Blackrock Hospital shareholder could face restriction on bringing legal actions

Blackrock Hospital shareholder Dr Joseph Sheehan could face an application to restrict his ability to bring legal actions because of the number he has been involved in, a High Court judge has said.

Mr Justice Michael Twomey said he was prepared to consider such an application, based on evidence presented, to justify what is called an "Isaac Wunder" order against Dr Sheehan. These orders require a litigant to seek leave of the High Court before instituting further proceedings against a particular party.

Courts should "not hesitate" to impose such orders on litigants who are monopolising scarce court resources to pursue a private grievance, the judge said.

He made the comments when dismissing Dr Sheehan's claim for fraudulent misrepresentation against financier Talos Capital which provided loans to a Sheehan-controlled company set up to buy loans from the special liquidators of Irish Bank Resolution Corporation (IBRC).

Dr Sheehan had issued proceedings against Talos in New York in which he also claimed misrepresentation against the firm. Talos later brought an anti-suit action against him in England, arguing England had exclusive jurisdiction to deal with this aspect of his case. An English judge found Dr Sheehan to be in breach of an injunction by pursuing the New York proceedings.

Mr Justice Twomey said, in the New York case, Dr Sheehan chose not to give any evidence while, in the English case, no evidence was provided on his behalf to contradict the finding he was in breach of a court order.

IBRC litigation

Dr Sheehan has also been involved in litigation here against IBRC, the judge said. Kieran Wallace, one of the IBRC liquidators, gave evidence IBRC has been sued more times by Dr Sheehan and parties connected to him than by any others since the liquidation of IBRC began.

The judge said there had already been 10 judgments given by the High Court and Court of Appeal in relation to what is essentially a private dispute over the ownership of Blackrock Hospital in cases that have taken up half a year of court time.

It was clear to the court, even before the Talos proceedings, Dr Sheehan and the parties in which he is in dispute over Blackrock Hospital “are monopolising large periods of time of the High Court and Court of Appeal while at the same time there are large backlogs in both courts and thus other litigants are having their right of access to the courts delayed”.

Isaac Wunder orders act as a filter rather than a barrier to right of access to court and in practice they are necessary in a very small percentage of litigants who engage in "never-ending vexatious litigation", many of whom are undeterred by costs orders they can't afford to pay anyway, he said.

In the case of litigants sufficiently wealthy to pay costs, they should not be immune from the prospect of Isaac Wunder orders, he said. The Republic has the lowest number of judges per capita in the OECD and it was important for judges to be alive to the abuse of scarce court resources, he added.

The court was not proposing, at this stage, to consider its own Isaac Wunder order against Dr Sheehan, he said.

No application from a third party had been made for one, but the judge was prepared to consider it if such an application was made. If it was granted it would only apply to future proceedings, not those already before the court, he said.

Substantive case

Earlier, dealing with the substantive case, Mr Justice Twomey said Dr Sheehan had alleged, as a result of fraudulent misrepresentation, he signed a settlement agreement with Talos in relation to a guarantee he provided for a €2.4 million loan by Talos to the Sheehan-controlled company, JCS. This money was for a deposit to purchase the IBRC loans.

It was claimed on behalf of Dr Sheehan, at the time of the settlement agreement, it had been impliedly misrepresented to him by Talos’s solicitors that JCS, which was by then controlled by Talos, had not settled a claim for the return of the deposit when in fact it had done so.

Talos denied the claims.

The judge found there was not a misrepresentation by Talos to Dr Sheehan. He also rejected a second claim by Dr Sheehan relating to reduction of his debt by €1.7 million based on an allegation of concurrent wrongdoing.