John Morrissey’s appeal over €30.5m Anglo loan dismissed

The Court of Appeal has dismissed a businessman's appeal over whether an investment fund was entitled to sue him over a €30.5 million debt it bought from Irish Bank Resolution Corporation (IBRC).

John Morrissey claimed the alleged general illegal conduct of IBRC's predecessor, Anglo Irish Bank, precluded the fund, LSREF III Stone Investments, pursuing him for the property loans debt.

The appeal court found Mr Morrissey, Palmerston Road, Rathmines Dublin, was bound by some of seven previous and unappealed High Court rulings related to the loans. One of these, in particular, related to a finding that Anglo’s conduct was outside the scope of his action unless he could show the relationship between him and the bank was fiduciary in nature, the court said.

One of those judgments, in May 2013, found the relationship between Mr Morrissey and the bank did not go beyond the ordinary contractual relationship and there was therefore no fiduciary relationship.

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The courts previously heard Mr Morrissey is a qualified actuary who worked in a number of sectors, including Guinness Peat Aviation, before setting up his own aircraft leasing business.

In 1994, he sold that leasing company to Royal Bank of Scotland before going on to study experimental physics in Trinity College Dublin. While there, he met the founder of a software company Havok, with which he also became involved, and which was later sold to computer technology giant, Intel.

Around 1999, he got into the property business primarily acquiring and renovating period properties in Dublin 6 which he either sold or rented.

It was now too late for the wider issue of Anglo's conduct to be raised by way of defence, Mr Justice Hogan said

Dismissing his appeal on Thursday, Mr Justice Gerard Hogan, on behalf of the three-judge appeal court, said Mr Morrissey was allowed to admit fresh evidence at the outset of his appeal which related to the conviction in July 2016 of three former Anglo executives for conspiracy to defraud.

At the heart of his appeal was his claim, due to alleged illegal conduct of Anglo, IBRC, and following the sale of his loans, LSREF III Stone, was debarred from recovering the debt, Mr Justice Hogan said.

The parameters for the defence to the claim Mr Morrissey owed the debt were established in a previous High Court decision which was not appealed and the wider issue of illegality could only be raised where there was a fiduciary duty, the judge said.

It was now too late for the wider issue of Anglo’s conduct to be raised by way of defence, Mr Justice Hogan said.

Mr Morrissey, who had successfully claimed he was overcharged €143,000 in interest, had argued this showed bad faith on the part of the bank but the overcharging was the result of, “at worst careless computation” with no evidence of any intention to deceive, the judge said.

There was no basis for Mr Morrissey’s claim the sale of the loan to LSREF III Stone was champertous, he also held. Champerty is a form of maintenance where financial support is provided by a party with no connection to a dispute in exchange for a share in the spoils of any proceeds from litigation or some other profit.

A 2015 High Court decision striking out the majority of Mr Morrissey’s defence and counterclaim was also correct, the judge said.

Mr Morrissey also had no standing to challenge the constitutionality of that part of the 2013 Act setting up IBRC, permitting the sale of the loans, because he would not benefit in any tangible or practical way from a finding of unconstitutionality, he ruled.