JUDGMENT OF MR JUSTICE MICHAEL PEART DELIVERED ON THE 24TH DAY OF JUNE 2016:
1. The defendant appeals against the order of the High Court (Keane j.) dated 31st July 2014 granting judgment against him in the sum of €77,095,090.59 on the plaintiff’s motion for summary judgment. The trial judge was satisfied that the defendant had not established on affidavit a bona fide defence to the claim.
2. That judgment sum arises on foot of certain loan facilities granted to the defendant by Allied Irish Banks plc., and on foot of certain personal guarantees executed by the defendant in the bank’s favour. The liabilities on foot of these loans and guarantees were transferred to the plaintiff, which is a subsidiary of the National Asset Management Agency (NAMA), under the NAMA Act. A letter of demand in respect of the sums claimed to be due was served on the defendant on the 10th March 2014, and they were not paid.
3. Prior to that letter of demand, there had been extensive discussions, negotiations, correspondence and interaction generally between the parties and their representatives which was directed towards trying to achieve a consensual approach to an optimal result for both parties, including an agreement as to a realisation of assets, including certain assets which did not form part of the security provided by the defendant in respect of the facilities in question.
4. This course of dealing between the parties resulted in a Memorandum of Understanding between the parties dated 2nd March 2012, and an Amendment Agreement to it dated 2nd March 2012. However, the plaintiff terminated that agreement as it considered that there had been a significant non-disclosure of assets by the defendant.
5. Since the plaintiff was nevertheless anxious to try and retain the cooperation of the defendant by a consensual realisation of assets, there was a further round of extensive engagement and negotiation embarked upon by the parties and their professional advisers which resulted in a further agreement in August 2012 which is central to the issues sought to be raised by the defendant in resistance to the plaintiff’s motion for summary judgment. The agreement reached was not committed to writing and executed by the parties, but its details are summarised in a letter written by the defendant’s solicitor to the plaintiff’s solicitor on the 24th August 2012, and that summary account is confirmed in a letter from the plaintiff’s solicitor dated 28th August 2012. For convenience I will refer to this agreement as “the McCabe letter”.
6. The defendant contends for an interpretation of the McCabe letter, including by reference to and in the context of all the background facts and circumstances, which if correct, would mean that although the defendant does not deny that he owes the amounts claimed, the plaintiff is not entitled to sue for judgment in respect thereof, and that in so far as the agreement might be seen as one whereby the plaintiff agreed not to take enforcement action in respect of certain assets, and agreed to negotiate a settlement with KBC Bank and ABN AMRO “on a pari passu basis based upon the value of assets that would be available for distribution on an assumption that Mr Crosbie was at this date declared bankrupt”, it is implicit that proceedings seeking judgment would not be commenced.
7. It is submitted that the trial judge was incorrect to conclude that the defendant had failed to establish on affidavit an arguable bona fide defence in accordance with the well-known Aer Rianta principles. The authorities from which the relevant test for establishing a bona fide defence derives and is explained is well set forth in the trial judge’s judgment, and in truth there is no issue taken with the trial judge’s conclusions in relation to the test. It is his application of the test to the facts of this case, and his conclusions in that regard, with which the defendant takes issue.
8. I have thus far set out only a very brief summary of the nature of the issues arising on this appeal. The extensive detail of the general background to the proceedings, the negotiations and agreements referred to, and the parties’ submissions are very extensively and well set forth in the trial judge’s written judgment which he delivered on the 27th June 2014, and there is no need for that to be repeated in extenso in this judgment.
9. I will however set forth paragraphs 32 - 34 of the trial judge’s judgment since they contain what is relevant in the McCabe letter which is essential to an understanding of the issues raised on this appeal:
"32. The defendant swore an affidavit in response [to the plaintiffs grounding affidavit] on the 23rd April 2014. He contends that he has a full defence to the plaintiff’s claim “based on the fact that [he] and NAMA, and by extension the plaintiff, entered into a solemn agreement in August 2012 … under which it was agreed inter alia that, in consideration of his providing the plaintiff security interests in certain assets, in respect of which the plaintiff has no legal or equitable interest or claim, and control over a number of companies (trading and non-trading), the plaintiff agreed that it would no longer have recourse over [his] remaining assets, including his interest in its family home, his son’s home and business carried on by his wife..
33. The defendant contends that the terms of what he describes as a “comprehensive agreement” between him and the plaintiff are to be found in the text of a letter dated 24th August 2012 from his solicitor, Mr Liam McCabe, a partner in the firm of solicitors acting for the Connection, to Mr Tom Dane, a partner in the firm of solicitors acting for the NAMA (“the McCabe letter”). That letter commences on the following terms: -
‘I refer to recent meetings and negotiations concerning the above. As requested by your client, I now attach the following documentation which is furnished to you based on our client’s understanding which is summarised in the points set out below. Accordingly, your client may not use or rely on these documents if it is of the view that the summary below is incorrect or does not accurately reflect the agreement.’
