Allied Irish Banks Plc and Another v Boyd and Another

• Jurisdiction: Ireland
• Judge: Ms. Justice Butler
• Judgment Date: 21 December 2023
• Neutral Citation: [2023] IECA 318
• Court: Court of Appeal (Ireland)
• Docket Number: Record No.: 2022/256

Between/

Allied Irish Banks Plc

and

Everyday Finance Designated Activity Company

Plaintiff/Appellant

and

Michael Boyd and John Boyd

Defendants/Respondents

[2023] IECA 318

Costello J.

Faherty J.

Butler J.

Record No.: 2022/256

High Court Record Number: 2017/1570S

THE COURT OF APPEAL

CIVIL

NO REDACTIONS NEEDED

JUDGMENT of Ms. Justice Butler delivered on the 21 ^st day of December 2023

Introduction

1 . This is an appeal taken by the appellant from a decision of the High Court (Heslin J.) [2022] IEHC 574 setting aside an order made by Murphy J. on 5 May 2021 renewing a summary summons which had been issued by the appellant on 9 August 2017.

2 . The decision of Heslin J. examines the arguments made by the parties in some detail before concluding that the plaintiff had not established special circumstances which justified an extension of time to renew the summons under O.8, r.4 of the Rules of the Superior Courts. The main ground on which the appellant appeals this decision is the contention that the trial judge erred in considering and rejecting each of the matters relied on by it separately rather than considering whether cumulatively they amounted to special circumstances. The appellant also contends that the trial judge erred in not concluding that it would be in the interests of justice to permit the renewal of the summons.

3 . There was no significant disagreement between the parties as to the applicable law – namely O.8 of the Rules as substituted by S.I. 482 of 2018 and as interpreted by Haughton J. in Murphy v. HSE [2021] IECA 3. The dispute between them lay in the application of the legal principles to the particular facts of the case. As those facts are complex, I will set them out in some detail at the outset before looking at the relevant legal principles and the decision of Heslin J. I will then consider whether, in light of all of the facts and circumstances, the conclusion reached by Heslin J. that the renewal of the summons should be set aside should be upheld.

4 . It might be noted that by order of Costello J. made in the Court of Appeal on 22 February 2023 Everyday Finance DAC were joined to the proceedings as a second plaintiff and, for the purposes of this appeal, a second appellant. This arose in circumstances where the loan, the subject of the underlying proceedings, was sold by AIB to Everyday Finance DAC on 4 October 2022. Nothing in particular turns on this save that the reader should be aware that references to “the appellant” in this judgment in the context of events, all of which took place before October 2022, are necessarily references to AIB alone.

Background Facts

5 . The underlying proceedings arise out of the failure of one Agnes Boyd (also “Mrs. Boyd”, “the defendant” or “the deceased”) to make repayments on two loans made to her by the appellant in 2006 and 2007. The circumstances of these loans were unusual in that Mrs. Boyd was 77 years of age and a widow at the time the loans were drawn down by her and the amount was large – over €1.7m. between two separate loans. It appears that the purpose of the loans was twofold. Some €200,000 was to be applied towards the renovation of Mrs. Boyd's existing dwelling house and the balance was to be applied towards the purchase of a new dwelling house. The original intention was that the proceeds of sale of the existing dwelling house would then be applied to substantially reduce the amount outstanding on the loan for the new dwelling house. The timing of the loans was inauspicious and following a crash in the property market in 2008 Mrs. Boyd was left with significant residual debt to the appellant. Formal demands for repayment were made by the appellant in July 2015 and January 2016 but the outstanding balance on the loans was not repaid.

6 . This led the appellant to issue proceedings by way of summary summons on 9 August 2017 seeking judgment in the sum of €1,025,303.35. The appellant engaged a summons server who attempted to serve the proceedings on Mrs. Boyd, who was by then 88 years of age, at her home. In all, five unsuccessful attempts at service were made between 24 October 2017 and 14 November 2017. On two occasions there was no reply when the summons server knocked at the door. On two occasions the door was answered by a man who indicated that Mrs. Boyd was incapacitated and could not come to the door. On one other occasion the summons server met a different man in the driveway who told him that Mrs. Boyd could not come to the door which was not opened when he knocked. As a result of this the appellant instructed its solicitors to prepare an application for substituted service. The solicitors were also instructed to issue possession proceedings regarding the property which had been provided as security for the loans in the appropriate Circuit Court. These proceedings were drafted but were not issued until much later. Likewise motion papers for the substituted service application were drafted but before they were filed the appellant received a letter of complaint from Mrs. Boyd dated 22 November 2017. This letter was stated to have been prepared by her with assistance. According to an averment made by the appellant's solicitor, the appellant decided not to progress the proceedings nor to issue the Circuit Court proceedings until the complaint had been resolved.

