High Court of Ireland Decisions

1. This Action is one in a complex series of litigation involving Bula Limited (“Bula”). A major Action (1986 No. 1089Sp) Bula Limited -v- Tara Mines and Others (The Tara Action) was sponsored and pursued on behalf of Bula by Michael Wymes, Richard Wood, Thomas C Roche and Thomas J Roche who are the major shareholders in Bula Holdings Ltd. (“Bula Holdings”) the holding company for Bula. It was heard by Lynch J. lasting 277 days. Michael Wymes was 120 days in the witness box. Lynch J. gave a 180 page Judgment on the 6th of February 1997 rejecting all the Plaintiffs’ claims. At page 104, he held that the external debt including £11 million to Bula Holdings exceeded £27 million. At page 108, he said the domestic Banks were owed £12 million.

2. A lengthy note of Appeal to the Supreme Court was served but at the outset of the Appeal only two grounds were advanced. In the Judgment of the Court on the 15th of January 1999 Keane J. held that neither ground had been made out and the Appeal was dismissed.

3. In the second of the two major Actions (1986 No. 6624P) Bula as Plaintiff was again sponsored by Messrs. Wymes, Wood and the Roches. This Action was against Laurence Crowley NBFC, UIB, AIIB and a fifth party (later struck out by consent by Barr J. on the 29th of April 1997) (the Bank Action). The case made was that "the banks were negligent deceitful in breach of contract and in breach in and about their relationship with Bula. The claims against the Receiver are broadly similar" (see ruling of Barr J. 29th of April 1999).

4. At a very late stage in the Bank action in January 1997 Bula was given liberty to introduce new claims against the banks and the Receiver on foot of the Statute of Limitations 1957. On application by the Plaintiff Barr J. directed a preliminary issue should be tried and points of claim on the limitation issue were delivered on 19th March 1997. In the course of hearing the preliminary issue commencing on the 9th of April 1997 the question of whether the payment by the State of interest due by Bula to NBFC (£56,760.90) made on the 19th of February 1986 had the authority of Bula was raised. Barr J. held on the 29th of April 1997 that the findings of Lynch J. in his Judgment relevant to any issue in the Bank Action were not reviewable, (a ruling which was never challenged) and that the finding of Lynch J. regarding the payment of interest by the State to NBFC amounted to a finding that it was not an unlawful payment or one which was secret or unauthorised by Bula and was binding on the Plaintiffs in the Bank Action.

5. Barr J. directed that the Bank Action go to full hearing and an amended Statement of claim was delivered on 27th May 1997. When the case resumed for hearing on the 10th of June 1997 Counsel for the Plaintiffs conceded that the claims made in the Bank Action (other than outstanding Statute of Limitation claims introduced in January 1997) could not succeed unless Bula was successful in the Supreme Court Appeal then pending in the Tara Action and the relevant findings of fact by Lynch J. were set aside by that Court. Counsel for the Plaintiffs made an application for an adjournment pending the outcome of the Supreme Court Appeal in the Tara Action. This was opposed by the Receiver and the banks.

6. In his ruling dated the 10th of June 1997 Barr J. said the application ought to have been made at the commencement of the trial which was about 10 weeks after the Judgment of Lynch J. on the 6th of February 1997. He said he had no doubt that a conscious decision was made to proceed with the preliminary issue arising out of the Statute of Limitations in the hope that the Plaintiff might be successful and to postpone the application for an adjournment to await the outcome of the preliminary issues. He said that a manipulation of litigation in that way is itself an abuse of the process of the Court. Having considered all the factors Barr J. granted an adjournment to await the outcome of the Plaintiffs Appeal to the Supreme Court in the Tara Action on terms that the Appeal in the Tara Action would be diligently prosecuted and expedited, failing which the Defendants could apply for an Order dismissing the primary claims of the Plaintiffs in the Bank Action without prejudice to remaining issues under the Statute of Limitations; further that the Plaintiffs recognise and agree that if the Tara Appeal was dismissed without overturning any material findings of fact made by Lynch J. the Plaintiffs primary claims in the Bank Action should stand dismissed with costs without prejudice to the Plaintiffs claim on foot of the Statute of Limitations and further that each of the Plaintiffs undertake that they will not mount further proceedings against the Defendants or any of their servants or agents in respect of any alleged wrong doing of which they are presently aware or in the opinion of the Court ought now to be aware. There were further conditions not material to this application, Barr J. did not require as the price of the adjournment that the Plaintiffs withdraw opposition to the sale of all of Bula’s ore body by the Receiver. He said the heart of the Bula case was that the Receiver’s appointment by the banks was unlawful and that he had no right to sell the ore body. He pointed out that the advantage derived by the Defendants in having all the primary claims made against them by Bula including the challenge to the Receiver’s right to sell the ore body dependant on the success of the Plaintiffs Appeal to the Supreme Court in the Tara case was an equitable quid pro quo for allowing the Plaintiffs to preserve their challenge to the status of the Receiver pending the outcome of that Appeal.

