AIB v Forde & O'Driscoll

• Jurisdiction: Ireland
• Judge: Ms. Justice Máire Whelan
• Judgment Date: 11 May 2020
• Neutral Citation: [2020] IECA 133
• Date: 11 May 2020
• Court: Court of Appeal (Ireland)
• Docket Number: Record Number: 2019/63

BETWEEN/

ALLIED IRISH BANKS PLC

RESPONDENT

- AND -

SIMON FORDE & DARRAGH O'DRISCOLL

APPELLANTS

[2020] IECA 133

Whelan J.

Ní Raifeartaigh J.

Murray J.

Record Number: 2019/63

Record Number: 2019/64

THE COURT OF APPEAL

Judgment of Ms. Justice Máire Whelan delivered on the 11th day of May 2020

Introduction

1 This is an appeal against orders for summary judgment granted to the respondent (“the bank”) by O'Hanlon J. in the High Court on 11th February, 2019. The orders were made in the absence of the appellants’ legal representatives. As against the first appellant summary judgment was granted in the following sums:-

(i) €20,095.49 pursuant to a joint letter of sanction;

(ii) €112,576.37 pursuant to a sole letter of sanction; and

(iii) €204,000 pursuant to a guarantee together with costs.

As against the second appellant judgment was granted as follows:-

(i) €20,095.49 pursuant to the terms of a joint letter of sanction; and

(ii) €204,000 pursuant to a guarantee together with costs.

History of litigation

2 The within proceedings were instituted by way of a single summary summons on 26th November, 2014. The special indorsement of claim sought interest pursuant to contract and/or pursuant to statute, a matter which the appellants contested as hereafter set out. The litigation appears to have gone into abeyance for almost three years thereafter. Both appellants entered appearances in person on 23rd October, 2017. A notice of intention to proceed was served on 25th October, 2017 on both appellants and the third named defendant Forcoll Developments Limited which is not a party to this appeal.

3 On 28th May, 2018 and 24th May, 2018 notices of motion issued out of the Central Office of the High Court seeking summary judgment against the first and second named appellants respectively. The said motions were in each case grounded on an affidavit of Colette Rooney sworn on behalf of the bank on 18th May, 2018. One motion was initially returnable for 28th June, 2018; the other for 29th June, 2018. Thereafter the motions appeared in the Master's List on 5th July, 2018. W.B. Gavin & Co. Solicitors came on record for the appellants on 20th July, 2018 and thereafter the motions were adjourned from time to time including on 20th July, 2018; 12th October, 2018; 9th November, 2018; and, 30th November, 2018 on which latter date both motions were transferred from the Master's Court to the Judges’ List on consent.

Appellants’ Replying Affidavit

4 The grounding affidavits of Colette Rooney of 18th May, 2018 included eight exhibits in respect to the first named appellant and six exhibits in respect to the second named appellant. A replying affidavit was sworn on 19th July, 2018 by Darragh O'Driscoll, the second named appellant. Paragraph 1 of the said affidavit deposed as follows:-

“…I make this affidavit on behalf of and with the authority of the first named defendant.”

It was very clear therefore that this affidavit was sworn on behalf of the first named appellant, Simon Forde, as well as on the deponent's own behalf. Indeed, in a replying affidavit sworn on 8th October, 2018 Colette Rooney appears to acknowledge as much, deposing at para. 3:-

“…I note that Mr. O'Driscoll avers to the fact that Mr. O'Driscoll's affidavit is made on behalf of and with the authority of the first named defendant, Simon Forde. I note that, to date, Mr. Forde has not sworn a replying affidavit in response to the motion issued specifically against him in the herein proceedings. However, although it is not clear, for the purposes of this affidavit I am taking it that Mr. O'Driscoll's affidavit is intended to be in response to the motion issued against Mr. O'Driscoll and also in response to the motion issued against Mr. Forde on the basis of Mr. O'Driscoll's averment that he makes his affidavit for and on behalf of Mr. Forde. If my understanding of the position is incorrect, I reserve the right to file a further affidavit.” (emphasis added)

5 The said replying affidavit sworn on behalf of both appellants contested the bank's claims and disputed its entitlement to judgment on a number of grounds including the following:-

(i) By way of preliminary issue it was asserted that there had been extensive delay by the bank which had been inordinate and prejudicial to the appellants. At para. 2 the prejudice was identified thus: “…I have been prejudiced by the delay in this regard as the plaintiff has continued to apply penal interest and surcharges without explanation or warning to me.” Prejudice was also asserted on the basis that employees of the bank who had dealt with the case “are no longer employed by the plaintiff and may not be available to give evidence”.

