Roche v Wymes
| Jurisdiction | Ireland |
| Judge | Mr Justice John MacMenamin |
| Judgment Date | 08 May 2008 |
| Neutral Citation | [2008] IEHC 141 |
| Court | High Court |
| Date | 08 May 2008 |
[2008] IEHC 141
THE HIGH COURT
BETWEEN
AND
ANDREWS & MILLETT LAW OF GUARANTEES 4ED 2005 432 - 433
DEERING v EARL OF WINCHELSEA 1787 1 COX EQ CAS 318
GARDINER v BROOKE 1897 2 IR 6
STIMPSON v SMITH 1999 1 CH 340
SNOWDON, RE 1881 50 LJ CH 540
ELLESMERE BREWERY CO v COOPER 1896 1 QB 75
BRADY & KERR LIMITATION OF ACTIONS 2ED 1994 48
WOLMERHAUSEN v GULLICK 1893 2 CH 514
ANDREWS & MILLETT LAW OF GUARANTEES 4ED 2005 PARA 12.019 140
RUMSEY v NORTH EASTERN RAILWAY CO 1863 14 CB (NS) 641
TATTENBORN LAW OF RESTITUTION IN ENGLAND & IRELAND 3ED 2002 119
GOFF & JONES LAW OF RESTITUTION 6ED 2002 PARA 36.004
CIVIL LIABILITY ACT 1961 S35
CIVIL LIABILITY ACT 1961 S35(1)
CIVIL LIABILITY ACT 1961 PART III CHAP IV S45(1)
CIVIL LIABILITY ACT 1961 PART III CHAP IV S45(2)
DEERING v EARL OF WINCHELSEA 1787 2 BOS 270
PENDLEBURY v WALKER 1841 4 Y & C EX 424
COMMERCIAL UNION ASSURANCE CO LTD v HAYDEN 1977 QB 804
BURROWS LAW OF RESTITUTION 2ED 2002 291 - 293
BULA LTD (IN RECEIVERSHIP) & ORS v CROWLEY & ORS UNREP MURPHY 10.6.2005 2005/6/1209 2005 IEHC 212
GUARANTEES
Co-sureties
Claim for contribution in respect of payments under guarantees - Limitation of actions - Whether acknowledgment of payment - Whether claim statute barred - Calculation of contribution - Principles to be applied - Factors to be taken into account - Common indebtedness of guarantors - Dering v Earl of Winchelsea (1787) 1 Cox 319, Ellesmere Brewery Co v Cooper [1896] 1 QB 75, Gardner v Brooks [1897] 2 IR 6 and Stimpson v Smith [1999] 1 Ch 340 applied - Statute of Limitations 1957 (No 6) s 56 - Held defendant liable for contribution (2006/857P & 2006/32COM - MacMenamin J - 8/5/2008) [2008] IEHC 141
Roche v Wymes
Facts: The plaintiff sought a declaration that the defendant was obliged to pay to him such sum as the Court might determine as representing a ‘rateable contribution’ stated to be due to the plaintiff by the defendant on foot of payments of €9 million to National Irish Bank (NIB) and €1.4 million to Ulster Bank Markets Limited. Those payments were made in 2004, in respect of guarantees given by the plaintiff and defendant to those banks, and judgments obtained on foot of the guarantees obtained by those banks against the plaintiff, the defendant, the estate of Thomas C. Roche and Richard Wood. The aforementioned individuals were co-guarantors to the indebtedness of a company, Bula Ltd. to various banks. The plaintiff submitted that because the payments made eliminated or reduced the defendant’s financial obligations and insofar as he and Thomas C. Roche’s estate overpaid in discharge of those debts, he was entitled to claim contribution from the defendant. The payments to the banks were made on foot of a settlement agreement entered into between the banks and the plaintiff and executors of Thomas C. Roche’s estate. Subsequent to those payments, the defendant successfully applied to have removed the judgment mortgage entered against him and in that application he referred to the payments made by the Roches. The defendant claimed that the extent of his indebtedness was not co-terminous with that of the plaintiff.
Held by MacMenamin J. in favour of the plaintiff: That in an action for equitable contribution, the cause of action by one surety who has paid more than his due proportion of the debt against a co-surety for contribution, arises only where the surety making the claim has paid the debt. The settlement entered into by the banks and the plaintiff was sufficient to discharge the liability of the guarantors and ultimately extinguished the defendant’s debt. The defendant relied on the settlement when it suited him and he acquiesced in the settlement. In relation to the NIB claim, the plaintiff was entitled to contribution in the sum of €1,831,500. In relation to the Ulster claim, the defendant made an overpayment. The plaintiff was entitled to judgment in the sum of €1,707,119.
Reporter: L.O’S.
JUDGMENT of Mr Justice John MacMenamin dated 8th day of May, 2008.