7. As stated already the Plaintiffs were not successful in the Supreme Court Appeal in the Tara Action which was dismissed on the 15th of January 1999. The Plaintiffs, however, applied to the Supreme Court to set aside the Judgment in the Appeal on the ground of apparent bias. That application was heard after the hearing of this case and the Appeal was refused.

8. Following the judgment of Lynch J. on 6th February 1997 in the Tara Action and around the time the Bank Action was getting off the ground Bula Limited (in Receivership) (acting through Mr. Wymes) issued proceedings against the Receiver Laurence Crowley on the 13th of March 1997 claiming an Order directing the Receiver to deliver up possession of the Bula lands, his right to possession having been extinguished pursuant to statute and also damages for trespass, detention, conversion, breach of contract, negligence and/or breach of duty, intimidation, conspiracy, acting in excess of authority, abuse of process, mesne profits, interests and costs. An appearance was entered on the 21st of March 1997.

9. Notice of intention to proceed in this action dated the 14th of May 1999 was served and on the 21st of June 1999 a Statement of claim was delivered running to 40 paragraphs. A lis pendens was registered on 17th May 1999.

10. In the Statement of claim Bula claimed the total amount of principal monies advanced by the banks between 1974 to 1984 was £5 million. The repayment of principal monies and accrued interest was secured by debentures or mortgages dated between 1974 and 1984. The dates of demand for repayment of all monies claimed due were the 25th of June 1982 for NBFC, 28th of July 1982 for UIB and the 5th of August 1983 for AIIB. It sets out payments to NBFC between the 30th of March 1983 and 19th of December 1984, to UIB between April 1983 and October 1984 and to AIIB between March 1983 and October 1984. It claims the dates from which time commenced to run for limitation purposes in favour of Bula were the 19th February 1986 for NBFC, the 31st of October 1984 for UIB and 19th of October 1983 for AIIB. It claims payments to NBFC by way of payments to principal and capital as arranged and agreed, both subsequent to making the demands and prior thereto, as well as amounts held in suspense accounts with accrued interest are sufficient to repay the principal debt.

11. It claimed the banks did not issue proceedings within the time limit prescribed by the Statute of Limitations to claim a sale but relied on the Receiver to sell the property and pay to them the net proceeds of sale. The banks did not issue proceedings against Bula until the 4th of April 1997. Proceedings seeking well charging orders were not issued until the 22nd of April 1997 and were not served until the 30th of March 1998. The Plaintiff claimed that as a result the Receiver’s title to the land and any right to execute for repayment of principal and interest was extinguished as from the 19th of February 1992 for NBFC, the 31st of October 1996 for UIB and the 19th of October 1995 for AIIB. It claimed it was entitled to have the Receiver discharged, the mortgages and debentures cancelled, assets returned, and documents of title returned with documents received as Receiver and Manager.

12. On the 5th of July 1999 the Receiver issued a Notice of Motion claiming that the proceedings should be struck out:-

13. The application was based on the Affidavit of Laurence Crowley. He was appointed Receiver and Manager on the 8th of October 1985 under the banks’ debentures. He believes that it is clear and indisputable as a matter of fact and law that monies are in fact due to owing by Bula to NBFC and that Bula’s claim that debts due are Statute barred or discharged in full is without foundation. No issue of title to land is involved. He puts the total indebtedness of Bula to the banks as of the 30th of April 1999 at IR £60,024,884.86. When he last attempted to sell the ore body in 1986 the Bank Action was commenced. He also referred to the Tara Action and the finding of Lynch J. in his Judgment of the 6th of February 1997, that a payment to NBFC on the 19th of February 1986, was made with the authority of Bula. The statutory period therefore could not expire before the 19th of February 1998 by which time proceedings had been instituted by NBFC on the 22nd of April 1997 thereby stopping the Statute from running. He referred to the Bank Action and the conditions under which the adjournment was granted pending the determination of the Supreme Court Appeal of the Tara Action, namely if the appeal were unsuccessful, the primary claims would stand dismissed without prejudice to claims on foot of the Statute of Limitations relating to AIIB and UIB. He also referred to the undertaking not to mount any further proceedings against the Defendants in respect of any alleged wrong doing of which they were presently aware or in the opinion the Court ought to be aware. He referred to other sets of proceedings, the instant one, a similar one against the banks and the ones instituted by the banks against Bula on the 22nd of April 1997. On the 22nd of August 1997 Bula Holdings instituted proceedings against Bula for alleged advances amounting to £100,950,780.00. He claimed that once the Supreme Court dismissed the Tara Appeal he was entitled as Receiver to dispose of the lands. He commenced a marketing campaign and he executed a confidentiality agreement at considerable cost which would be wasted if the sale could not proceed.

14. In this action notice to proceed was dated the 14th of May 1999 and the Statement of Claim delivered 23rd of June 1999.

