Bank of Ireland Mortgage Bank v White
| Jurisdiction | Ireland |
| Judge | Mr. Justice MacGrath |
| Judgment Date | 22 February 2019 |
| Neutral Citation | [2019] IEHC 465 |
| Court | High Court |
| Docket Number | [2014 No. 1492 S] |
| Date | 22 February 2019 |
[2019] IEHC 465
THE HIGH COURT
MacGrath J.
[2014 No. 1492 S]
AND
Summary judgment – Loan agreement – Arguable defence – Plaintiff seeking summary judgment – Whether an arguable defence had been advanced by the defendants
Facts: The plaintiff, Bank of Ireland Mortgage Bank, applied to the High Court for summary judgment. The amount claimed in the summary summons was €249,615.80 together with interest. This had since been reduced due to the sale of the property, the subject of the mortgage loan offer and the application of the net proceeds of the sale in reduction of the alleged debt. In response to the application for summary judgment, the first defendant, Mr White, advanced one ground of defence. He contended that the property was sold at gross undervalue and that in the context of such sale, the receiver was acting as agent of the plaintiff, rather than as his agent. The second defendant, Mrs White, advanced two grounds of defence. She contended that she did not sign, nor was she party to, the mortgage loan agreement. She did not deny that monies were subsequently transferred into an account in the names of both herself and the first defendant, but she averred that she did not sign the agreement and she was not bound by the terms of the mortgage loan document. Mrs White also contended that the property was sold at an undervalue and argued that the receiver effectively took his instructions from the plaintiff and therefore was a de facto and de jure agent of the plaintiff. It was therefore contended that the plaintiff was ultimately responsible for the actions of the receiver and that any sale at undervalue must be set off against the loan amount allegedly due.
Held by MacGrath J that no arguable defence had been advanced by Mr White to suggest that he was not liable for the loan save the argument, which he had rejected, that the receiver acted as agent of the bank, that the property was sold at undervalue, and that the debt due to the bank must be reduced by the amount of such undervalue. MacGrath J concluded, therefore, that the plaintiff was entitled to summary judgment in the sum claimed, being €171,825.12 plus interest from 2nd June, 2017, as against Mr White.
MacGrath J held that, in relation to Mrs White, he would refuse the application for summary judgment and grant her liberty to defend the proceedings on the basis that she did not sign the loan agreement, was not otherwise a party thereto and was not liable thereon.
Application granted in part.
This is an application for summary judgment. The amount claimed in the summary summons is €249,615.80 together with interest. This has since been reduced due to the sale of the property, the subject of the mortgage loan offer and the application of the net proceeds of the sale in reduction of the alleged debt. Mr. and Mrs. White are separately represented in these proceedings.
Ms. Fiona Cassidy, a manager in the arrears support unit of the plaintiff bank, in an affidavit sworn on 12th September, 2014, grounding the application for summary judgment avers that the defendants applied to the plaintiff for a mortgage loan in respect of property at 75 Riversdale, Oranmore, Galway City. By letter dated 6th October, 2004, the plaintiff offered to loan to the defendants the sum of €220,000 to be repaid over 25 years by means of an ‘ interest combo mortgage loan’ at an initial fixed interest rate of 2.750% for the first twelve instalments of €503.02. Following this the mortgage loan was to continue at a variable interest rate for the remainder of the 25-year term. At para. 3 of her affidavit Ms. Cassidy avers that the defendants, and each of them, indicated their agreement to the terms of the loan by signing it on 11th October, 2004. Funds were thereafter drawn down into a mortgage account which was in the name of both defendants. The property at 75 Riverdale, Oranmore, Galway City was provided as security for the loan.
Ms. Cassidy avers that by signing the said mortgage loan offer letter, the defendants agreed to the conditions contained therein including clause 4(b) which stipulated, inter alia, that the plaintiff was entitled to demand early repayment of the principal sum and accrued interest in the event of default. It is contended that the defendants were in breach of clause 4(b) by failing to make repayments on the due dates. The plaintiff demanded repayment by letter dated 10th February, 2011. This act of default, it is pleaded, entitles the plaintiff to exercise the powers conferred upon it to seek early repayment of the principal and accrued interest.
