute Launceston for the plaintiff.

Clause 18.2 of the general conditions of personal loans as exhibited in an earlier affidavit provides that the Bank may at any time transfer, assign or dispose of the benefit of the agreement and the security documents to any person on such terms as the Bank may think fit whether as part of a loan transfer or securitisation scheme or otherwise without notice to the borrower or any other person."

11 11. That piece of evidence is uncontroverted. It demonstrates that built into the contractual obligations undertaken by the defendants with the existing plaintiff there was the prospect or possibility or ability for a transfer or an assignment or a disposal of the benefit of the agreement to be effected.

12 12. The affidavit evidence goes on under the heading " Assignment of the Facilities

"By loan sale deed in relation to a portfolio of facilities dated 28 ^th March, 2014, the plaintiff (the assignor) together with the special liquidators agreed to sell to Launceston certain assets being facilities and related security as set out therein."

The assets which the plaintiff agreed to sell included the facilities and related security. Launceston is seeking the consent of the solicitors for the special liquidators to exhibit a redacted copy of the loan sale deed and it will be exhibited to a supplemental affidavit when and if it becomes available.

Pursuant to the loan sale deed, a deed of transfer was executed as between the plaintiff and Launceston, as assignee, on 23 ^rd May, 2014, (the deed of assignment). Launceston is seeking the consent of the solicitors for the special liquidators to exhibit a redacted copy of the deed of assignment which will be exhibited to a supplemental affidavit when and if it becomes available.

Pursuant to clause 4.1 of the deed of assignment, the assignor unconditionally, irrevocably and absolutely transferred, conveyed and assigned to Launceston, all such rights, title, interest, benefits, liabilities and obligations as the assignor may have in the purchased assets subject to the benefit in each case of the related finance agreement, with effect from the completion date.

I say and am advised that the assignment of the facilities and related security connected to the within proceedings from the plaintiff to Launceston completed on 23 ^rd May, 2014. I further say I am advised that by letter dated 6 ^th June, 2014, from the plaintiff, the defendants have been notified of:-

(i) the agreement which was signed with facilities and all related security and ancillary rights; and

(ii) the date upon which the assignment occurred."

He exhibits what he described as the relevant letter as an exhibit to this affidavit. I will turn to that in due course.

"On 12 ^th June, 2014, a copy of the letter of 6 ^th June, 2014, was handed to Mr. Comer on behalf of both defendants by Mason Hayes and Curran Solicitors. I say and am advised that the facilities have been absolutely assigned by writing under hand of the assignor in circumstances in which express notice in writing has been given to the defendants as debtors. In circumstances where the deed of assignment has become effective as and from 23 ^rd May, 2014 and where notice thereof has been given to the debtors in writing, the said assignment has become and is deemed to be effectual in law."

13 13. The exhibit to that affidavit is the letter dated 6 ^th June of this year addressed to the defendants at their premises in Herbert Park, Ballsbridge. It is headed "Important information on your facilities" and points out that it concerns the commercial facilities with IBRC in special liquidation and carries the numbers which are set out at the top of the letter and its goes on to say:-

"Dear Customer "

On 28 ^th March, 2014, (the sale date) IBRC agreed to sell amounts owing to it in respect of both facilities and the facility letters guarantee and security and all other rights including any judgments and obligations relating to your facilities with IBRC (henceforth the facility documents) to Launceston Property Finance Limited (the purchaser) in accordance with the...