High Court refuses preliminary issue trial on statute of limitations due to lack of factual agreement and mixed questions.

THE HIGH COURT

[2025] IEHC 401

Record No. 2018/9858/P

BETWEEN

VICO PROPERTIES LIMITED

PLAINTIFF

AND

BANK OF SCOTLAND PLC AND LLOYDS BANK PLC

DEFENDANTS

JUDGMENT of Ms. Justice Marguerite Bolger delivered on the 10th day of July 2025.

1. This is the defendants’ application for a trial of two proposed preliminary issues pursuant to O. 25, r. 1 of the Rules of the Superior Courts or, alternatively, an order pursuant to O. 34, r. 2 directing that the proposed preliminary issues be raised for the opinion of the Court, either by special case or in such other manner as the Court may deem expedient. For the reasons set out below, I am refusing this application.

Legal principles on the trial of a preliminary issue

2. There is large agreement between the parties in relation to the legal principles on which a court will determine an application to direct a trial of a preliminary issue but differing views on the application of the principles to the relevant facts of this case. The default position is a unitary trial described by McKechnie J. in Campion v. South Tipperary County Council [2015] 1 IR 716, at para. 22, as “the starting point”. McKechnie J. went on to give an authoritative summary of the legal position, at para. 35: “there cannot exist any dispute about the material facts as asserted by the relevant party: such can be agreed by the moving party or accepted by him or her, solely for the purposes of the application;

there must exist a question of law which is discrete and which can be distilled from the factual matrix as presented”. He highlighted that a key consideration of the court will be whether the issues, which it is sought to be tried on a preliminary basis, will fall for determination in the substantive proceedings (at para. 52).

3. The jurisprudence emphasises the need for “questions of pure law where no evidence is needed and no further information is required” (as per O’Higgins C.J. in Tara Exploration and Development Company Ltd v. Minister for Industry and Commerce [1975] IR 242). In Kilty v. Hayden [1969] IR 261, Ó Dálaigh C.J. said O. 25 was also concerned with the separate trial of a discrete point of law dissociated from issues of fact.

4. Where a plea involves mixed questions of law and fact, and issues of law cannot be determined as discrete standalone issues of law on the basis of assumed facts, an application to order the trial of a preliminary issue may be refused, as Laffoy J. did in Dempsey v. Minister for Education and Science [2006] IEHC 183.

5. Issues pertaining to the Statute of Limitations are a “classic example” of an issue which could “dispose of the entire action or otherwise be likely to lead to a substantial saving in time and cost”, as per Faherty J. in Elliott v. ACC Bank Plc [2020] IECA 278. Collins J. in Smith v. Cunningham [2021] IECA 268, referred to the “obvious practical benefit” in determining a Statute of Limitations point on a preliminary basis where it could be done justly and fairly. However, a Statute of Limitations point that requires determination of facts, such as a plea of fraudulent concealment pursuant to s. 71 of the Statute of Limitations 1957, would not necessarily be suitable for the trial of a preliminary issue, as in Buttimer v. Bank of Scotland Plc [2020] IEHC 439. However even where facts are agreed: “…the court must then assess whether those agreed facts provide an adequate evidential basis for a just determination of the limitation issue or whether the issue is such that it can properly be determined only at the trial of the proceedings. As is all too evident from the authorities discussed above, in cases such as this an intense examination of the facts will be necessary in order to determine the issue of limitation and in some instances that can only properly be done at trial. In such cases, the pragmatic attraction of an early determination of a limitation defence will have to yield to the requirements of justice” (Collins J. in Smith v. Cunningham, at para. 62).

Proposed preliminary issues

6. The defendants propose the following issues to be tried as preliminary issues: a. Whether the Plaintiff’s claim against the Defendants, or any part thereof, is statute-barred by operation of section 11 of the Statute of Limitations Act 1957, as amended and/or as a matter of English law (if applicable), whether pursuant to section 2 and/or 5 of the Limitation Act 1980 or otherwise. b. Whether the Plaintiff did or would have met the “Sophisticated Customer Criteria” contained in the Undertaking given by the Defendants to the Financial Services Authority on 29 June 2012, as amended by Supplemental Agreement made between the Defendants and the Financial Services Authority on 4 February 2013, such that the Plaintiff was or would have been ineligible for the Past Business Review provided for in that Undertaking, even if the sale of the interest rate swap was regulated by the Financial Services Authority as contended for by the Plaintiff (and denied by the Defendants).

