Heaphy v Governor and Company of the Bank of Ireland (Approved)

Factual and Procedural Background

The Plaintiff initiated proceedings seeking various declaratory orders, injunctive relief, and damages against the Defendant, Company A, primarily concerning ownership of a property in The City ("the Property") and the conduct of Company A's business following a state-backed bank guarantee issued in 2008 ("the Bank Guarantee"). The Plaintiff alleged breaches of the Competition Act 2002 by Company A.

The judgment addresses three motions: the Plaintiff's motions for judgment in default of defence and to add two additional co-defendants, and Company A's motion to dismiss the proceedings under procedural rules and inherent jurisdiction, also seeking to vacate a lis pendens registered by the Plaintiff over the Property.

Prior litigation history includes multiple proceedings where Company A obtained judgments against the Plaintiff related to personal guarantees and loans. These judgments were upheld on appeal, and possession orders for the Property were affirmed. The Plaintiff discontinued a prior related action before commencing the current proceedings and registered a lis pendens over the Property.

The Plaintiff later sought to add Company A's current and former auditors as co-defendants, relying on passages from the auditors' 2022 report highlighting risks in valuation and management judgment, although Company A contended these passages were taken out of context and the auditors had concluded the financial statements were true and fair.

The Plaintiff's solicitor withdrew from representation due to the Plaintiff's direct and threatening communications with one of the auditors, leading the Plaintiff to represent himself at the hearing.

Legal Issues Presented

1. Whether the Plaintiff's claim discloses a reasonable cause of action or is bound to fail, justifying dismissal under Order 19, rule 28 of the Rules of the Superior Courts or the court's inherent jurisdiction.
2. Whether the Plaintiff has locus standi to bring claims concerning Company A's conduct beyond his direct contractual relationship.
3. Whether the Plaintiff's claims are barred by prior final determinations or statute of limitations.
4. Whether the Plaintiff's motion to add co-defendants (the auditors) has any legal basis.
5. Whether the lis pendens registered by the Plaintiff over the Property should be vacated under section 123 of the Land and Conveyancing Act 2009 in light of the transfer of Company A’s rights to a third party.

Arguments of the Parties

Plaintiff's Arguments

• The Plaintiff alleged that Company A engaged in unlawful price-fixing by "fixing" the value of mortgages used as collateral at their originating market value, contrary to sections 4 and 5 of the Competition Act 2002.
• He contended breaches of International Financial Reporting Standards (IFRS) by Company A, including applying inconsistent valuation methodologies and failing to record significant income.
• The Plaintiff claimed that Company A wrongfully amended assignment clauses in loan agreements to use customers' mortgages as contingent collateral without informing them.
• He alleged collusion and fraudulent concealment involving Company A and various third parties, including auditors and law enforcement bodies.
• He sought declarations regarding ownership of the Property, setting aside possession orders, and damages exceeding €55 million under multiple heads.
• The Plaintiff sought to add Company A’s auditors as co-defendants based on the auditor’s report indicating risks of error and fraud in valuation processes.

Defendant's Arguments

• Company A argued the Plaintiff’s claim discloses no reasonable cause of action and is bound to fail for multiple reasons: the claims re-litigate matters already finally determined by courts; the claims are statute-barred; and the Plaintiff lacks locus standi to bring general claims about Company A’s conduct.
• Company A contended the Plaintiff’s allegations about assignment clauses and price-fixing are legally unsustainable and factually unsupported.
• The motion to add co-defendants was described as misconceived, lacking any basis for claims against the auditors, and reflecting an attempt to trigger a broad investigation rather than pursue a legitimate claim.
• Company A noted that the auditor’s report passages relied upon were taken out of context and that the auditors concluded the financial statements were true and fair.
• Company A sought to dismiss the proceedings and vacate the lis pendens registered over the Property.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by considering Company A's motion to dismiss, which would resolve the other motions. It noted that the Plaintiff’s claims largely re-litigate issues previously determined by the courts, including final judgments and possession orders, and are thus barred by the principles of res judicata and abuse of process.

The court analysed the Plaintiff’s main claims under five categories, focusing on the first three which concerned alleged breaches of competition law and accounting standards by Company A. It found these claims lacked legal coherence, particularly the contention that Company A engaged in unlawful price-fixing by valuing mortgages at their originating market value. The court explained that price-fixing under the Competition Act 2002 requires an agreement between competitors to fix prices, which was not present here.

The court further held that the Plaintiff’s claims were statute-barred as the relevant conduct occurred by 2015, and the Plaintiff had public knowledge of key facts from 2012. The Plaintiff’s plea of fraudulent concealment was deemed unsupported by particulars and insufficient to extend limitation periods.

Regarding standing, the court emphasised that the Plaintiff could only complain about conduct affecting his own contractual liabilities. Generalised complaints about Company A’s conduct or alleged breaches of accounting standards that did not affect the Plaintiff personally were not actionable.

The court also addressed the Plaintiff’s attempts to add the auditors as co-defendants, concluding that the application was misconceived, based on a misreading of the auditor’s report, and aimed at provoking a broad investigation rather than asserting a viable claim.

On the issue of the lis pendens, the court noted uncertainty whether Company A retained standing to seek its vacation after transferring its rights to a third party. Consequently, the court refused to vacate the lis pendens at this stage.

In sum, the court found the Plaintiff’s entire claim disclosed no reasonable cause of action, was bound to fail, and constituted an abuse of process, justifying dismissal under Order 19, rule 28(1).

Holding and Implications

The Plaintiff’s claim is STRUCK OUT.

The court dismissed all aspects of the Plaintiff’s claim as legally unsustainable, barred by prior final judgments and statute of limitations, and an abuse of process. The Plaintiff’s motions for judgment in default of defence and to add co-defendants were refused. The lis pendens registered over the Property was not vacated due to questions over Company A’s standing following transfer of rights to a third party.

This decision directly terminates the current proceedings without establishing any new legal precedent. The Plaintiff’s remedy for concerns about Company A’s conduct lies outside the courts, as the claims raised do not meet legal standards for civil litigation.