The High Court refused to stay a €6,458,028.74 judgment against Niall McFadden pending appeal, subject to undertakings from both sides. The bank must undertake not to initiate bankruptcy proceedings against him and to compensate him for reasonable losses if he succeeds on appeal after enforcement steps. McFadden must undertake to preserve assets pending appeal.
Mr Justice Clarke delivered the supplemental judgment on 27 April 2010. In a principal judgment delivered on 20 April, he had found that McFadden remained liable to Danske Bank A/S, trading as National Irish Bank, under a guarantee. The parties agreed that judgment should be entered for €6,458,028.74, plus costs to be taxed if not agreed. The remaining issue was whether enforcement should be stayed pending an appeal to the Supreme Court.
The bank accepted that any appeal would be genuine, though it maintained that the appeal would ultimately fail. Clarke said the court had to balance possible harm to both sides and consider whether conditions could reduce that harm.
McFadden’s counsel argued that enforcement without a stay could expose him to bankruptcy and irreversible consequences. The bank argued that delay could damage its prospects of recovery because creditors may gain priority according to the timing of enforcement steps. Its counsel pointed to an existing eight-figure judgment against McFadden in favour of another financial institution. McFadden’s counsel accepted that judgment existed, while saying the institution continued to do business with his group of companies, Boundary.
Clarke concluded that a stay was unnecessary if the undertakings were given. The bank’s bankruptcy undertaking prevents it from initiating a bankruptcy or creditor-arrangement process against McFadden based on the order while the appeal is pending. It does not prevent the bank from relying on the order in a process started by another party. The bank must also undertake to pay damages reasonably arising if McFadden succeeds on appeal after the bank has recovered funds or taken other enforcement steps to his detriment. McFadden, in turn, must undertake not to deal with assets in a way that impairs the bank’s recovery rights.
The refusal of a stay was conditional; the judgment does not say that the undertakings had already been provided. Clarke said he would consider imposing terms pending appeal if some or all were not forthcoming. The supplemental judgment does not determine the outcome of any appeal.