Allied Irish Bank v O'Callaghan

• Jurisdiction: Ireland
• Judge: Mr. Justice Robert Haughton
• Judgment Date: 19 November 2020
• Neutral Citation: [2020] IECA 318
• Date: 19 November 2020
• Court: Court of Appeal (Ireland)
• Docket Number: Court of Appeal Record Number: 2019/246

BETWEEN/

ALLIED IRISH BANKS PLC

PLAINTIFF/RESPONDENT

- AND -

THOMAS O'CALLAGHAN

AND

MARY O'CALLAGHAN

DEFENDANTS/APPELLANTS

[2020] IECA 318

Haughton J.

Murray J.

Pilkington J.

Court of Appeal Record Number: 2019/246

High Court Record No. 2017/823S

THE COURT OF APPEAL

Civil

Summary judgment – Defence – Plenary hearing – Appellants appealing from summary judgment – Whether the appellants had demonstrated any credible or bona fide defence

Facts: The appellants, Mr and Mrs O’Callaghan, appealed to the Court of Appeal from the order and judgment of Donnelly J made on 29 April 2019 whereby it was ordered that the respondent, Allied Irish Banks PLC, recover jointly and severally against the appellants the sum of €466,757.63 with interest thereon at the statutory rate from that date, together with the costs of the proceedings, with a stay on execution for a period of four months from the date of perfection of the order. The issue in this appeal was whether the appellants, or either of them, had demonstrated any credible or bona fide defence such that the proceedings should be remitted to plenary hearing.

Held by Haughton J that he was not satisfied that the appellants had made out any bone fide or credible defence. As the figure in respect of which judgment should be entered changed by reason of the respondent’s waiver of surcharge, Haughton J directed that the respondent file and serve an affidavit setting out the recalculated principal and interest exclusive of surcharge.

Haughton J held that he would dismiss the appeal and affirm the order of the High Court save insofar as adjustment to the amount of the judgment was required by the deduction of the surcharge interest.

Appeal dismissed.

JUDGMENT of Mr. Justice Robert Haughton delivered on the 19th day of November 2020

Introduction

1 This is an appeal from the order and judgment of Ms. Justice Donnelly made on 29 April 2019 whereby it was ordered that the respondent (“the Bank”) recover jointly and severally against the appellants (who are husband and wife) the sum of €466,757.63 with interest thereon at the statutory rate from that date, together with the costs of the proceedings, with a stay on execution for a period of four months from the date of perfection of the order. The issue in this appeal is whether the appellants, or either of them, have demonstrated any credible or bona fide defence such that the proceedings should be remitted to plenary hearing.

2 The Summary Summons which issued herein on 10 May 2017 pleads the monies claimed as being due and owing on foot of three accounts maintained and operated by the appellants at the bank's Newcastle West branch as follows:

(1) Account Number 37978822:-

It is pleaded that the sum of €448,456.48 being principal and interest as of 12 April 2017 was due by the appellants to the Bank on foot of this loan account together with further interest from 12 April 2017 at the varying rates from time to time applying “[f]ull particulars of which have been furnished to the defendants.” It is pleaded that these sums are due on foot of a loan facility made available to the appellants jointly and severally dated 22 January 2019 whereby a loan facility in the amount of €416.000 for the purpose of purchasing property was made available to the appellants, the terms and conditions of which “were accepted by the defendants on 4 February 2009.”

(2) Account Number 08617094: -

The sum of €7,822.77 being principal and interest as at 12 April 2017 is claimed on foot of this loan account, together with further interest from that date, “full particulars of which have been furnished to the defendants”. It is pleaded that this is due on foot of a loan facility in the amount of €204,000 made available to the appellants jointly and severally and dated 22 January 2009 for the purpose of purchasing property, the terms and conditions of which “were accepted by the defendants on 4 February 2009”.

(3) Account Number 37978236: -

The sum of €10,478.38 for principal and interest as at 12 April 2017 is claimed on foot of this account, together with further interest from 12 April 2017 at varying rates “full particulars of which have been furnished to the defendants”. It is pleaded that this was an overdraft facility in the amount of €20.000 made available to the appellants jointly and severally dated 22 January 2009 the terms and conditions of which were accepted by the appellants on 4 February 2009.

3 The Summary Summons pleads that written demands for payment on foot of these accounts were made by the Bank on 12 December 2014 and 8 August 2016, despite which no payment was made, and that the total sum due and owing as at 12 April 2017 was €463,757.63.

