Supreme Court dismisses stay application against judge with bank account, citing no objective bias. Appeal prioritized pending directions.

THE SUPREME COURT

Appeal No. 373/14

Denham C.J.

MacMenamin J

Laffoy J.

Between/

The Governors and Company of the Bank of Ireland

Plaintiff/Respondent

and

Blake O’Donnell, Bruce O’Donnell,

Brian O’Donnell and Mary Patricia O’Donnell

Defendants/Appellants

Judgment delivered on the 8th day of December, 2015, by Denham C.J.

1. Blake O’Donnell, Bruce O’Donnell, Brian O’Donnell and Mary Patricia O’Donnell, the defendants/appellants, are referred to collectively

as “the appellants”. The Governor and Company of the Bank of Ireland, the plaintiff/respondent, is referred to as “the respondent”.

2. The appellants have brought a motion seeking an order of a stay on the order of McGovern J. dated the 21st July, 2014, and

perfected on the 24th July, 2014.

3. This motion was listed with, and heard together with, a motion brought by Brian O’Donnell and Mary Patricia O’Donnell, seeking to

apply to the Supreme Court for leave to extend time to appeal an order of Kelly J. dated the 12th December, 2011, which was

perfected on the 14th December, 2011.

4. In that said motion the Court found that Brian O’Donnell and Mary Patricia O’Donnell did not have locus standi to bring that

application as they were declared bankrupts.

5. The reasons given in that application, on which judgment is given today, are applicable to Brian O’Donnell and Mary Patricia

O’Donnell in this motion also.

6. Brian O’Donnell and Mary Patricia O’Donnell were adjudicated bankrupt by the High Court (Charleton J.) on the 23rd August, 2013,

and an application for a stay was refused.

7. Once declared bankrupt the appellants’ property rights vested in the Official Assignee under s. 44 of the Bankruptcy Act, 1988,

referred to as ‘the Act of 1988’. Under s. 3 of the Act of 1988, the term “property” includes “things in action”, which includes the

right to litigate.

8. The plenary summons in these proceedings, on the general endorsement of claim, seek:-

“1. A declaration that the issued shares of Havergate Investments Limited (formerly Columbus Courtyard Limited)

(being 6,000 ord. US$1 shares) are the shares of the Third and Fourth Named Defendants, or are held for their

benefit, and are not the property of the First Named Defendant (or of Huntston Limited) nor subject to any trust in

the First Named Defendant's favour.

2. A declaration that the issued shares of Kennor Advisory Limited (formerly Fourteen Ninety Two Management

Limited) (being 5,100 ord. US$1 shares) are the shares of the Third and Fourth Named Defendants, or are held for

their benefit, and are not the property of the First Named Defendant (or of Huntston Limited) nor subject to any

trust in the First Named Defendant's favour.

3. Following the grant of the relief sought at (1) above, an order requiring the First and Second Named Defendants

to take, or procure the taking of, such steps as are necessary to ensure that the issued shares of Havergate

Investments Limited (formerly Columbus Courtyard Limited) are restored and/or transferred to the legal and

beneficial ownership of the Third and Fourth Named Defendants.

4. Following the grant of the relief sought at (2) above, an order requiring the First and Second Named Defendants

to take, or procure the taking of, such steps as are necessary to ensure that the issued shares of Kennor Advisory

Limited (formerly Fourteen Ninety Two Management Limited) are restored and/or transferred to the legal and

beneficial ownership of the Third and Fourth Named Defendants.

5. A declaration that the sole issued share in Hibernia (2005) Limited is legally and beneficially owned by the Third

and Fourth Named Defendants.

6. An account of all monies received and/or paid out by Kennor Advisory Limited (formerly Fourteen Ninety Two

Management Limited) to, or to the benefit of, the Defendants and each of them.

7. Further, and/or in the alternative, damages for fraud.

8. Further, and/or in the alternative, damages for conspiracy.”

9. While certain personal actions do not vest in the Official Assignee, the action in this case is not of such a personal nature.

10. Consequently, decisions as to the property in the bankrupts’ estate now vest in the Official Assignee, and this includes the

decision making power in litigation.