15. He relies on the fact that the claim does not query the title of Bula, but merely seeks to attack his authority as Receiver. Therefore the lis pendens should be vacated. He relies on the undertaking not to mount any further proceedings in respect of alleged wrong doing of which they were then aware or ought to have been aware, since the allegations in these proceedings rely on facts known to the Plaintiff on the 18th of June 1997, but were not known in March 1997 when the proceedings issued. It was not known that Barr J. would hold the NBFC debt was acknowledged in February 1986. The claim of alleged wrong doing relies on the facts unknown when the Plenary Summons issued but which were known when the undertaking was given. This involves a clear breach of the undertaking.

16. He claims Mr. Wymes, for Bula, contests the claim made in the Bank Action that the right to repayment of principal sums and interest expired against the NBFC on the 14th of December 1996, the last payment having being made on the 14th of December 1984 (i.e. 12 years). The effect of the decision of Barr J. that for the NBFC the latest payment was made on the 19th of February 1986, would mean that the statutory period had not expired until the 19th of February 1998, but the Plaintiff contended in paragraph 23 of Statement of Claim that the period of limitation expired on the 19th of February 1992, which he says is unstatable. If the NBFC's debt is not statute barred the validity of his appointment is unaffected.

17. He refers to the terms of the relevant mortgages which provided that when demand was made all monies owing should be paid and all such monies should be capitalised and form an aggregate principal sum as from the date of demand. Therefore the principal is the sum owing to NBFC on the 25th of June 1982 (date of demand) amounting £5,347,137.53 taking account of all repayments. Interest continued to accrue on that sum. As of the date the 19th of February 1986 the total sum due was £7,645,132.60.

18. He said even if the acknowledgement of the 19th of February 1986 only acknowledges principal and even if total payment between date of demand and the 19th of February 1986 goes to principal, there still remained £2,110,961.68 as of the 19th of February 1986. This could only have become barred by the 19th of February 1998 by which time the bank’s possession proceedings had been instituted. He said claims made in these proceedings could and should have been made in the Bank Action and there is also a breach of the undertaking. He also claimed without prejudice that the Statute of Limitation ceased to run against the banks on his appointment as Receiver.

19. Mr. Wymes for Bula in his replying Affidavit reviewed the background from his prospective. He referred the various proceedings including the Motion to the Supreme Court served on the 2nd of June 1999 to set aside the Supreme Court Judgment in the Tara Action and direct a rehearing. He claims that the Supreme Court decision is no longer final and conclusive and that the title and legal basis of the Receiver is sub judice. He says the essence of the Plaintiff’s case in these proceedings is that the Receiver no longer has any title or authority to act in relation to Bula’s assets because the principal and interest due to UIB and AIIB and the interest due to NBFC are statute barred and the principal due to NBFC is extinguished by payments made to NBFC and payments to NBFC suspense account with accrued interest. He says that a question also arises as to the monies received by NBFC on foot of guarantees by T C Roche and T J Roche. He referred to payment to NBFC prior to demand of £1,262,235.70. He referred to the accrual of the cause of Action of each of the banks as follows:-

20. NBFC 19th of February 1986.

21. Proceedings were not issued by the banks for the recovery of their debt until the 4th of April 1997. Proceedings seeking well charging Orders were not made by the banks until the 22nd of April 1997. He claimed any right to execute on the assets for repayment for capital sums and/or interest was extinguished pursuant to the Statute of Limitations as follows:-

22. NBFC (six years accrued interest only) 19th of February 1992.

23. UIB (principal and interest) 31st of October 1996.

24. AIIB (principal and interest) 19th of October 1995.

25. He claims it was understood in 1997 that as a result of Barr J.'s ruling on the 29th of April 1997 NBFC were entitled to recover £5.2 million made up of the original NBFC principal of £2.75 million with six years interest being £2.45 million. The principal sum of £2.75 million was subject to a reduction by any payments to principal. He claims it was agreed and accepted by NBFC in or about 1980 that any payments were to made in respect of principal. He referred to monies paid to a suspense account at NBFC, the principal amounts being:-

26. Under Court Order 1st November 1983 £378,348.00.

27. A & L Goodbody/Thrush Securities Limited £580,761.38

28. Richard Walsh/Rock Rohan Estate £459,868.75

29. Orpheus Mining (1985) £36,735.54

30. He claims the total of suspense account money with accrued interest amounts to £4.4 million and serves as a set off against the £5.2 million allegedly owed to NBFC. He claims that the banks Solicitors agreed by letter of the 19th of December 1997 that Bula was entitled to such set off. He further claims that by reason of the payments made of £3,112,667.90 and the suspense account setoff in the region of £4.4 million the debt of £5.2 million to NBFC arising pursuant to the Order of Barr J. on the 29th of April 1997 is extinguished and that NBFC owe Bula £2.3 million. If according to the agreement in 1980 that payments by Bula were to be in respect of principal, the principal amount of £2.75 million would have been reduced by the payments of £1,262,235.70 made prior to demand.

31. He claims further that he has not been given information sought concerning guarantees by T C Roche and T T Roche of certain of NBFC's debt as well as other information relating to the amount of original principal and dates of repayments of principal, principal and interest in the suspense accounts and details of all security held. He claimed he cannot verify the accuracy of relevant figures without this information.

