The Court of Appeal has allowed Paul and Gerard Dormer’s appeal against orders refusing them permission to amend their claim against Allied Irish Bank (AIB) and striking out their proceedings.
The appeal concerned a dispute arising from a settlement of AIB summary summons proceedings. Under the January 2014 settlement, three AIB officials were to recommend to the bank’s Area Credit Committee facilities on terms based on October 2013 Heads of Terms. The Dormers were to consent to judgment for the bank’s claim if specified events did not occur by 3 March 2014, including the completion of a deed with Bank of Scotland.
The committee declined the proposal. On 4 March 2014, the High Court entered judgment for AIB after refusing the Dormers’ request for an adjournment to pursue concerns about the bank’s compliance with the settlement. That order was not appealed. The Dormers later brought separate proceedings alleging misrepresentation and breach of the settlement agreement, and sought to have the judgment set aside.
They then applied to amend their statement of claim to add fraudulent misrepresentation. The High Court refused the amendment and struck out the proceedings, finding that the claims were barred by earlier decisions and amounted to an abuse of process. The Dormers appealed.
The Court of Appeal concluded that the alleged breach of the settlement agreement had not been determined on 4 March 2014. The High Court had refused an adjournment and entered judgment under the settlement; it had not heard or decided the Dormers’ allegations about AIB’s performance. The appeal court therefore held that res judicata and issue estoppel did not bar the claim. It also said the interlocutory injunction proceedings in February 2015 did not prevent the claim from proceeding: findings beyond what was needed to decide whether to continue the injunction were not binding rulings on the underlying claim.
The court held that, in the unusual circumstances of this settlement, the absence of a fraud allegation did not by itself bar the Dormers from seeking to set aside the judgment. It said the proposed amendment had a factual basis sufficient to avoid being struck out as bound to fail. That conclusion did not decide whether the allegations were true or establish that AIB breached its obligations. The court also found no established actual prejudice to AIB from allowing the amendment.
The appeal was allowed in respect of both the refusal to amend and the striking out of the action. The judgment does not report a trial determination of the underlying allegations.