34. There follows an itemised list of documents, evidencing the resignation and replacement of the defendant, his wife and son as directors of 12 identified companies that formed part of the Connection, together with a list of documents relevant to the defendant’s shareholding in Amphitheatre Ireland Ltd and his interest in Point Village Development Ltd. The text of the letter then continues:-
‘Our client Harry Crosbie has instructed us to confirm that subject as stated above, he will on or before 31st August 2012 appoint both Auke Van der Werff and Pearse Farrell jointly as his attorneys (subject of course to their willingness to act as such) with power to assist NAMA in the development and disposal of those of Mr Crosbie’s assets as are charged to NAMA. We are instructed to agree the text of this with [NAMA’s solicitors] within that time frame.
We are instructed that in consideration of the delivery of the enclosed documents, NAMA has agreed as follows with Harry Crosbie:-
1. On before 1 March 2014 will release its charge and any claim to Mr Crosbie’s home at Hanover Quay, Dublin 2 and the property at 126 Booterstown Avenue, Blackrock, Co. Dublin, being the home of Simon Crosbie.
2. The business of Storecon Limited and Automation Transport Limited will be transferred to Simon Crosbie for nominal consideration within a month of this date subject to the prior sale by Storecon Limited of its site in Dublin Port with the proceeds of sale (net of any taxes payable thereon) being paid to NAMA. We understand that NAMA has agreed that the entire share capital of Storecon and Automation Transport will be transferred to Simon Crosbie free from encumbrance for nominal consideration. In the interests of certainty, we are requiring that this also be done within a month of the date hereof.
3. Harry Crosbie agrees to sell his property in Dublin Port to Dublin Port Company by way of contract for sale the draft of which has already been furnished to [the defendant’s solicitors]. Please note that Edward Spain of this office has confirmed comments on this documentation earlier today to [NAMA’s solicitors] and these points would require to be negotiated with Dublin Port in good faith over the coming days. We do not anticipate any difficulty in resolving any of these points as they are really matters of detail in the overall context.
4. Mr Crosbie agrees to have no further engagement with Dunnes Stores or Margaret Heffernan concerning the ongoing litigation at the Point Village.
5. Without prejudice to Mrs Rita Crosbie’s claim to full ownership of the property in Eze, France, Harry Crosbie will endeavour to procure a sale of a 50% interest in the apartment within 18 months from the date hereof. NAMA will not object to the proceeds of such sale being applied in discharge of any indebtedness relating to Mrs Crosbie’s house Wexford.
6. NAMA will endeavour to settle Harry Crosbie’s indebtedness to both KBC Bank and ABN AMRO on a pari passu basis upon the value of the assets that would be available for a distribution on an assumption that Mr Crosbie was on this date declared bankrupt.
7. We understand that NAMA has no interest in the property or business of Cafe H and will cooperate in procuring the unencumbered transfer of the lease(s) of the premises to its current operator, Fastwell Limited or Mrs Rita Crosbie or her nominee (excluding Harry Crosbie). We appreciate that this may require the consent of the landlord which is of course a matter that Rita Crosbie will have to deal with.
8. As regards the three interlinked apartments at Villefranche Sur Mer, France, Harry Crosbie agrees to appoint a sales agent to dispose of these properties on terms that the agent is required to disclose all relevant information to NAMA and will have a duty of care to NAMA. Harry Crosbie agrees that he will procure that 45% of the sales proceeds (net of taxes and costs) in his hands shall be remitted to NAMA. This represents Mr Crosbie’s shareholding in the company that owns the apartments.
You will appreciate that Harry Crosbie is concerned that the disposal of his assets may give rise to tax liabilities for him personally. We appreciate that this will be managed sensibly such that these are minimised. However, we require your client’s confirmation that such liabilities are (sic) will be discharged out of the proceeds of sale. We trust that this is all in order and you might please confirm accordingly. If any query arises, please let me know and feel free to contact me … at any stage.”
10. The McCabe letter is what the defendant contends is a comprehensive agreement between the parties which, he says, was understood to preclude the plaintiff from taking enforcement proceedings against him, or suing him for judgment for the sums due, and seeking to have him declared bankrupt. This is put alternatively by stating that to sue him for the amounts due and seek to have him declared bankrupt is inconsistent with any agreement not to take enforcement proceedings against particular assets. The defendant, as noted by the trial judge, has also referred to the McCabe letter as “[demonstrating] the full and wide ranging nature of the final agreement come to between the parties in respect of my indebtedness”, and again later as “an operative, effective and legally binding compromise between the parties”.
