Irish Bank Resolution Corporation Ltd -v- Halpin

• Jurisdiction: Ireland
• Judge: Ms. Justice Finlay Geoghegan
• Judgment Date: 10 December 2014
• Neutral Citation: [2014] IECA 3
• Court: Court of Appeal (Ireland)
• Date: 10 December 2014

Between/

Irish Bank Resolution Corporation Limited

Plaintiff/Respondent

V

Patrick Halpin

Defendant/Appellant

[2014] IECA 3

Finlay Geoghegan J., Birmingham J., Irvine J.

[Appeal No. 508/2012] [Appeal No. 12/2014] [Article 64 Transfer Cases]

THE COURT OF APPEAL

Appeal – Application for Substitution – Civil Procedure – Liquidation firm – Bankruptcy – Contract – Notice Party – Banking

The facts of this case involved a motion to substitute a party in appeal proceedings. Kenmare Property Finance Limited (Kenmare) sought primarily an order that it be substituted for Irish Bank Resolution Corporation Limited (IBRC). Counsel for Kenmare clarified that if the court was not prepared to make the order for substitution as sought it was seeking to be added as a party to the appeal. Kenmare stated that a previous agreement in March, 2014, the Special Liquidators of IBRC agreed to transfer and assign to Kenmare in exchange for valuable consideration, Kenmare accepted that it had no interest in the facilities or causes of action of IBRC against Mr. Halpin, but affirmed that, it is the person who is entitled to the benefit of the underlying facilities to the proceedings and of the 2012 and 2013 High Court judgments and should now be substituted for IBRC as plaintiff and that the proceedings, including the two appeals now before this Court should proceed between itself and Mr. Halpin. The issue was presented for deliberation before Finlay Geoghegan J., Birmingham J, and Irvine J. in the Court of Appeal.

The court of appeal analyzed the submissions from the parties. Kenmare Properties relied upon case law such as O’Keeffe v. An Bord Pleanála 1993 and Bank of Ireland Finance Limited v. Browne to fortify their claim for substitution. Counsel for Halpin drew attention to the condition attached to the order made in O’Keeffe v. An Bord Pleanála and to the refusal of the Supreme Court to make such an order in O’Cearbhaill v. Bord Telecom Éireann [1993] ELR 253. He submitted that there was no authority to support the application of Kenmare to be substituted as plaintiff at the appeal stage. The court of appeal decided that it was in the interests of justice that Kenmare be added as a party to the proceedings and permitted to participate as a respondent in the hearing of the appeals, but confined to any argument advanced by IBRC. The court of appeal declared that there would be an order in each appeal that Kenmare Property Finance Limited be added as a second plaintiff in the proceedings and as a respondent to the appeal with a restriction that it may only advance any argument on the appeal capable of being advanced by Irish Bank Resolution Corporation Limited

Ms. Justice Finlay Geoghegan

Judgment of the Court delivered on the 10th day of December, 2014 by Ms. Justice Finlay Geoghegan

1 This judgment is given in two identical applications brought by notice of motion dated the 30th July, 2012, by Kenmare Property Finance Limited (“Kenmare”) seeking primarily an order that it be substituted for Irish Bank Resolution Corporation Limited (in special liquidation) (“IBRC”) the plaintiff/respondent in the within proceedings and two appeals, such that the proceedings including the appeals be carried on between the defendant/appellant (Mr. Halpin) and Kenmare as plaintiff/respondent.

2 Alternative relief is sought in the notice of motion and in the course of the hearing, counsel for Kenmare clarified that if the court was not prepared to make the order for substitution as sought it was seeking to be added as a party to the appeal.

3 The High Court proceedings giving rise to the two appeals is a single proceeding commenced by summary summons in 2012 (2012 No. 2559 S.) in which IBRC sought summary judgment against Mr. Halpin in the sum of €25,560,423.26 as guarantor of facilities granted by Irish Nationwide Building Society (“INBS”) to Crossplan Investments Limited. Proceedings were entered to the Commercial List and on the 4th October, 2012, the High Court (Kelly J.) ordered and adjudged "that the plaintiff do recover as against the defendant the sum of €20,000,000 (€20 million)…". The court also made an order that the balance of the plaintiff’s claim be adjourned to plenary hearing.

4 On the 7th November, 2013, following the plenary procedure and oral hearing, the High Court (Cooke J.) ordered and adjudged “that the plaintiff do recover against the defendant the sum of €6,338,369.09…”. Each High Court order also awarded costs in favour of the plaintiff against the defendant.

5 On the 12th November, 2012, Mr. Halpin issued a notice of appeal against the High Court order and judgment of the 4th October 2012, the grounds of appeal include that the court erred in granting judgment on the summary summons when there was an arguable defence.

6 On the 9th January, 2014, Mr. Halpin issued a notice of appeal against the judgment of the 7th November, 2013. The grounds include that the plaintiff was not entitled to judgment against the defendant in the sum of €6,338,369.09 or any amount.

7 These two notices of motion were issued and made returnable before the Supreme Court on the 17th October, 2014. On the 29th October, 2014, prior to the hearing of the motions, the Chief Justice, with the concurrence of the other judges of the Supreme Court issued the direction under Article 64.3.1 of the Constitution specifying the classes of appeals pending before the Supreme Court to be transferred to the Court of Appeal. It is not in dispute that these two appeals fall into a class of appeal so transferred.

8 The facts upon which Kenmare’s motions are grounded are set out in the affidavits sworn by Karen McCrave and Jonathon Hanley, each of whom made the affidavits as directors of Kenmare. In short, the facts relied upon are that by an agreement in writing of the 18th March, 2014, the Special Liquidators of IBRC agreed to transfer and assign to Kenmare in exchange for valuable consideration the entirety of IBRC’s “rights and benefits under and in, inter alia, the facilities the subject matter of the within proceedings”. Further that that agreement was completed on the 23rd May, 2014, when the Special Liquidators of IBRC executed a Deed of Transfer in writing whereby it is deposed:

“IBRC as ‘Assignor’ absolutely transferred to, transmitted to and assigned unto Kenmare as ‘Assignee’ the entirety of those rights, title, interests and advantages hitherto conferred upon IBRC pursuant to the facilities entered into between IBRC on the one part as lendor and the Defendant on the other part as borrower on various dates, including the facilities the subject matter of the within proceedings.”

9 In support of their averments the deponents have exhibited to their affidavits copies of the Agreement of the 28th March, 2014, and Deed of Transfer of 23rd May, 2014, albeit with significant redactions which, they depose, have been required by the Special Liquidators of IBRC by reason of “commercial sensitivity and banker/client confidentiality” and “by virtue of the ongoing nature of the sale of IBRC’s loan book”.

10 It is further deposed that in accordance with the definition of “assets” transferred pursuant to clause 2 of the loan sale deed of the 23rd May, 2014, there is included “Ancillary Rights and Claims” as defined which in turn include “all rights, title and interest of whatever nature in any judgment of the Vendor [IBRC]”.

11 Ms. McCrave and Mr. Hanley deposed to the notice given to Mr. Halpin of the assignment of the rights previously held by IBRC in the facilities, the subject matter of these proceedings and the proceedings to Kenmare.

12 Mr. Halpin in his replying affidavits relied upon correspondence from the Special Liquidators of October 2013, in which they invited submissions from him as to how his loans might be sold and his replying submission. He further deposes...