ACC Bank Plc v Tobin
| Jurisdiction | Ireland |
| Judge | Ms. Justice Laffoy |
| Judgment Date | 27 July 2012 |
| Neutral Citation | [2012] IEHC 348 |
| Court | High Court |
| Date | 27 July 2012 |
[2012] IEHC 348
THE HIGH COURT
BETWEEN
AND
RSC O.63 r9
RSC O.38 r5
ALLIED IRISH BANKS PLC v MAGUIRE & ORS T/A SEAMUS MAGUIRE & CO SOLICITORS UNREP PEART 28.7.2009 2009/3/686 2009 IEHC 374
DANSKE BANK AS T/A NATIONAL IRISH BANK v O'CEALLAIGH T/A SEAN O'CEALLAIGH & CO SOLICITORS 2012 1 ILRM 428 2011/11/2534 2011 IEHC 216
BANK OF IRELAND MORTGAGE BANK v COLEMAN T/A COLEMAN & CO 2009 3 IR 699
PROFESSIONS
Solicitors
Application to set aside decision of Master striking out summary summons - Application for compensation for breach of solicitor's undertaking - Solicitor acted in capacity as solicitor and borrower - Undertaking to acquire good marketable title and to secure bank valid first legal mortgage over lands - No title to land - Failure to repay loan - Jurisdiction of Master - Whether breach of undertaking - Whether to award compensation for breach of undertaking - Whether to set aside decision of Master - Allied Irish Banks Plc v Maguire [2009] IEHC 374, (Unrep, Peart J, 28/7/2009); Danske Bank v O'Ceallaigh [2011] IEHC 216, [2012] 1 ILRM 428 and Bank of Ireland Mortgage Bank v Coleman [2009] 3 IR 699 considered - Rules of the Superior Courts 1986 (SI 15/1986), O 38, r 5 and O 63, r 9 - Application granted and compensation awarded (2012/234SP - Laffoy J - 27/7/2012) [2012] IEHC 348
ACC Bank plc v Tobin
Facts: The plaintiff had offered a loan facility to the defendant in a personal capacity over three years. As part of that transaction, the defendant had agreed to provide security by a fixed charge over a number of acres of land in County Limerick ("the property").
The defendant in his capacity as a solicitor had provided an undertaking to ensure good title to the property was obtained and also that the plaintiff obtained a valid first legal mortgage over the property. Following the defendant's default on repayment, and the fact he appeared no longer able to comply with the undertaking, the plaintiff served a special summons to obtain relief. In July 2012, a Master had dismissed the summons and awarded costs to the defendant. The plaintiff now sought to set aside the Master's decision and reliefs based upon the undertaking.
Held by Laffoy J, that the Court would take the opportunity to condemn the defendant's conduct in providing an undertaking he failed to comply with, and indeed could never comply with, in his capacity as an officer of the Court. Further, the defence provided was an abuse of process in itself.
The Court considered the Master had erred in dismissing the plaintiff's summons. The Court preferred the plaintiff's submissions that the matter should not be relisted for plenary hearing, but should be decided immediately. In the instant case, the terms of the undertaking were clear and the defendant was clearly in breach. As such, it was proper that the defendant should compensate the plaintiff for the breach of that undertaking. Given the wilful breach, the Court would not reduce the compensation to reflect the current value of the property. Danske Bank v O'Ceallaigh [2011] IEHC 216 considered.
Judgment of Ms. Justice Laffoy delivered on 27th day of July, 2012.
1. In the special endorsement of claim on the special summons in this matter, which issued on 17 th April, 2012, the plaintiff seeks certain reliefs on foot of a solicitor's undertaking given by the defendant to the plaintiff, in his capacity as a solicitor. Coincidentally, the defendant was also the borrower from the plaintiff. The material aspects of the transaction are set out below.