11. Thus, it is for the Official Assignee to decide whether to proceed with this litigation, or not, insofar as Brian O’Donnell and Mary

Patricia O’Donnell are concerned. Brian O’Donnell and Mary Patricia O’Donnell have no locus standi.

12. Consequently, I would dismiss the application insofar as it is brought by Brian O’Donnell and Mary Patricia O’Donnell as they lack

locus standi.

13. Of the appellants in this motion, there remains Blake O’Donnell and Bruce O’Donnell, who I shall refer to as “the remaining

appellants”.

14. The order in issue, and on which the remaining appellants seek a stay, is an order of McGovern J. dated the 21st July, 2014,

which was perfected on the 24th July, 2014. It is an order in the case management of the proceedings.

15. The matter came before McGovern J. in a notice of motion for directions. Having heard Counsel for the Bank of Ireland, Blake

O’Donnell and Brian O’Donnell in person, and counsel for the Official Assignee in Bankruptcy, McGovern J. ordered:-

“1.(a) that the Plaintiff do have liberty to issue a Motion seeking to strike out the Defendants’ Defences and

Counterclaims by the 31st day of July 2014

(b) that the Defendants should have four weeks within which to reply to such Motion

(c) the Plaintiff do deliver any reply within a period of two weeks.

2.(a) that the first second third and fourth named Defendants do have liberty to issue a Notice of Motion and

grounding Affidavit seeking liberty to join third parties by the 31st day of July 2014

(b) that the Plaintiff do have four weeks within which to reply to such Motion

(c) the Defendants do have two weeks thereafter to deliver their reply

3. The abovementioned Motions to be returnable before this Court on the 23rd day of October 2014 for hearing.”

16. It is this order which has been appealed to this Court. The appeal refers to the refusal of McGovern J. to recuse himself on

grounds of alleged objective bias.

17. These matters in the High Court stand adjourned pending the hearing of the appeal in the Supreme Court.

18. The remaining appellants have raised issues as to a mortgage held by McGovern J. and associations with the respondent.

19. McGovern J. in refusing to recuse himself stated:-

“I’m not going to recuse myself. My wife was in a partnership in which I had no involvement. They may have had

borrowings in the past with Bank of Ireland. All those borrowings, as far as I’m aware, have been discharged. My wife and

I did have a mortgage on our home, like so many other people, and Bank of Ireland were the people we banked with. That

has been paid off. I may have had a mortgage on more than one property with Bank of Ireland. They have all been paid

off. I hold a current account and maybe a deposit account with Bank of Ireland, but I have no borrowings from Bank of

Ireland. In a country this size, if everybody was to recuse themselves on the basis that they have a banking arrangement

of that nature with a bank nothing would ever get done. I’m not a shareholder in Bank of Ireland. I have never been a

shareholder in Bank of Ireland. I merely have a bank account with Bank of Ireland and I don’t see that as any reason why

I should recuse myself and I am refusing that application, because there’s no reason why this matter should be delayed.

It’s in the Commercial List and it has been sent to me to be dealt with and, whatever has to be done, I will deal with it.”

20. The law to be applied on an application for a stay has been stated and re-stated in cases. The Court seeks to maintain a balance

so that justice will not be denied to any party. This means that the circumstances of the case require consideration by the Court. In

Danske Bank v. McFadden [2010] IEHC 119, Clarke J. addressed the principles to be applied by a court in contemplating a stay.

21. This analysis reflects the words of Egan J. in Redmond v Ireland, [1992] 2 IR 362 at p. 368:-

“… the court must form some view (even though not a final view) on the reality of the likely outcome of the appeal”.

22. The law as to objective bias has been clearly stated by this Court: see Bula Ltd v. Tara Mines Ltd [2000] 4 I.R. 412; Kenny v.

Trinity College Dublin [2008] 2 I.R. 40; O’Callaghan v. Mahon [2008] 2 I.R. 514; O’Ceallaigh v. An Bord Altranais [2011] IESC 50.

23. In all the circumstances of the case I would not grant a stay to the remaining appellants.

24. However, in all the circumstances, it would be appropriate to prioritise the appeal in this case. Thus, on the delivery of this

judgment the Court will discuss with the parties directions for the hearing of the appeal.

25. In conclusion, consequently, I would deny the application for a stay, and the motion will be dismissed.