The High Court has allowed John (also known as Johnny) Moran to add a counterclaim alleging misrepresentation against Irish Bank Resolution Corporation Limited, while refusing his proposed claim that he was treated unequally because his companies’ loans were not transferred to the National Asset Management Agency (NAMA).
In a judgment delivered on 25 January 2013, Mr Justice Kelly ruled on Moran’s application to amend his defence and add a counterclaim. The application arose in the bank’s proceedings seeking €19,282,828, said to be due under guarantees relating to borrowings by JRM Hotels Limited and Blarney Inn Limited. Both companies were in receivership. The alleged guarantees and liability remain disputed: Moran’s defence denied that he entered into the guarantees and raised other challenges to the bank’s claim.
The proposed counterclaim included allegations that the bank misrepresented matters to Moran. It also sought to add the Minister for Finance, Ireland and the Attorney General as defendants to a claim alleging unconstitutional inequality. Moran argued that borrowers and guarantors whose loans were transferred to NAMA received more favourable treatment than those whose loans remained with the bank, and that his companies’ loans would have been dealt with differently had they been transferred.
The judge refused permission to add the NAMA and constitutional rights claim. He said the proposed claim did not seek a declaration that the NAMA legislation was unconstitutional, although its substance amounted to a challenge to that legislation. He also found that the evidence supporting the application was insufficient. No evidence showed that the companies’ loans could have been acquired by NAMA, that NAMA would have restructured or compromised the loans, or that the claimed difference in treatment would have produced the outcome Moran alleged. The application also did not explain why the constitutional claims were raised more than a year after the proceedings began.
The judgment further found no sufficient connection between the proposed State defendants, the bank’s claim and Moran’s existing defence to justify joining them to the counterclaim. The court did not decide whether the guarantees were valid, whether the bank’s claim was owed, or whether the misrepresentation allegations were true.
Mr Justice Kelly allowed only the proposed amendment alleging misrepresentation against the bank. The ruling concerned permission to amend the pleadings; it did not determine that counterclaim on its merits.