Patrick Wheelock v Promontoria (Arrow) Ltd and Stephen Tennant

• Jurisdiction: Ireland
• Judge: Mr. Justice Robert Haughton
• Judgment Date: 12 March 2021
• Neutral Citation: [2021] IECA 71
• Date: 12 March 2021
• Docket Number: Court of Appeal Record Number: 2020/92
• Court: Court of Appeal (Ireland)

Between:

Patrick Wheelock

Plaintiff/Appellant

and

Promontoria (Arrow) Limited and Stephen Tennant

Defendants/Respondents

[2021] IECA 71

Haughton J.

Collins J.

Pilkington J.

Court of Appeal Record Number: 2020/92

High Court Record Number: 2018/9598P

THE COURT OF APPEAL

Discovery – Relevance – Unjust enrichment – Appellant seeking discovery – Whether the discovery sought was relevant and necessary

Facts: The appellant, Mr Wheelock, appealed to the Court of Appeal against the judgment delivered ex tempore in the High Court by Twomey J on 28 February 2020 refusing to order discovery to the appellant of the following category of documents: “All documents evidencing or recording the purchase price, or sum, paid by Promontoria in acquiring the Loan Facility and/or Deeds or Mortgage.” The context in which this discovery was sought was the claim in the proceedings by the appellant for declarations setting aside the purported appointment by the first respondent, Promontoria (Arrow) Ltd (Promontoria), of the second respondent, Mr Tennant, as a receiver over the appellant’s property in Waterford and other reliefs including damages, and a counterclaim by Promontoria asserting that the appellant had received benefit from the advancement of certain loan monies as a result of which the appellant had received unjust enrichment at the expense of Promontoria. In essence, the appellant contended that the discovery sought was relevant and necessary for his defence of the counterclaim and for the fair disposal of the proceedings.

Held by Haughton J that while the decision on whether to grant or refuse discovery involves the exercise of discretion by the trial judge, with which the Court of Appeal will generally be slow to intervene, he was of the view that the trial judge in this instance erred in his approach to relevance in preferring one view of the law, where that view was contested and an alternative view was put forward. For that reason Haughton J held that the Court of Appeal could intervene, and should do so on the grounds that the discovery sought was relevant and necessary for the fair disposal of the action. In Haughton J’s view the Category 13 discovery was relevant and necessary for the purpose of contesting the counterclaim for unjust enrichment in circumstances where it was arguable that broader equitable principles were engaged, and where a wide spectrum of evidence was likely to be relevant to consideration and determination of the various elements of such a claim. Haughton J therefore allowed the appeal and granted the discovery sought in Category 13.

Haughton J ordered that the inspection of the documents should be limited to (1) the appellant (2) his solicitor having conduct of the case and (3) his counsel, only, without further leave of the High Court. Haughton J held that undertakings in writing must be given by those parties not to use or quote the price acquisition information in open court or in any documents or electronic transmissions (other than secure inter partes correspondence or correspondence between solicitor and counsel), save with redaction agreed inter partes or with leave of the High Court. Haughton J held that in the case of the appellant this undertaking must be given on oath in an affidavit. Haughton J held that as these proceedings would be heard in open court, this restriction and this judgment would not limit the appellant from relying fully on the relevant information at further hearings, or at trial, subject to further direction of the High Court. Haughton J proposed not interfering with the High Court order reserving costs, and proposed reserving the costs of the appeal to the trial judge.

Appeal allowed.

Unapproved

No Redactions Needed

JUDGMENT delivered by Mr. Justice Robert Haughton on the 12th day of March 2021

Introduction

1 . This is an appeal against the judgment delivered ex tempore in the High Court by Twomey J. on 28 February 2020 refusing to order discovery to the appellant of the following category of documents:-

“All documents evidencing or recording the purchase price, or sum, paid by Promontoria in acquiring the Loan Facility and/or Deeds or Mortgage.”

2 . The context in which this discovery is sought is the claim in these proceedings by the appellant for declarations setting aside the purported appointment by the first named respondent (“Promontoria”) of the second named respondent as a receiver over the appellant's property in Waterford (“the Monvoy Lands”) and other reliefs including damages, and a counterclaim by Promontoria asserting that the appellant has received benefit from the advancement of certain loan monies as a result of which the appellant has received unjust enrichment at the expense of Promontoria. In essence, the appellant contends that the discovery sought is relevant and necessary for his defence of the counterclaim and for the fair disposal of the proceedings.

