The Court of Appeal has dismissed John Morrissey’s appeals in a series of disputes arising from loans made by Anglo Irish Bank and later transferred to LSREF III Stone Investments Ltd. The court upheld the earlier rulings that limited the defences he could raise, found no basis to invalidate the loan transfer as champertous, and held that he lacked standing to challenge section 12 of the Irish Bank Resolution Corporation Act 2013.
The appeals followed High Court proceedings over a debt that Finlay Geoghegan J. quantified in October 2014 at €31,542,125, before credits. The High Court had separately found that the bank overcharged interest by €143,676.64 and directed that amount be deducted. That finding was not appealed.
The loans and related debt proceedings were transferred by IBRC’s special liquidators to Stone under a deed dated 11 July 2014. Stone was substituted for IBRC in the debt case. The High Court later ruled that the assignment was valid under the loan terms and, alternatively, under section 28 of the Supreme Court of Judicature Act (Ireland) 1877. It entered judgment for Stone against Morrissey for €30.18 million, crediting the interest overcharge.
Morrissey argued that Anglo’s alleged unlawful conduct, including conduct by senior executives, should prevent recovery of the debt. The Court of Appeal said earlier, unappealed orders confined that broader defence to a claim that the bank had a fiduciary relationship with him. The High Court had found no such relationship in 2013. The appeal court therefore held that Morrissey could not now rely on Anglo’s general banking conduct as a defence.
On the interest issue, the appeal court said the debt claim concerned sums lawfully due and that overcharging did not itself bar recovery of the properly due amount. It said the evidence supported, at most, carelessness in calculating interest, not an intention to deceive. The court did not decide whether an intentional overcharge could ever justify striking out a debt claim.
The court also rejected the challenge to the loan sale as maintenance or champerty, finding no evidence that the transaction was more than a sale of the loans with the associated right to sue. It upheld the High Court’s decision to strike out most of Morrissey’s amended defence and counterclaim as outside the permitted scope and an attempt to revisit matters already decided.
Because the loan transfer was valid independently of section 12, the court held that Morrissey would gain no practical benefit from a finding that the section was unconstitutional and therefore lacked standing to challenge it. The appeal was dismissed. The judgment does not set out a new debt award; the €30.18 million judgment was made earlier by the High Court.