R.J.G. (Holdings) Ltd v Financial Services Ombudsman

• Jurisdiction: Ireland
• Judge: Mr. Justice Herbert
• Judgment Date: 31 October 2012
• Neutral Citation: [2012] IEHC 452
• Court: High Court
• Date: 31 October 2012

[2012] IEHC 452

THE HIGH COURT

[No. 1163 J.R./2011]

RJG (Holdings) Ltd v Financial Services Ombudsman & Anor

No Redaction Needed

JUDICIAL REVIEW

BETWEEN

R.J.G. (HOLDINGS) LIMITED

APPLICANT

AND

THE FINANCIAL SERVICES OMBUDSMAN

RESPONDENT

AND

DANSKE BANK A/S TRADING AS NATIONAL IRISH BANK

NOTICE PARTY

ADAM & ORS v MIN FOR JUSTICE & ORS 2001 3 IR 53

GORDON v DPP & DISTRICT JUDGE MCGUINNESS 2002 2 IR 369

BAMBRICK v COBLEY 2006 1 ILRM 81 2005/3/573 2005 IEHC 43

TATE ACCESS FLOORS INCORPORATED v BOSWELL 1990 3 AER 303

ATKIN v MORAN 1871 IR 6 EQ 79

CHANCERY REGULATION ACT 1850 S15

HOLCOMBE v ANTROBUS 8 BEV 412

DEFEUCHERES v DAWES 11 BEV 46

ST VICTOR v DEVEREUX 6 BEV 584

P (A) v JUDGE MCDONAGH UNREP C LARKE 10.7.2009 2009/46/11494 2009 IEHC 316

BEHBEHANI & ORS v SALEM & ORS 1989 2 AER 143

BRINK'S MAT LTD v ELCOMBE 1988 3 AER 188

CENTRAL BANK & FINANCIAL SERVICES AUTHORITY OF IRELAND ACT 2004 PART VIII(B)

G v DPP 1994 IR 374

RSC O.84 r21(1)

NEWHART DEVELOPMENTS LTD v COOPERATIVE COMMERCIAL BANK LTD 1978 1 QB 814

TUDOR GRANGE HOLDINGS LTD & ORS v CITIBANK NA & ANOR 1992 CH 53

PRACTICE AND PROCEDURE

Set aside

Leave for judicial review - Ex parte application -Full disclosure rule -Claim of non disclosure of material facts at application for leave - Inherent jurisdiction of court - Whether non disclosure of material facts - Whether facts material - Whether order granting leave should be set aside - Lascomme Ltd v United Dominions Trust (Ireland) Ltd [1993] 3 IR 412; Bambrick v. Cobley [2005] IEHC 43, [2006] ILRM 81; Atkin v Moran (1871) 6 IR Eq 79; State (Vozza) v Ó Floinn [1957] IR 227 and G v DPP [1994] IR 374 applied - Adam v Minister for Justice, Equality and Law Reform [2001] 3 IR 53; Gordon v Director of Public Prosecutions [2002] 2 IR 369; Behbehani v Salem [1989] 1 WLR 723; Newhart Developments Ltd v Co-operative Commercial Bank [1978] 1 QB 814 and Tudor Grange Holdings Ltd v Citibank NA [1992] Ch 53 considered - Tate Access Floors Inc v Boswell [1991] Ch 512 followed -- Rules of the Superior Courts 1986 (SI 15/1986), O 84 r 21 - Order set aside (2011/1163JR - Herbert J - 31/10/2012) [2012] IEHC 452

RJG (Holdings) Ltd v Financial Services Ombudsman

Facts: A verifying affidavit concerning the issue of the non-disclosure of documents in an ex parte application by the applicant, seeking leave to apply for judicial review. The documents consisted of pre-application letters, the Deed of Debenture, letters for Demand for Payment and the Deed of Appointment of a receiver.

Herbert J held that the rules regarding non-disclosure must be applied rigorously for the court to properly discharge its function in exercising its discretion to grant or refuse leave.

The failure of the applicant and its legal advisors to make disclosure of the letters to the court at the ex parte application was a breach of their obligation to disclose all matters which may affect the mind of the court in exercising this discretion. An application for ex parte relief must put all such correspondence before the court or if “without prejudice” inform the court of its existence. The non-disclosure however viewed objectively, was not significant in this instance and it would therefore be disproportionate to set aside the order.

The failure of the applicant and its legal advisers at the hearing of the application to disclose the Deed of Debenture the Letters of Demand for Payment and the Deed of Appointment of a receiver and manager was culpable and significant. Herbert J held that he had no doubt that this egregious and erroneous non-disclosure might have affected the mind of the court in exercising its discretion. The documents concerned the consent of the receiver and whether the applicant had any right or interest sufficient to confer standing. They were of the utmost materiality to the just and proper determination of the application for leave to apply for judicial review. Bambrick v Cobley [2005] IEHC 43 considered.