32. He claims that the title of the Receiver and right to execute for repayment of principal and interest are all extinguished, that the object of the Receiver’s appointment no longer exists and that he is not entitled to act and should be discharged. He claims the mortgages and debentures should be cancelled and, the Company’s assets returned to it with documents of title and other documents of the Receiver and Manager.

33. He refers to the facility letter of the 22nd of December 1979 amended the 16th of July 1981, whereby Bula Holding agreed to lend £5 million to Bula, interest being increased from 12% to 20% in 1981. Bula Holdings became entitled to repayment on appointment of the Receiver (8th of October 1985). Bula Holdings commenced proceedings 22nd August 1997 by Summary Summons claiming £100,950,789.00 with interest accruing from the 1st of April 1997. The Action was adjourned for preliminary hearing. At the time of swearing the Affidavit, two Motions, one for discovery and one for the trial of a preliminary issue were pending. He claims that if the Receiver disposes of the assets Bula cannot meet its obligations to Bula Holdings, he claims this would be a wrongful interference with subsisting contracts and economic interest and/or attempted procurement of breach of contract.

34. He also claims there are major taxation disadvantages attaching to the sale of the assets as opposed to the sale of shares in Bula and that the Receiver has embarked unilaterally on a sale of assets without meaningful consultation with the shareholders of Bula. He claims this is a breach of good faith fiduciary duty and duty of care.

35. In relation to the specific points in Notice of Motion he claims the title of the Receiver to the lands, the right to dispose of same, the charges and the mortgages are in dispute. The Receiver’s claim to vacate the lis pendens is devoid of legal foundation or merit.

36. Re breach of undertaking. He says he gave careful consideration whether here was any wrong doing on the part of the Receiver or the banks of which he was then aware or ought to have been aware and which was not subject of the three sets of proceedings already in existence. He said he could conceive of no such wrong doing whatever.

37. In respect of the Statute of Limitations issue, two sets of proceedings had been issued on the 13th of March 1997 and the re amended statement of claim in the Bank Action had been served on the 7th of May 1997. He said that as of the end of May 1997 the ruling of Barr J. if not reversed left Bula’s obligations to NBFC at £5.2 million. The suspense accounts money was in the order of £4 million leaving a shortfall of £1.2 million. This was his understanding as of the 18th of June 1997. He avers he had no knowledge or belief that the debt to NBFC was or could be extinguished in toto or that there existed any basis for such extinguishment or further alleged wrong doing. He said he had no knowledge of the Roche guarantee until September 1997 and no knowledge of the Receiver’s wrong doing (i.e. planning to dispose of Bula’s assets without title, wrongful interference with economic interest and/or procurement of breach of contract and acting in disregard of taxation disadvantages). He believes his claim is stateable and well founded. He says the issue of interest has not been determined by Barr J. or Lynch J.. He claims the principal in issue is the principal borrowed (£2.75 million) not any aggregated figure. He says that Bula does not contend there were total payments of £3.2 million between the date of demand in 1982 and the last acknowledgement in February 1986. He says this figure includes a payment in 1991 by Thrush Securities of £580,761.38 which should be credited in the suspense account with accrued interest. He queries whether it is imperative that the assets be sold forthwith and suggests it is an attempt to pre-empt the obtaining of a Judgment Mortgages by Bula Holdings and the pending Motion to the Supreme Court. Since he says the Receiver acknowledges in his letter of the 7th of May 1999 that he would retain the proceeds after the sale to the extent that distribution might be depended on the Statute of Limitations until the issues were determined. On the basis of this Affidavit no funds could be distributed, therefore no benefit accrued to the banks from an immediate sale.

38. As to whether claims could have been raised in the bank proceedings, he claims it was not possible to raise the claims in this Action in the bank proceedings. Since the Statute of Limitations issue has been adjourned pending the Tara Appeal no issue arose in 1997 as to amount of principal and interest due to NBFC. Also the Receiver had not indicated in June 1997 that he was going to market the ore body disregarding the commercial disadvantages of an asset sale or unlawfully interfering with contracts. Therefore he says the proceedings involved new claims of which he was not and could not have aware as of June 1997.

39. In his second Affidavit the Receiver restates the basis of his claim. He says that the essential core was not addressed. No explanation is given for the assertion that the application of the Statute of Limitations to interest remains to be determined in the case of NBFC or the claim that the effect of the decision of Barr J. was in relation to principal only or that the right to recover six years interest ran from the 19th of February 1986. Mr. Wymes says that limitation period for NBFC is shorter than for the other banks and that NBFC is only entitled to six years arrears of interest from the date time commenced to run. He failed to controvert the specific case made about the aggregated figure for principal. The Receiver claims the appropriate period of limitations for NBFC is twelve years by virtue of a deed under seal. He said Barr J. determined that the payment to NBFC on the 19th of February 1986 was a payment of interest in respect of this debt. He restates the terms of the agreement between Bula and NBFC that on the making of a demand that all sums due whether principal interest or charges should be capitalised and form an aggregate sum. Therefore on the date of demand the principal sum was £5,347,137.53. He said the allegation of an agreement with NBFC that the payments made were to be appropriated to principal does not affect the existence of the debt owed to NBFC. He points out that the alleged agreement is not referred to in the Statement of Claim, was never before referred to by Mr. Wymes, is unparticularised in the Affidavit and is denied by NBFC. He does not accept it could have operated to affect the written agreement.

