The High Court has dismissed Danske Bank’s application to strike out a damages claim brought by Maureen Coyne over a property development loan. The court ruled that the claim was separate from earlier proceedings in which the bank obtained judgment for the outstanding debt, and was not barred by the rule against splitting claims.
Mr Justice Noonan’s judgment, delivered on 5 July 2017, concerned the bank’s application to dismiss the proceedings on grounds including that the claim disclosed no reasonable cause of action, was bound to fail, and was an abuse of process. Raymond Coyne had discontinued his claim, leaving Mrs Coyne as the sole continuing plaintiff.
The claim concerns a €225,000 loan advanced in 2006 to the Coynes for a proposed property development. After the property market collapsed, they could not sell the properties or repay the loan. In July 2015, the High Court granted the bank judgment for €137,150.03, the net amount due after the bank sold the properties and credited the proceeds.
Mrs Coyne alleges that bank branch manager Declan Cox devised the development plan and acted as her financial adviser. She further alleges that Mr Cox knew her husband did not meet the bank’s lending criteria and arranged for the bank to receive an income letter stating an annual salary package of €65,000, despite his actual income being lower. An affidavit from the company’s financial director supports the account that Mr Cox requested such a letter. These allegations have not been proved. Mrs Coyne says she did not know about the letter when the loan was made.
The bank argued that the claim amounted to reckless lending, a tort not recognised in Irish law, and was barred by the earlier judgment or by the rule in Henderson v Henderson because the issues could have been raised in the debt proceedings. The judge found that the pleaded case went beyond reckless lending and included allegations that false information was knowingly put forward in support of the loan.
The court held that Mrs Coyne was not obliged to raise her damages claim as a defence, set-off or counterclaim in the summary proceedings. Since the earlier court had not determined the issues raised in this claim, the judge found that neither res judicata nor the rule in Henderson v Henderson prevented it from proceeding. The ruling addressed only the bank’s dismissal application; it did not decide whether the allegations were true or whether Mrs Coyne is entitled to damages.