McCambridge v Anglo Irish Bank Corporation Ltd

• Jurisdiction: Ireland
• Judge: Ms. Justice O'Regan
• Judgment Date: 07 June 2016
• Neutral Citation: [2016] IEHC 327
• Docket Number: [2009 No. 9048 P]
• Court: High Court
• Date: 07 June 2016

[2016] IEHC 327

THE HIGH COURT

O'Regan J.

[2009 No. 9048 P]

BETWEEN

GREGORY MCCAMBRIDGE

PLAINTIFF

AND

ANGLO IRISH BANK CORPORATION LIMITED

AND

MAINLAND VENTURERS CORPORATION

DEFENDANTS

Banking & Finance – S. 6(2)(a) of the Irish Bank Resolution Corporation Act 2013 – Damages – Pathfinder proceedings – Lifting of automatic stay – Amendment of statement of claim

Facts: Following the issuance of plenary summons by the plaintiff seeking rescission of commitment agreement together with damages against the defendant, the plaintiff now sought an order for lifting of the stay on the proceedings under s. 6(2)(a) of the 2013 Act and an order permitting the plaintiff to amend his statement of claim.

Ms. Justice O'Regan refused to grant an order for lifting the stay in relation to the proceedings instituted under s.6 (2)(a) of the 2013 Act. The Court observed that the Court would refuse to give consent under s.6 (2)(b) if it was satisfied that the cause of action against the defendant was clearly statute barred. The Court held that in the instant case, the plaintiff claimed to be a consumer to avoid implication of certain paras of the commitment agreement. The Court held that since the plaintiff was bound by the judgment of the Supreme Court in pathfinder proceedings wherein no elements of fraud or negligence had been found against the defendants, it would not be feasible to lift the automatic stay on the proposed proceedings.

JUDGMENT of Ms. Justice O'Regan delivered on the 7th day of June, 2016

Background

1 The within matter comes before the Court on foot of a notice of motion of 21st January, 2015, of the plaintiff wherein he is seeking various reliefs including:

a. the lifting of the stay on the proceedings pursuant to s.6(2)(a) of the Irish Bank Resolution Corporation Act 2013 together with -

b. an order joining a further party to the proceedings,

c. an order permitting the plaintiff to amend his statement of claim and

d. an order consolidating the within proceedings with allied debt collection proceedings.

2 The plaintiff issued a plenary summons on 7th October, 2009, seeking the rescission of a commitment agreement (dated 4th October, 2006) together with damages under various headings of claim. The plaintiff subsequently delivered a statement of claim of 4th November, 2009.

3 The proceedings concern a claim by the plaintiff as an investor against the Bank which invited and facilitated participation in a fund for the renovation of hotels in New York.

4 Allied proceedings were entered into the Commercial Court list on the application of the relevant plaintiff by order of 9th November, 2009, on the basis that such proceedings would act as pathfinder proceedings. In this regard, there were two affidavits of solicitor Thomas Norris on behalf of the plaintiffs filed, respectively dated 29th October, 2009 and 6th November, 2009.

Pathfinder Proceedings

5 At para. 20 of Mr. Norris's first affidavit he states:-

‘The proceedings and related proceedings are identical such that all cases can be admitted into the Commercial Court list and one case can proceed to determination, which would bind the remaining plaintiffs and I confirm that I am instructed on behalf of the plaintiff herein and the plaintiffs in the related proceedings and confirm that they will each be bound by the findings in whichever proceedings proceeds to hearing.’

6 At para. 24(a) of that affidavit Mr. Norris confirms that the affidavit was being sworn on behalf of twenty four plaintiffs. Mr. Norris liaised with and secured instructions from each of the individual plaintiffs.

7 In his second affidavit of 6th November, 2009, at para. 8, Mr. Norris confirms that the plaintiffs in the remaining proceedings have agreed to be bound by Mr. McCaughey's proceedings but goes on to state that this is conditional upon the said proceedings proceeding on a generic basis and the remaining plaintiffs will not be bound in the event that a claim is defeated on the basis of something that applies only to the plaintiff defeated. This caveat is explained because the defendants had raised an issue in respect of the residency of Mr. McCaughey (see para. 8).

8 During the course of the pathfinder proceedings one of the issues which arose was as to amending the pleadings to allow the plaintiff to plead that he held the status of ‘a consumer’. Ultimately liberty was afforded to the plaintiff to plead that he was a consumer. However, he resolved not to do so as he did not wish to disclose information that would be required if he availed of an entitlement to such a plea. His counsel asserted to the Court at that time that such status could not bind the other plaintiffs.

9 In the events the pathfinder proceedings took three weeks to be heard and ultimately a judgment was delivered by Birmingham J. on 27th July, 2011.

10 Because of the commitment agreement, one of the documents signed by the plaintiff as part of the investment process, the Court found that liability could only attach to the Bank if there was an element of fraud involved, and the Court held that there was no such fraud. At para. 201 of his judgment, Birmingham J. held that there was no evidence of fraud and the plaintiff had also failed to establish the evidence and entitlement to succeed on any one of the non-fraud elements of the claim. The judge indicated that investor remorse did not provide a basis for a successful legal action. Earlier, at para. 62 of the judgment, the Court indicated that granting consumer status may not in truth be of enormous significance because of the best practice within bank business.

11 Insofar as the issue of zoning was concerned, the pathfinder plaintiff indicated that if he had known of the zoning status he would not have invested. However, the Court found that ‘no reasonably prudent investor who found the investment otherwise attractive, is likely to have been dissuaded from investing by being told about the reality of the zoning issue.’

12 The High Court order was appealed, and ultimately Hardiman J. gave a unanimous decision of the Supreme Court on 13th March, 2013, and at para. 58 of his judgment, Hardiman J. stated that the matter involved a case where the parties had ordered a relationship on the basis of detailed, precise and elaborate contractual provisions. Further, at para. 88, he held that the finding as to the plaintiff's state of mind (vis-à-vis zoning) was a finding of fact.

Plaintiff's position

13 The plaintiff in this application has sworn two affidavits respectively dated 16th December, 2014 and 12th March, 2015.

14 Although the plaintiff did not see fit to disclose to this Court the commitment agreement and other documents executed by him at the time of the investment, they were in fact disclosed by Mr. Kieran Wallace in defence of the plaintiff's claim. These documents comprised:-

a. the commitment agreement of 4th October, 2006;

b. an investor questionnaire, and

c. a professorial investor declaration.

14 A. Mr. Wallace's affidavits are respectively dated 18th February, 2015 and 8th April, 2015.

15 In dealing with the plaintiff's business, his status as a consumer and the nature of the argument he believes he can now make vis-à-vis zoning notwithstanding the pathfinder proceedings the following information is disclosed:-

a. the plaintiff has been a private client of Anglo Irish Bank since 1999 and at all times Anglo purported to provide him with a bespoke service where it would source, package and sell a property and other funds (see para. 4 of the affidavit of the 16th December, 2014);

b. in para. 12 of his first affidavit he states that certain determinative findings were specific to Mr. McCaughey in the pathfinder proceedings and he can effectively distinguish...