Wheelock v Promontoria (Arrow) Ltd & anor [2020] IEHC 114 (28 February 2020)

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JUDGMENT (Ex Tempore) of Mr. Justice Twomey delivered on the 28th day of

1. This case involves an unjust enrichment claim by the first named defendant, Promontoria,

against the plaintiff, Mr. Wheelock. The within judgment relates to a motion for discovery

2. Mr. Wheelock claims that the nature of the remedy sought by Promontoria against him, is

such as to entitle Mr. Wheelock to know the price that Promontoria paid for Mr.

Wheelock’s loan and security, which it purchased from National Asset Loan Management

Limited (“NAMA”). This loan had originally been extended by Irish Bank Resolution

Corporation (formerly Anglo Irish Bank Corporation Limited (“Anglo Irish Bank” and the

3. In particular, Mr. Wheelock claims that for there to be unjust enrichment it must be at the

‘expense’ of the claimant, and that therefore this issue can only be determined by

considering the price paid for his loan and security by Promontoria, which Mr. Wheelock

seeks in this discovery application. This Court concludes that based on a consideration of

the nature of the unjust enrichment remedy, it is not relevant and necessary for the price

of the loan and security to be disclosed by Promontoria. This Court therefore refuses the

4. This is an application by the plaintiff, Mr. Wheelock for an order for discovery against the

first named defendant, Promontoria, pursuant to Order 31, rule 12 of the Rules of the

“All documents evidencing or recording the purchase price, or sum, paid by

Promontoria in acquiring the Loan Facility and/or Deeds or Mortgage.”

5. The proceedings themselves are concerned with an application by Mr. Wheelock for a

declaration that, inter alia, the Deeds of Mortgage pursuant to which the second named

defendant, Mr. Tennant, was appointed as Receiver over lands in Waterford (the “Monvoy

Lands”), are void as a result of the alleged forgery of Mr. Wheelock’s signature on the

mortgage with Anglo Irish Bank, by his former accountant, Mr. Michael O’Leary (“Mr.

O’Leary”). This mortgage and the related facility letter were subsequently acquired by

6. There are separate proceedings between the parties in which Promontoria seeks judgment

under the facility letter and in which Mr. Wheelock claims that the sums owed under the

relevant facility letter of some €2.6 million are not due, as his signature thereon was

similarly forged by Mr. O’Leary (in linked proceedings Promontoria (Arrow) Limited v.

7. Mr. Wheelock entered a settlement agreement with Mr. O’Leary, who allegedly forged his

signature on the mortgage and the facility letter, and he received a sum of €1.5 million in

order to compromise the proceedings that he had instituted against Mr. O’Leary.

8. It is alleged by Promontoria that all or part of this sum is compensation received by Mr.

Wheelock for his being allegedly bound to repay the sums under the facility letter and to

have the Monvoy Lands subject to a mortgage, arising from the alleged forgery.

9. In the current proceedings, Promontoria counterclaims that Mr. Wheelock benefited from

the purchase and development of the Monvoy Lands using the funds obtained under the

facility letter and secured by the mortgage and that he also benefited from the payment

of the settlement sum of €1.5 million from his former accountant.

10. On this basis, Promontoria alleges that if the mortgage is held to be void in these

proceedings, that this will lead to the unjust enrichment of Mr. Wheelock, in that he will

own the Monvoy Lands mortgage-free and he will have the benefit of €1.5 million

compensation for having his signature forged on that allegedly void Mortgage.

11. In order to defend this counterclaim of unjust enrichment, counsel for Mr. Wheelock

argues that it is relevant and necessary for the purchase price paid by Promontoria for the

loan facility and mortgage to be disclosed to him. This, he argues, is because a key

ingredient in any unjust enrichment claim against a defendant is that the enrichment was

12. On this basis, counsel for Mr. Wheelock argues that in order to determine whether the

alleged enrichment was at Promontoria’s expense, it is relevant and necessary for Mr.

