Bank of Ireland Mortgage Bank v O'Malley

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 29 November 2019
• Neutral Citation: [2019] IESC 84
• Date: 29 November 2019
• Docket Number: Record No: 363/2014
• Court: Supreme Court

[2019] IESC 84

THE SUPREME COURT

Clarke C.J.

Charleton J.

Ní Raifeartaigh J.

Record No: 363/2014

BETWEEN/

BANK OF IRELAND MORTGAGE BANK

PLAINTIFF/RESPONDENT

AND

JOSEPH O'MALLEY

DEFENDANT/APPELLANT

Summary judgment – Particularisation – Burden of proof – Appellant seeking to appeal against summary judgment – Whether the claim contained in the summary summons had been adequately particularised

Facts: The defendant/appellant, Mr O’Malley, appealed to the Supreme Court against an order of the High Court (Cross J) made on 7 July 2014, granting judgment in favour of the plaintiff/respondent, Bank of Ireland, in the sum of €221,795.53, together with the costs of the proceedings to be taxed in default of agreement. A dispute emerged between the parties as to the issues which properly arose for determination on this appeal. It was Bank of Ireland’s contention that the sole issue which arose for decision was as to whether the claim contained in the summary summons had been adequately particularised having regard to the requirements of O. 4, r. 4 of the Rules of the Superior Courts. In Mr O’Malley’s submission, however, it was contended that the true question to be determined on this appeal concerned not just the detail required to be included in the pleadings but also the evidential burden of proof to be discharged by the plaintiff on a summary application such as this.

Held by Clarke CJ that the special indorsement of claim in this case contained insufficient details of how the sum claimed was calculated so as to meet the requirements of O. 4, r. 4 of the Rules of the Superior Courts to the effect that all necessary particulars be provided. Clarke CJ held that the information was insufficient to allow, as the jurisprudence requires, a defendant served with a summary summons in that form to know whether they should concede or dispute the claim. Clarke CJ held that the plaintiff needed to establish the liquidated debt on a prima facie basis before it was necessary for the defendant to establish any defence which met the threshold for plenary hearing. Clarke CJ held that there was insufficient detail in the evidence submitted to provide the Court with an ability to assess whether the precise claim to the debt alleged had been established on such a prima facie basis.

Clarke CJ held that the justice of this case would be fully met by allowing the appeal and by remitting the matter back to the High Court on the basis that Bank of Ireland could apply to amend the special indorsement of claim to include such details as they may think are appropriate in the light of this judgment and could also tender such further evidence as may be appropriate to fill the evidential gap identified. Clarke CJ held that it would then be a matter for the High Court judge dealing with those applications to consider whether the lack of detail identified in this judgment had been remedied to the extent that judgment was appropriate.

Appeal allowed.

Judgment of Mr. Justice Clarke , Chief Justice, delivered the 29th November, 2019

1. Introduction

1.1 Financial institutions, and others, who claim to be owed a so called “liquidated sum” have the opportunity to use the summary procedure provided for in the Rules of the Superior Courts. A debt said to be due as a result of an unpaid loan provided by a financial institution represents one of the most common types of liquidated sum for which that procedure is used. The question which lies at the heart of this appeal concerns the level of detail of the relevant debt which must be set out, both in the summons issued by a financial institution using that procedure and, potentially, in the evidence which must be put before the court in order to substantiate the claim.

1.2 The defendant/appellant (“Mr. O'Malley”) has appealed against an order of the High Court (Cross J.) made on 7 July 2014, granting judgment in favour of the plaintiff/respondent (“Bank of Ireland”) in the sum of €221,795.53, together with the costs of the proceedings to be taxed in default of agreement.

2. Background Facts and High Court Proceedings

2.1 In October 2008, a mortgage loan facility agreement was entered into between the parties for the sum of €225,000 for a term of 18 years, repayable on a variable interest basis and secured by means of a legal charge over property situated at Inishcuttle, Kilmeena, Westport, Co. Mayo. Some amount of time subsequent to this, it is apparent that Mr. O'Malley experienced a change in financial circumstances and full monthly repayments on the loan facility agreement ceased in November 2011. It is not disputed that Mr. O'Malley drew down and has had the benefit of the funds described and that there were arrears outstanding on his account at all material times.