11. The plaintiff submitted in response however that nowhere in the McCabe letter is there any reference to any forbearance to sue on its part, or that it constitutes debt forgiveness or an acknowledgement that the agreement is in full and final settlement. The trial judge referred to the averments by Mr McLoughlin of NAMA that in view of the large shortfall anticipated to exist between any amount repaid on foot of asset realisations and the amount actually due, any overarching compromise whereby NAMA would agree not to sue the defendant could only have been reached in the clearest possible terms, and would in any event have required formal authorisation at the appropriate level within NAMA, and that no such authorisation was ever requested because debt forgiveness was never sought by the defendant and was never contemplated by NAMA.
12. The plaintiff submitted in the High Court and on this appeal that in such circumstances NAMA was perfectly within its rights to institute these summary summons proceedings, and that since the defendant does not deny that he owes the sums claimed, and since the McCabe letter provides no legal basis for any bona fide defence to the claim in respect of the monies due, the trial judge was correct in determining that no bona fide defence to the claim had been established and NAMA was therefore entitled to judgment in the sum granted.
13. A significant plank of the defendant’s argument is that the McCabe letter itself states that what is contained therein is but a summary of the terms agreed between the parties, and that it was incorrectly considered by the trial judge to be the entire of the terms agreed. It is submitted that a full plenary hearing would be necessary so that oral evidence could be given by all parties to the discussions which preceded agreement summarised in the McCabe letter, before it could be established to the necessary level of probability that NAMA was not precluded from bringing proceedings for judgment against the defendant. In this regard I should, as did the trial judge, refer to the fact that the defendant’s own belief or understanding that NAMA is precluded by the agreement of August 2012 from pursuing the defendant to judgment is one shared not only by the defendant’s solicitor Mr McCabe, but also his accountant, Mr Fitzpatrick, each of whom were party to the discussions and negotiations that took place, and each of whom have sworn affidavits to that effect. These averments were referred to by the trial judge in his judgment. Mr McCabe stated his view that NAMA has sought to repudiate this agreement by bringing these proceedings “in the teeth of the agreement”. Mr McLoughlin stated in his first affidavit, inter alia that the McCabe letter represents “the consensus and agreement between the parties” and that “the context of this agreement was that, in consideration of the defendant agreeing to divest control of and charge the assets in question in favour of the plaintiff … it was my understanding the plaintiff had come to a settlement with the defendant in respect of [his] indebtedness”.
14. The trial judge made specific reference to these averments, and indeed some others to like effect, and also to the later affidavit by Mr McLoughlin in response where he joins issue with what is stated by the defendant, Mr McCabe and Mr Fitzpatrick.
15. The trial judge noted that even though the plaintiff maintained before him (as it has continued to do on this appeal) that the agreement of 12th August 2012 as summarised in the McCabe letter was not a binding agreement, and that even if it was it was no longer in force because the defendant had not fully performed his obligations, it nevertheless was prepared to accept solely for the purpose of the motion for judgment and this appeal that it continued to bind the parties, but nevertheless could not give rise to any real bona fide defence against the claim for the sums due to the plaintiff.
16. It is clear from paragraph 48 of his judgment that the trial judge considered that there was but a single ground being put forward as a bona fide defence for the purpose of a plenary hearing, and that was “that there is an agreement in force between the parties, in the terms set out in the McCabe letter that precludes the plaintiff from seeking judgment against the defendant for the sum at issue”.
17. He considered how issues of construction must be dealt with on a motion for judgment, and referred to the judgment of Clarke J. in McGrath v. O’Driscoll [2007] 1 ILRM 203 where he stated at p. 210:
“So far as questions of law or construction are concerned the court can, on a motion for judgment, resolve such questions (including, where appropriate, questions of the construction of documents), but should only do so where the issues which arise are relatively straightforward and where there is no risk of an injustice being done by determining those questions within the somewhat limited framework of a motion for summary judgment”.
18. The trial judge then described the issue of construction that arose before him in the following terms:
“I am satisfied that the issue of construction arises in this case is relatively straightforward. As defined by the defendant it is whether there is a fair or reasonable probability of establishing as a real or bone fide defence that there is an agreement in force between the parties, in the terms set out in the McCabe letter, that precludes the plaintiff from seeking judgment against the defendant for the sum at issue. Accordingly, I propose to address that issue by reference to the principles that govern the construction of respectively express and implied contractual terms. In doing so, I propose also to consider whether there is any real risk of injustice being done by determining those questions within the somewhat limited framework of a motion for summary judgment.”
