Aib Mortgage Bank v Cosgrove

• Jurisdiction: Ireland
• Judge: Ms. Justice Faherty
• Judgment Date: 31 October 2017
• Neutral Citation: [2017] IEHC 803
• Docket Number: [2016 No. 55 CA]
• Court: High Court
• Date: 31 October 2017

BETWEEN

AIB MORTGAGE BANK

AND

ALLIED IRISH BANKS PLC

PLAINTIFFS/RESPONDENT

AND

GERARD COSGROVE

DEFENDANT/APPELLANT

[2017] IEHC 803

Faherty J.

[2016 No. 55 CA]

THE HIGH COURT

Land and Conveyancing - S. 3(2) of the Land and Conveyancing Law Reform Act 2013 - Order for possession - Appeal - S. 3 of the Family Home Protection Act 1976 - Code of Conduct of Mortgage Arrears ('CCMA') - S. 22 of the Courts (Supplemental Provisions) Act 1961

Facts: The defendant/appellant filed an appeal against the order of possession made by the Circuit Court in favour of the plaintiffs in relation to the defendant's premises. The defendant also filed an appeal against the order of the Circuit Court for dismissing his application for discovery. The defendant objected to the exercise of jurisdiction by the Circuit Court. The defendant contended that the Circuit Court had made an error while permitting the plaintiffs to substitute 'principal private residence' for 'rateable value'. The defendant also objected to the non-application of the principles of Unfair Terms Regulations by the Circuit Court in relation to the subject mortgage contract. The plaintiffs averred that they had complied with the requirements of the CCMA and gave a notice to the defendant in relation to the default in the repayment of loan instalments.

Ms. Justice Faherty affirmed the order of the Circuit Court. The Court, however, directed that since the subject premises constituted the family home of the parties, it would hear submissions on the issue of stay on the enforcement procedure. The Court held that there was full compliance with the requirements under the s.3 of the Family Home Protection Act 1976 as the defendant's spouse signed the 'consent to the deed of confirmation' and the 'spouse's consent' under the solicitor's advice. The Court noted that the jurisdiction of the Circuit Courts was extended to the mortgages in respect of the principal private residences by virtue of s. 3 of the Land and Conveyancing Law Reform Act 2013.

JUDGMENT of Ms. Justice Faherty delivered on the 31st day of October, 2017

1 This is the defendant's appeal against orders made by the Circuit Court on 3rd March, 2016, including, inter alia, an order that the plaintiff recover from the defendant possession of 95 Seacrest, Knocknacarra, Galway, and which are comprised in Folio 35049F Co. Galway (hereinafter referred to as 'the premises').

2 On the same date, and prior to making the order for possession, the Circuit Court heard and determined a number of other motions in the proceedings, in the following order:

(i) The plaintiff's motion to amend the special endorsement of claim on the Civil Bill for possession by deleting 'The rateable valuation of the premises does not exceed €253.95' and inserting 'The premises comprise the Defendant's principal private residence therefore falls within the exclusive jurisdiction of this Honourable Court by virtue of s. 3(2) of the Land and Conveyancing Law Reform Act 2013.'

The order sought was duly made on 3rd March, 2016 and the Circuit Court dispensed with the requirement to have the Civil Bill re-served on the defendant.

(ii) The defendant's motion to strike out the Civil Bill. This motion was dismissed by order of the Circuit Court on 3rd March, 2016.

(iii) The defendant's motion seeking 'Discovery and Inspection of Documentation and Interrogatories' dated 22nd June, 2015 (hereafter referred to as the 'discovery motion'). According to the plaintiff, the defendant's discovery motion was opened in full before the Circuit Court on 3rd March, 2016, and the Circuit Court declined to make an order in any category sought by the defendant.

Having ruled on the aforesaid motions, the Circuit Court then proceeded with the plaintiffs' substantive application for possession and duly made an order for possession in the plaintiffs' favour in respect of the premises.

3 By notice of appeal dated 11th March, 2016, the defendant appeals the orders made by the Circuit Court on 3rd March, 2016.

4 The defendant's defence to the application for possession is by and large set out in an affidavit sworn by him on 16th March, 2016 and 13th May, 2016.

The background to the order for possession

5 The plaintiffs claim is grounded, inter alia, on the affidavit sworn on 11th November, 2013, by Ms Paula Duffy an officer with the first plaintiff.

6 She avers that by letter of offer dated 2nd January, 2008, the first plaintiff offered the defendant a loan of €435,000 to purchase the premises. The terms of the offer included that the loan would be secured by a charge over the premises and that the loan could be repayable over 27 years in monthly instalments. Ms Duffy avers that it was a further term of the mortgage contract that in the event of the defendant failing to comply with the terms of the offer, the plaintiffs would be entitled to demand immediate repayment of all sums due.

