High Court: Vulture fund granted €1.3m summary judgment against Dublin man

A vulture fund has been granted summary judgment against a man who secured loans from Anglo Irish Bank in 2008, which were bought by the fund from IBRC in 2014.

The two loans amounted to €1.06 million, and the man owed approximately €1.33 million when they were called in by the fund in 2016.

Finding that it was clear that the man had no defence, Mr Justice Séamus Noonan rejected arguments that there had been a binding compromise between the parties before the loans had been called in, that the bank was guilty of contributory negligence for failing to conduct investigations into the man’s capacity to pay, and that the fund was not entitled to submit heavily redacted documents to the court.


In September 2008, Anglo Irish Bank Corporation Plc advanced two loans to Mr John Walls in the amounts of €941,000 and €119,000 respectively – a total of €1.06 million.

In 2014, Anglo’s successor, Irish Bank Resolution Corporation Ltd, sold certain loans to Launceston Property Finance DAC – including Mr Walls’s loans.

Default occurred on the loan facilities and a demand for payment was made by Launceston in November 2016 at which time the amount due on foot of the facilities was approximately €1.33 million – interest on which has continued to accrue.

In March 2017, Launceston issued a summary summons and a motion for summary judgment in May 2017.

In the High Court, Mr Walls raised three issues which he said gave rise to an arguable defence sufficient to have the matter remitted for plenary hearing.

The compromise point

The principal ground relied on by Mr Walls was that Launceston’s claim was the subject matter of a binding compromise entered into between the parties in 2016 – Mr Walls submitted that this compromise was negotiated between his solicitor, James Flynn, and Robert Dowling, an asset manager employed by Pepper Finance Corporation as agents for Launceston.

Considering the affidavit evidence given by Mr Flynn, in addition to the chain of emails between Mr Flynn and Mr Dowling discussing the possibility of a compromise, Mr Justice Noonan said that the email exchange was entirely inconsistent with the suggestion that a binding compromise had been entered into.

While it was submitted that the compromise was reached after a number of telephone calls, there was no evidence submitted to support this. As such, Mr Justice Noonan said that all that had been advanced to support the compromise point were “mere assertions” which were contradicted by the documentary evidence.

Asserting that this “…defence had been raised on the purely speculative basis that discovery might throw up something which would contradict the evidence that is actually before the court”, Mr Justice Noonan stated that this was not realistic and if it were, Mr Walls “should have proceeded with his motion for discovery once it became clear that the application for summary judgment was proceeding”.

Contributory negligence

Mr Walls submitted that Anglo had advanced over €1m to Mr Walls without ‘conducting any, or any adequate investigations or inquiry into my capacity to repay the amount loaned’, that Anglo was accountable for ‘some, if not all, of the loss which they, their successors and/or assigns claimed to have suffered thereby’, and therefore the defence of contributory negligence arose.

While accepting that Irish law did not recognise a tort of negligent or reckless lending, it was submitted that this did not exclude a defence of contributory negligence under s. 34 of the Civil Liability Act 1961. Reliance was also placed on KBC Bank Ireland Plc v. BCM Hanby Wallace [2013] 3 IR 759, in which Fennelly J considered that contributory negligence on the part of the bank could indeed arise as a cause of the loss suffered by it.

Mr Justice Noonan said that this argument was “entirely misconceived”, and that Fennelly J’s judgment had no applicability to the facts of the present case.

Mr Justice Noonan said that the defence of contributory negligence “may of course be raised against a bank in circumstances where it sues a third party for damages for negligence typically such as a solicitor, surveyor or valuer”, but that this was “of no materiality to a claim by a lender for money due”.

Redacted documents

The third ground raised by Mr Walls was in relation to the heavily redacted loan transfer deed. Mr Walls suggested that both he and the Court were “entitled to see the deed in its entire unredacted form to determine whether it does in fact establish what [Launceston] alleges and that it is not entitled to put a redacted document before the Court”.

Rejecting this submission, Mr Justice Noonan said that it was “now well settled that in claims of this nature involving loan portfolio sales… plaintiffs are entitled to redact documents for reasons of commercial sensitivity and privacy rights of third parties”.

Satisfied that Mr Walls failed to establish that he had a “fair or reasonable probability of having a bona fide defence”, Mr Justice Noonan held that Launceston was entitled to judgment for the sum claimed.

  • by Seosamh Gráinséir for Irish Legal News

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Other judgments by Mr Justice Seamus Noonan