40. He repeats the total sum due to NBFC on the date of acknowledgement on the 19th of February 1986 was £7,645,132.20 (made up £5,347,137.53 principal and £2,297,995.07 interest.

41. He said the payments made prior to demand (£1,262,235.70) were taken fully into account when calculating the balance due on the date of demand (£5,347,137.53).

42. He refers to payments made subsequent to demand, £1,850,462.20 and

43. £4.4 million contended by Mr. Wymes to be held in suspense accounts, total (£6,250,462.20). He says that even if this figure was correct and it was appropriate to apply same to the balance due on the 19th of February 1986 (neither of which was admitted) ignoring interest accrued subsequently for 13 years, there was still a balance due to NBFC of £1,394,670.00. He then says payment £390,348.00 as the first item in the suspense account (between the 4th of January 1984 and 7th of February 1984 was reduced by £12,000 following a request by Richard Wood a director of Bula to transfer that sum to the loan account. This £12,000 formed part a lodgment to loan account on the 19th of June 1984. In the Statement of Claim paragraph 12 (a) there is a claim that the sum of £378,348.00 left in the suspense account has been credited by Bula as payments to NBFC where as in reality this is properly credited to the suspense account. The sum of £378,348.00 has been offset fully for interest purposes against the debt due to NBFC and would not have generated any interest in its own right.

44. The second item, in the suspense account is A & L Goodbody/Thrush Securities £510,761.38. Pursuant to terms of settlement dated July 1991 this must await the outcome in the main Action Bula and others -v- Crowley and others of claims at (I), (J) and (K) of the Statement of claim. If the Plaintiffs claim fails in the High Court or the Supreme Court the money plus interest should be released by Goodbodys to the bank. If the Plaintiff is not successful the sum with interest is available to NBFC in reduction of indebtness. Therefore the figure of £1,850,462.20 (payments made subsequent to demand) is over stated by £378,348.00 and the suspense account money could not possibly amount to £4.4 million as alleged.

45. He says he is informed by NBFC there are no payments or realisations which would not have been taken into account into determining the amount due to NBFC at the date of demand, acknowledgement or subsequently and there are no other funds held in respect of the NBFC loan.

46. He claims nothing in Mr. Wymes’ Affidavit controverts his contention that the registration of a lis pendens is inappropriate. He reiterates he does not claim title per se.

47. With regard to the undertaking he refers to Mr. Wymes’ claim that he did not appreciate at the time that the NBFD debt was discharged. He points out that since given the information Mr. Wymes received no new information and apparently contends that he only directed his attention to these matters in April 1999. He asked how can he properly include this claim in proceedings which were initiated some two years earlier. He points out that the undertaking was granted in the context of a vigorously contested adjournment application and sought to insure a rapid resolution following the Supreme Court appeal in the Tara proceedings which would not be hampered by the mounting of new claims based on facts then available. He queries whether it is credible that Mr. Wymes did not realise until five months previously that Bula did not owe NBFC any money. He refers to the undertaking given by him in the Bank action in July 1986 to bring an application on Notice to approve any sale of the ore body, and says the effect of the Supreme Court Judgment in the Tara Action in January 1999 was to release him from that undertaking. He says that the Judgment of the Supreme Court is final and stands until set aside. It is not sub judice. He disputes that the Statement of Claim sent on the 20th of May 1999 was not a draft and says it differs in a number of respects from the Statement of Claim ultimately delivered. He says the claim by Mr. Wymes that proper information has not been supplied to him is been made in the light of the case made in the first Affidavit and in an effort to manufacture a basis for this Action proceeding. The Application has been brought on the basis of the matters pleaded in the Statement of Claim when Mr. Wymes had the benefit of exhaustive discovery in the Bank action and the Tara action. He says the proceedings between Bula and Bula Holdings have nothing to do with this Action and are in any event being strongly contested by him. He also says that Mr. Wymes is seeking to revisit a range of matters canvassed at lenght in other proceedings. The sale has been delayed for almost 15 years as a consequence of litigation by Mr. Wymes which has proved to be groundless. This is an attempt to put another hurdle in the way of realisation.