7 On 17th April, 2008, Miss Deirdre Cosgrove (otherwise Mullaney), as the lawful spouse of the defendant, signed a 'Consent to Mortgage', pursuant to s. 3 of the Family Home Protection Act 1976 ('the 1976 Act'), thereby agreeing to a mortgage being executed in respect of the premises. On the same date, she executed a 'Deed of Confirmation' in respect of the charge to be created on the premises, and acknowledging, inter alia, receipt of AIB mortgage conditions.

8 The defendant signed the letter of offer on 21st April, 2008. On the same date, Ms Cosgrove signed the spouse's consent to the letter of offer of the mortgage loan under the 1976 Act, acknowledging that she was the lawful spouse of the defendant and that the premises was a family home within the meaning of the 1976 Act.

9 Pursuant to the loan agreement, the first plaintiff's advanced the sum of €435,000 to the defendant on 28th April, 2008.

10 By 'Deed of Charge' dated 30th April, 2008, the defendant charged the premises to secure the monies advanced. On 27th August, 2008, the defendant was registered in the Land Registry as full owner of the premises. On the same date, the plaintiffs were registered as owners of the said charge.

11 Ms Duffy goes on to aver that the defendant defaulted in the repayment of the monthly instalments. She states that as of 26th September, 2013, the defendant was indebted to the first plaintiff in the sum of €488,502.30 (including arrears of €82,025.47). A demand was made by the first plaintiff for repayment of the said sum by letter dated 9th October, 2013. The first plaintiff issued a further letter on 21st October, 2013, in which it demanded possession of the premises, in accordance with the terms of the mortgage/charge on the premises.

12 On foot of the defendant's failure to deliver up possession, the plaintiffs instituted the within proceedings on 19th November, 2013.

The progress of the proceedings in the Circuit Court

13 As already referred to, prior to the substantive motion for possession, the defendant issued his motion for discovery. In or about the time of the issuing of the said motion (approximately mid 2015), the defendant's spouse swore an affidavit (albeit the Court has seen only an unsworn version) supplemental to the defendant's affidavit grounding his motion. This affidavit is considered more fully later in this judgment.

14 By motion dated 18th May, 2015, the defendant issued a notice to cross-examine Ms Duffy in respect of her affidavit grounding the motion for possession. The defendant's motion was made returnable for 25th May, 2015. It appears that no cross-examination of Ms Duffy took place on 25th May, 2015, or at any point thereafter. No further motion to cross-examine Miss Duffy was issued by the defendant.

15 On 18th May, 2015, Ms Duffy swore a supplemental affidavit in which she avers, inter alia, that the plaintiff had complied with the Code of Conduct on Mortgage Arrears (CCMA), issued by the Financial Regulator in January, 2011, and that, specifically, the plaintiff had put in place a Mortgage Arrears Resolution Process (MARP). With regard to the mortgage contract in issue in this appeal, Ms Duffy goes on to aver as follows:

'I say in particular that the plaintiffs complied with provisions 20 - 29 [of the CCMA] in dealing with the Defendant in that inter alia the plaintiffs notified the Defendant when the arrears were first outstanding for 31 calendar days within three business days provided the information specified in provision 23 of the CCMA then and thereafter provided an update in a quarterly basis, provided a MARP Booklet to the Defendant under cover of letter of 25th June, 2011, issued a letter to the Defendant in compliance with provision 27 of the CCMA on 8th August, 2011, a letter to the Defendant in compliance with provision 28 of the CCMA was not required as MARP had been commenced in this matter before the introduction of the 2013 CCMA, a letter issued to the Defendant in compliance with provision 29 of CCMA on the 28th June, 2013.'

16 She avers that the plaintiff complied with the provisions 30-34 of the CMMA in providing the defendant with a standard financial statement for completion, and that the standard financial statement duly completed by the defendant was considered and assessed 'bearing in mind the full circumstances of the defendant'. She also avers that the provisions of 49 - 55 of the CCMA were complied with in that an appeals process was put in place in compliance with the provisions of the CCMA. She avers that 'no valid appeal was received by the plaintiffs from the Defendant.' It is further averred that the defendant did not furnish documents sought by the plaintiffs for the purposes of determining his eligibility for alternative repayment arrangements.

17 In her affidavit, Ms Duffy exhibits the letter of 28th June, 2013 which was furnished to the defendant. It reads as follows:

'Our records show that at the close of...