Background

7. The plaintiff is a property company to which loan facilities were advanced by Bank of Scotland Ireland (BOSI) between 2003 and 2008. In June 2008, a condition of a further loan required the plaintiff to hedge 50% of their then debt for a period of three years by purchasing a three-year interest rate swap (hereinafter referred to as “IRDP”) which is a derivative product between two counterparties that provides for an exchange of interest dependent on the movement in a benchmark rate such as LIBOR. For the purpose of this application, the defendants accept that this was sold to the plaintiff by the first named defendant. In 2012, the UK Financial Services Authority (hereinafter referred to as “FSA”) launched a redress scheme to compensate certain customers affected by mis-selling of derivative products. By letter of 19 September 2012, the second named defendant wrote to the plaintiff informing them that they were potentially in scope of the FSA review. The second named defendant wrote again to the plaintiff, by letter of 15 November 2012, in which they stated:- “We have now identified that you were sold Interest Rate Derivative Products by Bank of Scotland (Ireland) Ltd. Bank of Scotland (Ireland) Ltd is regulated by the Irish Financial Regulator and not the FSA. Accordingly, any Interest Rate Derivative Products sold by Bank of Scotland (Ireland) Ltd are outside the scope of the FSA review.”

8. That letter made no mention of the Sophisticated Customer Criteria which is the subject matter of the defendant’s proposed second preliminary issue and did not suggest any other reason for the plaintiff’s exclusion from the FSA redress scheme other than because it claimed that the IRDP was sold by BOSI which was regulated by the Irish financial regulator and not by the UK FSA. Shortly after the November letter, the defendants sold the plaintiff’s loan portfolio to a fund which placed the plaintiff into receivership.

The pleading

9. The plaintiff’s statement of claim pleads:

(i) Breach of contract/negligence in relation to the sale of the IRDP.

(ii) A duty of care owed to the plaintiff in relation to “conditioning their continued support on the Plaintiff acquiring an IRDP” which the defendants breached.

(iii) Negligent misstatements and misrepresentations in the letter of 15 November 2012 which they said were made falsely. The statement of claim went on to plead, at para. 32: “Further and/or in the alternative, in the unlikely event that the Plaintiff was subsequently denied access to the Scheme for any other reason, the Plaintiff would have then had the right to institute a mis-selling action against the Defendants in the United Kingdom. However, this opportunity was denied to the Plaintiff due to its reliance on the representations made by the first and/or second named Defendant. By reason of this loss of opportunity the Plaintiff has suffered damage loss and expense, particulars of which will be provided.”

10. The defendants’ defence pleaded, by way of a preliminary objection, that the plaintiff’s claim was time barred pursuant to the Statute of Limitations 1957, having accrued, at the latest, in excess of six years prior to the commencement of these proceedings. It also pleaded, at para. 42, that: “…had the regulated activity (i.e. the sales process) and/or the sale of the Swap otherwise been regulated by the FSA – which is denied –, the Swap would have been out of scope of the Past Business Review on the basis that the Plaintiff met the ‘Sophisticated Customer Criteria’ as agreed in the Supplemental Agreement between the Defendants and the FSA”.

The defence went on to plead at para. 43 that: “The Plaintiff would have met the ‘Sophisticated Customer Criteria’ for the following two (separate and distinct) reasons:

i) At the time of the sale of the swap on 31 October 2008, the Plaintiff had the necessary experience and knowledge to understand the service to be provided and the type of product or transaction envisaged, including its complexity and the risks involved.

ii) The aggregate notional value of all IRDPs in existence immediately after the Swap was entered into by the Plaintiff on 31 October 2008 was greater than £10,000,000 (the notional value of the Swap alone being £13,775,222.67)” and para. 48: “…the Plaintiff was not eligible for redress under the Past Business Review. It is denied that the Plaintiff would have the right to institute, and/or would have succeeded in, an action for mis-selling against the Defendants in the United Kingdom and the Plaintiff is put on full proof of that assertion.”

