Pepper Finance Corporation [Ireland] Designated Activity Company v Conway & Anor (Approved)

Factual and Procedural Background

The Defendants borrowed money from Company A pursuant to a loan agreement in 2007 and made repayments until 2015, when they ceased payments. They did not dispute liability under the loan but challenged the Plaintiff's and successor's entitlement to enforce the mortgage charge. The Plaintiff obtained an Order for Possession of the Property following summary judgment proceedings in the Circuit Court in 2019, which was upheld on appeal to the High Court in January 2020. The Defendants' application for leave to appeal to the Supreme Court was refused in May 2020.

Subsequently, the Plaintiff purported to transfer its interest in the legal charge to Company B, which sought to be joined as Co-Plaintiff in the proceedings to oppose the Defendants' application to set aside the High Court judgment and order. The Defendants contend the transfer is invalid and challenge the Plaintiff's and Company B's legal standing.

The Defendants applied to set aside the High Court judgment and order on the basis of alleged bias by the High Court Judge, arising from an undisclosed business relationship with his former law firm which had acted for the Plaintiff. The Defendants also sought to reopen the merits of the possession proceedings. The hearing proceeded over multiple days, during which the Court joined Company B as Co-Plaintiff to secure rights of audience for the opposition to the set aside application.

Legal Issues Presented

1. Whether the Court has jurisdiction to entertain an application to set aside a final judgment and order of the High Court made on appeal from the Circuit Court, particularly where leave to appeal to the Supreme Court has been refused.
2. If jurisdiction exists, whether it is appropriate to exercise it in the circumstances of this case.
3. Whether the alleged undisclosed business relationship between the High Court Judge and his former law firm amounts to objective or subjective bias warranting setting aside the judgment and order.
4. The propriety of joining Company B as Co-Plaintiff following the transfer of the Plaintiff's interest in the mortgage charge.

Arguments of the Parties

Defendants' Arguments

• The Plaintiff lacked lawful interest in the mortgage charge due to an earlier sale of the mortgage portfolio to a third party, rendering the Plaintiff's and Company B's claims invalid.
• The High Court Judge was biased due to an undisclosed ongoing financial interest in his former law firm, which acted for the Plaintiff, warranting recusal and setting aside of the judgment and order.
• The judgment was flawed and erroneous, and the Defendants seek a plenary hearing to properly ventilate their case.
• The transfer of interest from the Plaintiff to Company B is a sham intended to avoid addressing the bias allegations.
• The Defendants challenge the jurisdiction of the Court to hear the set aside application under Order 124 and rely on the Court's inherent jurisdiction under the Constitution.

Company B's Arguments

• Company B is the registered owner of the mortgage charge and entitled to enforce the Order for Possession.
• It is appropriate to join Company B as Co-Plaintiff to oppose the set aside application as it has a material interest in the proceedings.
• The Defendants' application to set aside is an abuse of process, seeking to re-litigate issues already determined by the Circuit Court, High Court, and Supreme Court.
• The Defendants' allegations of bias are misconceived, resting on mere disagreement with judicial reasoning and assumptions without evidence of actual involvement by the Judge in the Plaintiff's affairs.
• The Defendants fail to establish a reasonable apprehension of bias under the objective test established by precedent.
• The jurisdiction to set aside a final judgment is extremely limited and does not extend to re-opening matters already finally determined, particularly after refusal of leave to appeal by the Supreme Court.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Pepper Finance v. Hanlon	Legal standing to enforce mortgage charge and entitlement to possession orders.	Supported findings that Plaintiff held legal title and was entitled to possession.
Pepper Finance v. Jenkins [2018] IEHC 485	Legal effect of Mortgage Sale Deed (MSD) in securitisation transactions.	Confirmed Plaintiff retained legal title despite securitisation; relied upon in affirming possession order.
Ulster Bank DAC v. McDonagh (No. 3) [2024] IEHC 609	Limits on High Court jurisdiction to set aside final judgments on grounds of fraud or irregularity.	Held no jurisdiction to set aside final judgment affirmed on appeal; applied analogously to deny set aside here.
Start Mortgages DAC v. Kavanagh [2023] IEHC 37	Exceptional jurisdiction to set aside final unappealed judgments; inherent jurisdiction limits.	Considered but declined to exercise jurisdiction to set aside final judgment; influenced approach in this case.
Greendale Developments Ltd (No. 3) [2000] 2 I.R. 514	Exceptional jurisdiction of Supreme Court to reopen final judgments.	Referenced for the high threshold required to set aside final orders; no clear authority for High Court to do so.
L.P. v. M.P. [2001] 1 I.R. 219	Obiter recognition of High Court's inherent jurisdiction akin to Supreme Court's to set aside final judgments.	Noted but not dispositive; applied in context of threshold for reopening final orders.
Pepper Finance Corporation v. Cannon [2020] IESC 2	Supreme Court jurisdiction to grant leave to appeal from High Court decisions on appeal from Circuit Court.	Confirmed appeal avenues existed; refusal of leave to appeal here bars reopening by another High Court judge.
Bula Ltd & Others v. Tara Mines Ltd (No.6) [2000] 4 I.R. 412	Objective test for reasonable apprehension of bias.	Applied to reject allegations of bias based on former solicitor relationship with Plaintiff's law firm.
Kelly v. Minister for Agriculture [2021] IESC 23	Objective reasonable bystander test for bias.	Supported conclusion that alleged financial links did not give rise to reasonable apprehension of bias.
Promontoria (Finn) Limited & Anor v. Armstrong & Anor [2024] IECA 73	Former professional relationship insufficient to establish bias without more.	Distinguished facts; no evidence Judge personally involved with Plaintiff; no bias found.
Orange Ltd v. Director of Telecoms (No 2) [2000] 4 I.R. 159	Bias in judicial review; requirement for external factor causing reasonable apprehension of bias.	Referenced to demonstrate that errors in decision do not infer bias; external factor required.
Spin Communications T/A Storm FM v. Independent Radio & Television Commission [2001] IESC 12	Objective bias requires extraneous factor existing prior to decision.	Applied to reject bias claims based solely on decision content or process.
Goode Concrete v. CRH Plc [2015] 3 I.R. 493	Objective test for perceived bias; recusal principles.	Distinguished as no shareholding or direct interest by Judge; no basis for bias.

