The Court of Appeal has set aside a High Court order granting Allied Irish Banks plc judgment for €853,920 against Michael McPhillips, directing that the bank’s entire claim proceed to a plenary hearing.
The judgment, delivered by Mr Justice Michael Peart on 27 March 2019, concerns a bank claim for €3,818,694.72 under five loan facilities. The High Court had entered judgment for sums claimed under four facilities and adjourned the fifth loan claim, relating to €2.5 million, for a plenary hearing. The appeal concerned the judgment on the four loans.
Mr McPhillips argued that the loans were connected because they shared security over the Abbey Gate Street property. He also sought permission to introduce evidence obtained from the bank after the High Court decision. That material showed that €848,783 in proceeds from the property’s receiver sale and from a deposit account had been credited to the fifth loan, rather than to the four loans on which judgment had been entered.
The Court of Appeal granted leave to introduce the new evidence. It found that the material existed at the time of the High Court hearing, Mr McPhillips had made diligent efforts to obtain it, it would probably have had an important influence on the outcome, and it was credible.
The court held that the new information supported an arguable counterclaim and equitable set-off across all five loans. It said the counterclaim arose from the same circumstances as the bank’s claim and that the shared security and allocation of its proceeds showed sufficient connection between the facilities. The court did not decide whether Mr McPhillips would succeed in his counterclaim; it held that he should be permitted to advance it in the plenary hearing.
The appeal was allowed and the High Court order of 25 May 2016 was set aside. The entire bank claim was adjourned for plenary hearing as if begun by plenary summons. AIB was directed to deliver a statement of claim within four weeks, or another period agreed by the parties. Mr McPhillips may deliver a defence and counterclaim within four weeks after that statement, or another agreed period.