11. The plaintiff filed a reply denying the contents of the Defence and pleading, inter alia, that the plaintiff was already within the scope of the FSA review prior to the supplementary agreement, and that the supplementary agreement did not change that position. The reply disputed that the plaintiff met the Sophisticated Customer Criteria and pleaded that the amended definition introduced by the supplemental agreement did not capture the plaintiff.

Facts accepted by the defendants

12. For the purpose of this application, the defendants accept the facts pleaded by the plaintiff at paras. 1 to 13 and 17 to 24 of the statement of claim and para. 5 of the reply, i.e. that the IRDP was sold to the plaintiff by the first named defendant. The particulars of breach of contract, negligence, breach of duty and misrepresentation in the statement of claim were not accepted and neither was the plea at para. 32 of the statement of claim about the plaintiff’s asserted right to institute mis-selling proceedings against the defendants in the UK.

Not all facts are agreed: Questions of English law

13. English law is relevant to both of the proposed preliminary issues. The defendants have secured an experienced King’s Counsel expert in English law who has sworn a lengthy affidavit setting out his view that the English court would find in favour of the defendants on both proposed preliminary issues. The level of detail in his affidavit alone confirms that both issues are complex and far from being straightforward. Whilst the opinion provided is detailed, it does not address the plaintiff’s proposed s. 71 Statute of Limitations point as the expert stated, at para. 32 of his affidavit: “An extended limitation is also available under s.32 of the Limitation Act 1980 in cases of fraud, deliberate concealment or mistake. I do not, however, consider this further as I have not identified any plea of fraud or deliberate concealment in this case relevant to the Mis-Selling Claims”. That position was correct as of the date on which the affidavit was sworn on 9 April 2024 insofar as it refers to a “plea”. It was not until the affidavit of the plaintiff’s solicitor was sworn on 26 July 2024 that the plaintiff indicated its intention to rely on s. 71 and seek to make a case of fraudulent concealment in the pleadings.

14. It should not be controversial to state that points of foreign law put before an Irish court constitute issues of fact. This position is accepted by the defendants as “strictly correct” (at footnote 22 of its written submissions) but they also contend that the points of English law arising in the within proposed preliminary issues are issues of private Irish international law. The defendants highlight that the plaintiff has not sought to contest the opinion of the defendants’ expert on English law (a point to which I return below) and cites the decision of Clarke C.J., in Walsh v.

National Irish Bank [2013] IESC 2 where the Supreme Court was asked to consider a possible obligation by a bank to disclose confidential information about its customer accounts held in the Isle of Man to the Irish Revenue Commissioner. An opinion from an Isle of Man firm of lawyers was exhibited in an affidavit sworn by one of the Bank’s officials. There was no sworn evidence from the author of the opinion verifying its content, and no counter view put before the Court about the law of the Isle of Man. At para. 6.2, Clarke J. stated: “…in the ordinary way, foreign law is treated as a matter of fact to be established, in the Irish courts, in the ordinary way by sworn evidence of that fact.

An affidavit from an appropriately qualified lawyer is the normal way in which evidence as to foreign law is to be established. Likewise, a party who wishes to dispute such evidence is required to put forward its own contrary evidence from a likewise suitably qualified lawyer. In the case of a dispute, then it may well be necessary that both lawyers be cross-examined so as to assist the Irish court in coming to a conclusion”. He went on, at para. 8.2: “It is also of the utmost importance that the evidential basis for any case is properly made out in the High Court.

That evidential basis includes proper evidence of any foreign law which is said to be relevant.” At para. 8.11 he stated: “In that context it does seem to me to be important to emphasise a distinction between two different types of circumstances where questions of foreign law may be relevant. In the first type of circumstance, foreign law is relevant because, in accordance with the principles of Irish private international law (or increasingly frequently by virtue of relevant European Union regulation) it is, as a matter of Irish law, required that the Irish courts apply an appropriate foreign law in determining a specific dispute.