Wheelock to be informed of the price at which Promontoria acquired Mr. Wheelock’s loan

and security. For example, counsel for Mr. Wheelock argues that if Promontoria acquired

Mr. Wheelock’s loans and security for €100,000, then it would be inequitable for

Promontoria to get the benefit of the entire settlement sum of €1.5 million. This is why in

Mr. Wheelock’s view, it is relevant and necessary for Mr. Wheelock to be provided with

the details of the price paid by Promontoria for his loans and related security.

13. Counsel for Mr. Wheelock relied on the decision in Promontoria (Aran) Ltd v. Sheehy

[2019] IEHC 613, in which the disclosure of the amount paid by the plaintiff for the

purchase of loans by the plaintiff from a predecessor bank was ordered, on the grounds

that the proceedings in that case concerned equitable relief, including unjust enrichment,

and so that while it was not normally appropriate to disclose price paid for loans in regular

debt collection cases, it was appropriate to make the order in that case.

14. In this case, it is this Court’s view that in order to determine whether the discovery

sought is relevant and necessary, it is important to consider the nature of the unjust

15. In this regard, a number of cases were opened to this Court which do not appear to have

been opened in the Sheehy case. One of those decisions is the case of Bank of Ireland

Mortgage Bank v. Murray [2019] IEHC 234, in which Baker J. dealt with a claim of unjust

enrichment and in which she relied on the judgment of the House of Lords in Lipkin

Gorman v. Karpnale [1991] 2 AC 548 in which Lord Goff stated that unjust enrichment:

“[…] is founded simply on the fact that [….] the third party cannot in conscience

retain the money – or, as we say nowadays, for the third party to retain the money

would result in his unjust enrichment at the expense of the owner of the money.”

16. It seems clear to this Court that the essence of the unjust enrichment action is whether in

conscience the defendant can retain money at the expense of the owner of that money.

On this basis, the core issue for Baker J. was determining whether the defendant in that

case received the benefit of the money. At paragraph 159 of her judgment in Murray she

“Application to the facts: Did Mr Murray receive the benefit of the monies?

In the light of the clear and non-controverted evidence that the money advanced in

four separate tranches between 2007 and 2009 were paid directly into a joint

current account which was utilised for various day-to-day purposes and other

purposes by Mr and Mrs Murray, I am satisfied that the defendants have each been

shown to have had the benefit of the monies advanced by the Bank.”

17. A second case on unjust enrichment which does not appear to have been opened in the

Sheehy decision is that of HKR Middle East Architects Engineering LC & Ors. v. English

[2019] IEHC 306. At paragraph 394 et seq., McDonald J. set out the principles applicable

to unjust enrichment (namely whether the defendant has been enriched, whether the

enrichment was at the claimant’s expense and whether the enrichment was unjust) and

“In these circumstances, it seems to me that this is a classic case in which the

remedy of unjust enrichment applies and accordingly I find that HKRME [as

opposed to the other two plaintiffs] is entitled to a remedy against Mr. English

arising out of the transfers in question. […] In these circumstances, it seems to me

that the appropriate order to make at this point in the proceedings is to direct an

account and enquiry be taken of the unpaid and lawful liabilities of HKRME.”

18. In light of McDonald J.’s order in the HKR judgment, it is relevant to note that one of the

reliefs sought by Promontoria in its counterclaim for unjust enrichment in these

proceedings is an order directing the taking of all consequential and necessary accounts

19. A UK Supreme Court case which is of particular relevance to this case is that of Bank of

Cyprus UK Ltd v. Menelaou [2016] 2 All ER 913. In that case, the UK Supreme Court first

set out the principles of unjust enrichment in a similar manner to that done by McDonald

