AIB Mortgage Bank v Gunning

JurisdictionIreland
JudgeMs. Justice Reynolds
Judgment Date10 October 2018
Neutral Citation[2018] IEHC 555
CourtHigh Court
Docket Number[2016 No. 1411 S.]
Date10 October 2018

[2018] IEHC 555

THE HIGH COURT

Reynolds J.

[2016 No. 1411 S.]

BETWEEN
AIB MORTGAGE BANK
PLAINTIFF
AND
DECLAN GUNNING

AND

FIONA GUNNING
DEFENDANTS

Banking and finance – Loan facility – Bona fide defence – Plaintiff seeking summary judgment against the defendants – Whether the defendants had a bona fide defence to the application

Facts: The defendants, Mr and Ms Gunning, in 2008, entered into an agreement to borrow the sum of €253,000.00 from the plaintiff, AIB Mortgage Bank. The purpose of the loan was to purchase a property situated at the Glebe, Lagan, Co. Longford. The loan facility was made available to the defendants in July 2008 in the amount of €253,000.00 for a 20 year period. In September 2008, the defendants accepted the loan facility and the terms and conditions of same. The defendants agreed to a mortgage over the said property together with a legal charge over a site at Kilglass, Lagan, Co. Longford. The defendants drew down the monies to facilitate the purchase of the said property. However, they subsequently defaulted on their loan repayments and in December 2015 and July 2016 the plaintiff demanded the amount then due and owing on foot of the said loan account. Despite repeated demands and requests, the monies remain due and owing. The plaintiff sought summary judgment in the sum of €313,570.00 as against the defendants, jointly and severely, together with costs. The plaintiff contended that the defendants had no bona fide defence to the application. The cornerstone of the defences relied upon by the defendants was that they were at all material times consumers and therefore entitled to certain statutory protections. Further, the defendants contended that the plaintiff had failed to provide the necessary protections to which they were entitled as consumers. In the alternative, the defendants posited that they had raised a prima facie case that they were consumers and that Council Directive 85/577/EEC was applicable and they sought a referral for a preliminary ruling to the Courts of Justice of the European Union to enquire into the applicability or otherwise of the said Directive.

Held by the High Court (Reynolds J) that it was clear from Allied Irish Banks plc v Fahy [2014] IEHC 244 that the onus rested on the defendants to establish that they were, at all material times, acting as consumers in relation to the loan agreement. Reynolds J was not satisfied on the evidence that they had discharged that burden; they entered into the loan agreement with a view to investing in a Buy to Let property and the "nature and aims of that agreement" were for the purposes of making profit. Reynolds J therefore concluded that this was a commercial transaction and that the issue of statutory protection under the Consumer Credit Act 1995 did not arise. Reynolds J held that the defendants' application for a referral to the Courts of Justice of the European Union must fail.

Reynolds J held that the plaintiff was entitled to judgment in the amount claimed, jointly and severely, as against the defendants.

Application granted.

JUDGMENT of Ms. Justice Reynolds delivered the 10th day of October, 2018
Introduction
1

In this case, the plaintiff seeks summary judgment in the sum of €313,570.00 as against the defendants, jointly and severely, together with costs.

Background
2

In 2008, the defendants entered into an agreement to borrow the sum of €253,000.00 from the plaintiff. The purpose of the loan was to purchase a property situate at the Glebe, Lagan, County Longford.

3

The loan facility was made available to the defendants in July 2008 in the amount of €253,000.00 for a 20 year period.

4

In September 2008, the defendants accepted the loan facility and the terms and conditions of same. The defendants agreed to a mortgage over the said property together with a legal charge over a site at Kilglass, Lagan, Co. Longford.

5

The defendants drew down the monies to facilitate the purchase of the said property. However, they subsequently defaulted on their loan repayments and in December 2015 and July 2016 the plaintiff demanded the amount then due and owing on foot of the said loan account.

6

Despite repeated demands and requests, the monies remain due and owing and the plaintiff contends that the defendants have no bona fide defence to the within application.

Issues Raised by the Defendants
7

The cornerstone of the defences relied upon by the defendants is that they were at all material times consumers and therefore entitled to certain statutory protections. Further, the defendants contend that the plaintiff has failed to provide the necessary protections to which they were entitled as consumers.

8

In the alternative, the defendants posit that they have raised a prima facie case that they are consumers and that Council Directive 85/577/EEC is applicable and seek a referral for a preliminary ruling to the Courts of Justice of the European Union to enquire into the applicability or otherwise of the said Directive.

The Proceedings
9

The summary proceedings came before this Court for hearing on the 8th May, 2018. The applicant sought liberty to enter final judgment against each of the defendants whilst the defendants brought their own application seeking a referral to the Courts of Justice of the European Union as already outlined.

Issues
10

The first issue to be determined is whether...

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1 cases
  • Allied Irish Banks Plc v Murphy
    • Ireland
    • High Court
    • 16 June 2020
    ...Named Defendant in Browne. 68 Thus, whilst the Defendants in the recent decision of the High Court in AIB Mortgage Bank v Gunning & anr [2018] IEHC 555, sought to rely upon the decision of Browne to support the contention that where it can be shown on a prima facie basis that a loan had bee......

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