ACC Loan Management Ltd v Kelly

JurisdictionIreland
CourtCourt of Appeal (Ireland)
JudgeMs. Justice Baker
Judgment Date22 Mar 2019
Neutral Citation[2019] IECA 99
Docket NumberAppeal No. 2017/364

[2019] IECA 99

THE COURT OF APPEAL

Baker J.

Whelan J.

McGovern J.

Baker J.

Appeal No. 2017/364

BETWEEN/
ACC LOAN MANAGEMENT LIMITED
PLAINTIFF/RESPONDENT
- AND -
OLIVER KELLY

AND

MARGARET KELLY
DEFENDANTS/APPELLANTS

Summary judgment – Bona fide defence – Cross-claim – Respondent seeking summary judgment – Whether the appellants had established a bona fide or credible defence to the claim for summary judgment

Facts: The defendants/appellants, Mr and Mrs Kelly, appealed to the Court of Appeal from an order made by the High Court that the plaintiff/respondent, ACC Loan Management Ltd (the Bank), be entitled to summary judgment in the sum of €671,097.14 against the defendants, Eagar J having determined that the defendants had advanced no arguable defence to the claim. Eagar J delivered a written judgment on 10 July 2017 in which he set out the evidence and noted the defences asserted by the defendants which he considered did not meet the threshold required to remit the proceedings for debt to plenary hearing. The defendants appealed the judgment and order of Eagar J on the following grounds: (a) that at least €489,000 of personal monies alleged to have been deposited with the Bank since 2006 is “missing”; (b) that the sums of €95,000 and €75,000 were unlawfully taken by the Bank from deposit accounts operated by the defendants with the Bank and applied to loan accounts in 2006; and (c) that the Bank failed to honour an agreement allegedly made in 2006 to provide funding to the defendants for a proposed development at 3 and 4, St. Laurence’s Park, Wicklow town, which it was alleged caused a loss of €4m. The primary ground of opposition advanced by the Bank to the appeal was that the matters sought to be raised before Eagar J in defence of the claim were matters which more properly are to be characterised as cross-claims or counter-claims, but that even taking at their height the assertions made by the defendants in the replying affidavits before the High Court, the matters therein deposed to were mere assertions and did not meet the threshold of establishing that a bona fide defence or cross-claim exists.

Held by Baker J that the trial judge was correct and that the defendants did not establish a bona fide or credible defence to the claim for summary judgment. However, Baker J considered that the trial judge did fall into error in not considering the possible counterclaim or cross-claim of Mr and Mrs Kelly and, in the circumstances and having regard to the authorities regarding the correct approach to such counterclaim or cross-claim, Baker J considered that the execution of judgment was to be stayed on the condition that Mr and Mrs Kelly commence proceedings regarding the “missing” funds within three months, and the proceedings be closely case managed thereafter with a view to bring them to a conclusion. Baker J held that the Bank was to have liberty to bring any motions it considered appropriate in the context of those intended proceedings, should they be issued, or arising from the order of the Court. Baker J held that, for the avoidance of doubt, the execution of judgment was not to prevent the registration of any judgment mortgage by the Bank, and what was to be stayed was any other mode of execution including the taking of any action on foot of judgment mortgage is registered.

Baker J held that the appeal would be allowed in part.

Appeal allowed in part.

JUDGMENT of Ms. Justice Baker delivered on the 22nd day of March 2019
1

This is an appeal from an order made by Eagar J. that ACC Loan Management Ltd (‘the Bank’) be entitled to summary judgment in the sum of €671,097.14 against the defendants, he having determined that the defendants had advanced no arguable defence to the claim.

2

Eagar J. delivered a written judgment on 10 July 2017, ACC Loan Management Ltd. v. Kelly [2017] IEHC 454, in which he set out the evidence and noted the defences asserted by the defendants which he considered did not meet the threshold required to remit the proceedings for debt to plenary hearing.

3

The defendants appealed the judgment and order of Eagar J. The grounds of appeal may be summarised as follows:

(a) that at least €489,000 of personal monies alleged to have been deposited with the Bank since 2006 is ‘missing’;

(b) that the sums of €95,000 and €75,000 were unlawfully taken by the Bank from deposit accounts operated by the defendants with the Bank and applied to loan accounts in 2006; and

(c) that the Bank failed to honour an agreement allegedly made in 2006 to provide funding to the defendants for a proposed development at 3 and 4, St. Laurence's Park, Wicklow town, which it is alleged caused a loss of €4m.

