The Supreme Court has dismissed Peter Kelly’s appeal in a debt recovery case, ruling that he could not introduce a credit-servicing argument that had not been properly raised during the full High Court hearing.
The Court’s judgment, delivered by Mr Justice Gerard Hogan on 28 January 2025, affirmed the Court of Appeal’s decision rejecting the argument as a new issue on appeal. The Supreme Court did not determine whether Cave Projects Ltd was engaged in credit servicing without authorisation, or whether the relevant legislation applied to the proceedings.
The dispute arose from a €12 million commercial property loan advanced by Bank of Ireland in 2007 to a five-person partnership that included Mr Kelly. The bank called in the loan in 2011 and began proceedings against the original borrowers. NAMA acquired the loans and security, then sold the loan to Cave Projects in 2013. Cave Projects was substituted as plaintiff in the existing proceedings.
After other defendants settled, the case continued against Mr Kelly. Following a plenary hearing in November 2022, the High Court entered judgment for Cave Projects in the sum of €11,407,826.09. Mr Kelly’s appeal was rejected by the Court of Appeal in October 2023.
Shortly before that appeal, the Central Bank issued a notice stating that it believed Cave Projects was providing credit-servicing services without authorisation. The notice recorded the regulator’s opinion; it did not itself change the law. The Supreme Court granted leave to appeal on the credit-servicing issue.
Mr Kelly argued that the statutory changes regulating credit servicing made enforcement of the debt unlawful without authorisation. Cave Projects disputed that it was carrying on credit servicing and argued that, even if it was, the legislation did not undo its entitlement to sue. The Central Bank made written submissions and addressed the Supreme Court at a resumed hearing.
The Court found that the issue had not been pleaded or effectively pursued at the High Court trial, and resolving it could have required oral evidence about Cave Projects’ activities. Because the case had already received a full trial, the Court said exceptional circumstances would be needed to allow the new argument on appeal. It found none.
The Court also said there was not persuasive and comprehensive evidence that Cave Projects’ conduct was illegal. It was unclear whether the legislation covered the pursuit of these proceedings or applied retrospectively to litigation begun before the regulatory changes. The Court said it was unnecessary to reach a final view on those questions. The order was to dismiss the appeal.