19. I am satisfied that the issue said by the defendant to amount to an arguable defence for the purpose of having the case adjourned to a plenary hearing was succinctly and correctly identified by the trial judge in the above passage. He then proceeded to consider the question of how the McCabe letter ought to be construed and the legal principles governing the construction of documents. These matters are considered extensively at paragraphs 53 - 57 of his judgment, and he particularly relies upon the judgments of Fennelly J. and O’Donnell J. in ICDL v. European Computer Driving Licence Foundation [2012] 3 I.R. 327 which he noted affirmed as the correct approach the comments of Lord Hoffman in I.C.S Ltd v. West Bromwich B.S. [1998] 1 WLR 896 in relation to interpretation of contracts by reference to the words used by the parties to express their intention, but that those words must be considered against what Lord Wilberforce called ‘the matrix of fact’. In other words, the context in which the document is prepared may assist the proper objective interpretation of the words used in the document, but the regard had to the surrounding circumstances must not be allowed to lead erroneously to an interpretation based on the subjective intention of the parties. I respectfully agree with the approach taken by the trial judge to the interpretation of the McCabe letter based upon the authorities to which he has referred.
20. In reaching his conclusions, he took into account the history of significant engagement and correspondence between the parties up to August 2012, and explicitly excluded from his consideration the content of any previous negotiations, and hence, the averments in affidavits from each side as to their subjective intentions or understanding prior to what is summarised as the agreement in the McCabe letter. As to defendant’s contention that the McCabe should be seen as constituting a legally binding compromise between the parties which precludes the plaintiff from obtaining judgment for the amount claimed as due and owing under the various facilities and guarantees signed by the defendant, the trial judge, taking into account the background to the letter, looked at the words used in the McCabe letter, and found firstly that that there are no words recording a full and final settlement or compromise of all claims between the parties, or any comprehensive agreement between the parties. Secondly, he found that there are no words to the effect that the plaintiff would refrain from seeking a money judgment in respect of amounts due and owing on foot of the facilities and/or the guarantees, or that the plaintiff would refrain from taking enforcement action against the plaintiff’s assets generally. Thirdly, he found that there are no words in the letter indicating that the plaintiff would have no recourse against the plaintiff personally beyond that represented by the security already held or to be held by virtue of the agreement evidenced in the McCabe letter. In each of these respects, I consider that the trial judge was correct.
21. Having so concluded, the trial judge then proceeded to reach conclusions as to what the agreement was capable of establishing as far as the obligations upon NAMA are concerned. He has set out those conclusions at paragraph 67 of his judgment.
22. In doing so, he made it clear that he was taking the relevant provisions “at their high water mark from the defendant’s perspective”, given that he was hearing a motion for summary judgment only, and made it clear that he was not expressing a concluded view. The defendant on this appeal questions why the trial judge clarified that he was reaching no concluded view of these matters in circumstances where he went on to refuse a plenary hearing. It is submitted that this is contradictory, and that the trial judge did in fact reach a concluded view instead of adjourning the question to a plenary hearing so that oral evidence could be heard and cross-examined. However, I am satisfied that there is nothing contradictory in the approach taken by the trial judge. He is entitled on a motion of this kind, where the question is whether the defendant has raised an arguable defence, to proceed on the assumption that what the defendant says will be proven in evidence at a trial, and to decide on that basis (i.e. taking the facts “at their high water mark from the defendant’s perspective”) that the defendant’s argument does not surpass the necessary threshold, and that therefore nothing would be achieved by postponing a decision to grant summary judgment by adjourning the case to plenary hearing. The fact that he went on to say that he was not reaching any concluded view does not take away from the fact that he was reaching a decision in accordance with the principles applicable on a motion for judgment. In reality, he need not have said that he was not reaching a concluded view, but the fact that he did does not mean that there is a contradiction.
23. On a prima facie basis only, and for the purposes of the motion for judgment, the trial judge was prepared to accept that one of the obligations upon NAMA which he identified from the McCabe letter, namely that at (d) in paragraph 67 “implies a further term, as a necessary corollary, that neither NAMA nor the plaintiff would petition for the defendant’s bankruptcy at least during the currency of the agreement or until NAMA had used its best endeavours to settle with those two creditors concerning the appropriate division between them on the defendant’s available assets, were he to have been declared bankrupt that day”. Again, that indicates that for the purpose of the motion before him, the trial judge was looking at matters from the perspective most favourable to the defendant’s position, given the fact that no clear words to this effect are present in the McCabe letter.
