The High Court has ruled that a dispute over a proposed settlement between Allied Irish Banks plc, Everyday Finance DAC and Thomas J Doran cannot be decided within their existing debt proceedings. Any attempt to enforce or rescind the settlement must be brought in separate proceedings, the court said.
Mr Justice Garrett Simons delivered the judgment on 2 September 2024. He held that the parties’ consent to adjourn the case in October 2023 did not give the court a procedural basis to enforce the proposed settlement summarily. No formal order was made at the time, and the deed had not been executed by Everyday Finance.
The case began in 2010, when AIB brought proceedings to recover a debt said to arise from two loan agreements made in 2006 and 2007. Everyday Finance later joined as a plaintiff, asserting that the debt had been transferred to it. The defendant filed a counterclaim, and the case was sent to a plenary hearing in 2012 because of factual disputes.
Those disputes include the defendant’s allegations that valuation reports exhibited by the bank were forged and that he would not have entered the loan agreements had the required valuations been obtained. He also alleges that he later learned AIB had valued certain lands at €600,000 despite a loan condition requiring a minimum valuation of €3 million. These remain allegations; the judgment did not decide them.
The hearing began on 24 October 2023. After settlement discussions overnight, counsel told the court the next day that matters had resolved and asked for the case to be adjourned until 28 February. The judge asked whether an order was required; counsel said no, and the proceedings were simply adjourned.
The defendant signed a proposed deed that would have required scheduled payments. It provided for the case to be struck out if the settlement sum was paid, or for the defendant to consent to judgment of €5,073,138.74 in default, with credit for interim payments. A €150,000 payment made to Everyday Finance’s solicitors was later returned because they considered the anti-money-laundering documentation insufficient. The deed was never executed on behalf of Everyday Finance; AIB was not named as a party to it. The defendant later purported to rescind the document, asserting no agreement existed.
Justice Simons said settlement agreements are contracts and ordinarily require separate proceedings for enforcement unless the parties obtain a court order allowing enforcement within the existing case. The adjournment was too neutral to serve that purpose and did not amount to a strike-out. The plaintiffs may bring separate proceedings if they still rely on the deed; either side may instead pursue its claim or counterclaim in the existing case. The matter was listed for mention on 9 October 2024 so the parties could address their next procedural steps.