AIB Mortgage Bank v John O'Doherty
| Jurisdiction | Ireland |
| Judge | Mr. Justice Keane |
| Judgment Date | 21 April 2015 |
| Neutral Citation | [2015] IEHC 233 |
| Court | High Court |
| Date | 21 April 2015 |
[2015] IEHC 233
THE HIGH COURT
BETWEEN
AND
Property – Mortgage – Order of possession of properties – Order directing plenary trial of proceedings
Facts: The applicant filed for an order of possession of properties at issue in the instant case duly mortgaged to it by the defendant as a result of default in the repayment of the loans obtained. Present proceedings had begun as a result of the defendant_s failure to discharge even a part of the sum demanded. The applicant contended that it had the power of sale granted in respect of the provisions under the relevant mortgage agreements. In the due course of the proceeding of the instant case the defendant applied for an order directing the plenary trial of the proceedings.
Mr. Justice Keane held that the application for an order of possession of properties would be granted. The Court stated that the applicant was entitled prima facie to the order. The Court held that the defendant did not have a valid defence to the application. The Court further held that the defendant_s application for an order directing the plenary trial of the proceedings would be refused. The Court found the application to be both dilatory and misconceived.
1. This is an application by AIB Mortgage Bank ("the bank") for an Order for possession of thirteen separate residential investment properties ("the properties") mortgaged to it by the defendant, to facilitate the exercise of the power of sale conferred upon the bank under the relevant mortgage agreements.
2. The application is brought by special summons that issued on the 1 l th October 2011. In the special indorsement of claim set out in that summons, the bank identifies each of the properties and the date of the mortgage or charge to which each property is subject in favour of the bank.
3. The special sumons is grounded on an affidavit sworn on the 19 th January 2012 by Hugh Mullally, a manager in the bank's credit operations department. Mr Mullally avers that the defendant has defaulted in the repayment of the loans he obtained to fund the acquisition of those properties
4. Mr Mullally has exhibited the indenture of mortgage in respect of each of the properties and, for those that comprise registered land, an attested copy of the folio and the certificate of charge also.
5. The bank submits that its power of sale has arisen and is exercisable in respect of each of the properties under the following circumstances. Mr Mullaly avers that, as of the 20 th August 2009, the total sum due and owing to the bank by the defendant in respect of the relevant loans was €4,799,770.60, which amount was still due and owing when the bank made a demand for repayment of that sum by letter dated the 3 rd September 2009, the bank's contention being that the secured monies had fallen immediately due and owing under the terms of each of the applicable indentures of mortgage because of the defendant's default in making the agreed repayments. Mr Mullally deposes that the defendant failed to discharge the sum demanded, or any part of it, with the result that the bank issued proceedings against him. Those proceedings bear the record number 4412S of 2009 and are entitled Allied Irish Banks plc and AIB Mortgage Bank plc v. John O'Doherty. By Order made in those proceedings on the 7 th December 2009, the High Court (in the person of Kelly J.) granted judgment against the defendant in the sum of €1,454,738.13 in favour of Allied Irish Banks plc and in the further sum of €4,791,008.86 in favour of the bank. Mr Mullally avers that the defendant has failed to discharge the said sum or any part thereof since then.
6. The bank contends that it is entitled to move for an order of possession primarily, and quite separately, on the basis of the summary judgment already obtained. The bank relies, in particular, upon the fact that the summary judgment granted to Allied Irish Banks plc on the 7 th December 2009 has not been appealed as demonstrating that all of the monies at issue have also fallen immediately due and payable by reference to another term of the relevant indenture of mortgage in respect of each of the properties whereby that occurs "[i]f a judgment against the [m]ortgagor (not being under appeal) remains unsatisfied for 21 days from its date..."
7. The bank relies on the term of each of the relevant mortgage deeds whereby the parties have agreed that the bank is to have the statutory powers of sale conferred on mortgagees under the Conveyancing Acts without the restriction on the exercise of those powers contained in s. 20 of the Conveyancing Act 1881. Mr Mullally avers that an order for possession is sought in respect of each of the properties as a necessary measure to effect the sale of each in order to recover so much of the monies advanced to the defendant, and due and owing by him, as may be represented by the proceeds of sale.
8. The bank relies on a number of affidavits attesting to service of the special summons upon the defendant and upon those persons who have been identified as occupants of the properties, together with the averment of Mr Mullally that he knows of no other person in actual occupation of, or in receipt of any rents or profits derived from the properties, as evidence that the bank has complied with the requirement of Order 9, rule 14 of the Rules of the Superior Courts in respect of service.
9. Accordingly, the bank contends that it is entitled prima facie to the order that it seeks for possession of the properties.
10. Mr Donnchadha Murphy, a solicitor acting for the bank, swore an affidavit on the 10 th December 2012, apprising the Court of the following subsequent developments. On the 12 th April 2012, the defendant issued a motion, which came before the Supreme Court on the 27 th April 2012, seeking an extension of time to bring an appeal against the Order made on the 7 th December 2009 granting summary judgment against him in favour of the bank.
11. Mr Murphy avers that, both in the relevant motion papers and in Court, the defendant sought to raise a number of grounds of appeal, including an argument that the outstanding borrowings upon which judgment had been granted were those of a company named Kirefield Limited and not those of the defendant.
12. A further proposed ground of appeal raised by the defendant referred to the bank's acknowledgment in a letter written on the 22 nd July 2011 - that is, subsequent to securing judgment - that interest had been overcharged on one of the relevant loan accounts. According to the bank, this arose because, due to an administrative error, the bank failed to require the commencement of loan repayments by the defendant on an "interest and capital" basis at the conclusion of an agreed initial five year period of repayment on an "interest only" basis. This error gave rise to a loan account balance that remained higher than it otherwise would have been, with the result that the interest payments calculated on that balance were also greater than they otherwise would have been.
13. By Order made on the 27 th April 2012, the Supreme Court refused the defendant's application for an extension of time to bring an appeal. However, Mr Murphy avers that the Supreme Court directed the bank to bring an application before the High Court to rectify the amount of the summary judgment granted to reflect the correct position in relation to the interest payments properly due.
14. The bank brought the appropriate application and, by Order made on the 30 th July 2012 in the Commercial Court, Kelly J. amended the...
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