Ulster Bank Ireland DAC v McDonagh
| Jurisdiction | Ireland |
| Judge | Birmingham P. |
| Judgment Date | 28 July 2022 |
| Neutral Citation | [2022] IECA 180 |
| Court | Court of Appeal (Ireland) |
| Docket Number | [2019 No. 491] [2020 No. 175] |
[2022] IECA 180
Birmingham P.
Barniville P.
Edwards J.
[2019 No. 491]
[2020 No. 174]
[2020 No. 175]
THE COURT OF APPEAL
CIVIL
Bias – Summary judgment – Liability – Appellants seeking to set aside a judgment – Whether a reasonable observer would apprehend that a member of the Court would have been unable to bring an open mind to bear, but rather would have been unconsciously biased towards the position of the respondents because of having acted for either or both of them
Facts: The first plaintiff/respondent, Ulster Bank DAC (the Bank), sought to recover judgment against the defendants/appellants, Messrs McDonagh, in the sum of €22,090,302.64 on foot of a liability said to have arisen from a loan advanced by the Bank to the defendants in July 2007. The second and third plaintiffs/respondents, Mr McCann and Mr Dillon, were appointed as receivers by the Bank on foot of security documentation executed as a term of a loan agreement. In High Court proceedings, the receivers sought orders that they were validly appointed as joint receivers over the secured assets. The Court of Appeal (Murray, Collins, Pilkington JJ), on 6th April 2022, delivered a judgment in an appeal brought by the defendants against certain decisions of the High Court ([2022] IECA 87). The defendants moved to set aside the judgment and sought related reliefs. They did so in circumstances where they claimed that it had come to their attention that, subsequent to delivery of the decision on the appeal, a member of the Court, while practising as a barrister, had acted on behalf of the plaintiffs.
Held by Birmingham P that the question that arose was a narrow one: would a reasonable observer, by which it must be meant a reasonable observer with a reasonable knowledge of the Irish legal system, apprehend that Collins J would have been unable to bring an open mind to bear, but rather would have been unconsciously biased towards the position of the plaintiffs because of having acted for either or both of them? Birmingham P held that the notion that those familiar with the work of the courts would see anything unusual or disturbing about the fact that a member of the Court had in the past, as a barrister, appeared for or against a party was unlikely. Birmingham P held that when the party is an institutional litigant, it is to be expected that it might have frequent business before the Court.
Birmingham P held that the application to set aside the judgment was without merit and bordered on being unstateable. Birmingham P refused the application.
Application refused.
JUDGMENT of the Court delivered on the 28 th day of July 2022 by Birmingham P.
. On 6 th April 2022, this Court (Murray, Collins, Pilkington JJ.) delivered a judgment in an appeal brought by the appellants against certain decisions of the High Court ( Ulster Banks & Ors v. McDonagh & Ors [2022] IECA 87). That judgment was a joint judgment of Murray J and Collins J, with which Pilkington J concurred. The defendants have now moved to set aside the judgment and have sought related reliefs. They do so in circumstances where they claim that it has come to their attention, subsequent to delivery of the decision on the appeal, that a member of the Court, while practising as a barrister, had acted on behalf of the plaintiffs.
. Before turning to address the issues raised in this application, it is appropriate to give some context to the motion now before the Court.
. In the High Court proceedings, Ulster Bank DAC (“the Bank”) had sought to recover judgment against the defendants in the sum of €22,090,302.64 on foot of a liability said to have arisen from a loan advanced by the Bank to the defendants in July 2007. The second and third plaintiffs were appointed as receivers by the Bank on foot of security documentation executed as a term of a loan agreement. In the High Court proceedings, the receivers sought orders that they were validly appointed as joint receivers over the secured assets.
. A point of significance in the High Court proceedings is the fact that on 13 th March 2013, the Bank and the defendants had entered into an agreement which was referred to throughout the proceedings as “the Compromise Agreement”. The agreement arose in the context of the collapse of the property market that had occurred, combined with delays in obtaining planning permission for the development of a data centre on lands at Kilpedder, County Wicklow, and the failure of the defendants to that point to comply with repayment obligations. It should be appreciated that the loan was designed to part-fund the acquisition by the defendants of what was stated to be an 80-acre site at Kilpedder.