1. The Tara Bula litigation, and the subsequent dispute between the main Bula promoters have now been before the courts for more than a quarter century. No recital of the facts, so redolent in length and complexity of Jarndyce v. Jarndyce in Dickens' Bleak House, can do justice to the personal cost, stress and anxiety which the events now to be summarised have had upon all those involved. In this, the latest chapter of this unfortunate saga, the parties were encouraged at the outset to resolve their differences, but to no avail. In the course of this lengthy hearing it has been impossible to avoid the sense that, while the sums of money involved are indeed substantial, they are now almost symbolic; the entrenched stance of the parties based on traumatic past events; predetermined by the respective roles played at critical points in the course of negotiations in the litigation, when the promoters at times must have stood on the brink of financial disaster. The plaintiff, Thomas J. Roche, has since enjoyed a success in business which can only be described as spectacular. The defendant has remained entangled in a morass of litigation. There is now apparently yet further litigation in being between the defendant's son and son-in-law relating to certain dispositions which may have some connection with the consequences of the earlier litigation. For now I turn to the events which give rise to this claim based on the equitable right of contribution.
2. The plaintiff, Thomas J. Roche, seeks a declaration that the defendant, Michael Wymes, is obliged to pay to him such sum as the Court may determine as representing a 'rateable contribution' stated to be due by Mr. Wymes to Mr. Roche on foot of payments of €9 million to National Irish Bank Ltd. (the successor in title to National Irish Investment Bank Ltd. formerly known as Northern Bank Finance Corporation Ltd.), (N.B.F.C.) and €1.4 million to Ulster Bank Ltd. (formerly known as Ulster Bank Markets Ltd. and originally known as Ulster Investment Bank Ltd.) ("Ulster"). These payments, made in 2004, were in respect of guarantees given, inter alia, by Thomas J.Roche and Michael Wymes to those banks, and judgments on foot of the guarantees obtained by the banks against the plaintiff, the defendant, the estate of Thomas J. Roche and Richard Wood.
3. The plaintiff, the defendant, Mr. Richard Wood, together with the late Mr. Thomas C. Roche, the plaintiffs' father (and the defendant's father-in-law), were co-guarantors to the indebtedness of Bula Ltd. ("Bula") to various banks and in particular to NBFC and Ulster. They were the main promoters of the company. The plaintiff says that, because the payments made eliminated or reduced Michael Wymes' financial obligations and insofar as he and his father's estate overpaid in discharge of these two debts, he is entitled to claim contribution from the defendant.
4. Bula, a limited company incorporated in 1971, was formed to acquire lands comprising 120 acres at Nevinstown, Co. Meath. Underneath there were valuable mineral deposits. The lands were to be acquired from Patrick Wright. Thereafter the company was to exploit for sale the minerals.
5. Bula's shareholders were the State; a holding company, Bula Holdings ("Holdings"); and representatives acting on behalf of Patrick Wright (deceased). Voting control of Bula was at all material times vested in 'Holdings', an unlimited company. The shareholders of Holdings were Crindle Investments (36%), Loire Investments (24%), Bula Trust (36%) and Mr. D. Godson and Mr. F. Dillon. Loire Investments was beneficially owned, primarily by Mr. Richard Wood, his family and companies associated with them. Bula Trust was beneficially owned primarily, by the defendant, Michael Wymes, his family and companies associated with them. Crindle Investments was beneficially owned by the plaintiff. 'Holdings' was formed as a vehicle through which shares were held in Bula between Thomas C. Roche, Thomas J. Roche, Michael J. Wymes and Richard Wood and to govern their relationship with the State and the other shareholders in Bula.
6. NBFC, Ulster and Allied Investment Banks Ltd. provided banking facilities to Bula. The banks took charges from the company to secure its indebtedness. That company's indebtedness to the banks (up to certain limits) was also personally guaranteed by the late Thomas C. Roche, Thomas J. Roche, Michael J. Wymes and Richard Wood who are collectively referred to in this judgment as the "guarantors".
7. The relevant guarantees for the purposes of these proceedings are:-
(a) a guarantee dated 25 th April 1978 between NBFC and the guarantors for a maximum amount of IR£1,000,000 together with interest and costs;
(b) a guarantee dated 10 th January 1980 between NBFC and the guarantors in respect of an additional maximum sum of IR£1,000,000 together with interest and costs;
(c) a guarantee dated 22 nd September 1981 between Ulster and the guarantors for a maximum amount of IR£1,828,506.
8. Bula defaulted on its liability to the banks and each of the guarantees was called in.
9. Judgment was obtained by NBFC against the guarantors on foot of the 1978 and 1980 guarantees in the High Court, on 20 th December 1982. This judgment is the starting point in the complex maze of evidence. The court has adopted the approach throughout in seeking to proceed on verifiable material, where possible corroborated independently or in documentary form.
10. The precise terms of the judgment (highly relevant to these proceedings) provided that NBFC was entitled to recover from the...
To continue reading
Request your trial
-
Roche v Wymes
...the courts in one form or another for more than thirty years. 2 The appeal is against the decision of MacMenamin J. in Roche v. Wymes [2008] IEHC 141. The findings of fact in the case are set out in considerable detail in that judgment and it is not proposed to give more than a brief outlin......