48. Mr. Ryan of NBFC confirms that the figures in the Receiver’s grounding and supplement Affidavits are correct.

49. In his second Affidavit Mr. Wymes claims that these proceedings involved new claims of wrong doing of which he did not know and could not have been aware in June 1997. He could not have known that the Receiver was planning as of 1999 to dispose of Bula’s assets despite the extinguishment of the banks’ debt. He claims there is interference with economic interest and procurement of breach of contract also acting in disregard of taxation and commercial disadvantages attaching to an asset sale. The sale of Bula assets would render Bula incapable of meeting its obligations to Bula Holdings so the contractual relations between Bula and Bula Holdings would be valueless. He claims there are major taxation and commercial disadvantages attaching to any disposal in a sale of assets alone as opposed to or in conjunction with a share sale. In paragraphs 12 to 40 he seeks to make the case that the NBFC debt had been discharged. In paragraphs 41 to 52 he deals with the allegation that the proceedings are in breach of the undertaking given to the Court in June 1997. He says it was in respect of prior acts of wrong doing not future acts. He claims the current wrong doing is that the Receiver is now planning to dispose of Bula’s assets despite the debt of the three banks having been extinguished. The Receiver is currently threatening wrongful interference with economic and contractual interests and/or the procurement of breach of contract. There is current disregard of commercial disadvantages attached to the asset sale alone. He submits these are all matters which had not happened or crystallised or constituted a cause of action as of the date of the undertaking. He says the Receiver sought to make the adjournment expressly conditional on the Plaintiff withdrawing any future right of challenge to the title of the banks and Receiver and there being no future objection by Bula on the basis of an ore body sale as opposed to a sale of shares. The conditions sought to be imposed by the banks and the Receiver were unacceptable to the Plaintiffs and they were not agreed or made a condition of the adjournment.

50. He claims that in June 1997 the total state of his understanding and knowledge was that there was a shortfall of £1.2 million towards the debt to NBFC of £5 million. As far as he was concerned the precise position as regards the debt owed to NBFC was being left in abeyance at the adjourned hearing and would be an issue to be later argued and determined when the Statute of Limitations claim would come again after the Appeal in the Tara case. He said the adjournment of the Statute of Limitation issue had been at the instigation of the Receiver and the banks and not the Plaintiff who had insisted and submitted that this issue be preceded with to finality.

51. As regards the sustainablitiy of a lis pendens he claims this litigation affects the Receiver’s right to dispose of Bula’s assets as well as the disputed bank charges and mortgages. In paragraphs 54 to 74 he goes on to make general observations about the Receiver, the banks, the AIIB suspense account monies, the declared purpose/motivation behind this Notice, the outstanding information, lack of frankness etc..

52. A third Affidavit by the Receiver exhibited the most recent abstracts delivered by him as Receiver to the Registrar of Companies for the period 8th of October 1998 to 7th April 1999 showing payments made by him comprising substantially the costs, fees and expenses of the receivership.

53. Mr. Wymes during the hearing filed a third Affidavit referring to the two sets of proceedings issued by NIIB, the first for judgment for £24,385,828.05 issued on the 4th April, 1997 and the second for a well charging order on Bula’s lands issued on the 22nd April, 1997. He claims the well charging proceedings evince an intention by NIIB to enforce payment other than by a sale by Mr. Crowley. If the NIIB intend that Mr. Crowley should seek to dispose of the lands then he claims the well charging proceedings are an abuse of the process of the Court. He also claims that the failure of the banks to disclose to Barr J. that they had issued two sets of proceedings for the recovery of debt and for well charging orders was an attempt to mislead the Judge and was an abuse of process of the Court. He again claims that payment to NBFC was payment of principal and refers to a letter to Bula dated the 24th of October 1980.

54. The Receiver took issue with several of the facts and contentions in Mr. Wymes third Affidavit.

55. While the Receiver claims the proceedings should be struck out under Order 19 Rule 28 as disclosing no reasonable cause of action and/or as being frivolous or vexatious or alternatively that they should be struck out under the inherent jurisdiction of the Court as an abuse of process or alternatively that the issues could have been (but were not) raised in the Bank Action, the fourth ground is that the proceedings contravene the undertaking of the first, second, fifth and sixth Plaintiffs which was given to the Court on the 18th of June 1997. I propose to deal first with this ground. The Receiver claims that the Statement of Claim contains a number of broad allegations raised in the Bank Action. The proceedings also rely on the limitation argument to contend the liability to the banks has been extinguished by the Statute of Limitations. It claims the limitation period for NBFC expired in 1992 and it claims the NBFC debts have been discharged by certain payments. It is submitted that it is clear that the allegation of wrong doing by the Receiver, i.e. his remaining in place when debts have been discharged or extinguished are based on matters which occurred prior to the 18th of June 1997 and Mr. Wymes ought to have been aware of them. If he makes the case that he did not comprehend or appreciate the facts it makes the undertaking meaningless. Bula was aware of the third party claim by Bula Holdings at the time of giving the undertaking.

56. The claim of wrongful interference with Bula’s contractual interests arises because the Receiver proposes to sell an asset to discharge debts to one set of creditors while Bula contends money is due to another creditor. Bula was aware of the Bula Holdings’ claim when it gave the undertaking, as it was aware that the Receiver was in possession with the purpose of selling.

57. The third claim concerns the direct sale of the assets as opposed to a sale of shares of the company. This issue was raised in the Bank action and was covered by the undertaking.

58. Quite apart from the undertakings, significant portions of the amended statement of claim replicates claims in the Bank Action and is res judicata . If claims were not replicated in the Bank Action but could have being litigated in it, Bula is precluded from now doing so on the basis of estoppel by omission.