. In broad terms, the net effect of the Compromise Agreement was that the liability of the defendants to the Bank, which at that time stood in the order of €25,000,000, was to be written-off in return for payment by the defendants of approximately €5,000,000. In circumstances described in some detail in the judgments of the High Court and of this Court, the Bank took the view that the defendants had been in breach of the Compromise Agreement, and that as a result, the Bank was entitled to treat the agreement as at an end, and to pursue the defendants in respect of the debts alleged to be due.
. On 1 st October 2014, the Bank appointed the second and third named plaintiffs as joint receivers over the lands in Kilpedder.
. In July 2018, proceedings were instituted by the Bank and came on for hearing before Twomey J. on 3 rd December 2019. The case was at hearing for a total of 21 days in the High Court and resulted in the delivery of two judgments. The first and principal judgment, delivered on 6 th April 2020 ( [2020] IEHC 185), explained that there were two broad issues in the case. The first issue was whether the defendants had been in breach of the Compromise Agreement and what consequences would flow from that if so, and the second issue related to the defendants' contention that the effect of the provisions of s. 17(2) of the Civil Liability Act 1961 was that the Bank – by reason of what was characterised as a compromise with a concurrent wrongdoer – was precluded from claiming against the defendants in respect of debts owed by them. What might be described as the “Civil Liability Act issue” arose in circumstances where, on 26 th June 2013, the Bank had instituted proceedings against CBRE, alleging negligence on their part in the preparation of a valuation report in respect of the Kilpedder lands. On 22 nd January 2016, the proceedings between the Bank and CBRE were settled, the Bank settling its action for a sum of €5,350,000. The second judgment, delivered by the High Court on 23 rd June 2020 ( [2020] IEHC 311), dealt with the issues that arose from the arguments that had been addressed in relation to the Civil Liability Act 1961.
. Subsequent to delivery of the judgments in the High Court, the first named defendant sought liberty to issue a motion seeking various orders, including: (i) an order setting aside the declaration that he had breached the Compromise Agreement, (ii) an order “voiding the entire effects of the Compromise Agreement”, (iii) an order setting aside the judgment granted to the Bank “for want of particulars”, and (iv) an order “permitting a review of the judgment”.
. Unsurprisingly, the Bank objected to the attempts to reopen the judgment and the question of whether there should be liberty to issue such a motion was debated in the High Court on 16 th July 2020. The High Court judge took the view that there was no basis for revisiting the Court's judgment.
. From the decisions of the High Court, an appeal was brought to this Court. The appeal was listed for hearing over two days: 16 th and 17 th February 2021. It may be noted that while the first named defendant appeared as a litigant in person before the High Court, all three defendants were represented before this Court. The second and third named defendants were represented by Ms. Avril Gallagher, solicitor, instructing Mr. Louis McEntagart SC and Mr. James McGowan BL (now a senior counsel). The first named defendant was represented by Mr. Geoffrey Nwadike, solicitor, and Ms. Tara Jawad-Sallar BL.
. It may also be noted that the dates for the hearing had been allocated back in October 2020. On the evening of 11 th February 2021, a Mr. William Murphy sought to lodge with the Court of Appeal Office a motion on behalf of the first named defendant seeking to adduce new evidence and to amend the reliefs sought in the Notice of Appeal. It was explained by Mr. Nwadike that Mr. Murphy, who had sought to lodge the motion, was a legal executive who “works in [his] office”. In the course of an affidavit, Mr. Nwadike averred that he had been instructed in the matter on the evening of Friday 3 rd February 2021, and that following acceptance of instructions, he had conducted “research” and ascertained that the second named plaintiff had had past commercial relationships with CBRE. It was therefore said that the second named plaintiff was “compromised” in the receivership. This Court concluded that the motion should be refused. Accordingly, the new “evidence” was not admitted, and the first named defendant was not permitted to amend his Notice of Appeal.
. The appeal hearing proceeded, and judgment was reserved. Judgment was delivered on 6 th April 2022. By any standards, it is an extremely detailed and comprehensive judgment, running to 127 pages, and deals meticulously with each of the issues that had been raised in the course of the appeal.
. The next matter of significance occurred on 19 th April 2022. On that occasion, the...
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DPP v S. W
...the person in the context of some other extracurricular activity. The cases of Bula, and most recently, Ulster Bank v. McDonagh, [2022] IECA 180 make clear that more than the mere establishment of a prior relationship of the sorts mentioned is required in order to establish objective bias. ......