No Automatic Abuse of Process from Repeated Possession Suits: Res judicata requires a merits decision and costs compliance preserves the right to re‑commence

No Automatic Abuse of Process from Repeated Possession Suits: Res judicata requires a merits decision and costs compliance preserves the right to re‑commence

Introduction

This commentary examines the High Court of Ireland’s judgment in Mars Capital Finance Ireland Designated Activity Company v Farrell & Anor [2025] IEHC 501 (Bolger J., 17 September 2025). The decision addresses an appeal by the defendants against the Circuit Court’s refusal to strike out mortgage possession proceedings under Order 19, Rule 28 of the Rules of the Superior Courts (RSC). At its core, the High Court clarifies when repeat proceedings constitute an abuse of process and reaffirms the requirements for res judicata in circumstances where earlier proceedings were discontinued or struck out without a merits determination.

The defendants argued that the plaintiff’s third set of possession proceedings should be struck out as an abuse of process, frivolous and vexatious, bound to fail, and/or not disclosing any reasonable cause of action. The plaintiff relied on a 2007 deed of mortgage and charge for €2.2 million, acknowledged by the defendants as monies received, but which the defendants say were not paid under the mortgage/letter of offer pleaded. No repayments have been made since 2011; arrears with interest stand at approximately €3.7 million.

Summary of the Judgment

The High Court dismissed the defendants’ appeal and affirmed the Circuit Court’s refusal to strike out the proceedings. The key holdings are:

  • Repeated proceedings are not automatically an abuse of process. Where earlier proceedings ended because of correctable mistakes and the plaintiff addressed those mistakes promptly—discontinuing or striking out and paying costs—subsequent proceedings are not thereby tainted (paras. 7–8).
  • The proceedings cannot be characterised as frivolous, vexatious, or bound to fail in circumstances where the defendants acknowledge receipt of substantial monies and have made no repayments since 2011; disputes regarding the validity of the 2007 loan agreement raise issues for trial (para. 9).
  • Res judicata and issue estoppel do not arise because there has been no judgment on the merits in prior proceedings and no necessary determination of the issues now raised (paras. 10–11, applying McCool Engineering Ltd v Honeywell Control Systems Ltd [2019] IEHC 695).
  • Compliance with costs orders following discontinuance is material to the abuse of process analysis; unlike the situation in Miranda v Rosas Construtores S.A. [2019] IECA 237, there was no sustained non-payment of costs justifying dismissal (para. 12).
  • Costs of the appeal: the plaintiff is entitled to costs, with a stay on execution pending resolution of the substantive proceedings (para. 14).

Factual and Procedural Background

The mortgage and arrears

The plaintiff seeks possession of the defendants’ property pursuant to a deed of mortgage and charge dated 15 March 2007 for €2.2 million. The defendants acknowledge receipt of those monies but dispute that the funds were advanced under the 2007 offer or mortgage pleaded. No repayments have been made since 2011, and arrears are approximately €3.7 million (para. 2).

The three sets of proceedings

  • 2016 proceedings: Soon after commencement, it emerged the incorrect mortgage charge had been transferred; at the time of demand letters, the plaintiff did not own the security. The matter came before Judge Linnane who indicated the proceedings should be struck out and fresh proceedings commenced. The plaintiff later applied to have them struck out; costs were awarded against the plaintiff (later increased to full costs on appeal). There is a dispute as to the quantum/level of costs, but the plaintiff says all costs have been discharged (para. 4).
  • 2021 proceedings: Fresh proceedings were issued, but demand letters were in the name of the wrong Mars entity. The plaintiff served a notice of discontinuance (16 February 2022), which under Order 21 of the Circuit Court Rules entails liability for the defendants’ costs. Those costs obligations are said to have been complied with, subject to a dispute about the amount (para. 5).
  • 2025 proceedings (current): The third set of proceedings which the defendants sought to strike out as an abuse of process and otherwise under O.19, r.28 RSC (paras. 1, 6).

Issues on Appeal

  • Whether the third set of possession proceedings is an abuse of process in light of two earlier proceedings that ended due to plaintiff error.
  • Whether the claim is frivolous or vexatious or bound to fail, or discloses no reasonable cause of action under Order 19, Rule 28 RSC.
  • Whether res judicata or issue estoppel bars the present proceedings given the history of prior litigation.
  • Whether (and how) compliance with costs orders affects the abuse of process assessment.

Analysis

1) The strike‑out jurisdiction under Order 19, Rule 28 RSC

Order 19, Rule 28 empowers the court to strike out a pleading that discloses no reasonable cause of action or is frivolous or vexatious or an abuse of process or is otherwise bound to fail. The jurisdiction is exceptional and applied sparingly, especially where there are live factual disputes more suited to trial. Bolger J. emphasizes that these proceedings cannot “hardly be frivolous or vexatious or bound to fail” given the acknowledged receipt of substantial funds and absence of repayments since 2011; the defendants’ challenge to the validity of the 2007 agreement presents a triable dispute for the trial judge rather than a basis to terminate the action summarily (para. 9).

