Summary Judgment, Concurrent Wrongdoers And The Civil Liability Act: Ulster Bank v McDonagh

• Published date: 10 July 2020
• Subject Matter: Finance and Banking, Litigation, Mediation & Arbitration, Debt Capital Markets, Trials & Appeals & Compensation
• Law Firm: Matheson
• Author: Ms Grainne Dever, Mairéad Ní Ghabh'in and Julie Murphy-O'Connor

The recent judgment of Ulster Bank & Ors v McDonagh & Ors [2020] IEHC 185, is one in a series of judgments stemming from the purchase of a site at Kilpeddar in County Wicklow in 2008. In this instalment, the Court addresses some important questions around settlements, concurrent wrongdoers and summary judgment. Although much of the judgment considers factual disputes and the substantive claim, the judgment also makes a number of interesting observations on the interpretation of s17(2) of the Civil Liability Act, 1961 insofar as it relates to summary debt claims.

The facts

In 2008 the Defendants, the McDonagh brothers, took out a '21.8 million loan from Ulster Bank (the "Bank") to purchase an 80-acre site at Kilpeddar, County Wicklow. Planning permission was obtained to develop a data centre, however, for various reasons this did not proceed and ultimately the McDonaghs were unable to repay the loan which was secured on the 80-acre site. A compromise agreement was reached between the Bank and the McDonaghs but after an alleged breach of the agreement, the Bank sought summary judgment against the McDonaghs in the sum of '22,090,302.64.

Prior to the initiation of these proceedings, the Bank had sued CBRE for an alleged negligent valuation of the Kilpeddar site and these proceedings settled for '5 million. The Bank applied this sum against the McDonaghs' loan in reduction of their overall debt.

The issue

A key defence raised by the McDonaghs was that (a) the McDonaghs and CBRE are concurrent wrongdoers and therefore, (b) pursuant to sections 17(2) and s35(1)(h) of the Civil Liability Act, no further monies are due and owing by the Defendants to the Bank.

In its defence, the Bank contended that (a) sections 17(2) and s35(1)(h) of the Act do not apply to summary debt claims; and (b) the McDonaghs and CBRE are not concurrent wrongdoers.

Applicability of the Act to summary debt cases

The Court first addressed whether the Act applied to summary debt claims. The Bank had relied on Histon v Shannon Foynes Port Company to argue that it did not. However, the trial judge, Twomey J, noted that in Histon it was held that the Act did not apply simply because counsel failed to produce an authority which provided otherwise. The judge in this case instead relied on ACC Bank v Malocco [2000] 3 IR 191 and AIB v O'Reilly & Anor [2019] IEHC 151. Both cases are authority for the application of the Act in summary debt claims.

The judge then analysed the key definitions of the...