Bank of Ireland Mortgage Bank v Murray and Another

• Jurisdiction: Ireland
• Court: Supreme Court
• Judge: Mr. Justice Maurice Collins,Ms. Justice Elizabeth Dunne,Mr. Justice Seamus Woulfe,Mr. Justice Gerard Hogan
• Judgment Date: 04 May 2025
• Neutral Citation: [2025] IESC 24
• Year: 2025
• Docket Number: S:AP:IE:2024:000064

Between

Bank of Ireland Mortgage Bank U.C.

Plaintiff/Respondent

and

Brian Murray

Defendant/Appellant

and

Attracta Murray

Defendant

[2025] IESC 24

Dunne J.

Woulfe J.

Hogan J.

Murray J.

Collins J.

S:AP:IE:2024:000064

AN CHÚIRT UACHTARACH

THE SUPREME COURT

Summary judgment – Loan – Consumer Credit Act 1995 – Appellant appealing from summary judgment – Whether the loan was unenforceable

Facts: The respondent, Bank of Ireland Mortgage Bank (the Bank), advanced two loans (the 2003 Loan and the 2007 Loan) ostensibly to both defendants, Mr Murray (the appellant) and Mrs Murray. The Bank issued proceedings in April 2013 claiming debt due on foot of the 2007 Loan and monies had and received by the defendants. The High Court (Baker J) ordered that the Bank recover from the appellant the sum of €132,355.63 and that the Bank recover as against Mrs Murray the sum of €202,233.03. The appellant appealed to the Court of Appeal on two grounds: (1) that the trial judge erred in failing to find that the 2007 Loan was unenforceable by reason of the provisions of ss. 30 and 38 of the Consumer Credit Act 1995; and (2) that the trial judge erred in finding that the appellant had “knowing receipt” of the proceeds of the 2007 loan as that term has been interpreted by the High Court of England and Wales in Primlake Ltd (in Liquidation) v Matthews [2006] EWHC 1227 (Ch). The Court of Appeal (Binchy J) dismissed the appellant’s appeal: [2024] IECA 11. On 16 July 2024, the Supreme Court granted the appellant leave to appeal in respect of the following grounds: (1) whether the 2007 Loan was unenforceable by virtue of the provisions set out in ss. 30 and 38 of the 1995 Act; (2) whether the appellant can be required, under the law of restitution, to repay the contractual debt to the Bank in circumstances where the Bank was successful in obtaining a judgment in the full amount against Mrs Murray; and (3) whether the Bank should have an entitlement to its costs as against the appellant in view of, inter alia, the Bank’s practice of processing joint mortgage agreements where only one of the parties is present.

Held by Dunne J that the appellant, whose proposition that he had no agreement with the Bank was accepted, was not a consumer who was a party to any kind of agreement with the Bank and could not invoke the provisions of the 1995 Act by way of defence of the proceedings. Dunne J could see no basis for disagreeing with Binchy J’s conclusion that it would not be unfair to hold the appellant “accountable for the full amount of the loan in the absence of a detailed analysis of the benefits that he received”. Dunne J held that the appellant was the beneficiary of money paid under a mistake of fact and, as such, the Bank was entitled to pursue its claim for restitution against him, notwithstanding the subsisting contract between it and Mrs Murray. Dunne J held that this was a case which was far removed from the concept of leapfrogging as described in cases such as Costello v MacDonald [2011] EWCA Civ 930; for that reason, the appellant could not look to the concept of leapfrogging to prevent the Bank from seeking to recover the debt due to it by way of a claim for restitution. Dunne J saw no basis for disagreeing with the conclusion of the trial judge that she was not satisfied that the appellant “can show that he changed his position or engaged in expenditure which would make it unfair to him, in all the circumstances, to require him to make restitution in whole or in part”. Dunne J could not conclude that the conduct of the Bank was such as to disentitle it from recovering the sum it provided to the defendants on the grounds of public policy.

Dunne J dismissed the appellant's appeal.

Appeal dismissed.

JUDGMENT of Mr. Justice Maurice Collins delivered on 4 June 2025

1 I agree with the judgment of Dunne J and with her proposed disposition of this appeal.

2 Given that the Court is divided as to the outcome of the appeal, I wish to explain my position briefly. For that purpose, I gratefully adopt the detailed statement of facts set out in Dunne J's judgment.

The Elements of a Claim in Unjust Enrichment

3 There was no dispute as to the essential elements of a claim in unjust enrichment. The claimant must establish three things: (1) that the defendant has been enriched; (2) that such enrichment was at the expense of the claimant and (3) that such enrichment was “ unjust”. Where these elements are established, the claimant is presumptively entitled to a remedy, normally that of restitution — the return of the enrichment to the claimant. However, the defendant may be able to establish a defence by demonstrating that there is some reason why the claimant should be denied a remedy: see Corporation of Dublin v Building and Allied Trade Union [1996] 1 IR 468, per Keane J (as he then was) at 484, as well as the discussion in Mitchell et al, Goff & Jones on Unjust Enrichment (10 ^th ed; 2022) (“ Goff & Jones”) at §§1–14 — 1–37.