The order of the Court granting leave to the applicant to apply for judicial review was set aside. The material not disclosed to the Court was of the greatest relevance in making that decision.

1 JUDGMENT of Mr. Justice Herbert delivered the 31st day of October 2012

2 In the ex parte application made by the applicant seeking leave to apply for judicial review the Statement required to ground application for judicial review, dated the 7 ^th December, 2011, described the applicant as engaged in the business of property holding through its subsidiaries Celts Hostel Limited and Braybourne Properties Limited. In that Statement of Grounds the applicant sought judicial review in the form of an order of certiorari, setting aside a Finding by the respondent made on the 10 ^th June, 2011, and, in the form of an order of mandamus, directing the respondent to hold an oral hearing in respect of a complaint of the applicant or certain portions thereof. The applicant also sought judicial review in the form of declarations that it was entitled to an oral hearing before the respondent in respect of all or portion of its complaints and, declarations that the decision of the respondent that the rescission of an agreement for lease was valid, was erroneous in law, unreasonable and irrational. In a verifying affidavit sworn by Mr. Raymond Gannon on the 7 ^th December, 2011, he stated that he was a director of the applicant company and made the affidavit on its behalf. No Minute of the Board of directors of the applicant authorising the commencement and prosecution of the application for judicial review was exhibited in that affidavit.

3 In this verifying affidavit, Mr. Gannon stated that on the 23 ^rd March, 2010, the applicant had made a number of complaints to the respondent pursuant to the provisions of s. 16 of the Central Bank and Financial Services Authority of Ireland Act 2004. Common to each of these complaints were the following facts. On the 1 ^st August, 2009, prospective tenants had entered into a written agreement with the applicant to take a lease of premises at 32 and 33 Blessington Street in the City of Dublin conditional upon the notice party giving its consent within 21 days of that date. The consent of the notice party was not given until the 7 ^th September, 2009, and, in the meanwhile the prospective lessees had purported to rescind the agreement for lease on the 4 ^th September, 2009. The applicant had acquired these properties in May 2008, by purchasing the shares in Braybourne Properties Limited and Celts Hostel Limited with the assistance of a loan from the notice party based upon a Facility Letter dated the 7 ^th April, 2008. This loan was secured by a Deed of Debenture made on the 21 ^st May, 2008, and registered on the 26 ^th May, 2008.

4 In its complaint to the respondent the applicant claimed:-

"That Ms. McDonagh, an officer of the notice party, had been expressly advised of this condition. It was further claimed that Mr. Gannon had spoke to Mr. Sean Lenihan, an officer of the notice party on the 2 ^nd September, 2009, and the 4 ^th September, 2009, and to Mr. Gordon Bothwell also an officer of the notice party, on the 3 ^rd September, 2009, in an attempt to procure the necessary consent of the notice party to the proposed lease;

That in June, 2009, the notice party had unilaterally altered the repayment terms of the Loan agreement to provide for capital and interest repayments despite an express oral representation made to Mr. Gannon by Mr. Bothwell that repayments would be on an interest only basis for the first year of the loan and, that thereafter repayment terms would be reviewed by mutual agreement;

That the notice party had wrongfully refused to release a deposit of €100,000 despite an oral agreement between Mr. Gannon and Mr. Bothwell that this sum would be placed on deposit with the notice party until renovation works had been completed on the premises at 32 and 33 Blessington Street, and that the claim by the notice party that this sum had been placed on deposit by the applicant for the duration of the loan was incorrect."

5 By a letter dated 19 ^th May, 2010, the notice party replied to the respondent putting in issue each of these complaints made by the applicant. By a letter dated the 31 ^st May, 2010, the applicant informed the respondent that it did not accept the response of the notice party. By a letter dated the 3 ^rd June, 2010, the respondent sought the applicant's comments on the contents of the letter dated the 19 ^th May, 2010, from the notice party to the respondent. This response was furnished by the applicant on the 23 ^rd June, 2010. By a letter dated the 29 ^th June, 2010, the respondent invited the applicant to submit the dispute to mediation. By a letter dated the 5 ^th July, 2010, the applicant agreed to mediation. By a letter dated the 7 ^th February, 2011, the notice party responded to a number of queries raised by the respondent in relation to the dispute. By a letter dated the 17 ^th February, 2011, the notice party responded to a number of queries raised by the respondent in relation to the matters at issue in the dispute and in which it continued the deny the complaints made by the applicant. By a letter dated the 18 ^th February, 2011, the respondent invited the applicant to make further submissions in the light of these responses from the notice party. A further submission was made by the applicant on the 1 ^st March, 2011. A further submission was made by the notice party dated the 22 ^nd March, 2011. By a letter dated the 25 ^th March, 2011, the respondent invited the applicant to make submissions in reply. These further submissions were made on the 31 ^st March, 2011.

6 At para. 19 of his verifying affidavit sworn on the 7 ^th December, 2011, in the application for leave to seek judicial review, Mr. Gannon makes the following...