The High Court has refused Gerard McCaughey consent to sue Irish Bank Resolution Corporation (in special liquidation) over an alleged settlement, finding that the evidence did not show even a prima facie stateable claim against the bank.
The application, heard by Ms Justice Murphy, sought leave under section 6(2)(b) of the Irish Bank Resolution Act 2013, or the court’s inherent jurisdiction, to bring a specific performance claim. McCaughey alleged that a settlement agreed on 28 April 2015 would have resolved IBRC’s claims against him, including costs from earlier proceedings. The court was considering only whether he could issue proceedings against IBRC; it did not determine the merits of any possible claim against Deutsche Bank AG.
The alleged agreement arose during negotiations involving representatives of Deutsche Bank, after that bank had acquired McCaughey’s loans from IBRC. McCaughey’s solicitor said Deutsche Bank’s representatives had agreed to settle all matters and that a representative accepted one of his client’s proposals. No signed agreement was produced. A draft prepared by Deutsche Bank’s solicitors named IBRC as a party, but the parties later disagreed over the proposed terms. Deutsche Bank’s solicitors said their client could settle only the summary proceedings.
IBRC denied taking part in or authorising settlement negotiations. Its special liquidator, Kieran Wallace, said Deutsche Bank had acquired authority to deal with the loans and that no IBRC representative had negotiated with McCaughey or his representatives.
The judge said that, if the claim were stateable, it could not conveniently be dealt with in the liquidation: the alleged settlement postdated the liquidation and involved multiple parties. But the application failed at the threshold. The judge found that correspondence showed McCaughey’s solicitor knew months before the alleged settlement that IBRC was represented by Ronan Daly Jermyn, while Deutsche Bank was represented by A&L Goodbody. The court considered the repeated statements that both banks had the same solicitors misleading on a material point.
The judge also concluded that the phrase “for the purposes of our discussions, we could assume” Deutsche Bank had taken over the “entire IBRC connection” did not establish that Deutsche Bank had authority to act for IBRC. Later correspondence, the judge said, did not assert that IBRC was party to the alleged agreement or that Deutsche Bank had authority from it.
The court refused consent to issue proceedings against IBRC under section 6(2)(b), exercising its inherent jurisdiction to prevent what it described as an abuse of process. It expressed no view on whether McCaughey might have a stateable claim against Deutsche Bank.