4 As Keane J observed in Corporation of Dublin v Building and Allied Trade Union, there is seldom any real difficulty in determining elements (1) and (2). That is certainly the position here. Mr Murray was clearly enriched and equally clearly that enrichment was at the expense of the Bank. The evidence of such enrichment here went much beyond the fact that the 2007 loan proceeds were paid into a joint account held by Mr Murray with his wife (as to the significance of which, see Goff & Jones, §4–76). The High Court Judge (Baker J) found generally that Mr Murray and his wife “ had the benefit of the monies advanced by the Bank” ( [2019] IEHC 234, §159) and found specifically that the loan proceeds had been applied to discharge tax liabilities of Mr Murray, to fund a payment to the Department of Family and Social Affairs in respect of a scheme for his benefit and to make a payment to a firm of solicitors to pay for a field purchased by him (§§159–168). In addition, the 2007 loan was used to pay off the balance of the earlier loan (the 2003 loan) which had been used to purchase an apartment in Spain for Mr Murray and his wife. Payments were also made to the benefit of Mr Murray's children. 1

5 As to element (3) — whether an enrichment is “ unjust” — the claimant must establish an “ unjust factor”, a legally recognised factor that makes the defendant's enrichment unjust: Goff & Jones, §1–25. Unjust factors are recognised “ because they establish that the claimant did not intend the defendant to receive a benefit in the circumstances, either because the claimant never had an intent to benefit the defendant in those circumstances or the intent was vitiated or qualified in some way”: Dargamo Holdings Ltd v Avonwick Holdings Ltd [2021] EWCA Civ 1149, [2022] 1 All ER (Comm) 1244 (“ Dargamo”) per Carr LJ at §58. An unjust enrichment claim is not based “ on a wide ranging and open-ended assessment of fairness (or justice) in the round” ( Dargamo, §59) and “ does not create a judicial licence to meet the perceived requirements of fairness on a case-by-case basis: legal rights arising from unjust enrichment should be determined by rules of law which are ascertainable and consistently applied” ( Investment Trust Companies v Revenue and Customs Commissioners [2017] UKSC 29, [2018] AC 275 (“ Investment Trust Companies”), per Lord Reed JSC, §39). Rigour in identifying the necessary “ unjust factor” avoids the danger of “ palm tree justice”: Corporation of Dublin v Building and Allied Trade Union, pages 483–484.

6 Here, again, there is no difficulty in identifying a recognised “ unjust factor”. On the facts as found by the High Court, the Bank advanced the 2007 loan — and thereby enriched Mr

Murray — in the mistaken belief that Mr Murray was a co-borrower, who would therefore be jointly and severally liable to repay that loan and in the mistaken belief that the 2007 loan would be secured on the Murrays' family home. According to Goff & Jones, “ [t]he starting point is now that any causative mistake of fact or law, spontaneous or induced, can qualify; the old rule against recovery for mistakes of law has been abandoned; and the courts have eschewed any requirement for the mistake to be a ‘liability mistake’, a ‘fundamental mistake’, or a mistake of any other particular type” (§9-01). Here, the Bank's mistake was one of fact and it was indeed fundamental to its decision to agree to the 2007 loan: it is perfectly clear that, if it had been aware of the true position, the Bank would not have made the 2007 loan. Mr Murray was, after all, the sole earner and it was by reference to his income as a fisherman that the Bank made its credit decision. Far from being spontaneous, the Bank's mistake was induced by the actions of Mrs Murray — not merely her actions leading to the making of the 2007 loan but also those relating to the 2003 loan. As of 2007, as far as the Bank was concerned, Mr and Mrs Murray were existing borrowers, with a performing loan secured on their family home. That mistaken belief — also the product of Mrs Murray's actions — was a significant factor in the Bank's decision to make the 2007 loan

7 The facts here are singular. If — as the High Court found to be the case — Mr Murray was not a party to either loan, it necessarily follows that the Bank was systematically misled, including by the furnishing to it of documents apparently signed by Mr Murray, where his signature was apparently witnessed by an independent third party (in one instance, a solicitor and, in another, a Commissioner for Oaths) but which, it transpired, he had not seen, still less signed (see the more detailed account in the judgment of Dunne J, at §§133 and following). Whatever Mrs Murray's motivation — and that is an issue to which I will return — the effect of her actions on the Bank was clear: it agreed to make a substantial loan in the mistaken belief that the borrowers were Mr and...