(ii) It was contended that much of the grounding affidavit was “hearsay and the terms and conditions of the loan referred to therein and in particular, the rights and entitlements upon the occurrence of any event of default were not to my recollection ever produced or given to me”.

(iii) A third issue was directed towards the appointment of a receiver by the bank over property situate at Tuam. It appears that the receiver was appointed on foot of a facility advanced pursuant to a facility letter of 16th July, 2010. It was contended that the property in question was not referred to anywhere in the facility letter. Thus it was asserted that the appointment of a receiver was improper. Correspondence exhibited in the appellants’ affidavit demonstrated that from December 2017 onward solicitors on their behalf were raising a wide variety of issues with regard to the receivership. Of direct relevance to these proceedings include the following issues: that the receiver had been appointed in respect of a debt of less than €20,000; that when the receiver took possession of the property there were rent-paying tenants in occupation; and, that there was no evidence forthcoming as to whether any of the rents and profits derived from the property had ever been applied in and towards satisfaction of the debt. Significantly it was expressly asserted in correspondence, including in a letter of 20th May, 2018, that the rents earned in respect of the property “should have been in excess of the amount of the money owed.” The response of the bank, which failed to contradict this specific issue, will be considered hereafter.

(iv) The appellants further raised issues concerning the guarantee, asserting that they had no recollection of same being explained or shown to them: “…neither Simon Forde or I were given any explanation of what these documents were.”

(v) The appellants took issue with the amount of interest levied. It was contended that the amount of interest being charged had not been particularised beyond “bald averments” in the bank's grounding affidavit. It was deposed that the appellants intended “…when such figures are presented to engage the services of Acquiring Solutions trading as BANKCheck… for the purposes of calculating the precise sum overcharged on the various loan accounts referred to in the grounding affidavit by the plaintiff.”

(vi) The appellants’ affidavit also raised issues concerning “Central Bank charges”, contending that the bank's grounding affidavit had failed to deal with certain charges granted by the bank to the Central Bank of Ireland on or about 15th February, 2008 which were “granted over certain present and future assets of AIB as part of a process of recapitalisation of AIB.” The affidavit further contended that any loan such as the appellants’ “fell within the present and future assets referred to in the charges.” Further, that such charges, the argument went, were and/or amounted to fixed charges or, if floating, crystallised on or before 1st December, 2010. Accordingly, the appellants contended that if any right or obligation was vested in the appellants prior to the charges, the said right or obligation was an asset which vested in the Central Bank prior to or on that date.

The bank's response

6 The appellants’ affidavit contesting liability and disputing the bank's entitlement to summary judgment was responded to on 8th October, 2018 by replying affidavit of Colette Rooney sworn on behalf of the bank. She contended at para. 4 that:-

“…a number of the issues raised in Mr. O'Driscoll's affidavit are either irrelevant to the within application or are more appropriately addressed by way of legal submission at the hearing of this application. Accordingly, I only propose to reply to certain salient matters hereunder and the absence of a response to each and every paragraph is not to be taken as an acceptance of its content.”

The affidavit failed to specifically identify the particular issues which the bank contended were irrelevant, neither did it identify with particularity those which were more appropriately to be addressed by way of legal submission at the hearing of the summary summons. The transcript of the hearing does not record any legal submission on behalf of the bank directed to an averment in the appellants’ affidavit.

7 In addressing the issue of delay the affidavit deposed that the bank had been attempting to dispose of secured assets to satisfy the indebtedness of the appellants and it was contended that “any alleged delay in proceeding with the herein motion has been to the benefit of the first and second named defendants as it has delayed judgment being obtained against them”.

8 With regard to the claim regarding excessive interest, at para. 8 it is deposed that the bank has “waived its claim for further interest as set out in the special indorsement of claim on the summary summons issued in the herein action.”

9 Concerning the receiver, para. 13 of the replying affidavit bears repeating in its entirety:-

“I say that the allegations with respect to the receiver are denied in full. However, without prejudice to this position, I say that such allegations are not relevant to the herein proceedings...