2) Abuse of process: repeat proceedings are not automatically abusive

The defendants argued that a third attempt at possession—following two earlier suits affected by plaintiff error—amounts to an abuse of process. The court decisively rejects an automatic rule. The earlier proceedings resulted from mistakes (wrong charge transferred; wrong corporate entity on demand letters), but:

  • No court has found those proceedings to be an abuse of process (para. 7).
  • The plaintiff moved promptly to cure the errors by seeking strike‑out/discontinuance and paying costs (paras. 7–8).
  • The Circuit Court’s approach in 2019 expressly contemplated fresh proceedings, and the rules on discontinuance preserve the plaintiff’s entitlement to bring subsequent proceedings, subject to costs (para. 7).

Bolger J. captures the governing principle: even if earlier proceedings “may have been an abuse of process” (a point not decided here), that does not auto‑infect subsequent proceedings; the assessment is fact‑specific and turns on the litigant’s conduct, including the discharge of costs and the absence of oppressive relitigation (para. 8).

3) Res judicata/issue estoppel: application of McCool Engineering

Applying Simons J.’s test in McCool Engineering Ltd v Honeywell Control Systems Ltd [2019] IEHC 695 (para. 33), res judicata requires:

  • a judgment by a court of competent jurisdiction;
  • a final decision on the merits;
  • that necessarily determined the same issue now arising; and
  • identity of parties or privies.

Only party identity is present here (para. 10). There has been no judgment or merits determination in either 2016 or 2021; those proceedings ended via strike‑out/discontinuance. Therefore, the McCool approach of examining the prior judgment “to identify the issues determined” and prevent “re‑agitation” does not apply: there was no merits decision and no issue decided against the plaintiff (para. 11).

This holding is important: discontinuance or administrative strike‑out without adjudication does not trigger res judicata or issue estoppel. It preserves the ability to re‑commence proceedings where substantive issues remain to be tried, subject to case management tools (including costs) to prevent oppression.

4) The role of costs and Miranda v Rosas

The High Court treats compliance with costs orders as a central safeguard against abuse. Citing Costello J. in Miranda and Others v Rosas Construtores S.A. T/A RAC Contractors and/or RAC Éire Partnership and Others [2019] IECA 237, the court acknowledges that persistent, unexplained non‑payment of costs can justify dismissal as a proportionate response, reflecting both litigant rights and the public interest in finality and efficient court resource allocation (para. 12).

Here, by contrast, the plaintiff has discharged costs (with only a dispute as to quantum), and the litigation history does not evidence the kind of recalcitrant pattern seen in Miranda. This compliance materially distinguishes the case and supports the conclusion that allowing the proceedings to continue is just and proportionate (paras. 7, 12).

5) Frivolous, vexatious, or bound to fail?

The court draws attention to two anchors that defeat a strike‑out:

  • The defendants’ acknowledgment that they received substantial funds (para. 9); and
  • The long‑standing non‑repayment (since 2011), with arrears of approximately €3.7 million (paras. 2, 9).

While the defendants challenge the specific 2007 loan agreement, that is a substantive issue for trial. The court will not, at the threshold stage, convert such a dispute into a basis to dismiss the action. The claim is not “bound to fail”; nor is it frivolous or vexatious on the pleaded materials (para. 9).

Precedents Cited and Their Influence

McCool Engineering Ltd v Honeywell Control Systems Ltd [2019] IEHC 695

McCool provides the modern Irish High Court articulation of res judicata/issue estoppel elements. Bolger J. uses McCool to structure the analysis (para. 10) and to reinforce the axial requirement that there be a final merits judgment necessarily deciding the same issue. Importantly, the judgment underscores McCool’s methodology of examining what was decided in the earlier action (para. 11); in the absence of any such decision (because the earlier cases ended procedurally), the estoppel cannot arise.

Miranda and Others v Rosas Construtores S.A. [2019] IECA 237

Miranda stands for the proposition that persistent non‑payment of costs orders can render an appeal (or proceedings) an abuse of process, given the court’s mandate to husband resources and protect bona fide litigants (para. 12). Bolger J. invokes Miranda to contextualise costs as a fairness tool. By contrasting the facts—where the Mars costs were paid (subject to a quantum dispute)—the High Court confirms that faithful compliance with costs mitigates concerns of oppression and supports the continuation of fresh proceedings when earlier ones faltered due to correctable mistakes.

Legal Reasoning

Bolger J.’s reasoning is structured around three interlocking principles:

  • Exceptional nature of strike‑out: The threshold for striking out under Order 19, Rule 28 is high. Where there are recognisable rights and factual disputes (e.g., acknowledged borrowing; disputed loan documentation), the appropriate forum is a full trial (para. 9).
  • Abuse of process is contextual, not automatic: Multiple proceedings do not, per se, equate to abuse. The court examines party conduct: prompt correction of error; proper use of procedural mechanisms (strike‑out/discontinuance); and payment of costs. These factors weighed against any finding of abuse in this case (paras. 7–8).
  • Strict res judicata criteria: Without a final merits adjudication and a necessarily determined issue in earlier proceedings, res judicata/issue estoppel does not bar a fresh action (paras. 10–11).

