The High Court dismissed claims against Bank of Scotland plc and receiver Michael McAteer over interest rate swaps and a mortgage secured on Comeragh House in County Waterford. It held that Parsley Properties Limited’s claim was invalid because the company was dissolved when the proceedings began, and that its later restoration did not validate them. The court also concluded that the claim had no reasonable prospect of succeeding at trial, and that the other plaintiffs’ claims depended on Parsley’s.
The plaintiffs alleged that the bank arranged loan facilities for Parsley’s 2005 investment in a UK retail site on the basis of fixed interest rates, but that the arrangements involved interest rate swaps. They claimed the swaps were unsuitable and that the bank had mis-sold them, misstated the position, and acted negligently and in breach of fiduciary duty. These were allegations, not findings that the bank had done so.
Angel Properties LLC had guaranteed Parsley’s obligations and mortgaged Comeragh House to the bank as security. Clive and Suzanne Holmes, who lived at the property under a caretaker agreement with Angel and were beneficiaries under the trust that owned Parsley, argued that the swaps altered Parsley’s obligations and that the bank should have notified and consulted Angel before it remained liable as surety. The bank sought dismissal under the Rules of the Superior Courts, arguing that Parsley’s dissolved status invalidated its claim and that the claims were bound to fail.
Parsley was dissolved on 3 July 2012. Proceedings were issued on 5 July 2013, and the Isle of Man High Court declared the dissolution void on 22 September 2013 under section 272 of the Isle of Man Companies Act 1931. The Irish High Court accepted the bank’s evidence about Manx law and held that restoration revived Parsley’s corporate existence but did not retrospectively validate proceedings started during dissolution. It therefore ruled that Parsley’s claim must fail.
The court separately found Angel’s notice and consultation argument unstateable: the facility letter expressly contemplated interest rate protection agreements, and Angel had mortgaged the property under that same facility. It also concluded, as an alternative basis for dismissal, that Parsley had no reasonable prospect of succeeding at trial. The judgment relied on the contractual acknowledgments and exclusionary terms, the absence of specifically pleaded fraud or fraudulent concealment, and the company’s ability to obtain professional advice. The court said the remaining claims depended on Parsley’s succeeding.
The judgment noted that the receiver had given the Holmeses notice to deliver vacant possession of Comeragh House in May 2013, and that they had threatened to seek an injunction if removed during the proceedings. The court’s order dismissed the plaintiffs’ claim; the judgment does not itself state an order for possession of the house.