Court's Reasoning and Analysis

The Court first addressed the jurisdictional issue, concluding that Order 124 of the Rules of the Superior Courts does not confer jurisdiction to set aside a final judgment and order rendered over five years prior, particularly where leave to appeal to the Supreme Court has been refused. The Court noted the constitutional principle of finality and the hierarchical structure of the judiciary, emphasizing that one High Court judge cannot act as an appellate tribunal over another High Court judge's final decision.

The Defendants' reliance on the inherent jurisdiction of the Court under Article 34.3 of the Constitution was considered. The Court found that this jurisdiction is limited and does not permit reopening final judgments after unsuccessful appeals, consistent with Supreme Court jurisprudence. The Court distinguished the present case from others where the same judge heard set aside applications and found no authority for one High Court judge to set aside a final order of another.

Regarding the alleged bias, the Court applied the objective test for reasonable apprehension of bias, considering relevant precedents. It found no evidence that the High Court Judge had any direct involvement with the Plaintiff or the proceedings while in private practice. The mere fact that the Judge's former law firm acted for the Plaintiff did not establish bias. The documents relied upon by the Defendants suggesting an ongoing financial connection were insufficient to raise a reasonable apprehension of bias for a properly informed objective observer.

The Court further observed that the Defendants' application was an attempt to re-litigate issues already conclusively determined by the Circuit Court, High Court, and Supreme Court. The Defendants failed to meet the high threshold required to set aside a final order on grounds of bias or irregularity, and the application was deemed an abuse of process.

Finally, the Court considered the application to join Company B as Co-Plaintiff. It found sufficient evidence on the balance of probabilities that the Plaintiff's interest had been transferred to Company B, which was registered as the owner of the charge. Joining Company B was appropriate to secure its rights of audience in opposing the set aside application, without prejudicing any future challenges to the validity of the transfer in enforcement proceedings.

Holding and Implications

The Court ordered the joinder of Company B as Co-Plaintiff and refused the Defendants' application to set aside the High Court judgment and order made in January 2020.

The direct effect of this decision is to uphold the finality of the possession order in favour of the Plaintiff (and successor Company B), thereby allowing enforcement proceedings to proceed. The Court reaffirmed the constitutional principle that final judgments of the High Court, once affirmed by the Supreme Court, cannot be reopened by another High Court judge on grounds of alleged bias absent exceptional circumstances which were not established here.

No new precedent was established; rather, the decision applies and confirms established legal principles regarding jurisdiction, finality, and the test for judicial bias. The Defendants remain free to pursue any appropriate plenary proceedings or appeals, but the procedural mechanism of setting aside by motion in these circumstances is not available.