vico Ltd & ors v Bank of Ireland & ors

Factual and Procedural Background

This appeal concerns an order of the High Court made on 28th July 2015, following a written judgment delivered on 24th July 2015. The order arose from a motion by the first, second, and third named defendants seeking to vacate a lis pendens registered by the plaintiffs in relation to the property known as "Gorse Hill" in Killiney, County Dublin, and to strike out the plaintiffs' claims as res judicata and/or an abuse of process.

The plaintiffs include a company ("Vico Limited") and four individuals ("the O'Donnell Children"). The defendants include a bank ("the Bank"), its subsidiary ("Bank of Ireland Private Banking Limited"), the appointed Receiver, and other parties. The dispute stems from prior litigation concerning substantial borrowings by the parents of the O'Donnell Children and guarantees and securities granted by Vico Limited over Gorse Hill.

Previously, the Bank secured a judgment against the parents for approximately €71 million. Vico Limited had guaranteed these liabilities and granted security over Gorse Hill. The Bank appointed the Receiver after default. The O'Donnell Children initiated plenary proceedings in 2012 seeking declarations that the mortgage, guarantees, and indemnities were void, but these claims were dismissed by the High Court in 2013 and on appeal to the Supreme Court in 2014 and 2015, which ordered the O'Donnell Children to vacate Gorse Hill.

In February 2015, the current proceedings were issued by Vico Limited and the O'Donnell Children, again challenging the validity of the guarantees and seeking to overturn the orders requiring them to vacate the property. Interlocutory injunctions sought to restrain the Bank and Receiver from taking possession were refused by the High Court. The Bank and Receiver also obtained orders restraining interference with the property and directing vacating by the parents and others.

The defendants subsequently moved to vacate the lis pendens and strike out the plaintiffs' claims as an abuse of process, relying on the doctrine of res judicata and the rule in Henderson v. Henderson. The High Court granted this motion, striking out the claims and vacating the lis pendens. The plaintiffs appealed both this substantive order and the refusal of the trial judge to recuse himself from the proceedings.

Legal Issues Presented

1. Whether the plaintiffs' claims in the current proceedings are barred by the rule in Henderson v. Henderson and constitute an abuse of process or are res judicata in light of prior litigation concerning the same subject matter.
2. Whether the trial judge erred in applying the principles of abuse of process and res judicata to strike out the plaintiffs' claims before the defendants had filed a defence.
3. Whether there was sufficient identity or privity of interest between Vico Limited and the O'Donnell Children to bind Vico to the prior judgments and bar its claims.
4. Whether the trial judge should have recused himself from hearing the defendants' motion and the related interlocutory applications.

Arguments of the Parties

Appellants' Arguments

• The legal principles identified by the High Court were accepted but argued they were incorrectly applied to the facts.
• Vico Limited was not a party to the prior Gorse Hill proceedings and the prior judgments did not determine issues relating to alleged breaches of fiduciary duty by Vico's directors or the validity of the securities granted by Vico.
• The current proceedings raise new claims, including allegations that the Bank and its subsidiary misrepresented the regulatory status of the subsidiary, which were not addressed in prior litigation.
• The High Court erred in striking out the claims as an abuse of process before the defendants filed a defence.

