Morrissey v National Asset Management Agency Ltd

• Jurisdiction: Ireland
• Judge: Mr Justice David Keane
• Judgment Date: 24 March 2017
• Neutral Citation: [2017] IEHC 193
• Court: High Court
• Docket Number: [2014 No. 2799P]
• Date: 24 March 2017

BETWEEN

CAROL

AND

JOHN MORRISSEY

PLAINTIFFS

AND

THE NATIONAL ASSET MANAGEMENT AGENCY LIMITED,

CAPITA ASSET SERVICES (IRELAND) LIMITED,

THE MINISTER FOR FINANCE, IRELAND

AND

THE ATTORNEY GENERAL.

DEFENDANTS

[2017] IEHC 193

Keane J.

[2014 No. 2799P]

THE HIGH COURT

Practice and Procedures – O.31, r. 12 of the Rules of the Superior Courts – Discovery of documents – Relevance and Necessity – Res judicata

Facts: The plaintiffs had filed two separate applications seeking orders for discovery against the first and second defendants, and the rest of the defendants (“State defendants”). The first and second defendants had instituted a counterclaim against the plaintiff wherein they were seeking an order for summary judgment for the non-payment of loan advanced to the plaintiffs.

Mr. Justice David Keane refused the applications for discovery filed by the plaintiffs in entirety. The Court held that the categories of the documents sought by the plaintiffs against all the defendants were neither relevant nor necessary for the fair disposal of the issues between the parties. The Court found that the plaintiffs could not seek discovery of those categories of the documents in relation to which they had filed an earlier application before the Court as that application was struck off by agreement between the parties. The Court, thus, held that the earlier order striking off the application operated as res judicata. The Court observed that the plaintiffs sought a broad and wide discovery of the documents at the expense of the State resources, which if granted, would not be of any benefit to them as it would not aid in the resolution of dispute between the parties.

JUDGEMENT of Mr Justice David Keane delivered on the 24th March 2017

Introduction

1 The plaintiffs in this action move for two separate orders of discovery, pursuant to O. 31, r. 12 of the Rules of the Superior Courts, as amended (“the RSC”); one against the first and second defendants (“the NAMA defendants”) and one against the third, fourth and fifth defendants (“the State defendants”).

Background

2 The plaintiffs are wife and husband. They reside, together with their children, as a family at 36 Palmerston Road, Dublin 6. It is their principal private residence.

3 The first plaintiff is a pharmacist who, in 2002, left her employment in that capacity to work full time in the home. Rather unhelpfully, in the pleadings, on affidavit and in exhibited correspondence, the first plaintiff changes back and forth between the use of the forenames Cearuil and Carol, while consistently using the surname Morrissey. It may be that the former is a gaelic name and the latter an anglicised version of it, but no clarification or explanation has been offered in that regard. Since the plaintiffs have elected to pursue this litigation through the medium of the English language, and have chosen to describe the first plaintiff as “Carol Morrissey” in the plenary summons with which they commenced proceedings, it seems to me that that is how she should be described, if unnecessary confusion is to be avoided.

4 The second plaintiff is a businessman. His business, according to the first plaintiff, has involved the purchase and development of property.

5 The first defendant (“NAMA”) is a statutory body established under the National Asset Management Agency Act 2009 (“the NAMA Act”). The second defendant (“Capita”) is a loan management service provider to NAMA. I will refer to those two defendants collectively as “the NAMA defendants.”

6 The third defendant is the Minister for Finance (“the Minister”). He is sued primarily in respect of the discharge of his functions under the NAMA Act. The fourth defendant is the State as a juristic person and the fifth defendant is the Law Officer of the State designated by the Constitution of Ireland. They are sued to answer the plaintiffs' challenge to the constitutionality of several provisions of the NAMA Act. Collectively, I will refer to those three defendants as the State defendants.

7 From the pleadings and affidavits that have been exchanged between the parties, the following background emerges.

8 Between June 2004 and July 2006, the second plaintiff took out 18 separate loan facilities with the Irish Nationwide Building Society (“INBS”). Those loan facilities were secured by way of mortgages and other security that he provided in his personal capacity over eight separate properties. One of those eight properties is the plaintiffs' principal residence at 36 Palmerston Road. The other seven were purchased by the second plaintiff as investment properties. NAMA refers to the said loan facilities and associated security as “the JM Connection.” The NAMA defendants contend that the aggregate amount of the relevant loan facilities offered by INBS was €27,578,000, of which the second defendant drew down a total sum of €27,278,000.

