Allied Irish Banks Plc v Darcy

JurisdictionIreland
JudgeMr Justice Charleton
Judgment Date14 July 2016
Neutral Citation[2016] IECA 214
Docket Number[C.A. Nos. 5 of 2014 &340 of 2015],High Court record number: 2014 No. 44 SP
CourtCourt of Appeal (Ireland)
Date14 July 2016

Charleton J

Peart J

Irvine J

Between
Allied Irish Banks PLC
Plaintiff/Respondent
and
Thomas Darcy

and

Antoinette Darcy
Defendants/Appellants

[2016] IECA 214

Charleton J.

High Court record number: 2014 No. 44 SP

Appeal numbers: 2014 5 COA and 2015 340

An Chuirt Achomhairc

The Court of Appeal

Abuse of process – Stay of proceedings – Possession orders – Appellants seeking stay of proceedings – Whether High Court?s refusal to stay proceedings was an abuse of the process

Facts: The appellants, Mr Darcy and Ms Darcy, appealed two judgments of the High Court in favour of the respondent, Allied Irish Banks Plc, the cumulative effect of which had been to order that their debt to the bank in the sum of ?21,154,079.30, together with interest accruing from 21st November 2013 onwards, stood well charged on four properties owned by them. These were specified in the order of Keane J of 3rd June 2015 as being a property called Woodview with grounds in Howth, a plot of ground in Malahide, a house in the same general area and another property in Howth. That well charging order was enabled by the earlier order of Gilligan J of 17th October 2014 which permitted the special summons grounding these proceedings to continue and reversed the order of 9th May 2014 of the Master of the High Court striking same out. While the order made by Gilligan J perfected on 21st October 2014 made a series of ordinary consequential orders that were typical of those made by a judge managing a special summons, it was his refusal to stay those proceedings as an abuse of the process of the courts that was the effective core of this appeal. This was argued by the appellants to be a breach of an order of the Supreme Court of 13th November 2013 in prior proceedings, record number 539SP of 2010, remitting the issue of possession orders to plenary hearing and was claimed to be sharp practice, opening the floodgates to the misuse of court proceedings and undermining the integrity of legal proceedings under Article 34 of the Constitution.

Held by Charleton J that the courts would be abjuring their responsibility to grant wronged parties an appropriate legal remedy if they were to force litigants to unnecessarily continue litigation that is flawed only in terms of procedural correctness. Charleton J noted that with every step taken in litigation there may be another party who needs to seek advice and take an appropriate procedural step in response such as entering a defence or delivering an affidavit. Charleton J stated that the Rules of the Superior Courts provide for a just response regarding the payment of costs where an action is discontinued. Charleton J held that where the case has gone as far as the effective close of pleadings, then the leave of the court is required on this subject to the imposition of conditions which, as a matter of fairness, will take such considerations into account. Charleton J held that the Family Home Protection Act 1976 was passed as a protection of property rights and that it does not prevent those protected from voluntarily alienating their own property.

Charleton J held that the judgements of both Gilligan J and Keane J and the orders made by them could not be disturbed on appeal.

Appeal dismissed.

Judgment of the Court delivered by Mr Justice Charleton on Thursday July 14th 2016
1

Thomas Darcy and Antoinette Darcy appeal two judgments of the High Court in favour of the respondent, Allied Irish Banks PLC, the cumulative effect of which has been to order that their debt to the bank in the sum of ?21,154,079.30, together with interest accruing from 21st November 2013 onwards, stands well charged on four properties owned by them. These are specified in the order of Keane J of 3rd June 2015 as being a property called Woodview with grounds in Howth, a plot of ground in Malahide, a house in the same general area and another property in Howth. That well charging order was enabled by the earlier order of Gilligan J of 17th October 2014 which permitted the special summons grounding these proceedings to continue and reversed the order of 9th May 2014 of the Master of the High Court striking same out. While the order made by Gilligan J perfected on 21st October 2014 makes a series of ordinary consequential orders that are typical of those made by a judge managing a special summons, it is his refusal to stay those proceedings as an abuse of the process of these courts that is the effective core of this appeal. This is argued by Thomas and Antoinette Darcy to be a breach of an order of the Supreme Court of 13th November 2013 in prior proceedings, record number 539SP of 2010, remitting the issue of possession orders to plenary hearing and is claimed to be sharp practice, opening the floodgates to the misuse of court proceedings and undermining the integrity of legal proceedings under Article 34 of the Constitution. This argument needs to be seen in the context of the background facts.