Respondents' Arguments

• The High Court correctly stated and applied the principles of abuse of process and res judicata.
• There is identity of purpose and object between the prior Gorse Hill proceedings and the current proceedings, both seeking to have the securities declared void and to prevent possession of Gorse Hill.
• The O'Donnell Children were shareholders of Vico at the relevant time, and Vico was effectively under their control; they could have joined Vico as a party in prior proceedings but chose not to.
• No evidence of fraud was presented to undermine the prior judgments.
• The application to strike out is properly made as an objection to the action, not a defence, and can be decided on the statement of claim alone.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Henderson v. Henderson (1843) 3 Hare 100	Rule preventing abuse of process by requiring parties to bring their whole case in one litigation to ensure finality.	Applied as the foundational principle to strike out claims that could or should have been raised in prior proceedings.
Johnson v. Gore Wood & Co [2002] 2 AC 1	Restatement and expansion of the abuse of process rule, emphasizing a merits-based approach and consideration of all circumstances.	Adopted to assess whether the later proceedings constituted an abuse of process, focusing on identity of issues and fairness.
Carroll v. Ryan [2003] I.R. 309	Approval of abuse of process principles in Irish jurisdiction.	Supported the application of abuse of process doctrine in this case.
A.A. v. Medical Council [2003] 4 IR 302	Further Irish authority approving abuse of process principles.	Referenced in confirming the legal framework.
Re. Vantive Holdings [2010] 2 I.R. 118	Clarification and application of abuse of process rules and res judicata in Irish law.	Used to confirm the approach to abuse of process and res judicata.
Dublin Corporation v. Building and Allied Trade Union [1996] I.R. 468	Exception to res judicata where judgment was procured by fraud.	Considered in relation to allegations of fraud undermining prior judgments.
Kenny v. Trinity College Dublin [2008] IESC 18	Standards for proving fraud sufficient to set aside a final judgment.	Applied to assess whether fraud allegations justified reopening issues.
Gleeson v. J. Wippell & Co. Ltd. [1977] 1 WLR 510	Doctrine of privity of interest for applying res judicata between different parties.	Applied to determine sufficient identity between Vico and the O'Donnell Children to bind Vico to prior decisions.
Corrigan v. Irish Land Commission [1977] I.R. 317	Principles governing setting aside substantive decisions due to procedural errors such as non-recusal.	Referenced to justify not setting aside substantive order despite alleged error in recusal decision.

Court's Reasoning and Analysis

The Court began by affirming the established legal principles governing abuse of process and res judicata, primarily the rule in Henderson v. Henderson, as restated by Lord Bingham in Johnson v. Gore Wood & Co. The Court emphasized the public interest in finality of litigation and preventing multiplicity of proceedings on the same cause or related causes of action.

The Court distinguished between the O'Donnell Children, who were parties to the prior Gorse Hill proceedings, and Vico Limited, which was not. Nonetheless, the Court found that Vico was under the full control of the O'Donnell Children from 18th July 2012, and there was a sufficient degree of identity or privity of interest to bind Vico to the prior judgments. The O'Donnell Children could have joined Vico as a party previously but chose not to.

The Court examined the claims raised in the current proceedings and concluded that all of them either were made, or could and should have been made, in the prior litigation. The Court rejected the appellants' contention that new claims regarding the Bank's subsidiary's regulatory status or alleged breaches of fiduciary duties were not addressed, finding no evidence of fraud or other special circumstances that would justify reopening the issues.

The Court also held that striking out the claims as an abuse of process before the filing of a defence was proper, as such an application is an objection to the action itself rather than a defence on the merits.

Regarding the appeal against the refusal of the trial judge to recuse himself, the Court declined to determine this issue in light of its decision to uphold the substantive strike out order. The Court noted that the plaintiffs were aware of the judge's decision not to recuse but proceeded with the hearing before him without objection and that even if recusal were warranted, the substantive decision would stand, making any rehearing before another judge a futile exercise.

The Court further observed that the recusal application was made without formal procedure and on limited grounds, and that there was no evidence of objective bias or improper conduct by the trial judge in his written judgment.

Holding and Implications

The Court DISMISSED the appeals against the High Court order of 28th July 2015 striking out the plaintiffs' claims and vacating the lis pendens, as well as the appeal against the refusal of the trial judge to recuse himself.

The direct effect of this decision is that the plaintiffs' claims challenging the validity of the guarantees, indemnities, and securities over Gorse Hill are barred by res judicata and abuse of process principles, and the lis pendens registered by the plaintiffs is vacated. No new precedent was established; the Court applied well-established rules to the facts presented.