7 . Before I look at the handling of the complaint, I should note that the appellant relies on the preceding facts as establishing, firstly, the deliberate evasion of service by Mrs. Boyd and persons who were presumed to be her sons and, secondly, from the terms of the complaint, that Mrs. Boyd was aware that the appellant had issued High Court proceedings against her. In fact, the appellant sees the complaint as having been made as a direct response to the litigation.

8 . The detail of the complaint made by Mrs. Boyd is not relevant to the issues I have to decide save insofar as the appellant contends that it does not disclose any legal or equitable defence to the proceedings. Mrs. Boyd complained that the appellant had failed in its duty towards her, as an elderly and vulnerable customer, by providing her with facilities and products which were inappropriate in light of her age, income and lack of business experience. She said that the appellant failed to advise her of the risks inherent in the proposal or to caution her as to the need to make provision for her future health and care needs. All of this, it was contended, led to a gross deterioration in her financial circumstances.

9 . The letter concluded by inviting the appellant to meet with Mrs. Boyd's representatives or members of her family “without seeking to lay down pre-conditions”. The letter was copied to the Central Bank and to the Financial Services & Pensions Ombudsman (“FSPO”). Separately, on 8 February 2018 Mrs. Boyd made a formal complaint in similar terms to the FSPO. Very shortly after this Mrs. Boyd died on 3 April 2018.

10 . The death of a party to litigation necessarily presents procedural issues which have to be addressed before the proceedings can continue. At its most basic, a deceased person cannot participate in court proceedings and, if the litigation is to continue, the proceedings must be reconstituted in order to proceed against the deceased person's estate. However, this cannot be done until a grant of probate has been extracted by the deceased person's personal representatives. If those entitled to extract a grant of probate do not do so, then under s.27(4) of the Succession Act 1965 the High Court may permit someone who is not normally entitled to probate to extract what is termed an ad litem grant to the estate of the deceased person to enable proceedings to be issued or served in cases where a statutory limitation period is due to expire.

11 . Further, under s.9(2)(b) of the Civil Liability Act 1961 proceedings in respect of a cause of action which has survived against the estate of a deceased person cannot be maintained unless either the proceedings had been issued and were pending at the time of death or, if proceedings were not issued at the time of death, they are commenced within the relevant time for that type of action under the Statute of Limitations or within two years from the date of death, whichever is the earlier. The effect of this is that in most routine contract and tort cases, if proceedings have not been issued before a potential defendant dies, the limitation period that would otherwise apply under s.11 of the Statute of Limitations is reduced to two years from the date of death.

12 . Regardless of the difficulties encountered in effecting service, in practical terms when Mrs. Boyd died the appellant had to reconstitute the proceedings against her estate. At this juncture it appears that the appellant also instructed its solicitors to consider whether fresh proceedings should be issued against the estate. It was not immediately possible for the appellant to do either of these things as, on checking with the Probate Office in June 2018 and again in July 2019, it transpired that a grant of probate had not yet been extracted to Mrs. Boyd's estate. The appellant instructed its solicitor to prepare an application seeking an ad litem grant under s.27(4) of the Succession Act but before this could be done, on 2 October 2019, a grant issued from the local Probate Registry to the respondents to this appeal, two of Mr. Boyd's sons who are the executors of her estate.

13 . I am not minded to be especially critical of the appellant for not moving more promptly between June 2018 and October 2019. The summary proceedings were issued comfortably within the time limit under s.11 of the Statute of Limitations and, as they were pending at the time of Mrs. Boyd's death, they did not become subject to the shorter two year time limit under s.9 of the Civil Liability Act 1961. Whilst the...