9 NAMA was established in December 2009. The Minister for Finance designated INBS as a “participating institution”, as defined under the 2009 Act, in 2010. The loans and “bank assets” comprising the JM Connection were acquired by National Asset Loan Management Limited (“NALM”), a NAMA group entity within the meaning of s. 4 of the NAMA Act, on 10 December 2010. As a service provider to NAMA, INBS continued to manage the JM connection loan portfolio following its acquisition by NALM.

10 By Order of the High Court, made under s. 34 of the Credit Institutions (Stabilisation) Act 2010, on 1 July 2010, the business of INBS, including the management of the JM Connection loan portfolio, transferred to Anglo Irish Bank Corporation, which had by then been nationalised. By resolution passed on 3 October 2011, Anglo Irish Bank Corporation changed its name to Irish Bank Resolution Corporation (“IBRC”), with effect from 14 October 2011. On 7 February 2013, immediately upon the enactment of the Irish Bank Resolution Corporation Act 2013, the Minister for Finance made the Irish Bank Resolution Corporation (Special Liquidation) Order, providing for the orderly winding up of IBRC. Thus, the Joint Special Liquidators of IBRC assumed management of the JM Connection loan portfolio until, on 12 August 2013, Capita took over in that role, in which it has remained to the present day.

11 The NAMA defendants contend that default first arose with some of the relevant loan accounts in or about January 2006, and that by June 2008 cumulative arrears of €734,538.34 had built up on eight loan accounts.

12 By letter, dated 22 January 2014, NALM demanded repayment of the sum of €32,131,530.21 from the second defendant in respect of certain of the JM Connection loans. The NAMA defendants contend that the sum demanded has not been paid. By deed of appointment, dated 27 January 2014, NAMA purported to appoint Neil Hughes and Joseph Walsh as statutory receivers over the seven investment properties. To date, NAMA has taken no enforcement action against the property at 36 Palmerston Road, the defendants' principal private residence.

Procedural history

13 A plenary summons issued on behalf of the plaintiffs on 27 February 2014. They delivered a statement of claim on 3 June 2014. The NAMA defendants delivered a defence and counterclaim on 10 July 2014. The State defendants delivered a defence on the same date. The plaintiffs delivered a reply to each defence, and a defence to the NAMA defendants' counterclaim, on 1 August 2014.

14 The NAMA defendants' counterclaim is primarily one for summary judgment against the second defendant in the amount of €32,516,390.55, plus interest on that sum accruing from 16 April 2014. That claim, it would appear, was originally the subject of separate summary proceedings that issued on 17 April 2014, entitled “ NALM v John Morrissey [2014 No. 1104S].” As one of several case management directions agreed between the parties, on 24 June 2014, Gilligan J ordered that those proceedings were to be stayed on the basis that the claim advanced in them was to be made the subject of a counterclaim by the NAMA defendants in these proceedings.

15 As reflected in the Order made on 24 June 2014, another direction agreed between the parties is that the trial of the action is to proceed on affidavit, subject to cross-examination. The result is that the following affidavits have been exchanged on the merits of the proceedings: an affidavit of the first plaintiff, sworn on 19 September 2014; an affidavit of the second plaintiff, sworn on the same date; an affidavit of Antoine Mac Donncha, sworn on behalf of the State defendants on the 21 October 2014; an affidavit Ben O'Donoghue, sworn on behalf of Capita on the 20 October 2014; and an affidavit of Michael Broderick, sworn on behalf of NAMA on the same date.

The plaintiffs' claim

16 The plaintiffs' statement of claim is very lengthy, running to 64 pages in total and containing 148 paragraphs leading up to the prayer for relief. The relief claimed extends over a further 20 enumerated paragraphs, set out over five of those 64 pages. Whether this reflects the innate complexity of the plaintiffs' claim, as they contend, or merely its discursiveness, as might be argued, is not directly at issue here.

17 Attempting a broad summary, the plaintiffs seek damages for breach of their constitutional rights (including their personal rights; property rights; family rights; marital rights; right to the inviolability of their dwelling; and rights to litigate and of access the courts), negligence (including negligent misrepresentation), breach of duty (including breach of statutory duty), breach of s. 3 of the European Convention on Human Rights Act 2003, and breach of their rights under s. 3 of the Guardianship of Infants Act 1964, together with interest on those damages and costs. They also seek an injunction preventing any future interference with their exercise of the relevant rights,...