The High Court has ordered LSREF III Stone Investments Ltd. to replace Irish Bank Resolution Corporation Ltd. (in special liquidation) as plaintiff in proceedings against John Morrissey over facilities allegedly owed to IBRC. The order changes who will pursue the claim; it does not determine whether Stone can ultimately recover the debt.
Ms Justice Finlay Geoghegan delivered the ruling on 10 November 2014 on a motion brought by IBRC and Stone. The proceedings concern facilities granted under a letter accepted by Morrissey in February 2009. The court had previously determined the amount at issue as €31,542,125.93, plus interest from 3 June 2014, less further receipts from a receiver. Whether the plaintiff was entitled to judgment for that amount remained unresolved.
IBRC and Stone relied on a deed of transfer dated 11 July 2014, following a sale agreement made in March. They argued that the debt and related rights had been assigned to Stone and that it should take over the case. Morrissey disputed the effectiveness or validity of the sale and transfer, and whether notice of the purported assignment had been properly given. He did not dispute that the documents had been entered into or that he received notice of the purported assignment.
The judge found that the applicants had provided enough initial evidence for the procedural application. She stressed that this was not a decision on whether the transfer was effective or valid, or whether a redacted copy of the transfer deed would be sufficient to establish Stone’s entitlement at a later stage. Those matters remained open for further proceedings.
The court also rejected the argument that the special liquidators lacked power to transfer the proceedings with the debt. It held that the debt was company property held when the liquidation began and that the liquidators had capacity to sell it and assign related rights and proceedings. That ruling on capacity did not settle the separate dispute over the transaction’s validity.
The judge found no prima facie case that IBRC or Stone had committed maintenance or champerty. She considered that Stone, as purported purchaser of the facilities, had a legitimate interest in the proceedings.
Stone must now plead its entitlement to judgment, and Morrissey may respond, including with defences concerning the purported sale and transfer. The court said it would hear counsel on directions for amended pleadings and anticipated possible discovery issues concerning the sale agreement and transfer deed, which had been produced in redacted form.