2. On 2 nd July, 2003 the plaintiff issued a letter headed "Letter of loan sanction & agreement" (the Loan Offer) to the defendant in his personal capacity offering him a loan in a maximum amount of €201,000 on the terms therein specified. It was expressly provided in the Loan Offer that the term of the loan facility was three years. It was also expressly provided that the plaintiff would get security by way of a first fixed charge over 52 acres of land at Ashroe, Murroe, County Limerick (the Secured Property). The method of repayment was set out in the Loan Offer. While it was provided that the principal should be repaid from the sale of sites in Murroe, County Limerick, it was expressly stipulated that "in any event the Loan Facility will be repaid in full on or before the 1 st August, 2006". The defendant, in his personal capacity, signed the "Acceptance of borrower" form at the end of the Loan Offer on 1 st August, 2003.
3. On 8 th December, 2003 the defendant, as a solicitor practising as "John A. Tobin, Solicitors" gave a solicitor's undertaking (the Undertaking) to the Bank. The Undertaking was obviously in the Bank's standard form and conformed to the form of undertaking used by most lending institutions in this jurisdiction at the time. The defendant, in his capacity as borrower, authorised the giving of the Undertaking on 8 th December, 2003, in a form at the end of the document headed "Client's Authority and Retainer". The Undertaking related to "lands at Ashroe Murroe County Limerick". In broad terms, in the Undertaking the defendant undertook as follows:
(a) To ensure that the defendant, in his personal capacity as borrower, acquired good marketable title to the Secured Property.
(b) To secure that the plaintiff obtained a valid first legal mortgage over the Secured Property, complying with the specific requirements set out, including the requirement that, within one month from the initial loan cheque issue, the stamped mortgage or charge would be lodged for registration in the Registry of Deeds or the Land Registry, and that there be completed and lodged with the plaintiff a report and certificate of title in the Bank's standard form as soon as practicable together with all the documents constituting the plaintiff's security.
4. The defendant, in his personal capacity and as borrower, drew down the funds the subject of the Loan Offer on 18 th February, 2004. The defendant, in his personal capacity as borrower, defaulted on repayment of the loan a number of years ago. As is averred to in the grounding affidavit of Sheila English sworn on 3 rd May, 2012, the balance due on the loan as at 30 th April, 2012 was €266,374.12.
5. It appears that the Secured Property is registered on two Land Registry folios: Folio 41955F County Limerick; and Folio 41956F County Limerick.
6. The copy of Folio 41955F exhibited in the grounding affidavit discloses that the lands registered on that folio comprise part of the townland of Ashroe containing 2.0700 hectares (equivalent to approximately 5 acres). On 7 th August, 2003 the defendant was registered as full owner on the folio in succession to Cormac Quigley. However, on 1 st December, 2008 two named individuals were registered as full owners in succession to the defendant. Prima facie, the defendant does not have any title to the lands registered on Folio 41955F in any capacity.
7. As appears from the copy of the folio exhibited in the grounding affidavit, the lands registered on Folio 41956F comprise part of the townland of Ashroe containing 28.8850 hectares (equivalent to approximately 71 acres). The registered owner on that folio is Cormac Quigley, who was registered on 3 rd November, 2000.
8. It is averred in the grounding affidavit of Sheila English that in or about 2010 the defendant proposed a transaction involving a land swap with part of the Secured Property. However, it is averred that the defendant never provided the documentation required to allow for an assessment of the proposal and that the plaintiff never consented to the same. However, in this context there is exhibited an undated transfer in relation to Folio 41956F from Cormac Quigley to the defendant, which appears to have been executed by Cormac Quigley. However, the transfer is not stamped. There is also exhibited an undated deed of charge in the plaintiff's standard form executed by the defendant in favour of the plaintiff charging the lands registered on Folio 41955F, which has not been stamped either. Obviously, as Folio 41955F is now registered in the names of third parties, that charge, even if it were stamped, could not be registered against Folio 41955F.
9. On the evidence put before the Court by the plaintiff, the defendant is undeniably in...
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