59. In the submissions for Mr. Wymes in relation to the breach of undertaking his contention in his Affidavit is repeated i.e. that he did not know and ought not to have known in June 1997 that the NBFC debt was extinguished in toto. It was not reasonable that he ought to have adverted to the 1980 agreement in relation to the application of payments to capital. When he did advert he became aware of something that existed at the date of the issue of the writ and accordingly could have been included in the proceedings. These proceedings are not “further proceedings” as they already existed as of June 18th 1997. If there were a breach of undertaking it would be contempt of Court and neither the Receiver nor the banks have brought contempt proceedings. If the Receivers’ application that the action has no reasonable prospect for success is unfounded, it would be contrary to the interests of justice to strike out the proceedings for breach of undertaking. Bula would have to apply to the Court to vary the undertaking. The claim made is that no money is owed to the banks. If the claim is not one that has no reasonable prospect of success it would be inequitable to deprive Bula of this right. Striking out would be draconian and an unconstitutional exercise of power. It was submitted that it is no part of the constitutional exercise of judicial power to award to an undeserving Plaintiff judgment against a Defendant who has an otherwise meritorious defence mainly because the Defendant breached some undertaking or order of the Court. It would be unconstitutional for the Court to deprive a Plaintiff with an otherwise good cause of action of the entirety of that action and to thereby render a wrong doing Defendant free to continue his wrong doings. At the time the undertaking was sought the banks had been perpetrating an abuse of the process of the Court by concealing earlier proceedings. It was submitted there was no breach or alternatively if there is a breach the Court has jurisdiction to release Bula from its undertaking to enable further prosecution. The Court could allow Bula to amend the points of claim on the Statute of Limitations issue to plead the setoff point for the purpose of having it dealt with as one issue and as part of the preliminary issue now subsumed in the balance of the main action.

60. In a second written submission on behalf of Mr. Wymes it was submitted that following the ruling of Barr J. it was accepted that the limitation period for NBFC expired on the 19th of February 1998. But the Statute of Limitations provided that on the expiration of the period fixed by the Act for a mortgagee to bring an action claiming a sale of mortgaged land the title of the mortgage was extinguished and also the right of the mortgagee to principal and interest secured was also extinguished. The ruling of Barr J. did not deal with the possibility that the debt of NBFC would become statute barred on 19th of February 1998. He claimed that the claim made in these proceedings are claims that existed prior to the ruling of Barr J.. The new acts of wrong doing relating to the Receivers present attempts to sell were not taking place in 1997 but the essential elements that the Receiver should no longer act, as the banks claim was extinguished by the Statute of Limitations or payment or setoff, were claims that could properly have being made at the time or formed in fact the basis of the issue of the writ. He agrees that the allegation in the statement of claim that the NBFC’s claim was extinguished on the 19th of June 1992 is wrong. It was intended to refer to six years interest accrued after principal came due. The Statute provides for a six year period for the recovery of interest which relates to interest predating the issue of the writ and he submits the claim may require an amendment. The jurisdiction under Order 19 Rule 28 can only be exercised on foot of facts that are not in dispute. The allegation that all payments are attributable to capital rather than interest must be accepted by the Court as fact at this hearing. It is not accepted that legal proceedings brought and maintained in breach of an undertaking are ipso facto an abuse of process and should be struck out on that basis. To strike out would be an attempt to punish the Plaintiff for breach of undertaking. If the Receiver is correct and the 1997 proceedings are based entirely on matters which occur prior to the 18th of June 1997 then as existing proceedings they did not come under the phrase “ any further proceedings ” referred to in the undertaking.

61. In my view the ruling of Barr J. on the 18th of June 1997 is clear. He said at page 2 “in short it was specifically conceded by Mr. Traynor on behalf of his client that all claims made by the Plaintiff against the banks and the Receiver (the primary claims) other than outstanding issues relating to the Statute of Limitations, must fail unless Bula is successful in its Appeal to the Supreme Court in Bula I (i.e. the Tara action) and relevant findings made by Lynch J. are set aside by that Court”. This did not happen. The Supreme Court Appeal is now definitively concluded against Bula.

62. The learned Trial Judge made a careful evaluation of the application by the Plaintiff for an adjournment. He said the primary claims by the Plaintiff are enormous and have been outstanding for twelve years and this created a particular hardship for the Receiver. He referred to the concession by the Plaintiff that if the Supreme Court Appeal in the Tara case is unsuccessful in that event “ they are willing to consent to Judgment ” leaving only the remaining Statute of Limitation issues outstanding. He granted the adjournment on terms including one that if the Supreme Court Appeal by Bula in the Tara case was unsuccessful “the Plaintiff’s primary claims in this action shall stand dismissed with costs” but without prejudice to the Plaintiff’s claims under the Statute of Limitations issue.

