The High Court has refused an interlocutory injunction sought by three plaintiffs to prevent the special liquidators of Irish Bank Resolution Corporation (IBRC) from transferring their loans as part of a large portfolio sale.
In a judgment delivered on 13 March 2014, Mr Justice Gilligan found there was a serious issue to be tried about whether the plaintiffs were entitled to be heard and to receive adequate reasons for a decision affecting their interests. For the purposes of this application only, he accepted that the special liquidators’ decision might be a public law decision and might carry a requirement to provide reasons. He did not decide those questions conclusively.
The plaintiffs—Dagenham Yank Limited, No One In Particular Limited and Brendan McCabe—say they were overcharged interest and that derivative agreements were mis-sold. Those claims remain for the substantive proceedings. They sought to stop the loans being sold while the claims were unresolved, arguing that a transfer could undermine their ability to obtain an effective remedy.
The loans were included in the €1.3 billion Stone portfolio. The liquidators had invited submissions on the proposed sale process, and the plaintiffs made representations in September 2013. In November, they were told their loans would be sold as part of the portfolio rather than individually. The plaintiffs later offered to buy their loans, but the offer was rejected.
The court held that damages appeared capable of being quantified and would be an adequate remedy if the plaintiffs succeeded at trial. The transfer of the loans would not, in itself, deprive them of a remedy, the judge said. He also noted the delay in bringing the interlocutory claim, that the loans continued to be treated as performing, and that the plaintiffs could still repay the outstanding indebtedness to buy them out.
Under section 8 of the Irish Bank Resolution Corporation Act 2013, the court had to consider the public interest and the Act’s purposes when deciding whether to grant interlocutory relief. The judge concluded that refusing the injunction would not give rise to an injustice and weighed the orderly winding up of IBRC and public confidence in the banking sector.
The court refused the injunction. The ruling addressed only interim relief; it did not determine the plaintiffs’ underlying claims of mis-selling or overcharging.