Allied Irish Banks Plc v McKeown
| Jurisdiction | Ireland |
| Judge | Ms. Justice Donnelly |
| Judgment Date | 28 November 2019 |
| Neutral Citation | [2019] IECA 296 |
| Date | 28 November 2019 |
| Docket Number | Record Number: 2017/239 |
| Court | Court of Appeal (Ireland) |
[2019] IECA 296
THE COURT OF APPEAL
Edwards J.
McGovern J.
Donnelly J.
Record Number: 2017/239
and
Banking & finance – Loans – Commercial properties – Loans for commercial properties – Appeal against High Court judgment for sums due to Bank
Facts: The appellants were professional landlords of commercial premises in Cork. The appellants had entered into a loan with the respondent in respect of refinancing earlier facilities. The terms of the loans were not complied with, and the respondent had obtained judgment in the High Court for the sums outstanding. The appellants now sought to challenge the decision at first instance, arguing that the High Court had fallen into error, as well as advancing new submissions.
Held by the Court, that the appeal would be dismissed. The appellants had failed to demonstrate why the new submissions had not been put forward at first instance, and the grounds of appeal that were properly laid before the Court were without merit.
On the 12th May, 2017, Costello J gave liberty to the plaintiff bank (hereinafter “the respondent”) to enter judgment against the first defendant in the sum of €1,469,251.43 and against the second defendant in the sum of €1,467,102.96. The sum against the first defendant represented an award against him personally in the sum of €1,429,166.22 and an award on a joint and several basis with the second defendant, in the sum of €40,548.60 (those sums less surcharge interest of €463.39). The sum against the second defendant was sought in the sum of €1,387,003.82 and €40,000 (those sums less surcharge interest of €449.46).
The first and second defendants have appealed against the judgment and order of the High Court. They will be referred to as the appellants in this judgment. As it has some relevance to the issues in this appeal, it must be noted that the appellants were legally represented in the High Court and the Notice of expedited appeal was filed by their solicitor and settled by counsel. They represented themselves at the hearing of the appeal.
The appellants carried on the business of professional landlords. They are husband and wife. They own a portfolio of commercial properties in Cork city. By letter of loan offer dated the 20th May, 2013, the respondent offered to refinance three facilities of the first appellant. Repayment was:
“On demand at the pleasure of the Bank subject to repayment/refinance on 31/12/2013. In the interim interest is to be funded by way of a monthly standing order in [respect of a specified amount]”.
A further letter of loan offer of the same date was made to both appellants and accepted by them. This related to a loan account and an overdraft facility. This was said to be repayable “[o]n demand at the pleasure of the Bank subject to repayment/refinance by 31.12.2013”.
Security for the facilities included two letters of guarantee from the second appellant for €1,650,000 and interest and €40,000 and interest in each case. The first guarantee was held as supporting security facilities 1 and 2 and the second was held as supporting security for facility 3. The first appellant expressly waived his entitlement to take independent legal advice prior to signing the letter which he signed and accepted on the 24th May, 2013. The funds were drawn down by way of refinancing i.e. they had previously been drawn down in respect of the existing facilities. It is and was common case before the High Court that the facilities were not repaid or refinanced and each of the loan accounts remained outstanding.
At the High Court, the appellants sought liberty to defend the proceedings and argued that they had established an arguable ground of defence in respect of: -
(a) The proper construction of the letters of May 2013;
(b) The alleged improper motives of the respondent in its dealings with the appellants and in particular in seeking summary judgment in these proceedings; and
(c) That the guarantees granted by the second appellant were discharged by a material alternation of the underlying loans.
The High Court judgment records that “the defendants advanced a variety of other arguments which were not pursued at the hearing of this case and therefore do not feature in this judgment.” Despite that statement a number of those grounds were argued at the oral hearing. In respect of all the issues argued before her, the trial judge rejected the case made out on behalf of the appellants and gave liberty to enter final judgment as set out above.
The notice of expedited appeal lists ten grounds of appeal. Grounds 1 to 3 relate to the interpretation of the loan offer of May 2013. Ground 4 appears to contain an error in excluding the word “not”. It seems the ground meant to refer to the trial judge erring in law and in fact in not holding that the respondent demanded repayment of the loan in bad faith and pursuant to ulterior motives. Ground 5 repeats a claim that the guarantees were invalid and unenforceable against the second appellant. Ground 6 is a general plea that the trial judge erred in holding that the appellants did not have a valid defence. Ground 7 is a general plea relating to a valid counterclaim. Ground 8 relates to a stay of execution. Ground 9 refers to a failure to have regard to the supplemental affidavits of the appellants. Ground 10 claims that there was a failure of natural justice by not giving the appellants a right to be heard and a fair hearing.
The written legal submissions of the appellants, which were filed by them in person, refer to 21 issues to be decided at the appeal. Many of these issues were not contained in the notice of expedited appeal and/or were expressly abandoned at the hearing in the High Court.
At the hearing of the appeal, the second appellant, on her own behalf and on behalf of the first appellant submitted that the High Court had been deceived by the respondent and by counsel making statements misrepresenting fact. This was explained as a reference by counsel to over €7,000,000 owed by the appellants to the respondent. On a query from the bench, this came from a reference in the transcript to that figure. It was abundantly clear from the transcript (including from its context within italics) that the reference to €7,000,000 was contained in a quote that counsel for the respondent had clearly read from another case. It was only after this was pointed out that the appellants withdrew this allegation of deceit.
In their written submissions, the appellants raised issues concerning proof of debt (under a number of separate sub-headings). As stated above, this was not at issue in the High Court proceedings, was not part of the notice of expedited appeal and is therefore not correctly before this Court as a ground of appeal. This point will not be considered further and is rejected.
The appellants also claimed that the judge was dismissive of their argument regarding the three zero balance mortgages unlawfully retained as security by the bank in the May 2013 agreements. This was not contained in the notice of expedited appeal nor was this argument developed any further in the oral or written submissions. There appears to be no real criticism of the trial judge's summary of the respondent's release of security. For all these reasons this point will not be considered further and is rejected.
The appellants complain that the total amount owed was circa €1.5 million but that the award was for circa €3 million. Apart from the fact that this was not a ground of appeal, it is clear that this issue is misconceived. The judgment was entered against each appellant on the basis set out above. Any monies realised by the respondent in executing against either of the appellants will result in a pro tanto reduction of their respective indebtedness.
The appellants, in their written submissions, raised for the first time an issue with the Central Bank's Tracker Mortgage Examination. This is not a matter which is relevant to any issue properly before this Court by way of appeal. This point will not be considered further and is rejected.
The appellants claim discovery in their written submissions. Discovery was only raised after judgment was given. It was not (for good reason) before the High Court and is not a matter properly before this Court. This point will not be considered further and is rejected.
The appellants claim that at the time proceedings issued, one of the security documents was in the name of AIB Mortgage Bank. It is not at all surprising this issue was not argued before the High Court and was not a ground of appeal. In any event, it is not properly before this Court and the point will not be considered further and is rejected.
The appellants made a further claim in relation to the costs of the proceedings and claim the respondent's behaviour has exacerbated the costs. This is done without context. In any event this particular issue as regards costs is not properly before the court at this point in the proceedings.
The appellants claim that there was no proof of drawdown in 2013. This is against a background where this was a restructuring of loans. This argument was not contained in the grounds of appeal. Apart from noting that such an argument has already been described as “a contrived and empty argument devoid of any merit whatsoever” in Bank of Ireland v Flanagan [2015] IECA 56 this point will not be considered further and is rejected.
Another new ground advanced in written submissions is, ...
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