Byrne v Coyle

• Jurisdiction: Ireland
• Judge: Mr. Justice Keane
• Judgment Date: 14 October 2014
• Neutral Citation: [2014] IEHC 475
• Court: High Court
• Date: 14 October 2014

[2014] IEHC 475

THE HIGH COURT

[No. 7937 P/2014]

Byrne v Coyle

No Redaction Needed

BETWEEN

GERALDINE BYRNE AND GERARD BYRNE

PLAINTIFFS/APPLICANTS

AND

SIMON COYLE

DEFENDANT/RESPONDENT

Interlocutory-Injunction -Temporary and discretionary - Mortgage arrears- Respondent receiver - Relevant correspondence of material value not submitted - Bank not party to proceedings - Campus Oil Ltd. v. Minister for Industry and Energy (No. 2) [1983] I.R. 88 test applied - Fair bona fide question - Balance of convenience - American Cyanamid v. Ethicon Ltd [1975] A.C. 396 considered

Facts The applicants made a complaint to the Financial Services Ombudsman (FSO) against the mortgagee bank alleging it had failed to provide them with a satisfactory response and that it had failed to supply them with the requested documentation. They wished to be allowed to engage with the bank in a meaningful way and were willing to engage in mediation should it be recommended by the FSO. They applied to the court for an interlocutory injunction restraining the receiver from taking any steps in relation to two of their properties, until said complaint be determined. The applicants mortgaged properties, one in West Cork and one in North County Dublin, when they were married in 2006. The applicants then separated in 2008. Their financial circumstances deteriorated. The records of correspondence between the applicants and the bank were presented as somewhat incomplete but it was said the applicants began to experience difficulty in repaying the relevant loans in 2009. There was, however, correspondence between the two parties concerning the possible restructuring of the applicant"s indebtedness to the bank. The bank claimed that it had responded to all of the queries raised with it by, or on behalf of, the applicants. The bank acknowledged that there was a delay on its part in dealing with certain queries and subsequently apologised for that delay. The applicant"s solicitor filed a complaint with the FSO on the 13th August 2014 requesting an investigation into the alleged failures. Consequently, the Court was invited to rule on whether the applicants had raised a real or bona fide issue concerning the bank"s alleged failure to agree an approach that would assist them in resolving their arrears.

Held In assessing whether the applicants raised a fair bona fide question to be tried, the judge could not ignore the fact that the applicants disclosed only a portion of the correspondence between themselves and the bank. Nor could he ignore the fact that the bank was not a party to the proceedings and was not given an opportunity to be heard in the matter. The applicants, relying on Campus Oil Ltd. v. Minister for Industry and Energy (No. 2) [1983] I.R. 88, argued they had raised a fair bona fide question; that an award of damages would be inadequate to compensate them for any loss they might suffer if the Court decided not to grant an injunction; and that the balance of convenience was in their favour. The judge considered the principles laid down American Cyanamid v. Ethicon Ltd [1975] A.C. 396. He stressed the grant of an interlocutory injunction was temporary and discretionary. The judge said it would be "entirely inequitable" to grant the interlocutory relief sought against a validly appointed liquidator rather than the bank, in an application and in proceedings, to which the bank was not a party. The judge said the injunction sought on an interlocutory basis was in precisely the same terms as the injunction forming the principal substantive relief sought at trial, and for that reason it was unlikely the case would go to trial. He said the grant of an interlocutory injunction was not appropriate as a means of maintaining the status quo pending such trial because if the injunction sought was granted, the effective contest between the parties would have been finally decided summarily in favour of the applicants. The judge concluded it would be an injustice to grant an injunction at interlocutory stage as it would effectively preclude the respondent from the opportunity of having his rights determined at trial.

-The judge was not prepared to finally decide any factual or legal aspects of the case. He concluded it would be more appropriate to do so at trial as different or more sufficient evidence may be available and the law would be debated in greater length.

Introduction

1 This is an application by the owners of two mortgaged properties ("the applicants") for an interlocutory injunction restraining a receiver ("the respondent") from taking any steps in relation to those properties until the determination of a complaint that the applicants have made to the Financial Services Ombudsman ("the FSO") against the mortgagee bank ("the bank").

