Bank of Ireland Mortgage Bank v McCarthy and Another

• Jurisdiction: Ireland
• Judge: Mr. Justice Binchy
• Judgment Date: 26 April 2023
• Neutral Citation: [2023] IECA 96
• Docket Number: Appeal Number: 2022/74
• Court: Court of Appeal (Ireland)

Between/

Bank of Ireland Mortgage Bank

Plaintiff/Respondent

and

John McCarthy and Jeremiah Healy

Defendants (Jeremiah Healy, sole Appellant)

[2023] IECA 96

Haughton J.

Ní Raifeartaigh J.

Binchy J.

Appeal Number: 2022/74

THE COURT OF APPEAL – UNAPPROVED

Summary judgment – Bona fide defence – Plenary hearing – Appellant appealing against summary judgment – Whether the appellant advanced sufficient evidence of a credible and bona fide defence to the proceedings such as to require the proceedings being referred to plenary hearing

Facts: The plaintiff/respondent, Bank of Ireland Mortgage Bank, advanced three loans to the first defendant, Mr McCarthy, and to the second defendant/appellant, Mr Healy, the first on 1st October 2007, and the second and third on 9th June 2008. It was not disputed that those loans were accepted and drawn down, and that security was provided by the defendants to the respondent over certain properties. The defendants fell into arrears in repayment of the loans, and in the usual way the respondent issued demands for payment of all sums due by the defendants. When the defendants failed to repay the loans, the respondent appointed a receiver over the secured properties, all of which were sold on 23rd December 2014, and the proceeds of sale of which were applied in reduction of the outstanding balances of the defendants’ loans. Following the disposal of the secured properties, the respondent issued, on 31st July 2015, summary judgment proceedings against the defendants. A motion for judgment was issued by the respondent in February 2017. On 24th February 2022, the High Court (Hyland J) granted the respondent summary judgment against the defendants in the sum of €914,762.19. The appellant appealed to the Court of Appeal from that decision. In the affidavits of the appellant, the defendants advanced three arguments in opposition to the proceedings. Those arguments were: (1) that the respondent had failed to account properly for the sale proceeds of the secured properties; (2) that the European Central Bank main-refinancing operations minimum bid rate (the Rate) had been abolished with effect from October 2008, and the respondent had failed to follow the procedures required by terms and conditions applicable to each loan as regards the application of a replacement rate; and (3) that the respondent had failed to admit the appellant’s loans to its tracker mortgage review. The appellant contended that the trial judge erred in failing to find that those matters constituted a credible and bona fide defence to the proceedings.

Held by Binchy J that there was nothing at all in the affidavits exchanged between the parties regarding the sale of the secured properties that gave rise to even the possibility of a defence to the proceedings, and he could find no fault with the conclusion of the trial judge on that issue. Binchy J held that the case the appellant wished to make about the Rate could not succeed without evidence, and since he had provided the Court with no evidence, it had no prospect of success. Binchy J held that reliance on The Governor and Company of the Bank of Ireland v Joanne Phelan could not overcome that evidential deficit, not least in circumstances where Phelan had concluded without the issue being determined. Binchy J held that the appellant’s argument that the trial judge fell into error in failing to hold that the respondent failed to admit the appellant to its tracker mortgage review contradicted the appellant’s earlier argument that with effect from 15th October 2008 there was no rate of interest applicable to the loans. Binchy J held that the mere admission/non admission of the appellant’s complaint to the respondent’s tracker mortgage review programme was irrelevant since it had no bearing at all on the issue of whether or not the Rate was discontinued and it therefore could not possibly constitute a defence to the respondent’s claim.

Binchy J held that, since all of the appellant’s grounds of appeal had failed, it followed that the respondent had been entirely successful in the appeal.

Appeal dismissed.

NO REDACTION NEEDED

JUDGMENT of Mr. Justice Binchy delivered on the 26 ^th day of April 2023

1 . This is a judgment in an appeal from a decision of the High Court (Hyland J.) of 24 ^th February 2022 whereby on that date the trial judge granted the respondent summary judgment against the defendants in the sum of €914,762.19. The appeal is brought by the second named defendant, Jeremiah Healy, only (“the appellant”).