In a particular context, Irish private international law or appropriate European Union regulation may mandate that the law to be applied in respect of a contractual dispute is the law of a specific foreign jurisdiction. In hearing evidence of, and determining, the relevant principles of the specified foreign law of contract, the Irish courts are doing no more than applying Irish private international law. Such an exercise is not really concerned with the comity of courts. Rather, it is a necessary part of the proper determination of a legal dispute in accordance with Irish law precisely because Irish law recognises the law of a foreign jurisdiction as being applicable rather than Irish law.

Such cases are not ones where the Irish courts are obliged, in accordance with Irish principles of comity, to recognise the jurisdiction of the courts of a foreign country” (my emphasis).

15. Counsel for the defendants submitted that in the absence of an affidavit from an expert on English law for the plaintiff, there can be no factual dispute between the parties and even if there are differences between experts, this can be addressed by way of a preliminary trial at which evidence could be given. That submission does not, in my view, sit comfortably with the need for there to be a discrete question of law that can be readily distilled from the factual matrix before the court can direct the trial of a preliminary issue. Insofar as it was suggested that this less conventional situation might come within the ‘special case’ envisaged by O. 34 r. 2, I do not agree. The approach contended for would constitute a significant departure from the well-established rule and practice that the trial of a preliminary issue, as an exception to the general principle of a unitary trial, requires a discrete issue of law on agreed facts.

16. I do not think the defendants really assert that issues of English law are anything other than issues of fact. Rather, they contended in oral submission that, in the absence of the plaintiff putting forward an expert in English law challenging the opinion of their expert, that the issue can be dealt with as a preliminary issue. However, this submission does not take adequate account of what the plaintiff’s solicitor has averred to in his replying affidavit disputing the defendants’ right to have a trial of the proposed preliminary issues, both of which are acknowledged by the defendants to involve questions of English law. At para. 17, the plaintiff’s solicitor says: “…foreign law can only be proved by way of evidence, and that issues of foreign law are matters of Fact. It is clear that, on this point alone, the facts in the matter have not been agreed, and that the matter is not suitable for trial of a preliminary issue. I say and believe that, it seems very likely, that there will need to be expert evidence, from both sides, on matters of English law, at the trial of the action.”

17. The affidavit of the defendants’ solicitor grounding this application confirms, at para. 39, that although they: “…are prepared to accept (for the purpose of the trial of the Proposed Preliminary Issues only) that Vico Properties’ contractual relationship was with Bank of Scotland plc, the Defendants will also lead evidence that any claim based on that asserted contractual relationship is statute-barred as a matter of English law”. Para. 40 of that affidavit states: “Whereas the Defendants propose to have the question of whether this aspect of Vico Properties’ claim is statute-barred dealt with as a matter of Irish law, for completeness the affidavit of Mr Cutress K.C. also deals with the relevant English law considerations which would arise in the event that the Court was of the view that the issue fell the be determined by reference to English law”. The second proposed preliminary issue in relation to the FSA review is also acknowledged to involve matters of English law.

18. Thus, it is very clear and fully acknowledged by the defendants that the determination of both proposed preliminary issues will involve questions of English law.

Therefore, they both involve issues of fact on which expert evidence will be required, with the possibility of cross-examination of the expert, as occurs regularly with many expert witnesses who furnish expert opinions for the assistance of the court. The fact that the plaintiff has not yet furnished an affidavit from an expert on English law does not reduce the issue to the situation that applied in Walsh v. NIB or render the matter suitable or appropriate for a determination for a preliminary trial.

19. The plaintiff has made it clear that it is very likely that there will be a need for expert evidence, from both sides, on matters of English law. That is not just the opinion of a lay person but is the opinion of the plaintiff’s solicitor. It is also set out in the written submissions of the plaintiff’s counsel, at para. 28, i.e. “it seems inevitable that there will be expert evidence on both sides in relation to [English law]”. Counsel for the plaintiff argued, in oral submissions, that the plaintiff’s legal team is entitled to form their own opinion on English law and, whilst their opinions might not be admissible evidence, they were entitled to use those opinions in deciding whether facts were agreed or not. There is merit in that submission.

