Ulster Bank Ireland DAC v McDonagh

JudgeMr. Justice Noonan
Judgment Date06 November 2023
Neutral Citation[2023] IECA 265
CourtCourt of Appeal (Ireland)
Docket NumberRecord Number: 2023/122 Record Number: 2023/123 High Court Record Number: 2022/107SP Record Number: 2023/124 High Court Record Number: 2022/108SP
Ulster Bank Ireland DAC
Brian McDonagh
Ulster Bank Ireland DAC
Maurice McDonagh
Ulster Bank Ireland DAC
Kenneth McDonagh

[2023] IECA 265

Whelan J.

Noonan J.

Meenan J.

Record Number: 2023/122

High Court Record Number: 2022/96SP

Record Number: 2023/123

High Court Record Number: 2022/107SP

Record Number: 2023/124

High Court Record Number: 2022/108SP


Well charging orders – Extension of time – Cross-examination – Appellants appealing against well charging orders and an order for sale – Whether the matters about which the appellants sought cross-examination were relevant or necessary to the court’s determination

Facts: The plaintiff/respondent, Ulster Bank Ireland DAC (the Bank), sought well charging orders over the homes of the defendants/appellants, Messrs McDonagh, and in addition, in the case of Mr B McDonagh, an order for sale. The matter was heard on affidavit in the High Court. On the 14th March, 2023, the High Court (Sanfey J) concluded was that the Bank had complied with the proofs necessary to establish its entitlement to the reliefs sought although the defendants argued that those orders should not be made without first ordering cross-examination of Mr Mahon, a senior manager. The judge did not consider such a course to be appropriate or necessary. He proceeded to grant the orders sought. The defendants appealed to the Court of Appeal on the following grounds: (1) the judge was wrong to find that the only application by the defendants was for leave to cross-examine Mr Mahon; (2) the judge erred in refusing an extension of time for the service of the notice to cross-examine Mr Mahon and failed to give any or any adequate reasons for his refusal; (3) the judge failed to properly apply equitable principles to the claim for relief by the Bank and, in particular, failed to conclude that the Bank’s failure to provide valuation evidence in the context of the potential futility of making an order and the Bank’s failure to disclose the profit participation agreement that it entered into with Fane Investments Ltd were factors which disentitled it to the reliefs sought.

Held by Noonan J that there was nothing evident from the transcript which could be considered to be an application for an extension of time. Noonan J held that, even it were possible to conclude that the defendants had in fact applied for an extension of time, it was clear from the findings of the trial judge that it would not have been granted because the defendants had failed to establish that any of the matters about which they sought cross-examination were either relevant or necessary to the court’s determination. Even were that not so, it seemed to Noonan J that the arguments about valuation and non-disclosure were ones that were already available to the defendants, even in the absence of cross-examination. Noonan J noted that the defendants had seven months to consider whether they wanted to cross-examine Mr Mahon and could have elected to do so without leave up until mid-November; rather than intimate that they intended to do so, they agreed with the Bank’s estimate of a two day trial on affidavit, which was duly fixed, and despite further interactions with the court up to the 20th December, 2012, in effect one term day before the trial, gave no hint that they wished to cross-examine Mr Mahon. Noonan J noted that at no time either before the High Court or the Court of Appeal, despite repeated questions from the Court of Appeal, had the defendants ever explained that state of affairs. In the light of that, Noonan J found it difficult to see how any complaint of unfairness to the defendants could legitimately be made, even had they disclosed a basis for the cross-examination sought.

Noonan J held that the defendants had demonstrated no error in the judgment of the High Court. Therefore, Noonan J dismissed the appeals. As the Bank had been entirely successful, it appeared to Noonan J to follow that it should be entitled to its costs in each case.

Appeals dismissed.


JUDGMENT of Mr. Justice Noonan delivered on the 6 th day of November, 2023


. These appeals are the latest chapter in a long running suite of litigation relating to loans advanced by the respondent (“the Bank”) to the appellants who are three brothers. The history of the matter is set out in some detail in the judgment of the High Court (Sanfey J.) of the 14 th March, 2023 under appeal. Sanfey J. delivered a single judgment in respect of all three matters, and as the appeal before this Court was run as a single unitary appeal by the same legal team appearing for all three defendants, I propose to adopt the same approach.


. The proceedings were brought on foot of three special summonses seeking well charging orders over the homes of each defendant, and in addition, in the case of Brian McDonagh, an order for sale. The matter was heard on affidavit in the High Court and the orders sought granted.