20. The UK Supreme Court (at p. 920) then went on to apply those principles to the facts of

According to Goff & Jones on The Law of Unjust Enrichment (8th edn, 2011), para

6–01, the requirement that the unjust enrichment of the defendant must have been

at the expense of the claimant “reflects the principle that the law of unjust

enrichment is not concerned with the disgorgement of gains made by defendants,

nor with the compensation of losses sustained by claimants, but with the reversal of

In my opinion the answer to the question whether Melissa was unjustly enriched at

the expense of the Bank is plainly yes. The Bank was central to the scheme from

start to finish. It had two charges on Rush Green Hall which secured indebtedness

of the £2.2 m. It agreed to release £785,000 for the purchase of Great Oak Court in

return for a charge on Great Oak Court. It was thus thanks to the Bank that Melissa

became owner of Great Oak Court, but only subject to the charge. Unfortunately

the charge was void for the reasons set out above. In the result Melissa became the

owner of Great Oak Court unencumbered by the charge. She was therefore

enriched at the expense of the Bank because the value of the property to Melissa

was considerably greater than it would have been but for the avoidance of the

charge and the Bank was left without the security which was central to the whole

21. It seems to this Court that the principles of unjust enrichment as applied in Menelaou and

as encapsulated in Lord Clarke’s judgment are decisive in determining in this case

22. It seems to this Court that the key principle underlining unjust enrichment is that Mr.

Wheelock should not be in a position where the value of the lands in his ownership are

considerably greater to him, at the expense of the bank (Anglo Irish Bank), or in this case

its successor in title (Promontoria), than it would have been but for the impugned

23. In this instance Mr. Wheelock is allegedly enriched in two ways, firstly if the mortgage is

held to be void, then he becomes the owner of the Monvoy Lands security-free. Secondly,

he received a settlement of €1.5 million from his former accountant which is alleged to be

compensation for the forged facility letter and the forged mortgage.

24. This possible windfall for Mr. Wheelock is at the expense of Promontoria because if the

mortgage and facility letter are held to be void, Promontoria lose valuable rights pursuant

25. In this Court’s view, it is this loss which is the ‘expense’ of Promontoria for the purposes

of determining whether an unjust enrichment is at a plaintiff’s ‘expense’. It is not the

purchase price which it has paid for those facility letters and mortgage. Hence, the

purchase price is not relevant and necessary information for the purpose of these

26. To put the matter another way, the conscience of equity is engaged by the fact that it

would be unconscionable for Mr. Wheelock to walk away with the Monvoy Lands, free of

the mortgage and free of the obligation to pay back the Bank (or more accurately its

successor in title, which acquired the Bank’s rights) which Bank had lent the money on

that security, and, it would be further unconscionable for Mr. Wheelock to retain €1.5

million in compensation from his settlement with Mr. O’Leary for, inter alia, being bound

27. This is why in this Court’s view it would be inequitable for Mr. Wheelock to retain that

benefit of development land worth say €1 million with no obligation to pay back the loan

and with no mortgage on the development land and with the benefit of having also

28. This is also why it would not be inequitable for the purchaser of the loan and the

mortgage, from the original bank, to become entitled to the development land of say €1

million or part or all of the settlement sum of €1.5 million, even if it paid only say

29. The former scenario is unconscionable, the latter scenario is as a result of an astute

30. This is why this Court believes that the price that Promontoria paid for the loans and

mortgage is not relevant and necessary for these proceedings and why the discovery

31. In any case, this Court does not believe that Mr. Wheelock is unduly prejudiced by this

order, since if an account is ordered by the trial judge and if Mr. Wheelock can persuade

the trial judge that it is in fact relevant and necessary to know the purchase price, that is

something that the trial judge can order at that stage.

Result: Discovery refused

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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Wheelock v Promontoria (Arrow) Ltd & anor [2020] IEHC 114 (28 February 2020) URL: http://www.bailii.org/ie/cases/IEHC/2020/2020IEHC114.html Cite as: [2020] IEHC 114

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