The High Court has struck out John Morrissey’s new proceedings against Irish Bank Resolution Corporation (IBRC), its special liquidators and LSREF III Stone Investments Limited, ruling that they sought to revisit issues already decided or to be dealt with in a related debt case.
In a judgment delivered on 11 March 2015, Ms Justice Costello found the proceedings an abuse of process under the principles of res judicata and Henderson v Henderson. She said claims that had been decided could not be re-litigated, while issues still to be decided belonged in the debt proceedings rather than in a second case.
Morrissey’s statement of claim alleged, among other things, unlawful interest overcharging, unfairness in the sale of his loans to Stone, and that the transfer was invalid. It also sought damages and declarations concerning the conduct of the debt proceedings and the constitutionality of section 12 of the Irish Bank Resolution Corporation Act 2013. These were allegations and claims made by Morrissey; the judgment does not make findings that all the alleged wrongdoing occurred.
The court said that prior rulings in the debt case had addressed matters including the bank’s interest charges, its ability to demand repayment, and the special liquidators’ power to sell the loans. It also noted that the actual validity of the loan sale agreement and deed of transfer remained for a later module of the debt proceedings. The judge said those issues could not be litigated simultaneously in both cases.
Costello rejected Morrissey’s argument that the history and modular conduct of the debt proceedings justified bringing a separate action. She said he had opportunities to make submissions as developments arose and that any challenge to decisions in the debt case should be pursued by appeal. The court also noted his counsel’s stated intention to appeal after that trial concluded.
The order struck out paragraphs 8 to 110 of the statement of claim as against the IBRC defendants and Stone, amounting to the entirety of the pleaded case against them. The fifth defendant, the Minister for Finance, had not brought a strike-out motion, and the judgment expressly said the order did not strike out claims against him. Costello said she would hear submissions on how the proceedings should continue against the State defendants.
The judge preserved a limited possibility for Morrissey to challenge section 12’s constitutionality if Stone succeeds in obtaining judgment against him in the debt proceedings on the basis of that section. She did not decide the validity of the loan transfer in this judgment.