63. Another condition was “the Plaintiff’ and each of them undertake that they will not mount further proceedings against the Defendant (or any of them their servants or agents) in respect of any alleged wrong doing of which they are presently aware or in the opinion of the Court ought now to be aware.” He did not require as the price of the adjournment that the Plaintiffs withdraw opposition to the sale of the Bula ore body by the Receiver saying “the heart of the Bula case is now and always has been that the Receivers appointment by the banks was unlawful and that he has no right to sell the ore body”. He referred to Bula’s hope that they will succeed in launching a Bula lead and zinc mine at Navan and said to deprive them of that as the price of the adjournment of the action would be an unfair and unreasonable to impose. But he goes on “ the advantage derived by the Defendants in having all of the primary claims made against them by Bula including the challenge to the Receivers right to sell the ore body dependant in the first instance on the success of the Plaintiff’s appeal to the Supreme Court in Bula I (i.e. the Tara Action) is a equitable quid pro quo for allowing the Plaintiffs to preserve their challenge to the status of the Receiver pending the outcome of that Appeal ” (Emphasis added) That could not be clearer. Since the Supreme Court Appeal was not successful Bula’s challenge to the Receiver’s right to sell the ore body has gone as part of the primary claims made against the Defendants in the Bank Action.

64. It is also significant that the learned Trial Judge says the remaining issues relate to the Statute of Limitations and “if the Supreme Court Appeal fails these issues will become essentially points of law and the hearing should be concluded in a matter of days”.

65. It seems to me that the intention of Barr J. was to draw a line under the protracted litigation stretching back to 1986. There was to be no more litigation in respect of any alleged wrong doing which the Plaintiffs were then aware or in the opinion of the Court ought to have been aware in June 1987.

66. Bula (that is Mr. Wymes) seeks to make the case that the statement of claim deals with wrong doing of which he was not aware in June 1997. Mr. Wymes claims that the NBFC is not owed any money because of payments made to principal and because of setoff and the operation of the Statute of Limitations and therefore the Receiver is not now entitled to act. The facts on which this claim is based were known to Bula at the time of the undertaking. Mr. Wymes claims he did not know and ought not to have known that the NBFC debt was extinguished. He claims it was not reasonable that he ought to have adverted to the 1980 letter in relation to the application of payments to capital.

67. In my opinion the undertaking did not concern failure to advert to something. That would not release him from the undertaking. The undertaking concerned facts known or which ought to have been known to Bula in June 1997. In my opinion Bula either knew or ought to have known those facts on which the present claim to extinguishment of debt are based.

68. The next wrong doing which Mr. Wymes says he did not know of was the alleged interference with commercial interests i.e. that Bula Holdings claim would not be paid if the Receiver sold the ore body. There is nothing new about the Bula Holdings’ claim. It was known at the time of the undertaking. The ruling also spelt out that the challenge to the Receiver’s right to sell the ore body must fail if the Supreme Court Appeal was unsuccessful.

69. The next wrong doing which he said he did not know of was the disregard for tax disadvantages attached to an asset sale. This cannot be true. This matter was part of the claim made in the Bank Action and raised at paragraph 20(8) of the revised statement of claim. As part of the primary claims in the Bank Action it benefits from the condition that since the Supreme Court Appeal has been unsuccessful it should stand dismissed. So much for the argument that these matters arose after the undertaking and were not matters of which the Plaintiff knew or ought to have known.

70. However, Mr. Wymes does not only rely on that argument . He also argues that the action is not “further proceedings” as the proceedings were in existence at the date of the undertaking. I do not accept that the undertaking not to mount further proceedings did not cover the statement of claim issued two years later in June 1999 running to 40 paragraphs. It cannot be seriously contended that Barr J. intended that the Plaintiffs would be free to litigate the claims in the Endorsement of claim despite replication in the Bank action merely because a Plenary Summons had been issued prior to the undertaking. The only matter which Bula was not precluded from litigating was wrong doing of which it was not aware or ought not to have been aware.

71. Bula claims that even if there is a breach of the undertaking the Court has no power to dismiss Bula’s claim. In my opinion the Court under its inherent power must be concerned to ensure that undertakings given to the Court are observed and that justice is done between the parties. The concern of Barr J. to do justice involved a finally balanced weighting of the respective rights of the parties. Bula obtained an adjournment on terms. Mr. Wymes is now seeking to go behind those terms. In order to enforce an undertaking given to the Court it is not necessary that contempt or committal proceedings as such have to be brought. The motion by the Receiver is in effect an application to enforce the undertaking. The Court can achieve compliance with the undertaking by simply putting a permanent stay on the action. In my opinion it would be a denial of justice to the Defendant to release Bula in any way from the undertakings given.

72. What I propose to do (subject to submissions from Counsel) is to put a permanent stay on the action. It is not necessary to rule on whether Bula was in the first instance entitled to register a lis pendens . The lis pendens must now be removed as the action is gone.

73. Since the Receiver succeeds on the ground of breach of undertaking it is not necessary to rule on the other grounds put forward in the application.

74. Mr. Wymes alleges that the Banks were perpetrating an abuse of the process of the Court by concealing the writs for debt and for well charging orders from Barr J. I fail to see how the issue of writs to prevent the running of the Statute of Limitations can be classified as an abuse of process.