On 23rd October, 2013, Mazars were appointed receivers over the property and on 30th October, 2014, the property was sold by the receiver. The gross sale price achieved was €100,000.
In response to the application for summary judgment, the first named defendant advances one ground of defence. He contends that the property was sold at gross undervalue and that in the context of such sale, the receiver was acting as agent of the plaintiff, rather than as his agent.
Mrs. White advances two grounds of defence. She contends that she did not sign, nor was she party to, the mortgage loan agreement. She does not deny that monies were subsequently transferred into an account in the names of both herself and the first named defendant, but she avers that she did not sign the agreement and she is not bound by the terms of the mortgage loan document. Mrs. White also contends that the property was sold at an undervalue and argues that the receiver effectively took his instructions from the plaintiff and therefore was a de facto and de jure agent of the plaintiff. It is therefore contended that the plaintiff is ultimately responsible for the actions of the receiver and that any sale at undervalue must be set off against the loan amount allegedly due.
In an affidavit sworn on 4th February, 2015, regarding the loan offer of 6th October 2004 allegedly signed by her some days later, Mrs. White avers:-
‘…I say that the signature that appears on the final page of the exhibit is not my signature and I do not know who signed the letter of offer on my behalf, and I did not give my authority or consent to any other person doing so.’
At para. 9 of her affidavit she avers that without prejudice to her assertion that she has no liability to the plaintiff for the repayment of the monies sought in the proceedings, she wishes and intends to examine the conduct of the plaintiff bank and the receiver. She complains that the receiver did not rent out the property as he should have, in order to reduce any liability to the bank. She also complains that the property was sold at undervalue and that from inquiries made by and on her behalf, the market value of the property in October, 2014 was in the region of €140,000, a figure reviewed in a later affidavit. She queries the circumstances surrounding the sale and describes them as being very unusual. Mrs. White resides in the vicinity of the property but never saw a ‘ For Sale’ sign on the house and there appeared to be no attempt by the receiver to market the house. At para. 10 of her affidavit she avers to her belief that the receiver owes a duty to obtain the best possible price that the circumstances permit and that this was not done. She states that she will adduce expert evidence to this effect. At para. 11 of her affidavit, she avers:-
‘I am further advised that the Bank may be responsible for the conduct of the receivership and I ought to be permitted to obtain discovery of all communications between the receiver and the Bank.’
Finally, she avers that if it is concluded that she is indebted to the bank, credit should be given for the sale proceeds of the property which ‘ should have realised if reasonable care had been used’.
Mrs. White, in her first affidavit, is critical that when the matter first came before the Court no affidavit had been sworn by the plaintiff bank updating the Court on the fact that the property had been sold.
Mr. White, in an affidavit sworn on 17th December, 2014, does not dispute that the monies were received by him. Further, he does not in that affidavit, positively aver that the receiver was acting as agent of the bank. He alleges that the property was sold at an undervalue, that other properties identical in nature to that of the sale property were sold for considerably in excess of the price achieved on sale. However, while it is not expressly contended that the receiver was the agent of the plaintiff, Mr. White refers to the ‘ plaintiff or its receiver’. It is not expressly averred that the receiver took his instructions and acted under the guidance, and at the behest, of the plaintiff such that he might be deemed to be an agent of the bank. Nevertheless, it is to be observed that it was only shortly prior to the swearing of the affidavit by Mr. White, that he and his solicitors became aware of the sale of the property.
By letter dated 15th December, 2014, Mr. White's solicitors, in correspondence with the solicitors for the plaintiff bank, sought details of the sale of the property and stated:-
‘Please do not respond to this request by saying we should contact the Receiver directly. The Receiver was appointed by the Bank over the property and accordingly it is appropriate for this request to be directed to yourselves.’
On behalf of the bank, Ms. Andrea de Courcey, legal case manager in its arrears support unit, in an affidavit sworn on 29th June, 2015, avers that the alleged failure on the part of the receiver to obtain the best available price for the property does not have any bearing on the plaintiff's entitlement to judgment. The receiver is a separate and distinct legal person from...
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