24. However, despite this conclusion, he was unable to accept that the McCabe letter could be construed as going further and precluding NAMA from seeking a money judgment, and he was satisfied also that no additional term could be properly implied to that effect under the ‘officious bystander’ test or the ‘business efficacy’ test as contended for by the defendant. He expressed that conclusion as follows at paragraph 69 - 71:
"69. However, I cannot accept that the terms of the McCabe letter are capable of conveying to any reasonable person who considers them, with the benefit of the background knowledge available to the parties, that any broader or wider agreement the defendant’s favour is established thereby. In particular, I do not accept, taking the agreement at its high water mark as an agreement not to seek enforcement against a certain identified assets and not to petition for the defendant’s bankruptcy for its long as the agreement applies, it is capable of being construed as an agreement not to seek a money judgement against the defendant. [Emphasis added]
70. I am reinforced in that view by the averments of Mr McLoughlin concerning the purposes for which the plaintiff is seeking judgment in this case, which averments I have already summarised at paragraph 31 supra. Those averments disclose that the plaintiff has identified, correctly or not, a number of other unsecured assets of the defendant, quite separate from those referred to in the McCabe letter, that the plaintiff wishes to secure judgment against. In response, the defendant has averred, in substance, that since these matters were known to NAMA and the plaintiff prior to the agreement at issue, they can have no relevance to the present application and amount to no more than a ‘rehash and recycle of old information’.
71. It seems to me that it would be a strained - indeed, untenable construction of the McCabe letter to assert that, in agreeing to release the security that it held over certain identified assets of the defendant, the plaintiff was also agreeing sub silentio not to seek security over any other unsecured personal assets of the defendant during the currency of that agreement and therefore, not to seek a money judgment against the defendant whether as the basis for seeking such security or to confer standing upon NAMA or the plaintiff to further investigate the defendant’s assets.”
25. The phrase “with the benefit of the background knowledge available to the parties” which I have underlined in paragraph 69 above from the trial judge’s judgment is criticised by the defendant, who submits that the trial judge erred by failing to observe the rule that only the words used by the parties in the document itself should be considered when construing its terms. However, I do not agree that the judge has erred by making reference to that background in the general way in which he did. To do so is permissible where it is considered only as part of the general ‘factual matrix’ or context in which the document was prepared, as already explained at paragraph 19 above, and against which it is being considered.
26. The trial judge concluded that the defendant had failed to satisfy him that “he has a fair or reasonable probability of having a real or bona fide defence” and that the plaintiff was entitled to enter judgment for the amount claimed. It is from that order that the defendant now appeals.
27. Before addressing the parties’ submissions on this appeal, I need to continue the narrative of how matters proceeded before the trial judge following his decision on the motion before him. On the 11th July 2014 he heard two further motions, one by the defendant in which he sought a stay on certain enforcement actions which he anticipated would be taken by the plaintiff against certain of his assets on foot of the judgment just granted, pending the determination of a plenary action commenced by him on the 12th June 2014, and in respect of any proceedings by NAMA to have him declared a bankrupt; and another by NAMA seeking to have that second set of proceedings struck out (in so far as they sought reliefs other than damages) because they were commenced without the plaintiff having first obtained the leave to commence them as required by s. 182 of the NAMA Act. The judge makes it clear in his further written judgment on these motions delivered on the 31st July 2014 that the defendant’s application for a stay was not sought pending any appeal that might be brought against the order granting judgment against him, but rather pending the determination of those second plenary proceedings.
28. For the reasons explained in his second written judgment, the trial judge struck out the claims in the plenary proceedings, except for the claim for damages, and he refused the stay sought by the defendant pending the determination of what remained of those proceedings.
29. It is fair to say that on this appeal the defendant is focussed not so much upon pursuing his denial of liability for the judgment sum on the basis put forward in the High Court, namely that the McCabe letter must be construed as an agreement which precluded NAMA from bringing proceedings against him for a money judgment (in fact he has conceded that he owes the sum for which judgment was granted), but rather upon an entitlement to pursue a counterclaim in the summary proceedings whereby he might obtain certain declarations as to the scope and effect of the judgment granted, including that the McCabe letter properly construed precludes NAMA from taking enforcement steps against the defendant’s assets, including the registration of a judgment mortgage, and also from seeking to have him declared bankrupt. In this particular regard the defendant relies upon clause 6 in the McCabe letter, and on what is stated in paragraph 3 of a letter dated 12th February 2013 from NAMA’s solicitors to the defendant’s solicitor where reference is made to what became the agreement referred to in the McCabe letter as being “an alternative to enforcement by NAMA”.
30. However, in my view it is implicit in the defendant’s position as expressed through counsel on this appeal that he now accepts that these matters do not amount to a defence as such to the money claim itself, but are matters which he should be entitled to have determined by way of a counterclaim in the summary proceedings, and presumably that until his counterclaim is determined he should be entitled to a stay on any enforcement of the money judgment pending a determination as to the scope and effect of the judgment.