20. It is clear that the plaintiff does not agree with the facts as put forward by the defendants about how the English court would approach the two proposed preliminary issues. The plaintiff has formed that view with the assistance of their solicitor and counsel. The plaintiff is entitled to resist the defendants’ application for a trial of preliminary issues on the basis that the factual matrix underpinning the questions of law are not agreed and that the matters are, therefore, unsuitable for a preliminary trial.

21. If I am wrong on that, I am satisfied that the two proposed preliminary issues, insofar as they require evidence of English law, involve mixed questions of law and fact and are, therefore, not discrete questions of law. I follow Laffoy J. in Dempsey where she refused to order the trial of a preliminary issue on the basis of assumed facts pleaded in the statement of claim because the pleas involved mixed questions of law and fact, and the issues of law identified could not be determined as discrete “standalone” issues of law on the basis of assumed facts.

Fraudulent concealment: Section 71

22. The plaintiff asserts a further and separate factual dispute on the Statute of Limitations point because the plaintiff has indicated its intention to seek to amend its reply to plead fraudulent concealment pursuant to s. 71 of the Statute of Limitations, having previously raised the issue in pre-action correspondence of 27 November 2018. The defendant challenges the bona fides of the plaintiff’s stated intention and suggests it is being proposed to thwart the within application.

23. The defendants pleaded the Statute of Limitations in their defence in a generalised way. It was not until the defendants’ solicitor swore an affidavit to ground the within application that the detail of the defendants’ Statute of Limitations plea was scoped out at para. 30(i) of the affidavit where it was averred: “By way of preliminary objection, the Defence asserts that Vico Properties’ claim is statute-barred. In particular, Vico Properties’ claim for breach of contract and negligence relate to the ISDA Master Agreement and the Confirmation, which were both executed in 2008 and the IRDP entered into as confirmed by the Confirmation had a term of three years to 2011 – more than six years prior to the commencement of these proceedings in 2018.” In those circumstances, the plaintiff is not precluded from relying on its intention to amend its reply, in its opposition to the within application. Issues will remain irrespective of the outcome of the proposed preliminary issues

24. The defendants describe the plaintiff’s case as a mis-selling claim and asserts it is statute barred. The plaintiff says its case is much wider, citing its plea that the defendants’ letter of 15 November 2012 contained misrepresentations, misstatements and negligent misstatements made fraudulently, pleas that may not be extinguished by any successful defence the defendants may have pursuant to the Statute of Limitations. The plaintiff has also pleaded, at para. 32 of its statement of claim, that even if they were excluded from the FSA redress scheme (the second issue the defendants seek to have determined as a preliminary issue), that they would have had the right to institute a mis-selling action against the defendants in the UK. The defendants deny this at para. 48 of their defence. That plea is not amongst those the defendants are prepared to accept for the purposes of the within application. Thus, that aspect of the plaintiff’s case will remain to be determined even if the defendants were to be fully successful in the preliminary trial it seeks.

Decision

25. This application has insufficient agreement on the factual matrix on which the proposed preliminary issues are based to be suitable for the preliminary trial that is sought, primarily arising from the lack of agreement on the applicable English law but also because of the plaintiff’s intention to seek to plead fraudulent concealment pursuant to s. 71 of the Statute of Limitations. Even if the trial of preliminary issues that is sought were to be allowed, it would not deal with all issues in the case.

26. I refuse this application and direct that all matters are to be dealt with by way of the default position of a unitary trial.

Indicative view on costs

27. In accordance with s. 169 of the Legal Services Regulation Act 2015, my indicative view on costs is that the plaintiff, having succeeded in resisting the defendants’ application, is entitled to their costs. I will put the matter in for mention at 10.00am on 29 July 2025 for such further submissions that the parties may wish to make on costs and any other orders that require to be made at this stage.

Counsel for the plaintiff: Colm Ó hOisín SC, Hugh Moulton BL

Counsel for the defendants: Kelley Smith SC, Hugh McDowell BL