vico Ltd & ors v Bank of Ireland & ors

Factual and Procedural Background

The first, second, and third named defendants applied to vacate two lis pendens registered by the first named plaintiff concerning the property known as "Gorse Hill," located at Vico Road, Killiney, Co. Dublin. The lis pendens were registered following the vacation of the property by the second, third, fourth, and fifth named plaintiffs, who are the children of two individuals, pursuant to a Supreme Court order. The lis pendens registration coincided with this Court's refusal to grant interlocutory injunctions restraining the Bank from taking possession of Gorse Hill.

The defendants sought to vacate the lis pendens on grounds including abuse of process, res judicata, and that the plaintiffs' claims were frivolous or vexatious. The defendants also alleged manifest and unjustifiable delay by the first named plaintiff in pursuing its claims and registering the lis pendens.

The plaintiffs challenged the security documents under which the third named defendant, acting as receiver, took control of Gorse Hill. They contested the validity of the security documents executed by the first named plaintiff as security for loans made by the first named defendant to the plaintiffs' parents. The plaintiffs sought to restrain the defendants from acting on those security documents and sought protection of their possession and enjoyment of the property.

Procedurally, the Bank had initiated summary proceedings against the plaintiffs' parents in 2010 seeking recovery of approximately €69 million. A settlement agreement was reached in 2011, but the parents defaulted on repayments, leading to judgment for approximately €71 million. The Bank then issued a demand to the first named plaintiff, a company controlled by the plaintiffs' family and owner of Gorse Hill. After non-payment, the Bank appointed a receiver over the property in June 2012.

In July 2012, the entire share capital of the first named plaintiff was transferred to the plaintiffs, who subsequently initiated proceedings against the Bank and the receiver, known as the "Gorse Hill proceedings." Attempts to join the first named plaintiff as a defendant in those proceedings were refused. Additional proceedings were issued in 2015 by the first named plaintiff seeking injunctions and damages relating to possession of Gorse Hill.

Legal Issues Presented

1. Whether the lis pendens registered by the first named plaintiff should be vacated on the grounds of abuse of process, res judicata, or being frivolous and vexatious.
2. Whether the claims brought by the plaintiffs constitute a collateral attack on prior judgments and are barred by the rule in Henderson v. Henderson.
3. Whether the first named plaintiff was a necessary party to the earlier Gorse Hill proceedings and if its absence affects the applicability of res judicata.
4. The applicability of the doctrine of abuse of process in the context of repeated litigation on substantially the same issues.
5. The validity and enforceability of the security documents and guarantees executed by the first named plaintiff.

Arguments of the Parties

Defendants' Arguments

• The lis pendens registration constitutes an abuse of process and should be vacated pursuant to statutory provisions.
• The plaintiffs' claims are barred by res judicata and the rule in Henderson v. Henderson, as they seek to re-litigate issues already decided.
• The first named plaintiff delayed unreasonably in making claims and registering the lis pendens, indicating improper purpose.
• The claims are frivolous, vexatious, and amount to a collateral attack on prior judgments.
• There is a manifest privity of interest between the first named plaintiff and the plaintiffs, rendering the claims effectively an attempt to relitigate the same matters.

Plaintiffs' Arguments

• The first named plaintiff was not a party to the earlier Gorse Hill proceedings and thus is not bound by prior judgments.
• The Bank's witnesses in the earlier proceedings committed perjury and gave false evidence regarding the nature of the lending entities.
• The plaintiffs contend that monies were lent by a different entity than previously determined, which was not addressed in earlier proceedings.
• The first named plaintiff has a constitutional and human rights entitlement to access the courts and to issue proceedings when it sees fit.
• There are new issues raised in the current proceedings, including alleged breaches of statutory codes and irregularities, which were not canvassed previously.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Henderson v. Henderson (1843) 3 Hare 100	Principle that a party must bring their whole case in one action; prevents re-litigation of issues that could have been raised earlier.	The court found the plaintiffs’ claims barred as they could have been raised in earlier proceedings, constituting abuse of process.
Dublin Corporation v. Building and Allied Trade Union [1996] 1 I.R. 468	Emphasizes the public interest in finality of litigation and preventing multiple proceedings.	Supported the court’s view on finality and that parties should not be allowed to re-litigate settled matters.
Re Vantive Holdings [2010] 2 I.R. 118	Endorses the rule in Henderson v. Henderson and sets parameters for abuse of process.	Reinforced the court’s application of abuse of process doctrine to dismiss the plaintiffs’ claims.
Kenny v. Trinity College Dublin [2008] IESC 18	Sets evidential threshold for setting aside judgments on grounds of fraud.	The court held that allegations of fraud must be deliberate and materially affect the judgment; plaintiffs failed to meet this standard.
Johnson v. Gore Wood [2002] 2 AC 1	Clarifies abuse of process and its relation to estoppel; emphasizes finality and efficiency in litigation.	Used to analyze whether plaintiffs’ subsequent claims amounted to abuse of process.
Salomon v. Salomon & Company [1897] AC 22	Corporate personality principle distinguishing company from its shareholders.	Considered in assessing whether the first named plaintiff was bound by prior judgments involving its shareholders.
Gleeson v. J. Wippell & Co. Limited [1977] 1 WLR 510	Addresses privity of interest and when judgments bind third parties.	Supported the court’s conclusion of sufficient privity of interest between the company and plaintiffs to apply res judicata.
Camiveo Limited v. Dunnes Stores [2015] IESC 43	Execution of deeds binds parties taking benefit even if they do not execute the deed.	Applied to reject plaintiffs’ claim that non-execution of security documents invalidated them.

Court's Reasoning and Analysis

The court began by outlining the factual matrix, noting the prior proceedings between the Bank and the plaintiffs’ parents, and the subsequent litigation involving the plaintiffs and the Bank. It recognized that the plaintiffs’ current claims fundamentally challenge the validity of security documents and seek possession of Gorse Hill, matters already litigated in the "Gorse Hill proceedings."

Applying the doctrine of res judicata and the rule in Henderson v. Henderson, the court emphasized the importance of finality in litigation and preventing multiplicity of proceedings. It found that the plaintiffs, including the first named plaintiff company, were in privity of interest, as the company was controlled by the plaintiffs who could have joined or initiated parallel proceedings earlier but chose not to.

The court rejected the plaintiffs’ argument that the first named plaintiff was not bound by prior judgments due to non-participation, referencing the principle that parties with sufficient identity of interest are bound to accept final decisions. It also dismissed allegations of fraud as unsupported by the evidential threshold required to set aside judgments.

The court further addressed specific new issues raised by the plaintiffs, including alleged breaches of statutory codes and non-execution of documents, finding these either not applicable, already determined, or incapable of success based on established law.

Overall, the court concluded that the proceedings were an abuse of process, vexatious, and constituted a collateral attack on prior judgments. It noted unreasonable delay by the plaintiffs in registering lis pendens and found that the registration was for an improper purpose to frustrate the Bank and receiver.

Holding and Implications

The court granted the defendants’ application to vacate the lis pendens and dismissed the plaintiffs’ claims as an abuse of process barred by res judicata and the rule in Henderson v. Henderson. The plaintiffs were estopped from pursuing the proceedings, which were deemed frivolous and vexatious.

The direct effect is that the Bank and its receiver may proceed with possession and realization of the property without further obstruction from the plaintiffs in these proceedings. No new precedent was established; the decision reinforces existing principles concerning abuse of process, finality, and the limits on re-litigating settled disputes.