31. In the High Court the defendant contended that the “comprehensive agreement” summarised in the McCabe letter properly construed not only precluded NAMA from taking enforcement proceedings against him or his assets, but also from even suing him personally for the amounts claimed to be due on foot of the facility letters and his guarantees. The issue for determination on this appeal is narrower in scope given the way the argument has developed, and is really reduced to whether the defendant should be entitled in these summary proceedings to pursue what he refers to as a counterclaim where he seeks certain declaratory reliefs, even though judgment has been granted to the plaintiff for the amount claimed.
32. The defendant relies upon what the trial judge stated at paragraphs 67 and 68 of his judgment in relation to the obligations which he was prepared at that point to conclude existed upon NAMA under the “comprehensive agreement”, and submits that if at trial of the counterclaim those obligations are upheld and declarations to that effect are granted, it would greatly affect the steps which NAMA could take by way of enforcement both against the assets of the defendant, and by way of further action against him personally, particularly by way of bankruptcy proceedings. He refers to the fact that he is precluded from seeking those reliefs in the plenary proceedings commenced by him on the 12th June 2014 because the relevant reliefs have been struck out in the absence of leave having been sought and granted prior to the commencement of those proceedings, and that the present summary proceedings are the only remaining mechanism by which the Court can be asked to reach a conclusion on the proper interpretation of the agreement summarised in the McCabe letter. It is submitted that particularly in such circumstances where no other avenue is open to him to have these issues determined, he ought in the interests of justice to be permitted to have them determined by way of a counterclaim, as otherwise a great injustice would be inflicted upon the defendant by him not being able to advance his case on the meaning to be given to the agreement evidenced in the McCabe letter.
33. The defendant denies that he has altered his case on this appeal, as is alleged by NAMA on this appeal. He submits that it was always his case that the essence of the agreement between the parties was that in consideration of what was agreed to be done by him, NAMA would not resort to enforcement of the debt against his personal assets, and would not seek to have him declared bankrupt. He refers to the fact that the Memorandum of Understanding had been terminated in early August 2012, after which NAMA would have been entitled to sue the defendant for amounts due, but for the fact that the further “comprehensive agreement” was reached as evidenced in the McCabe letter, and he says that this included an agreement that they would not pursue him personally and would not take enforcement action against his assets provided that he took certain steps which he says he has taken. There may yet be some dispute as to whether he has done all that he undertook to do, but that is his case.
34. He submits that the trial judge was wrong to consider the McCabe letter only in terms of whether it could be read as precluding NAMA from seeking a money judgment, and ought to have considered its wider implications in relation to enforcement action against assets, and allowed a counterclaim to be brought to have that matter determined. It is submitted that it is at least arguable to the required standard that the McCabe letter contained such an agreement by NAMA at least by implication, and of course the defendant also maintains that it is not necessarily the case that the McCabe letter contains all that was agreed between the parties prior to the date of the McCabe letter. This is another reason why he considers that a plenary hearing on the counterclaim is required so that oral evidence can be given as to what was agreed during the negotiations. Again, it is worth emphasising that the defendant relies heavily upon the fact that the McCabe letter on its own terms contains only a summary of what was agreed. As put by counsel, the issue which the defendant wanted to be permitted to litigate by way of counterclaim is whether the agreement implied that NAMA would not go after the personal assets of the defendant and would not seek to have him declared bankrupt. That is the issue which he seeks to be able to have determined by way of a counterclaim in the present summary proceedings.
35. NAMA on the other hand submits that what the defendant is trying to achieve is to prevent it from enforcing its judgment, by asserting that he believes that the McCabe letter evidences an agreement by NAMA that it would not do so, and that it would not pursue him in bankruptcy proceedings. NAMA submits that a counterclaim in the summary proceedings is not the appropriate method by which to seek to achieve that end. It submits that what declarations the defendant seeks do not amount to a counterclaim as properly understood, since even if the defendant is successful in the counterclaim it could not amount to an equitable set-off by way of defence against the money judgment.
36. It is submitted therefore that the appropriate way for the defendant to resist enforcement on the basis of his contended interpretation of the McCabe letter is by way of a defence to any enforcement proceedings that NAMA might actually commence in respect of any particular asset in the future, or by way of resistance to any bankruptcy proceedings. In that regard it can be noted that following the granting of judgment NAMA has registered the judgment against a number of the defendant’s assets, but has not as yet taken any steps to have those judgment mortgages declared well charged, and neither has it as yet sought to have the defendant declared bankrupt.
