Bank of Ireland v Wales

• Jurisdiction: Ireland
• Judge: Ms. Justice Siobhán Phelan
• Judgment Date: 13 July 2022
• Neutral Citation: [2022] IEHC 433
• Court: High Court
• Docket Number: [Record No. 2013/2633 S]

Between:

Governor and Company of the Bank of Ireland

Plaintiff

and

Matthew Wales

Defendant

[2022] IEHC 433

[Record No. 2013/2633 S]

THE HIGH COURT

Summary judgment – Want of prosecution – Inordinate and inexcusable delay – Defendant seeking to dismiss the proceedings for want of prosecution and/or on the grounds of inordinate and inexcusable delay – Whether prejudice to the defendant had been demonstrated

Facts: The plaintiff, the Governor and Company of the Bank of Ireland, instituted proceedings by way of summary summons issued on the 16th of August, 2013 in respect of unpaid loan agreements entered into in August, 2006. The loans were secured against two properties both of which had been sold, one before and one since the issue of proceedings. Substantial payments were made to reduce the original indebtedness but this notwithstanding the claim for the balance alleged to be outstanding was pursued by the plaintiff. The plaintiff issued a motion for liberty to enter final judgment on the 20th of February, 2018. The defendant, Mr Wales, issued a motion seeking to dismiss the proceedings for want of prosecution and/or on the grounds of inordinate and inexcusable delay on the 23rd of April, 2018. At the date of hearing in May, 2022, the plaintiff was seeking judgment in the sum of €166,106.62.

Held by the High Court (Phelan J) that the application for an order dismissing the plaintiff’s claim for delay would be refused on the basis that while the delay was inordinate and periods of same were inexcusable, no real prejudice to the defendant had been demonstrated. Phelan J held that she would make an order pursuant to O. 37, r. 7 of the Rules of the Superior Courts granting the defendant leave to defend the plaintiff’s claim and directing the matter be adjourned to plenary hearing.

Phelan J proposed fixing timelines for exchange of pleadings and the progression of proceedings given the antiquity of the action and she would hear the parties in that regard and any other consequential matters.

Application refused.

JUDGMENT of Ms. Justice Siobhán Phelan, delivered on the 13 ^th day of July, 2022

INTRODUCTION

1 . The within proceedings were instituted by way of summary summons issued on the 16 ^th of August, 2013 in respect of unpaid loan agreements entered into in August, 2006. The loans were secured against two properties both of which have been sold, one before and one since the issue of proceedings. Substantial payments have been made to reduce the original indebtedness but this notwithstanding the claim for the balance alleged to be outstanding is now pursued by the Plaintiff.

2 . This judgment is delivered in respect of two motions, namely:

• I. the Plaintiff's motion for liberty to enter final judgment on the 20 ^th of February, 2018; and

• II. the Defendant's motion seeking to dismiss the proceedings for want of prosecution and/or on the grounds of inordinate and inexcusable delay which motion was issued on the 23 ^rd of April, 2018.

3 . At the date of hearing in May, 2022, the Plaintiff was seeking judgment in the sum of €166,106.62.

PROCEDURAL HISTORY

4 . The summary summons which issued in August, 2013 was served pursuant to an order for substituted service (Peart J.) obtained in March, 2014. An appearance was entered on the 19 ^th of March, 2014. The Plaintiff in the proceedings as issued was initially the ICS Building Society.

5 . The Minister for Finance subsequently approved a scheme of transfer between ICS Building Society and the Governor and Company of the Bank of Ireland (“Bank of Ireland”) by way of statutory instrument made pursuant to the Central Bank Act 1971 ( S.I. No. 257 of 2014).

6 . The application for liberty to enter final judgment was grounded on an affidavit of Mr. Gerard Browne (sworn on the 13 ^th of February, 2018) and was preceded by service of a Notice of Intention to Proceed and Notice of Change of Solicitor which were filed in December, 2016 but following failed attempts at service on various dates in April and May, 2017, were finally served by delivery through the letter box of copy documents at the office of the Defendant's legal practice.

7 . The lack of detail in the claim as pleaded was strongly criticised by the Defendant in his replying affidavit of the 23 ^rd of April, 2018. The filing and delivery of the Defendant's replying affidavit coincided with the Defendant's application to dismiss the proceedings on delay grounds.