2.2 On 23 January 2014, a summary summons was issued on behalf of Bank of Ireland, seeking judgment in the sum of €221,795.53, which, it was stated, remained owing on the loan agreement. The special indorsement of claim on the summary summons stated, in material terms:-

“6. The Defendant has failed to repay the monies in accordance with the terms of the said loan offer and on or about the 2nd January 2014 the sum of €221,795.53 was due and owing by the Defendant to the Plaintiff.

7. Pursuant to General Condition 4(b) of the loan agreement, the Plaintiff has called upon the defendant to pay the principal and accrued interest due on foot of the said loan.

8. Despite having been called upon to do so, the Defendant has failed refused and/or neglected to repay the sum due and owing to the plaintiff or any part thereof and the entire sum of €221,795.53 remains due and owing by the Defendant to the Plaintiff.”

2.3 In accordance with the normal procedure, Bank of Ireland issued a motion for judgment on 21 February 2014, returnable before the Master of the High Court, which motion was grounded on the affidavit of Fiona Cassidy, an employee of Bank of Ireland, sworn on 14 February 2014. Among the exhibits to that affidavit was a Bank of Ireland document headed “Statement of Account” (“the Statement of Account”), which was said to correspond to Mr. O'Malley's loan account with the bank.

2.4 In May 2014, the matter was transferred to the Judges' List for hearing and the application for summary judgment came before Cross J. on 7 July 2014. It is apparent that the High Court had the benefit of an affidavit sworn by Mr. O'Malley, which at that time had not been filed in the High Court but which was accepted by the High Court judge on the basis of an undertaking to do the same. In that affidavit, it was alleged by Mr. O'Malley that the pleadings of Bank of Ireland were defective in respect of what was said to be a lack of detail concerning the sum of €221,795.53. Mr. O'Malley argued that it is necessary for a plaintiff in summary proceedings to identify and prove the amount of the principal sum still owing, the interest which has accrued and, if applicable, any bank surcharges and/or penalties due. Mr. O'Malley deposed that, in February 2014, solicitors acting on his behalf had requested that a detailed breakdown of the sum of monies alleged to be owed be provided and that, in response, he had received from Bank of Ireland a copy of the Statement of Account. It was Mr. O'Malley's case that, in order that the bank be entitled to judgment, there must be a sufficient calculation set out as to how the amount claimed is said to be due.

2.5 A transcript of the decision of the High Court has been made available to this Court. Acknowledging the complaints of Mr. O'Malley, Cross J. stated:-

“The defendant makes the point, however, that for a summary summons, the requirements of the law, as stated by [Mr.] Justice Butler in [ Allied Irish Banks v. The George Ltd. (Unreported, High Court, Butler J., 21st July 1975)] had not been complied with. I would agree that the indorsement of claim itself doesn't say principal or interest. The affidavit doesn't particularise principal or interest as you would like it. However, the affidavit does refer to the statement of account at [Exhibit 1 to the affidavit of Fiona Cassidy], and I think that this is sufficient to allow the defendant to know in terms of more modern law as to what case he has to meet, and where and how the claim is made, how the arrears, as specified in the exhibit, which is a statement from the bank, details the sum of €221,795.23 as being due, and setting out the arrears … I think, therefore, the defendant is clearly in breach of the loan agreement, and with that, and with the information they've been given, I hold that there is sufficient evidence there to satisfy the requirements of law as to what should or should not be contained in a motion such as this …”

2.6 On that basis, Cross J. granted judgment to Bank of Ireland in the sum of €221,795.53, with a stay of sixth months on the execution of the order. The High Court judge did not grant interest accruing from the date that the proceedings commenced.

2.7 By notice of appeal dated 1 August 2014, Mr. O'Malley sought an order from this Court to set aside the decision of the High Court of 7 July 2014, together with any further order which the Court might deem just. For completeness, it should be noted that this appeal was one of those cases which were initially transferred from this Court to the Court of Appeal under to a direction given under Article 64.3.1 of the Constitution but which have, in recent times, been returned to this Court.

3. Submissions and Case Law

3.1 In considering this appeal, the well-established principles governing the test to be applied by a court in deciding whether to grant summary judgment should first be set out. As held by the Supreme Court in First Commercial Bank plc v. Anglin [1996] 1 I.R. 75, and subsequently endorsed in Aer Rianta cpt v. Ryanair Ltd. [2001] 4 I.R. 607, in deciding whether to grant summary judgment to a plaintiff, the...