The High Court has rejected Joseph Sheehan’s claims against Talos Capital Limited over a settlement of his liability under a guarantee connected to a €2.4 million loan to JCS Investments Holdings XIV Limited (JCS).
In a judgment delivered on 20 June 2018, Mr Justice Twomey found there had been no actionable misrepresentation by Talos and that section 17 of the Civil Liability Act 1961 did not apply. The court therefore dismissed both claims. The judgment does not record a new monetary award in these proceedings.
Sheehan alleged that, during negotiations in November 2015, Talos’s solicitor misled his solicitor into believing that JCS’s claim against Irish Bank Resolution Corporation (IBRC) for repayment of a deposit remained unresolved. Sheehan said he agreed to a settlement with Talos to regain control of JCS and pursue that claim. He sought to have the settlement set aside.
The court found that IBRC had agreed to pay €1.7 million to JCS under a settlement signed on 28 September 2015. JCS received the money and paid it to Talos on 3 November 2015. Sheehan’s settlement with Talos followed on 19 November 2015. Under it, he paid €3,958,536, including the judgment amount and JCS’s costs and expenses, and regained control of JCS.
The alleged misrepresentation rested on an email of 16 November 2015 referring to UK legal costs certificates. The court considered that email alongside earlier emails and cost schedules, including one sent to Sheehan’s solicitor on 13 November that identified a part-paid legal invoice and lower outstanding costs. It concluded the correspondence as a whole did not represent that all the UK costs certificates remained unpaid. The judge also noted that Sheehan did not give evidence about his own reliance on the alleged representation.
Sheehan’s separate argument was that the €1.7 million payment should reduce what he paid under his guarantee because IBRC and he were concurrent wrongdoers causing the same damage to Talos. The court rejected that argument: JCS, not Talos, had paid the deposit to IBRC and held the claim for its return. IBRC paid the settlement money to JCS; JCS’s subsequent payment to Talos did not make Talos the injured party in the claim against IBRC.
The judgment also discussed Isaac Wunder orders, which can require a litigant to obtain court permission before starting further proceedings. The judge said no party had applied for such an order and declined to impose one on his own initiative at this stage. He said any future application would have to be considered on its evidence and submissions.