Paul Dormer and Another v Allied Irish Banks Plc and Others

JurisdictionIreland
JudgeMr. Justice Brian J. McGovern
Judgment Date26 February 2015
Neutral Citation[2015] IEHC 133
CourtHigh Court
Date26 February 2015

[2015] IEHC 133

THE HIGH COURT

[No. 10198 P./2014]
[No. 179 COM/2014]
Paul Dormer & Anor. v Allied Irish Banks Plc & Ors.
COMMERCIAL

BETWEEN

PAUL DORMER AND GERARD DORMER
PLAINTIFFS

AND

ALLIED IRISH BANKS PLC, LUKE CHARLETON AND MARCUS PURCELL
DEFENDANTS

Banking and Finance – Repayment of loan – Default – Execution of judgment – Vacation of judgment – rem judicatam

Facts: The plaintiffs being the judgment debtors of the first named defendant had applied for an order for vacating the judgment obtained by the first named defendant. The plaintiffs contended that the settlement agreement entered into between the plaintiffs and the representatives of the first named defendant was based on misrepresentations as the recommendations made by those representatives to the Area Credit Committee for credit facilities were negative and resulted in rejection of that proposal.

Justice Brian J. McGovern refused to grant an order for the vacation of a judgment and vacated the interim injunction that had earlier been granted in the proceedings. The Court held that in the absence of fraud or fundamental issue of justice, it would not be feasible to set aside an order and that too, against which no appeal had been preferred. The Court found that under the terms of agreement, it was agreed to by the plaintiffs that in the event the settlement fails, the plaintiffs would irrevocably consent to the judgment and now the plaintiffs would not be permitted to plead the issue again based on rem judicatam.

1

JUDGMENT of Mr. Justice Brian J. McGovern delivered on the 26th day of February, 2015

2

1. The plaintiffs in this action are judgment debtors of the first named defendant. In High Court commercial proceedings bearing record number [2013 No. 4139 S.] [2013 No. 184 COM] ( "the earlier proceedings"), Allied Irish Bank Plc obtained judgment against Paul Dormer and Gerard Dormer (the plaintiffs in these proceedings) in the sum of €17,663,876.

3

2. In the present proceedings, the plaintiffs seek to have the said judgment vacated on the basis that it was obtained on foot of a settlement agreement which was not properly completed. By notice of motion dated 3 rd December, 2014, the plaintiffs sought an interlocutory injunction restraining the receivers (the second and third named defendants) from taking any further steps to sell, market or otherwise deal in the assets of the plaintiffs or take any of the steps in the exercise pursuant to their appointment, which is disputed, pending the trial of the action. On 3 rd December, 2014, the plaintiffs had obtained an interim injunction following an ex parteapplication made before Gilligan J.

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3. In the earlier proceedings, an application for summary judgment was listed before Kelly J. on 30 th January, 2014. On that date, the parties entered into a written settlement agreement and the summary judgment application was adjourned to 4 thMarch, 2014, to allow the implementation of the agreement. The agreement provided, inter alia, at para. 5(3):-

"Eamon Conneely, Sarah Bowen and Michael Morris will, subject to the satisfaction of the matters referred to in 1 and 2 above, recommend to the Area Credit Committee of the Plaintiff, a proposal for credit facilities on the terms of the Heads of Terms as issued on 8 th October, 2013, as may require to be varied or amended on such terms as Mr. Conneely, Ms. Bowen and Mr. Morris believe to be necessary insofar as is required to take account of the valuations received by the Plaintiff pursuant to Special Condition 1 of the Heads of Terms and to take account of the terms of settlement with Mrs. Dormer, referred to at 1 above."

5

Under the terms of the agreement, the plaintiffs unconditionally agreed that judgment would be entered against them in the event that the Credit Committee rejected the proposal.

6

4. The gist of the plaintiffs' claim in these proceedings is that the first named defendant wrongfully obtained judgment against them by misrepresenting its adherence to the settlement agreement which required members of the first named defendant to recommend to the Area Credit Committee of the first defendant, a proposal for credit facilities. The plaintiffs claim that after judgment was obtained against them, they made a data protection request and discovered that the recommendation made to the Area Credit Committee was nothing of the kind because it was couched in terms which included negative information about the plaintiffs. This meant that the rejection of the recommended proposal was inevitable.

Issues
7

5. In this motion, a number of issues arise. They are:-

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(i) what is the meaning and effect of the settlement agreement?;

9

(ii) can the judgment of 4 th March, 2014, be set aside or vacated?;

10

(iii) is there a fair issue to be tried?;

11

(iv) whether damages are an adequate remedy?; and

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(v) what is the value of the plaintiffs' undertaking as to damages?

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6. The settlement agreement of 30 th January, 2014, in the earlier proceedings was signed by the plaintiffs and a representative of the first defendant. The agreement provides at clause 5 that certain steps shall be taken by the bank including the recommendation to be made by Eamon Conneely, Sarah Bowen and Michael Morris to the Area Credit Committee (Clause 5(3)). Clause 4 of the agreement states:-

"The defendants further irrevocably agree to consent to judgment as aforesaid in the event that the plaintiff has not agreed, on or before 28 th February, 2014, to provide facilities on foot of the recommendation referred to at para. 5(3) of the Steps below."

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7. It seems to me that the terms of the agreement are quite clear. The parties named in clause 5(3) were to make a recommendation to the Area Credit Committee of the bank for credit facilities on the terms set out therein. There was no guarantee that the Credit Committee would accept the recommendation and, as things turned out, that is what happened. A recommendation was made and the Area Credit Committee declined to offer further credit facilities.

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8. The order of Kelly J. made on 4 th March, 2014, in the earlier proceedings, records that having regard to the terms...

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