The Court of Appeal recently upheld a High Court decision to re-enter proceedings settled in 2011 for judgment in circumstances where the Defendants failed to comply with the terms of the settlement agreement.
In Solicitors Mutual Defence Fund Limited v Costigan and Ors Practising under the style and title of Bloxham and Ors [2021] IECA 20, the Plaintiff had commenced proceedings in 2009 against former stockbrokers Bloxhams, alleging that they had negligently advised it to invest a significant sum of money into investment bonds, which had then lost 97% of their value. The parties subsequently agreed to settle the proceedings in advance of trial in 2011, pursuant to which the Defendants agreed to pay the Plaintiff €8.4 million in agreed instalments. As part of the settlement agreement, the parties agreed that the proceedings would be struck out on consent with liberty to re-enter into the Commercial Court for judgment if the Defendants failed to make the agreed payments.
The Defendants subsequently defaulted on their payments to the Plaintiff and in June 2019, the Plaintiff sought to have the proceedings re-entered into the Commercial Court list. The Defendants argued that the Court no longer had jurisdiction to deal with the proceedings (and was rendered “functus officio”) in circumstances where the matter had been struck out and the Plaintiff was required to issue fresh proceedings should it wish to enforce the settlement agreement.
Mr. Justice McDonald in the High Court ruled that where the proceedings had been struck out with “liberty to re-enter”, it was clear that the parties had “envisaged a potential future role for the Court”. However, he said that this did not extend to re-litigating the original matter. Rather, it allowed for the matter to be re-entered in order to recover the balance due and owing from the Defendants in line with the settlement agreement.
Mr. Justice McDonald’s decision was upheld by Mr. Justice Binchy in the Court of Appeal, who outlined that refusing to re-enter the proceedings went against the express intention of the settlement agreement.
The decision illustrates the Court’s willingness to facilitate the re-entry of proceedings to determine specific matters in dispute, however it is clear that Courts will not allow parties to use this mechanism to re-litigate the original subject matter of their claim.
A full copy of Mr. Justice Binchy’s decision is available here.
