The High Court has allowed John McCabe and John Walsh to defend a claim seeking enforcement in Ireland of a Florida judgment for US$5.775 million, but only on the ground that the settlement behind that judgment was allegedly procured by fraud. The court adjourned the case for a plenary hearing; it did not decide whether fraud occurred or whether the Florida judgment can ultimately be enforced against them.
Bussoleno Limited, incorporated in the British Virgin Islands, sought summary judgment based on a Florida judgment dated 24 April 2009. That judgment followed a mediated settlement under which the defendants had agreed to pay US$3.75 million in instalments over eight years. After US$225,000 was paid, the settlement provided for judgment of US$6 million less payments already made. The Florida court entered judgment for US$5.775 million against five defendants jointly and severally.
McCabe and Walsh opposed the Irish application. Patrick Kelly did not oppose it. The High Court considered whether the opposing defendants had shown an arguable defence to enforcement. It rejected their arguments that Bussoleno had not established it was the party entitled to the Florida judgment, that the judgment was not final and conclusive, and that enforcing it could expose them to US tax penalties or criminal sanctions. Those were decisions on whether the proposed defences could proceed at this stage, not findings about any separate Florida claims.
The fraud argument concerned alleged non-disclosure of the relationship between Bussoleno and Rene Gareau, including the claim that the Gareau Family Trust beneficially owned Bussoleno. The court found an arguable basis for claims that Gareau owed McCabe and Walsh fiduciary duties and that Bussoleno may have owed related duties to disclose its relationship with him when the settlement was made. It stressed that these issues involve factual and legal questions unsuitable for resolution on a summary judgment motion.
Bussoleno argued that the defendants should be prevented from raising fraud because McCabe had previously unsuccessfully sought to set aside the Florida judgment. The High Court held that whether estoppel or abuse of process barred the argument also required determination at a plenary hearing.
The court granted McCabe and Walsh leave to defend and remitted the matter for plenary hearing, restricting their defence to the alleged fraud in obtaining the mediated settlement and subsequent Florida judgment. It did not grant judgment against Kelly or specify the order concerning him; the judge said counsel would be heard on that order, as well as on directions for the proceedings.