Background

2 . The respondent advanced three loans to the defendants, the first on 1 ^st October 2007, and the second and third on 9 ^th June 2008. The first loan, bearing account reference number XXXX7720 was in the sum of €750,000, the second, bearing account reference number XXXX8167 was in the sum of €250.000 and the third bearing account reference number XXXX9207 was also in the sum of €250.000. It is not disputed that these loans were accepted and drawn down, and that security was provided by the defendants to the respondent over certain properties (the “secured properties”).

3 . The defendants fell into arrears in repayment of the loans, and in the usual way the respondent issued demands for payment of all sums due by the defendants. When the defendants failed to repay the loans, the respondent appointed a receiver over the secured properties, all of which were sold on 23 ^rd December 2014, and the proceeds of sale of which were applied in reduction of the outstanding balances of the defendants' loans.

4 . Following the disposal of the secured properties, the respondent issued, on 31 ^st July 2015, summary judgment proceedings against the defendants, claiming a total sum of €866,181.74. An appearance was entered on behalf of the defendants on 8 ^th October 2015, and while it is unclear what transpired in the meantime, a motion for judgment was issued by the respondent in February 2017. By this motion, the respondent sought judgment in the sum of €876,619.62.

5 . The motion for judgment was grounded on the affidavit of Mr. Sean Buckley, who describes himself as a manager in the arrears support unit of the respondent. In the usual way, Mr. Buckley deposes as to the issue of letters of loan offer by the respondent to the defendants and the default of the defendants in making repayment of each of the loans in accordance with the terms and conditions applicable thereto. He refers to the demands made by the respondent for repayment of all sums due and owing in respect of each loan and describes the balance outstanding in respect of each loan as of the date of his affidavit.

6 . In an affidavit sworn on 2 ^nd May 2017, in reply to the affidavit of Mr. Buckley, the appellant refers to the secured properties, and to the sale of those properties through a receiver. The appellant avers that on 8 ^th March 2017, his solicitor sought particulars of the sales of the secured properties including the dates of the sales, by whom they were sold, the sale prices, particulars as to how the proceeds of sale were credited to the accounts of the defendants, and how those amounts were calculated. He exhibits his solicitor's letter of 8 ^th March 2017, and a reply received from the solicitors for the respondent of 13 ^th March 2017 by which the solicitors for the respondent stated that they had the referred the defendants' solicitor's letter of 8 ^th March to their client for instructions. They also stated that the affidavit of Mr. Buckley had made no reference to the sales of the secured properties because the proceedings are summary judgment proceedings.

7 . The disposals of the secured properties were addressed by an affidavit sworn on 3 ^rd April by a Mr. Emmet Pullan, also a manager in the arrears support unit of the respondent. Four properties were sold. In a table in the affidavit, Mr. Pullan provides a description (i.e. the address) of each the four properties, the sale price, the date of sale and the amount credited to the accounts of the defendants. Three of the properties had been sold as part of a portfolio sale of properties. In respect of the sales of those properties, Mr. Pullan avers: “I say that the properties detailed at entries 1 – 3 in paragraph 4 above were sold as part of a portfolio sale of properties in December 2014. The plaintiffs' assessment of the fair market value of the properties prior to the sale was greater than the amount that the ultimate purchaser was willing to pay. Therefore, the sales proceeded on the basis of the offer made by the purchaser and, although not obliged to do so, the Bank applied a further credit, in addition to the net proceeds received, to the defendants' accounts.” Mr Pullan then avers that as of 8 ^th February 2017, the aggregate sum of €893,199.18 remained due and owing by the defendants to the respondent.

8 . The appellant swore a further affidavit on 5 ^th July 2019. In relation to the secured properties, the appellant avers that the defendants had made a data access request of the respondent on 19 ^th July 2016, and while they had received a reply to that request, no information had been provided at that point in time in relation to the sale of the secured properties. He then refers to the affidavit of Mr. Pullan and to the apparent sale of the secured properties by way of private treaty as part of a portfolio sale of properties. He claims he is entitled to further information in relation to the sales of the secured properties so that he can properly assess the value of the properties at the time of sale, and in particular he says that he needs access to the valuations which were carried out on behalf of the respondent in connection with the sales.

9 . The appellant also raised two other issues by this affidavit. The first of these issues concerns the rates of interest applied to the loans of the defendants. The appellant avers that he has been informed...