37. It has been submitted that there is nothing to prevent the defendant from raising such issues in any enforcement proceedings that may be brought, where the target of those proceedings is property that does not comprise a “bank asset” under the NAMA Act, and that there could be no question of any leave being required in that regard under s. 182 of that Act. In this regard, NAMA has pointed out that the only “bank asset” that is referred to in the McCabe letter is the house at Booterstown which was provided as security for one of the loans that was transferred into NAMA, and which, while owned by the defendant, is occupied by his son and family. It is submitted therefore that in so far as Keane J. made an order striking out the plenary proceedings because no leave had been obtained as required by s. 182 of the NAMA Act, the only asset in respect of which the defendant is now precluded from raising any objection to enforcement in any such proceedings by NAMA is the house in Booterstown.
38. Lest there be any doubt as to whether or not the defendant conceded on this appeal that there was no defence as such to the money claim brought on the summary summons, I should say that I am satisfied that the trial judge was correct to conclude that the McCabe letter could not reasonably be construed as meaning that NAMA had agreed that it would not pursue a claim a monetary or personal judgment against the defendant for the amount due, and that no bona fide defence had been raised on the affidavits in that regard.
39. The gravamen of this appeal is the question of whether, despite judgment having been granted, the defendant should be permitted to argue by way of a counterclaim in these proceedings as to whether NAMA is precluded from taking enforcement action against the personal assets of the defendant by the agreement summarised in the McCabe letter. As I have indicated, the defence put up on the motion for summary judgment was principally that this agreement precluded NAMA from even seeking a money judgment. That defence was rejected. However, it would appear from the trial judge’s judgment that the defence being put up on the motion may have been characterised in other ways but it does not seem to have been debated in terms of a counterclaim as such. In this regard I refer to paragraphs 64-66 of the judgment which state the following:
"64. In response to the plaintiff’s submission that the McCabe letter is incapable of being construed as a debt forgiveness agreement or one releasing the defendant from his guarantees, Counsel for the defendant argued that the defendant does not make such a case. Rather, the defendant submits that the McCabe letter evidences an agreement whereby, in various formulations assayed on the defendant’s behalf, the plaintiff bound itself “not to sue or to bankrupt the defendant”; “not to enforce the defendant’s personal liability in the manner being an attempted in these proceedings”; or “that the defendant’s remaining assets would not be attacked and would be set aside”.
65. However, there are no words in the McCabe letter to the effect that the plaintiff will refrain or forbear from seeking a money judgement against the defendant in respect of the monies lawfully due and owing by the defendant to the plaintiff under the facility letters or the guarantees, or both, or that the plaintiff will refrain, or forbear, from taking enforcement action against the plaintiff’s assets generally. [Emphasis added]
66. There are no words in the McCabe letter to the effect that the plaintiff is to have no personal recourse to the plaintiff, beyond that represented by the security thereby (or previously) obtained by the plaintiff from the defendant.”
40. It is apparent from paragraph 65 thereof that the judge was addressed in terms of the McCabe letter constituting, inter alia, an agreement by NAMA not to take enforcement action against the plaintiff’s assets generally. In so far as he considered this argument, it would appear that he considered it in terms of whether it constituted an arguable defence to the claim for summary judgement in the amount due.
41. What happened following the granting of judgment is of relevance. I have referred already to the fact that following the hearing of the motion for judgment and prior to judgment being delivered, the defendant issued plenary proceedings on the 14th June 2014 seeking, inter alia, declarations in the terms which he now seeks to achieve by way of counterclaim. I have referred to the fact that those proceedings, save as regards a claim for damages, were struck out because prior leave had not been sought as required by s. 182 of the NAMA Act. Perhaps the defendant had presumed that he could seek the declaratory reliefs as regards enforcement in such proceedings rather than by way of counterclaim in the present proceedings, and this explains why the matter was not urged specifically in terms of a counterclaim when the motion was being heard and determined before Keane J. What happened then was that the defendant brought a motion in these proceedings in which he sought a stay on the judgment not pending the determination of any appeal against the judgment, but pending the determination of the plenary proceedings. NAMA in turn brought a motion to have the plenary proceedings struck out because no prior leave had been obtained, as I have just mentioned. This motion was granted which in effect undermined completely the basis for seeking a stay pending the determination of the plenary proceedings.
42. All of that helps to explain why the defendant is now so anxious to be able to pursue the declaratory reliefs as to enforcement of the judgment by way of a counterclaim in these proceedings since his avenue for doing so in the plenary proceedings has been closed off. Quite apart from any substantive arguments made by NAMA on this appeal, it argues that the defendant is precluded from arguing for a counterclaim in these proceedings because in reality he did not make that argument in the High Court. The defendant argues that he did raise the question of non-enforcement when debating the meaning of the McCabe letter. But having heard the argument of both parties in this regard, and having considered the way in which the trial judge dealt with the matter, I am satisfied that it was raised only by way of an arguable defence. This explains why the trial judge did not address it as such as a potential counterclaim.