4

The appeal is fully defended.

5

The appellants are litigants in person and Mr. Kelly made the arguments on behalf of himself and his wife who attended at the hearing of the appeal. The primary ground of opposition advanced by the Bank to the appeal is that the matters sought to be raised before Eagar J. in defence of the claim were matters which more properly are to be characterised as cross-claims or counter-claims, but that even taking at their height the assertions made by the defendants in the replying affidavits before the High Court, the matters therein deposed to are mere assertions and do not meet the threshold of establishing that a bona fide defence or cross-claim exists.

6

The main focus of oral argument by Mr. Kelly at the hearing of the appeal was what he termed the ‘missing money’, which he says represents funds lodged by the defendants into a deposit account or accounts with the Bank, and in respect of which the Bank has declined or failed to answer his queries.

7

Notwithstanding that Mr. Kelly made an assertion of fraud in one sentence in his second last affidavit before the High Court, his assertion is that the Bank mistakenly, rather than as a result of fraud, failed to credit the deposit accounts with substantial lodgements and that the money remains untraced within the Bank's records.

8

Mr. Kelly accepts that the amounts in respect to which he makes these assertions are very significant and that it may appear improbable that the Bank records would have failed to show the whereabouts of these monies, but he points to two serious errors in the Bank's process as a result of which documentation intended for himself and his wife were sent to the wrong address. These events have led him and his wife to take a view that the Bank processes and records are not reliable.

Factual background
9

Mr. and Mrs. Kelly are a married couple who have developed residential investment property in Wicklow, and who owned a licensed premises in County Wicklow and another in Strokestown, County Roscommon. The Bank's claim arises from two loan facilities granted in 2006. The first facility was advanced pursuant to a loan agreement made on or about 2 August 2006 by which the Bank agreed to advance to Mr. and Mrs. Kelly the sum of €300,000 to purchase a residential investment property. The loan was to be secured on the premises to be purchased and on another also in Wicklow town, and the contract also provided for the deposit of the sum of €35,000 in a deposit account with the Bank by way of security. The claim in respect of this loan facility is made following the sale by the receiver of the secured premises and arising from which a formal demand issued on 23 October 2013 in the sum of €71,097.44, the balance left after the proceeds of sale were applied to the then outstanding loan.

10

The second facility was advanced pursuant to a loan agreement made on or about 22 November 2006 by which the Bank agreed to provide a loan facility to Mr. and Mrs. Kelly in the sum of €600,000 for the stated purpose of assisting with the purchase of a residential investment property in Wicklow town. Security was to be provided over that property to be purchased, and over the other two premises in Wicklow town which secured the first facility. The security also included an assignment by way of security of a Bank deposit account containing €95,000.

11

The Bank demanded payment of the outstanding balance of €600,000 in respect of the second facility by formal letter of demand on 23 October 2013.

12

The total amount claimed in the summary summons therefore is the amount of €671,097.14, the balance outstanding on the first loan and the entire capital sum advanced on the second loan. The Bank expressly waived any interest claim on both facilities. In the light of that concession, one ground of defence advanced by Mr. and Mrs. Kelly, that the Bank had miscalculated the interest payments and had overcharged them, is no longer in issue.

The grounds of defence asserted
13

In his first affidavit sworn on 21 May 2014, Mr. Kelly makes the point that the first facility letter mis-described the address of the residential investment property to be funded from that loan, and also points to the fact that the Bank, in error, sent correspondence to them to the wrong address. He makes a similar argument with regard to the second loan facility where the property to be purchased was also mis-described. He asserts that in the circumstances, it is likely that the Bank mis-directed correspondence to that incorrect address.

14

While it is not asserted that the security interest in favour of the Bank were created over the wrong property, Mr. Kelly argued that these errors show a possible frailty in Bank records which bears out or supports his assertion that the Bank has failed to keep or to disclose proper records of movements in Mr. and Mrs. Kelly's accounts with the Bank.

15

Mr. Kelly points to Bank statements which were sent to the wrong addresses on a number of occasions, and to the fact that different, but also wrong, addresses were used on a sequence of statements. Several wrong addresses are identified to which correspondence was addressed and he describes the use of,...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT