Irish Bank Resolution Corporation Ltd v Morrissey

JurisdictionIreland
JudgeMs. Justice Finlay Geoghegan
Judgment Date29 October 2014
Neutral Citation[2014] IEHC 470
CourtHigh Court
Date29 October 2014

[2014] IEHC 470

THE HIGH COURT

[No. 1548 S/2011]
[No. 86 COM/2011]
Irish Bank Resolution Corporation Ltd (in Special Liquidation) v Morrissey
COMMERCIAL

BETWEEN

IRISH BANK RESOLUTION CORPORATION LIMITED (IN SPECIAL LIQUIDATION)
PLAINTIFF

AND

JOHN MORRISSEY
DEFENDANT

IRISH BANK RESOLUTION CORPORATION ACT 2013 S4

IRISH BANK RESOLUTION CORPORATION ACT 2013 S6

HAPGOOD & ORS PAGETS LAW OF BANKING 13ED 2007 234

AMERICAN TIMBER & TRADING CO v FIRST NATIONAL BANK OF OREGON 511 F 2D 980 (9TH CIRCUIT)

Summary Summons – Loans – Bank – Practice and Procedures - Rulings

Facts: Proceedings in the case at hand were commenced by the issue of a summary summons by Anglo Irish Bank Corporation Ltd. (‘Anglo’) on 13th April 2011. Anglo sought judgment in the sum of €36,787,674.37 plus interest. The amount claimed was alleged to be the aggregate of sums due and owing by the defendant to Anglo pursuant to facilities granted since 2000. In light of the events and prior judgements in these proceedings, the issues to be determined which commenced on 3rd June 2014, fell into two parts. The first were issues pertaining to the quantum of the liability of the defendant on the facilities which he accepted he was given by Anglo.. Secondly, issues pertaining to the entitlement of the plaintiff to obtain judgment against the defendant for the amount determined as due on the facilities advanced to the defendant. At the commencement of the hearing, these second set of issues were the plaintiff”s proof that it remained entitled to obtain judgment against the defendant, notwithstanding the terms of the loan sale agreement of March 2014; the defendant”s objection to the legality of the continuation of the proceedings after March 2014, upon the grounds that they contravened the prohibition on maintenance and champerty, and the defendant”s objection to the Court determining those issues without production of an unredacted copy of the loan sale agreement or by reason of the extent of the redactions made to the loan sale agreement produced by the defendant.

Held by Justice Finlay Geoghegan that the judgement was confined to a determination of the amount due on the facilities the subject matter of the proceedings as at 3rd June 2014 and insofar as necessary, clarification of any outstanding issues in the proceedings. In light of the available evidence and relevant statutory provisions it was determined that for the purposes of the final determination of proceedings in the High Court, the amount due on the facilities advanced by the plaintiff to the defendant as of 3rd June 2014 was €31,542,125.93 ( i.e.€31,685,802.97 - €143,676.64). In light of further issues to be decided in the High Court in relation to the plaintiff”s entitlement to judgment against the defendant in the sum of €31,542,125.93 (plus interest since 3rd June 2014 and less further receivership receipts), Justice Finlay Geoghegan reasoned that these were: (i) the application by the plaintiff and LSREF III Stone Investments Ltd. (‘Stone’) for substitution of Stone as plaintiff, and (ii) any issue not already decided arising from the purported agreement to sell the defendant”s facilities to Stone in March 2014 and the purported completion of the sale in July 2014 which related to the plaintiff”s entitlement to judgment against the defendant for the above sum in these proceedings.

1

JUDGMENT (No. 3) on Quantum due on Facilities of Ms. Justice Finlay Geoghegan delivered on the 29th day of October 2014

2

1. The background to this judgment, even since the commencement of proceedings is lengthy and complex but must be set out in order to explain where the proceedings have reached and what the Court is now determining in this judgment.

3

2. The proceedings were commenced by the issue of a summary summons by Anglo Irish Bank Corporation Ltd. ("Anglo") on 13 th April 2011. Anglo sought judgment in the sum of €36,787,674.37 plus interest. The amount claimed was alleged to be the aggregate of sums due and owing by the defendant to Anglo pursuant to facilities granted since 2000. The most recent facility letter, which covered all the then facilities, was dated 5 th February 2009.

4

3. The proceedings were admitted to the Commercial List, and on 14 th July 2011, Anglo's application for summary judgment was refused and the proceedings remitted for plenary hearing. Thereafter, a defence and counterclaim was delivered and further pleadings, notices for particulars and replies thereto. The plaintiff became Irish Bank Resolution Corporation Ltd. ("IBRC") and the title of the proceedings changed.

5

4. The defendant in the defence and counterclaim delivered on 21 st November 2011, admitted at para. 1 that a loan was made to him by the plaintiff "in the amount and at the times alleged in the special endorsement of claim on the summary summons", but continued to plead that he was not then liable for the payment of any monies thereon to the plaintiff. He also counterclaimed for a number of reliefs.

6

5. Following further procedural exchanges, the High Court (Kelly J.) made an order on 23 rd January 2012, setting down for trial and determination in advance of the determination of any other issues in the proceedings, two issues, namely:

7

(a) Whether the plaintiff was entitled to make demands on foot of the loan facility of February [2009] as it did; and

8

(b) whether the relationship between the plaintiff and the defendant went beyond that of a contractual relationship, such that a fiduciary relationship existed between the plaintiff and the defendant.

9

6. Following further procedural preparation, including the exchange of witness statements in accordance with Commercial List Directions, those issues came on for trial before me at the end of January 2013.

10

7. On 7 th February 2013, whilst the matter was still at hearing and the defendant under cross examination, the Oireachtas enacted the Irish Bank Resolution Corporation Act 2013. On the same day, the Minister for Finance made the Special Liquidation Order pursuant to s. 4 of the Act, and appointed Mr. Kieran Wallace and Mr. Eamonn Richardson as joint special liquidators ("the Special Liquidators"). The following morning, Counsel for the Bank informed the Court that they had been instructed by the Special Liquidators to continue the proceedings against the defendant. The evidence was completed and the Court then permitted an adjournment to allow, in particular, Counsel for the defendant consider the impact of the 2013 Act, and the appointment of the Special Liquidators on the issues being determined in the first module of the trial pursuant to the order of 23 rd January 2012.

11

8. On 19 th February 2013, the Court heard closing submissions on the modular issues and submissions on the impact of the Act, including the defendant's contentions that the plaintiff's claim was now stayed pursuant to s. 6 of the Act; if not, that the Special Liquidators were not entitled to continue the claim against the defendant and that the Court should exercise its discretion not to determine the issues set down for hearing by the order of 23 rd January 2012, by reason of the passing of the Act. Each of those contentions were rejected and the reasons therefore given in the reserved judgment delivered by the Court on 14 th May 2013.

12

9. In that judgment, the decisions on the issues set down were:

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(i) The plaintiff was entitled to make demand on the defendant pursuant to the facilities granted in February 2009, as it did in January 2010; and

14

(ii) the relationship between the plaintiff and the defendant did not go beyond that of a contractual relationship, such that a fiduciary relationship existed between the plaintiff and the defendant.

15

10. There were subsequent hearings in relation to directions to be given for the determination of the remaining issues in the proceedings, and ultimately, a hearing for the purposes of determining:-

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(a) What order should be made following the judgment delivered on 14 th May 2013, and

17

(b) what issues remained to be determined in the proceedings.

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11. In addition, at the same time, the defendant brought a motion seeking liberty to amend his defence at the hearing in June 2013. For reasons given in an ex tempore ruling on the day, I refused the application to amend.

19

12. At that hearing, the plaintiff submitted that there were no further issues to be decided and that the plaintiff was entitled to judgment against the defendant in the sum of €31,971.343.14. The defendant submitted there were multiple issues yet to be decided.

20

13. I delivered a supplemental reserved judgment on the outstanding issues on 12 th November 2013, and determined that the order to be made was the declarations on the issues set down by the order of 23 rd January 2012, already set out above. I further determined, for the reasons set out in that judgment, that there were further issues to be decided relating to the amount to which the plaintiff was entitled to judgment, but the only such issues were:

21

(i) The defendant's dispute in relation to the amount of interest charged upon the facilities upon the grounds set out in para. 11 of the defence; and

22

(ii) the plaintiff's proof of the amounts for which the defendant should be given credit by reason of realisations made by the receiver less the deduction of any expenses permitted in accordance with the relevant security documents.

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14. The plea at para. 11 of the defence stated:-

"The Accounts and Bank Statements of the Plaintiff on foot of which the sums claimed herein are inaccurate. Interest on foot of the Facility Letter of 2009 and all preceding Facility Letters were charged at the Plaintiff's stated rate which wrongfully and unlawfully included an undisclosed...

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4 cases
  • Morrissey v Irish Bank Resolution Corporation Ltd
    • Ireland
    • Court of Appeal (Ireland)
    • 25 Mayo 2017
    ...there were some seven reserved judgments involving these parties delivered by Finlay Geoghegan J. and Costello J.. In IBRC v. Morrissey [2014] IEHC 470 Finlay Geoghegan J. held (in a judgment delivered on 29th October 2014) that IBRC had overcharged the defendant in terms of interest payme......
  • Sheehan v Breccia and Others
    • Ireland
    • High Court
    • 5 Febrero 2016
    ...He explained that he had been made aware by Breccia's solicitors of the judgment in Irish Bank Resolution Corporation Ltd. v. Morrissey [2014] IEHC 470. In that case, as in the present case, General Condition 19.2 provided:- ‘Interest shall accrue and be calculated on the basis of a 360 day......
  • McAteer v Fried
    • Ireland
    • Court of Appeal (Ireland)
    • 17 Julio 2019
    ...of the interest claimed by reference [to] LIBOR by operation of the doctrine of severance.’ The decision in IBRC v. Morrissey [2014] I.E.H.C. 470 was relied on as authority for the proposition that where it was found that interest was calculated incorrectly, a borrower was entitled to an in......
  • Irish Bank Resolution Corporation Ltd (in special liquidation) v Peter Lavelle
    • Ireland
    • High Court
    • 21 Mayo 2015
    ...High Court authorities starting with IBRC v. Comer & Anor. [2014] IEHC 671, and thereafter, IBRC (In Special Liquidation) v. Morrissey [2014] IEHC 470, IBRC (In Special Liquidation) v. McCaughey [2014] IEHC 517, Lombard IrelandLimited v. Kevin Devlin Transport Limited & Anor. [2014] IEHC 65......

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