43. Also, it is evident that the grounds of appeal set forth at length in the Notice of Appeal studiously avoids any plea that the trial judge erred by actually refusing to permit a counterclaim. A number of the grounds make reference to a counterclaim, but in my view somewhat obliquely, and certainly not in such a way as to make clear that the defendant sought to be permitted to pursue the enforcement matter by way of a counterclaim as opposed to a defence.
44. However, quite apart from the fact that it does not appear to have been argued and put forward directly as a counterclaim rather than as part of an overall defence argument, there are other reasons why I do not consider that it is appropriate that the defendant should be allowed to plead a counterclaim in these summary proceedings, even if the matter had been addressed directly and then refused by the trial judge.
45. In so far as what the defendant wishes to do in reality is to have a determination in his favour that a proper construction of the McCabe letter and the agreement which is summarised therein would preclude NAMA from taking any enforcement steps in relation to assets and from seeking to have him declared a bankrupt, his claims in that regard are not truly a counterclaim in the sense that they would amount to a defence by way of equitable set-off. Those claims do not sound as a defence to the NAMA judgment claim or to any part of the sum due. This is not a case where one could say that were the defendant successful in his counterclaim, the Court would grant judgment for only part of the amount found to be due because the defendant is entitled to a set-off in respect of another sum due to him or by way of deduction from the amount due to NAMA. The asserted counterclaim is of a different character completely, and is in the nature of a cross-claim. In my view it is not appropriate that it should be determined as part of these summary proceedings. The whole purpose of summary judgment procedure is to provide a simple and expeditious procedure to a plaintiff who claims to be owed money, and where no defence to that claim exists. It is only where an asserted counterclaim or a cross-claim could sound in a monetary judgment, and therefore provide an equitable set-off against the plaintiff’s claim that ordinarily it should be determined in summary proceedings.
46. Given the breadth of the Court’s jurisdiction under Order 37, r. 7 RSC I do not exclude the possibility that in a summary proceeding a defendant may raise a counterclaim or cross-claim which would not result in a monetary judgment, and therefore not give rise to an equitable set off against the plaintiff’s judgment, and could be successful in an application for a stay on the plaintiff’s judgment pending the determination of the counterclaim or cross-claim. However, in that regard I agree completely with what has been stated by Ms. Justice Finlay Geoghegan at para. 17 of her separate judgment in this appeal, that it would be an unusual application, and one to be determined on its own facts and in accordance with the established principles in Prendergast v. Biddle, unreported, Supreme Court, 31st July 1957.
47. In her recent judgment in National Asset Management Limited v. Kelleher, Court of Appeal, April 2016, Ms. Justice Finlay Geoghegan has dealt comprehensively with summary summons procedures where the question of a counterclaim arises. She has done so by a careful examination of authorities and the relevant rules of court. That judgment was delivered after the present appeal was argued before this Court, and I am not therefore relying on that judgment as such for the conclusions which I have reached in this case, and it is not appropriate therefore that I would set out in my judgment the relevant passages therein. I mention her judgment only for the assistance of the parties and the information of others more widely. I believe nevertheless that my conclusions in the present appeal are entirely consistent with that judgment.
48. What the defendant strives for on this appeal is to be permitted to have a determination as to the enforcement steps if any that NAMA is entitled to pursue on foot of the judgment obtained by reference to the terms of the agreement summarised in the McCabe letter, and to raise that matter in a counterclaim. I am firmly of the view that this ought not to be permitted, quite apart from the fact that he ought to have raised that matter specifically in the High Court to which I have already referred. He ought not to be permitted to do so because it is not a claim which is truly a counterclaim which can give rise to a claim of set-off against the amount due on foot of the judgment. Even if the matter was fully argued in the High Court in relation to a counterclaim and the trial judge had refused to permit it by way of counterclaim, I would be satisfied that such a decision would have been the correct one, given the object and purpose of the summary summons procedure so clearly explained by Finlay Geoghegan J. in NAMA v. Kelleher to which I have referred.
49. If the defendant believes that the McCabe letter or the agreement summarised therein disbars NAMA from seeking to enforce its judgment against particular assets or from seeking to have him declared bankrupt, he has the opportunity for so arguing if and when NAMA seeks to take any such steps perhaps by issuing well-charging proceedings in relation to any judgment mortgage they may have registered over particular assets, or they serve bankruptcy proceedings upon him. That is the occasion of which the defendant can avail in order to make the case which he seeks to make in the present summary summons proceedings.
50. For all these reasons I would dismiss this appeal.
