The High Court has ruled that Solicitors Mutual Defence Fund Limited may re-enter proceedings against defendants who were parties to a 2011 settlement, to pursue its rights under the agreement’s payment-default clause. The court did not grant the plaintiff judgment for the claimed balance, and the defendants may still raise defences.
Mr Justice Denis McDonald delivered the judgment on 14 May 2020. The issue before him was limited to whether an order made in 2011 had left the court functus officio — with no further role in the proceedings. Other issues, including delay and any defences to enforcement, were not decided.
The dispute arose after the plaintiff said it invested €8.4 million in a bond in January 2005 on the defendants’ recommendation and that the bond later lost 97% of its value. It sued in 2009, alleging breach of contract, negligence and other wrongs. Those were allegations in the original case, not findings in this judgment.
Under a settlement dated 28 January 2011, the plaintiff agreed to accept €7.3 million in full and final settlement of claims arising from the bond purchase. The agreement provided for an initial €1.3 million payment and six further instalments of €1 million. It also said that, if an instalment remained unpaid for more than seven days, the plaintiff could seek to re-enter the proceedings and obtain judgment for €8.4 million less payments made.
The High Court struck out the proceedings against the first 14 defendants on 31 January 2011, with liberty to re-enter. The settlement terms were not included in that order or filed with the court. The plaintiff later applied to re-enter and sought judgment for €4,921,276.59, which it said was outstanding. It said the initial payment and the first two instalments had been paid, but later instalments had not.
Five defendants opposed re-entry, arguing that the strike-out had ended the proceedings and that the plaintiff would have to bring a new action to enforce the settlement. Justice McDonald read the order as a whole and considered its context, including the settlement clause. He concluded that the order’s reference to liberty to re-enter preserved a limited future role for the court: to allow an application under that clause, rather than to reopen the original claims for trial.
The ruling does not decide whether the plaintiff is entitled to the amount sought. The court said the defendants could raise any legitimate defences, and that delay would have to be considered if relevant. The parties were invited to agree on costs or submit their positions in writing within 14 days.