The proceedings

2 In the underlying proceedings, the applicants seek (as the only substantive relief claimed) an injunction in precisely the same terms. The plenary summons claiming that relief issued on the 11 ^th September 2014. While an appearance was entered on behalf of the receiver on the 16 ^th September 2014, no statement of claim has yet been delivered.

The background

3 The following facts are asserted in the affidavits sworn by the applicants' solicitor on their behalf. The two properties concerned, one in West Cork andone in North County Dublin, were mortgaged by the applicants, who were then married and living together, in 2006. The West Cork property was then the applicants' holiday home, having once been the wife's childhood family home. The applicants separated in 2008, since which time their financial circumstances have significantly deteriorated. The husband is currently living in the West Cork property on a temporary basis. The wife continues to reside in the marital family home in Dublin (which, it appears, is not mortgaged to the bank) but would hope to retire to the West Cork property eventually. The North County Dublin property is an apartment that was purchased as an investment.

4 While the averments made on the applicants' behalf are terse and the documentation exhibited is, at best, an incomplete record of the interactions between the applicants and the bank, it would seem that the applicants began to experience difficulty in repaying the relevant loans in 2009. There appears to have been an extensive correspondence between the applicants and the bank since then concerning the possible restructuring of the applicants indebtedness to the bank. Some parts of that correspondence are exhibited to the grounding affidavit of the applicants' solicitor. From that patchy record, it appears that the applicants and their solicitor take the view that the bank has not provided all of the documentation and information sought from it on the applicants' behalf for the purpose of that process, whereas the bank takes the view that it has responded to all of the queries raised with it by, or on behalf of, the applicants. The bank has acknowledged that there was a delay on its part in dealing with certain queries and has apologised for that delay.

5 The applicants' solicitor avers that he filed a complaint with the FSO on the applicants' behalf on the 13 ^th August 2014 and exhibits the relevant letter. That letter states, in relevant part:

"I would be obliged if you would investigate the issue of the [bank's] failure to:"

1. Provide satisfactory response to my client's communications dating as far back as 2009; and

2. Failure to provide requested documentation."

6 Counsel for the applicants submits that, contrary to what is averred by the applicants' solicitor, the letter concerned does not contain the applicants' complaint to the FSO but is, rather, in the nature of a preliminary step in the complaints process.

7 The applicants' solicitor swore a further affidavit on their behalf on the 3 ^rd October 2014. At paragraph 3 he avers as follows:

"I say that the Applicants' complaints to the [FSO] include, but may not be restricted to, complaints that by failing to respond adequately to the Applicants' correspondence the bank is in breach of the Consumer Protection Code 2012 ("the Code")(by which it has conceded it is governed in relation to the properties in question) - in particular in relation to [Provision] 8.3 of the Code which states "Where an account is in arrears, a regulated entity must seek to agree an approach (whether with a personal consumer or through a third party nominated by the personal consumer in accordance with Provision 8.5) that willassist the personal consumer in resolving the arrears." Further that the bank has refused and/or failed to provide the Applicants with repeatedly requested documentation that would enable the Applicants' solicitors to examine terms and conditions by which the bank claims the Applicants are bound. Further, that the inordinate delays by the bank, since acknowledged by the bank, in dealing with the Applicants' proposals for repayment of the relevant mortgages resulted in a worsening of the Applicants' financial situation and their ability to repay the mortgages."

8 The applicants' solicitor does not exhibit a copy of the more extensive complaint to the FSO just described, nor does he state when that more extensive complaint was made.

9 It seems that, for the purpose of the present interlocutory application, the Court is being invited to conclude that the applicants have raised a real or bona fide issue concerning whether, as they contend, the bank has failed to seek to agree an approach that will assist them as personal consumers in resolving their arrears, contrary to Provision 8.3 of the 2012 Consumer Protection Code.

10 However, as already noted, the applicants have exhibited only a portion of the correspondence evidencing the extensive interaction that they have had with the bank. Although the applicants have exhibited a...