Background

3 . In 2014 National Asset Loan Management Limited (“NALM”) initiated judgment proceedings against the appellant, bearing High Court Record No. 2014/9112P (“the Judgment Proceedings”), in which Promontoria has since been substituted as plaintiff. That claim for judgment is based upon a Facility Letter dated 23 December 2011 (the “Facility Letter”) issued by IBRC (formerly Anglo Irish Bank plc), for a maximum facility of €2.67 million; the Facility Letter was largely a capitalisation of previous Anglo loan facilities which had been drawn down. The Loan Facility, and two Deeds of Mortgage dated 18 July 2003 and 22 August 2008 (“the Deeds of Mortgage”) were later transferred to National Asset Loan Management Limited, and subsequently acquired by Promontoria from NALM on 11 December 2015 by way of Loan Sale and Deed of Transfer.

4 . The appellant has consistently maintained that the Facility Letter is falsified, as his signature thereon was forged by his former accountant, Michael O'Leary. The appellant also asserts that the signatures purporting to be his on the Deeds of Mortgage are not in fact his signatures, and that the signatures of persons purporting to witness his signature are not genuine.

5 . Following demands for payment by NALM in December 2013 and early 2014 solicitors acting on behalf of the appellant wrote to NALM on 7 February 2014, and to Hays Solicitors acting on behalf of NALM on 12 March 2014 putting NALM on notice of these matters, alleging that the Facility Letter and Deeds of Mortgage are invalid, and further asserting that Mr. O'Leary controlled funds borrowed from Anglo, and that the appellant did not have access to or use such funds.

6 . As a result of the alleged fraud, the appellant instituted proceedings against Mr. O'Leary bearing High Court Record No. 2014/5751P (the “O'Leary Proceedings”) in which he sought compensation from Michael O'Leary and Company and others in the sum of €7,943,445. It was pleaded in the statement of claim in the O'Leary proceedings that the Monvoy Lands were acquired by the appellant in November 1989 for £170,000, which was paid from earnings of the appellant held on his behalf by Michael O'Leary and Company. Those proceedings were ultimately compromised on 10 February 2017 on the basis that the professional indemnity insurers for Michael O'Leary and Company paid the appellant €1,500,000 inclusive of legal costs, on the express basis that this represented the full extent of the insurance policy. In that Settlement Agreement Mr. O'Leary personally consented to judgment in favour of the appellant in the sum of €2,950,000, but he was subsequently adjudicated bankrupt. As the appellant was an unsecured creditor behind NALM and others, he has received no payment or benefit from the O'Leary bankruptcy estate.

The present proceedings

7 . On 2 October 2018 Promontoria appointed the second named respondent receiver over the Monvoy Lands. The appointment of the receiver precipitated the commencement of these proceedings by the appellant by Plenary Summons issued on 5 November 2018. In the statement of claim delivered on 19 December 2018 it is pleaded that the Deeds of Mortgage are void, and that their registration as burdens over the Monvoy Lands was procured in reliance upon instruments of fraud and/or was induced by mistake, and is therefore without legal effect. Paragraph 21 notes that NALM had appointed Myles Kirby as receiver over the Monvoy Lands, but discharged him on 22 June 2015 after being advised of the falsification of the Deeds of Mortgage. Promontoria claimed to have acquired the Deeds of Mortgage on 11 December 2015. The statement of claim pleads that prior to that acquisition Promontoria, its servants or agents were aware, had actual notice, or ought to have been aware, of the falsification of the appellant's signature on the Deeds of Mortgage, and of the invalidity of the purported registration of the Deeds of Mortgage as burdens on the Monvoy Lands. It is further pleaded that the Facility Letter does not bear the genuine signature of the appellant, and that demands for payment made by Promontoria on 21 September 2018 are invalid and made at a time when Promontoria was aware of the appellant's consistent denial that he had signed the facility and his denial of liability. In the prayer the appellant claims declarations of invalidity in respect of the Deeds of Mortgage and the registered charges and the appointment of the second named respondent, and ancillary reliefs including injunctions and damages.

8 . In its Defence and Counterclaim, and for the first time, Promontoria has advanced a claim seeking damages/compensation for unjust enrichment, disgorgement of profits and/or equitable compensation against the appellant. In the counterclaim it is pleaded at paragraph 27 that “the Loan Facility was a continuation of previous loan facilities… which had been advanced by Anglo to, ostensibly, the plaintiff and Mr. O'Leary” and that the...