Background facts
2

The bank describes Thomas and Antoinette Darcy as property developers. The special summons, on which the Supreme Court made the order remitting the issue of possession orders to plenary hearing, asserted that by four letters of loan sanction, dated between 19th January 2006 and 4th June 2008, they borrowed the sum of ?15,808,303 and that this indebtedness was secured by legal charges on the four properties specified in the order of Keane J of 3rd June 2015. On this appeal, it has not been contested that such sums were borrowed and it has not been disputed that legal mortgages were properly entered into on all four properties. One of these properties, now destroyed by fire, was the family home of Thomas and Antoinette Darcy: called Woodview in Howth. All of the mortgages contain a section which states, in standard form, that the signor is the spouse of the mortgagor, that it is advisable for parties to obtain independent legal advice, that consent of the spouse is required, that the mortgage is a continuing security and finally, a section requiring a signature confirming that consent is given pursuant to section 3 of the Family Home Protection Act 1976. This last section is not filled in because the mortgagors of all of the properties were both Thomas and Antoinette Darcy. Hence, the bank asserts that no spousal consent was required.

3

The borrowings were not repaid. Summary proceedings were brought by the bank, with the same title as this appeal, record number 2010/2292S and judgment was obtained in default of appearance on 16th February 2011 in the sum of ?17,422,790.53. An application was then brought by Thomas and Antoinette Darcy to the High Court to set aside that default judgment. Ryan J refused to overturn that default order by judgment of 20th July 2012. The next step was for the bank to enforce the judgment, which was growing in amount because of court interest. Included among the methods of enforcement that might have been available to the bank was an application following a demand leading to bankruptcy or the enforcement of the existing mortgages up to sale and recovery of the debt. The vehicle chosen was to obtain an order for possession with a view to sale, by special summons and affidavit, and this was done in proceedings with the same title as this appeal, which is record number 539SP of 2010. These proceedings referenced a letter of demand which, because of its form, gave rise to an issue as to whether an order well charging the sums on the various properties could be made in consequence of the repeal by the Land and Conveyancing Law Reform Act 2009 of particular provisions of the Registration of Title Act 1964. This particular omission in the law has since been rectified by the commencement of the Land and Conveyancing Law Reform Act 2013. By order of the High Court, McGovern J, of 16th April 2012, an order for possession of the properties was made. It was this order that was appealed to the Supreme Court by Thomas and Antoinette Darcy. Following from the failure of the bank to uphold the order of McGovern J in the Supreme Court, the bank did not continue with those proceedings, 539SP of 2010, but instead instituted new proceedings: these current proceedings 2014 No. 44SP. The summons thereof recites that the bank:

?accepts that the present proceedings have been necessitated by the decision of the Supreme Court of 13 November 2013 to set aside an Order of the High Court (McGovern J of 16 April 2012) which High Court decision had previously given [The Bank] the relief that it seeks in these proceedings. However, the appeal before the Supreme Court proceeded on the basis that by reason of the provisions of the Land and Conveyancing Law Reform Act 2013, which statutorily overruled the decision in Start Mortgages Limited v Gunn [2011] IEHC 275, [Thomas and Antoinette Darcy] would have no defence to any new proceedings brought seeking the same relief by reason of the 2013 Act.

These proceedings commenced on 28th January 2014, while the notice of discontinuance of the proceedings which were remitted to plenary hearing by the Supreme Court was only served on the 9th April 2014.

Supreme Court order
4

On the appeal in 539SP of 2010, Thomas and Antoinette Darcy relied on the decision of Dunne J in Start Mortgages v Gunn [2011] IEHC 275 (High Court, Dunne J, 25 July 2011) to assert that an issue arose as to the entitlement of the bank to possession of their properties. It is common case that the Supreme Court in giving judgment on the appeal was not ruling on that issue but rather on the question of whether a hearing with oral evidence was necessary in order to properly decide that question. There was a further factual issue regarding the posting by the bank of a letter of demand, the particular form of the letter and whether or not it was...

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6 cases
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    ...the 24 July 2013…to invoke them despite the Start Mortgages ruling:” He points out that this court in Allied Irish Banks Plc v D'Arcy [2016] IECA 214 so held. The Slaney Road mortgage predated the commencement of the 2009 Act on 1 st December 73 . I am satisfied that once section 1 of the L......
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    ...Appeal (Peart J., Irvine J. and Charleton J.) on 14th July, 2016 in the appeal referred to earlier (in para. 20) under Neutral Citation [2016] IECA 214, in which the order of the High Court (Keane J.) was upheld. Order 44 I propose that there be an order allowing the appeal and discharging......
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