. It is convenient to refer to a brief summary of the background to this matter. In 2007, the Bank loaned almost €22M to the McDonaghs for the purpose of purchasing approximately 80 acres of land at Kilpedder, County Wicklow with the intention of developing a data centre thereon. This ultimately never came to pass.


. The detail of this and the subsequent history is set out in the Bank's grounding affidavit sworn by Ted Mahon, a senior manager. The loans went into default, receivers were appointed, and debt proceedings issued against the McDonaghs. These were fully contested and were heard over 19 days before Twomey J. following which a reserved judgment was delivered. In the course of that trial, Brian McDonagh, whom I think it is fair to say is the main protagonist in these proceedings, represented himself but his brothers were represented by solicitor and counsel. Twomey J. found in favour of the Bank and granted judgment in the sum of €22,947.202.85 against the defendants. The McDonaghs duly appealed to this Court which delivered a detailed judgment rejecting the appeal. In contrast to the High Court, all parties were represented in the Court of Appeal.


. In summarising the background, Sanfey J. referred to a number of averments by Mr. Mahon in his grounding affidavit including that Brian McDonagh “sought to surreptitiously purchase the Kilpedder lands at a significantly reduced price of €1,501,000 whilst at the same time avoid his residual liability to Ulster Bank, then standing in excess of €20M. In attempting to do so Brian McDonagh used a corporate vehicle, called Granja Limited (‘Granja’), as a ‘front’ for his dishonest endeavour”. The judge also noted the averment by Mr. Mahon that he “… cannot sufficiently emphasise the extent to which Brian McDonagh has gone to obstruct and frustrate Ulster Bank in recovering the monies due to it from the McDonaghs”. He refers to the analysis by Twomey J. in the summary proceedings where the latter said (at para. 18):

“For the reasons set out below, this court has concluded that much of the evidence provided in support of the McDonaghs' claim was inconsistent and unreliable. In particular, this court found that Mr. Brian McDonagh was party to two forged declarations of trust and he put a ‘fake’ letter on his file. In addition, this court concluded that Mr. Brian McDonagh gave incorrect sworn evidence, which he must have known was false. (Although it was not relevant to this court's conclusions, it is worth noting that this is not the first time that Mr. Brian McDonagh's credibility has been called into question in the courts — as noted below, he was found to have misled the High Court on two separate occasions (McDermott J. and Keane J.) by his failure to disclose relevant evidence and the English High Court found him to be an unreliable witness (Morgan J.)).”


. The Kilpedder lands were eventually sold for approximately €3M to a company called Fane Investments Limited (“Fane”). It later emerged that the Bank entered into a profit participation agreement (“PPA”) with Fane which broadly provided that in the event of a sale on by Fane at a profit, the Bank would be entitled to a 25% participation in that profit. The Bank has confirmed that if and when any sum is realised by it on foot of the PPA, it will be credited to the account of the defendants. It further transpired that in 2015 Promontoria (Aran) Limited acquired the Bank's economic interest in the loan facility and underlying securities, although the Bank retained the legal interest and thus the right to enforce the judgment mortgages the subject of these proceedings. Those judgment mortgages were registered by the Bank against the interests of each defendant in their respective residences.


. The spouses of Maurice and Kenneth McDonagh sought to intervene in the proceedings before Sanfey J., as did the life partner of Brian McDonagh. In his replying affidavit to that of Mr. Mahon, Brian McDonagh averred that the application against him was made with malice on the part of the plaintiff and in the absence of recognition of the rights of “my spouse”. He averred that the Bank “has no entitlement to attack the property rights of my spouse in this application absent her involvement as a party. I say my spouse has a right to be heard in matters pertinent to the family dwelling”. It was however subsequently demonstrated, and now no longer disputed, that Brian McDonagh has no spouse, but rather a life partner to whom he is not married, and his residence does not constitute a “family home” within the statutory definition.


. The central issue arising in this appeal is a claim by the McDonaghs that the trial judge wrongly refused to allow them to cross-examine Mr. Mahon on his affidavit. A brief chronology is...

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1 cases
  • Promontoria Scariff DAC v McDonagh
    • Ireland
    • High Court
    • 12 March 2024
    ...home. The property was therefore not a family home within the meaning of the 1976 Act. In Ulster Bank Ireland DAC v Brian McDonagh & Ors [2023] IECA 265, which involved the same Defendant, the Court of Appeal 2 (Noonan J.) observed at paragraph 7 that it “… was however subsequently demonstr......

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