8 . Thereafter, by order dated the 9 ^th of November, 2020, the High Court (Simons J.) directed that the title of the present proceedings be amended so as to substitute the Governor and the Company of the Bank of Ireland as Plaintiff on foot of a notice of motion originally returnable to March, 2018. The order further directed that the amended title of the proceedings be duly entered in the Central Office of the High Court with the proper officer. These orders were made consequent upon s. 41 of the Central Bank Act 1971, and in accordance with the principles set out in the judgment of the Supreme Court in First Active Plc v. Cunningham [2018] IESC 11; [2018] 2 I.R. 300. The proceedings are now maintained by the Governor of the Bank of Ireland in reliance on a Scheme of Transfer between the ICS and the Bank of Ireland. Substitution is provided for as a matter of law pursuant to s. 41 of the Central Bank Act, 1971 as follows:

“41.—Where, immediately before the transfer date, any legal proceedings are pending to which the transferor is a party and the proceedings have reference to the business agreed to be transferred, the name of the transferee shall on the transfer date be substituted for that of the transferor and the proceedings shall not abate by reason of such substitution.”

9 . In response to the criticisms as to a lack of detail, a more detailed explanation was provided by the Plaintiff in a second affidavit of Mr. Browne (sworn on the 18 ^th of April, 2019), almost a year after the Defendant's replying affidavit was received. This was replied to by Affidavit of the First Named Defendant sworn in July, 2019.

10 . In or about November, 2020, Simons J. ordered the amendment of the pleadings on application of the Plaintiff in reliance on the judgment of the Supreme Court in Bank of Ireland Mortgage Bank v. O'Malley [2019] IESC 84. The summons was amended to incorporate statements of both loan accounts from drawdown in each case up to the rest date of the 31 ^st of July, 2013, showing that as of July, 2013, the sum of €620,781.84 was due and owing by the Defendant.

11 . The further conduct of the proceedings was then characterized by the furnishing of late affidavits well after the date for hearing of the two motions was fixed. By case management order dated the 7 ^th of April, 2022, the High Court (Barr J.) refused to adjourn the hearing on application on behalf of the Plaintiff who had just been served with a further affidavit exhibiting an expert report (from one Mr. Weakliam) on behalf of the Defendant in which it was contended, inter alia, that the plaintiff had erred in the application of the tracker interest rate to the two loans. The Court (Barr J.) fixed further time for replying affidavits on behalf of the Plaintiff in response to the late affidavit from the Defendant.

12 . In compliance with the case management order, a third affidavit was sworn by Mr. Browne and was accompanied by affidavit of Messrs. Morley and Rogers, all sworn just over a week before the assigned hearing date in May, 2022.

13 . Just two days before the date fixed for hearing, the Defendant issued a notice to cross-examine one of the Plaintiff's deponents (Mr. Browne) on his affidavits in the proceedings. This application was the subject of a preliminary ruling during the course of the hearing in circumstances where the two motions together had been called on for one day, with the suggestion of a possibility that they might run into a second day.

14 . As late as the date of the hearing, application was made to court to receive a further affidavit from the Defendant's expert in reply to the three affidavits filed by the Plaintiff the previous week.

15 . The application for a preliminary ruling in relation to the question of cross-examination of Mr. Browne followed on from the opening of all of the affidavit evidence, including the late affidavit of Mr. Weakliam, which I admitted in circumstances where his report had already been exhibited by the Defendant and had been the subject of affidavit evidence in response on behalf of the Plaintiff.

THE CLAIM

16 . As appears from the special indorsement of claim, the proceedings seek to recover monies said to be owed by the Defendant pursuant to two loans entered into with ICS Building Society. These loans are said to have been made pursuant to loan offer letters dated the 1 ^st of August, 2006, and the 2 ^nd of August, 2006, respectively. It is pleaded that the loan offers were accepted in writing by the Defendant on the 7 ^th of August, 2006, and that the monies on both loan accounts were duly drawn down by the Defendant on the 26 ^th of September, 2006.

17 . It is also pleaded that the respective loans had been secured by way of a legal charge over two properties in Clonskeagh, Dublin 14 (“the mortgaged properties”). Separate proceedings seeking possession of the two properties were brought in the Circuit Court and he two mortgaged properties have been sold and the sale proceeds have been credited against the debt. The manner in which the sale proceeds have been treated is a matter of considerable controversy between the parties. The sale of the mortgaged properties is not reflected in either the original nor the amended version of the summary summons. While there is a reduction in the amount claimed as between details endorsed on the summons as issued and the amended summons, this reduction is not pleaded by reference to a corresponding...