Ireland: A Speed Bump For Purchasers Of Loans


Following the acquisition of a loan portfolio from Irish Bank Resolution Corporation Limited (“IBRC”), Mars Capital Ireland Limited (“Mars”) sought an order substituting it as plaintiff in lieu of IBRC, in the proceedings against the defendants.

As there were over 500 Circuit Court proceedings relating to loans in the portfolio, rather than bringing standalone applications in each set of proceedings, Mars adopted the practice of making one omnibus application for an order substituting it as plaintiff in lieu of Irish Nationwide Building Society, Anglo Irish Bank Corporation Limited, or IBRC2 as appropriate in each of the Circuit Court proceedings.

The Court referred to the standard of proof required for a substitution application, as determined by the High Court in Irish Bank Resolution Corporation Limited –v- Comer3 and stated:

“I am satisfied on the evidence set out in the affidavits…that the applicant has adduced prima face evidence that IBRC, the existing plaintiff has by a deed of transfer assigned to the applicant all its rights, title, interests and benefits in the facilities to the defendants in these proceedings and the defendants as outlined in the other pleadings.”

On that basis, the Court indicated that it would have been entitled to make the orders sought by the plaintiff. 

However, having regard to the fact that the plaintiff had issued an omnibus application, the Court then determined that a further question arose as to whether the substitution was in the interests of justice and that this fell to be considered:

“not only from the point of view of the costs that might be saved by the applicant but also the impact of such an order on the administration of justice in the Circuit Court”.

The Court considered the administrative burden that might be imposed on Circuit Court offices and stated that:

“It is important that steps should not be taken (even if superficially attractive) which have the potential to confuse or disrupt the orderly local administration of each case whether in court or in the court office and that each of the 576 cases should be seen to be dealt with individually in its proper local jurisdiction.”

Noting that there had been a number of errors in the schedule of cases originally submitted and that an updated schedule had been furnished, the Court concluded that:

“This indicates to me that despite the considerable work done in bringing this application when one tries to consolidate this large number of cases throughout the State for this purpose, mistakes occur.”

Separately, the Judge noted that “though notice is not a requirement under the rules it may prove to be a more satisfactory and efficient method of advancing cases”4.

Likely effects of the judgment

Importantly, the decision affects Circuit Court cases only. The option of making an omnibus application in the High Court is not affected by this decision. 

However, the finding that each of the Circuit Court cases should be dealt with individually rather than leaving it to the discretion of the Judge in the appropriate circuit to deal with an omnibus application in respect of each circuit appears likely to require hundreds of separate applications to be made across all of the circuits in Ireland.


Somewhat unusually, a single omnibus application was made to the President of the Circuit Court in this instance rather than an omnibus application to each circuit. It seems that the concerns expressed by the Court may have been alleviated had an application been made in each circuit relating to cases within the respective jurisdiction.

However, in light of the decision, it seems likely that acquirers of loan portfolios who wish to be substituted as plaintiff in any related Circuit Court proceedings may face difficulties if an omnibus application is issued in each circuit.

Consequently, the additional time and cost implications will need to be considered at both the diligence stage of any acquisition and, subsequently, when a decision is being made regarding the merits of continuing with any such proceedings or identifying alternative approaches on a case by case basis.

Separately, the judgment arguably conflates the interests of the administration of justice with mere administrative convenience,5 but the point does not appear to have been fully argued.


1 High Court unreported, McDermott J, 6 July 2016.

2 Anglo Irish Bank Corporation plc (“Anglo”) is a former name of Irish Bank Resolution Corporation Limited. Pursuant to a transfer order made by the High Court under the Credit Institutions (Stabilisation) Act 2010, the assets and liabilities of Irish Nationwide Building Society transferred to Anglo.  

3 [2014] IEHC 671.

4 In Comer, Kelly J (as he then was) noted, at paragraph 38, that the application had been made on notice and that in the circumstances of that case, he thought it was the wise thing to do. It should be noted that Kelly J had heard the application for admission of the Comer proceedings to the Commercial List and, at the time when he gave the judgment on the substitution application, counsel for the defendants had strongly resisted that application. Accordingly, it is arguable that the court’s view on the wisdom of bringing that application on notice was case specific.

5 In the Northern Irish case of in the matter of an application by Maurice Darley for judicial review (Queen’s Bench (Crown side) Unreported, Girvan J., 16 June 1997) the court noted: “It is important to note that the court in that case stressed the overriding principle is that justice must be done. Ensuring administrative convenience and doing justice as between the parties did not always amount to the same thing. If there is a conflict between the two, the interests of justice, of course, must prevail”.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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