4 The application for summary judgment was made on foot of a notice of motion issued on 30 June 2017 and grounded on an affidavit sworn on 26 June 2017 by Brian McGuinness, a manager of the Bank based at Bankcentre, Ballsbridge, Dublin 4. Mr. McGuinness exhibits the Bank's loan facility sanction dated 29 January 2009 (“the 2009 Loan Sanction”), which covers all three loans, and sets out the then applicable rates of interest. All three borrowings were stated to be “repayable on demand”. Without prejudice to that the loan for €416,000 was repayable over six months by monthly payments commencing on 1 March 2009, with a final repayment of €418,159.01 on 1 July 2009. The lending was subject to “the enclosed general terms and conditions”. The second loan for €204,000 was similarly without prejudice to being repayable on demand repayable over six months by monthly repayments with the final repayment of €205,058.75 on 1 July 2009. The overdraft was also “repayable on demand”, but it was “the bank's present intention that the overdraft arrangement will outstand until further notice or until you wish to have it reviewed.” It is notable that the term of the first two loans was very short, and, as emerged from later affidavits, this is because the 2009 Loan Sanction was a renewal of earlier loan sanctions originating in 2005.

5 The 2009 Loan Sanction set out a list of security required for the credit facilities. This included a mortgage from the appellants over 2 acres at Clomnore, Dromcollogher, being the lands described in Folio 53892F County Limerick, an assignment by the appellants over funds “in non-AIB for a minimum amount of €150,000”, and assignments of various Life Policies. Immediately after the list of securities the Facility included the following underlined statement –

“You must send a copy of this Credit Agreement to your solicitor as soon as possible so that your solicitor can advise you in relation to the execution of the mortgage.”

6 The 2009 Loan Sanction was, on its face, accepted by both appellants on 4 February 2009 as evidenced by their signatures on the third page, and no issue was taken in relation to this. Their signatures also appear on other pages headed the “AIB Payment Protector Declaration” and “Direct Debit Instructions – Loan Repayment”.

7 Mr. McGuinness then exhibits letters of demand dated 12 December 2014, and 8 August 2016 sent separately to each of the appellants, and again no issue was taken by the appellants with these demands.

8 Mr. McGuinness then exhibits a single page statement in respect of each account, giving a snapshot of the balance due at a particular time. In respect of the first loan account this shows that as of 3 March 2017 there was a sum due of €392,492.64, with the statement “balance excludes interest accrued since 16/09/2011 of €57,173.58”, and a note at the bottom “Surcharges – see notice at branch”. In respect of the second account the statement records a balance due as of 18 May 2017 of €6,846.57 with a note “Balance excludes interest accrued since 16/09/2011 of €997.30”, together with a note at the bottom stating “Surcharges – see notice at branch”. In respect of the overdraft account the statement refers to a balance due as of 7 February 2017 of €7,496.65 and notes “Balance excludes interest accrued since 16/12/2011 of €3,049.45” and again refers at the bottom to “Surcharges – see notice at branch”.

9 It will be noted that the balances on these statements do not tot up to the sums set out in the Summary Summons. Mr. McGuinness avers at para. 7 –

“I say that notwithstanding the said demands, the Defendants continue to be in default of repayment and I say that the amount of €466,757.63 remains due and owing by the Defendants jointly and severally to the Plaintiffs”.

10 I pause here to say that had the appellants taken issue in the High Court with the level of particulars furnished in the Summary Summons it is likely that it would have been found wanting in several respects. In particular it gives no detail as to the earlier lending of which the 2009 Loan Sanction was a renewal; it fails to identify or plead the Terms and Conditions applicable to any of the lending; it refers to “full particulars whereof have been furnished to the defendants” but fails to identify the statements or other documents where these are to be found, and therefore falls short of incorporating Bank statements – a shortcoming that is not made good by the one page statements exhibited by Mr. McGuinness. No particulars are given of the terms relating to surcharges or the sums claimed in respect of surcharge – again a deficiency not remedied by Mr. McGuinness' first affidavit. Had issue been taken it is more likely than not that the Bank would have been given an opportunity to amend/furnish fuller particulars.

11 A replying affidavit was sworn by the second named appellant (“Mrs. O'Callaghan”) on 2 November 2019. She says that she is a nurse, and resides at Clonmore. Drumcollogher. County Limerick, and that she makes the affidavit on behalf of herself and on behalf of the first named appellant (“Mr. O'Callaghan”). In seeking a plenary hearing the gravamen of the proposed defences appears from the...