The court also reinforces proportionality: terminating proceedings at a threshold stage is a severe remedy, justified where persistent non‑compliance (e.g., failure to satisfy costs) signals abuse, as in Miranda. Absent that pattern—and with substantive issues to be tried—allowing the claim to proceed is the measured response (paras. 7–9, 12).

Impact and Implications

For lenders and financial institutions

  • Correctable procedural errors (e.g., title defects; wrong demand entity) do not necessarily preclude re‑commencement, provided the errors are promptly cured and costs are paid.
  • Compliance with costs orders is critical. Non‑payment risks a Miranda‑type outcome where proceedings may be dismissed as an abuse of process.
  • When opposing strike‑out applications, lenders can rely on acknowledged indebtedness and arrears as hallmarks that the claim is not bound to fail.

For borrowers

  • Abuse of process arguments will not succeed merely because a lender has tried more than once. Defendants should identify concrete prejudice, oppressive conduct, or persistent non‑compliance (e.g., non‑payment of costs) to ground such applications.
  • Disputes challenging the validity of loan documents or demand mechanics are generally triable issues; they are not, without more, a basis to strike out a possession claim at the threshold.

For courts and the system

  • The decision balances the public interest in finality and efficient resource use with access to justice. Costs orders remain a primary calibration tool for proportionality.
  • By clarifying that prior procedural terminations do not engage res judicata, the decision prevents premature foreclosure of substantive rights while discouraging casual relitigation through the discipline of costs.

Likely citation value

As a High Court decision, the judgment is authoritative for Circuit Court practice and persuasive for future High Court cases. It will likely be cited for:

  • the non‑automatic nature of abuse of process in repeat possession suits;
  • the strict application of McCool’s res judicata elements; and
  • the practical significance of costs compliance post‑discontinuance (contra Miranda scenarios).

Complex Concepts Simplified

  • Abuse of process: Misuse of the court’s procedure in a way that is unjust to a party or undermines the administration of justice. Not every mistake or repeated action qualifies; the court looks at conduct in the round, including costs compliance and proportionality.
  • Frivolous or vexatious: Claims lacking a serious purpose or brought to harass or oppress. A claim supported by acknowledged borrowing and non‑repayment is unlikely to be frivolous.
  • Bound to fail: A pleading that, even if all facts pleaded are true, cannot possibly succeed as a matter of law. Where material issues (e.g., validity of loan documentation) are contested, the claim is not bound to fail.
  • Res judicata/issue estoppel: A bar preventing re‑litigation of issues already finally decided between the same parties. It requires a prior final merits decision that necessarily determined the same issue now raised.
  • Discontinuance: A plaintiff’s procedural step to end proceedings, usually with an obligation to pay the defendant’s costs. It does not of itself prevent the plaintiff from starting fresh proceedings on the same dispute, though the court may manage repeat litigation through costs and case management.

What the Decision Does Not Decide

  • It does not determine whether the 2007 loan agreement and mortgage are valid and enforceable; those are issues for the trial judge.
  • It does not grant possession to the plaintiff; it only allows the proceedings to continue to trial.
  • It does not resolve the parties’ dispute about the precise quantum of costs previously due; it notes the dispute relates to amount rather than non‑payment.

Conclusion

Mars Capital v Farrell provides a clear and pragmatic statement of Irish law at the intersection of strike‑out powers, abuse of process, and res judicata in mortgage possession litigation. The High Court holds that repeat proceedings are not automatically abusive where earlier suits were discontinued or struck out due to errors promptly remedied and costs paid. The strict McCool criteria for res judicata—especially the need for a prior final merits decision—are reaffirmed. And the court underscores costs compliance as a central safeguard: persistent non‑payment, as in Miranda, can justify dismissal, but faithful compliance supports allowing the merits to be tried.

Key takeaways:

  • No automatic bar: Multiple prior missteps do not alone extinguish a plaintiff’s right to litigate.
  • Res judicata is merits‑dependent: Without a final adjudication, issue estoppel does not arise.
  • Costs are the lever: Payment of costs after discontinuance is pivotal in avoiding an abuse finding.
  • Strike‑out remains exceptional: Acknowledged indebtedness and triable disputes militate against summary termination.

On costs, the court’s indicative order—costs to the successful respondent (plaintiff) with a stay pending the outcome—strikes a fair balance between vindicating success on the application and ensuring the substantive case can proceed without undue pressure. In the broader landscape, the judgment enhances procedural clarity for lenders and borrowers alike, charting a principled path between finality and fairness in possession litigation.

Counsel/Solicitors: Plaintiff represented by Theo Donnelly BL; Defendants represented by Cian Farrell, Solicitor.

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