Byrne v Mars Capital Ireland Designed Activity Company; Byrne v Mars Capital Ireland Designed Activity Company; Byrne v Mars Capital Ireland Designed Activity Company and Others
| Jurisdiction | Ireland |
| Judge | Ms. Justice Siobhán Stack |
| Judgment Date | 16 June 2023 |
| Neutral Citation | [2023] IEHC 334 |
| Court | High Court |
| Docket Number | Record No. 2019/9810 P Record No. 2020/220P |
[2023] IEHC 334
Record No. 2019/9810 P
Record No. 2019/9811P
Record No. 2020/220P
THE HIGH COURT
JUDGMENT of Ms. Justice Siobhán Stack delivered on the 16th day of June, 2023 .
. The defendants in the three above-named proceedings (which I will refer to as the First Proceedings, Second Proceedings, and Third Proceedings, respectively) have applied in each case to dismiss the plaintiff's claim on the basis that it is frivolous and vexatious and/or discloses no cause of action and/or is bound to fail. The applications are brought both pursuant to Order 19, r. 28 of the Rules of the Superior Courts and pursuant to the inherent jurisdiction of the court.
. The applications were heard together over two days and I think it is more convenient to deliver a single written judgment relating to all three proceedings, as the plaintiff's complaints in all three relate to the arrangement of certain loan facilities and the grant of related charges as security in favour of Irish National Building Society (“INBS”) in the period between 2003 and 2006, and to the subsequent administration of those loans. It is convenient to set out the essentials of what occurred in 2006 before considering some common arguments made by the plaintiff in each case and then considering the applications of the defendants in each case by reference to the pleadings and, where relevant, affidavit evidence in each motion.
. In 2003, the plaintiff and his then wife took out a loan in the amount of €275,000 which was secured on their family home, which I will refer to as “ Property A”. This loan was to be secured by way of a first legal mortgage over Property A and was refinanced in 2006, when a further €40,000 was advanced. The charge was executed by the plaintiff and his wife on 13 June 2006 and was apparently subsequently registered as a burden on the relevant Folio.
. By 2006, the plaintiff and his wife had separated, albeit that they both still lived in Property A. The plaintiff therefore obtained a further loan from INBS for the purpose of purchasing another property, Property B. The plaintiff and his wife, by this time, planned to divorce and the plaintiff says he intended living in Property B. I will refer to the taking out of this loan and the execution of the relevant charge over Property B in favour of INBS as “the 2006 Mortgage Transaction”.
. As discussed in more detail below, Property A was subsequently sold and the outstanding arrears on it paid off, and these proceedings concern Property B and the loans secured on it by way of charge.
. The letter of mortgage offer dated 7 June, 2006, and signed by the plaintiff, has been exhibited to the grounding affidavit sworn on behalf of the defendant in the application made in the First Proceedings. This shows that the letter was dated 26 May, 2006, and referred to the approval of an application for mortgage facility subject to the terms and conditions set out in the letter. The letter is clear in stating that the type of mortgage to be granted was: “First Legal Mortgage over Residential Investment Property”. The sum of €395,000 was advanced and the period of the loan agreement was approximately 20 years. The type of loan was quite clearly stated to be “interest only” and the purpose of the loan was stated to be “To Purchase A Residential Investment Property”.
. Special conditions were attached to that letter of loan offer including one at 8.11 which stated:
“ This property is a residential investment property and is not intended to be used as a principal private residence.”
A further special condition, at 75.11, was that the INBS was to be granted a cross collateral charge on Property A.
. A number of factual assertions have been made by the plaintiff concerning the 2006 Mortgage Transaction. In essence, the plaintiff alleges that he was told by the local branch manager of INBS at the time he took out the loan that, later, he could alter the terms of the loan, which was initially interest only and at a higher rate than would be applicable to a mortgage of a principal private residence. He alleges that the branch manager told him: “I will get you your mortgage first then you can change it any way you like later.” Specifically, it is alleged that the branch manager represented to him that, after three years, he could move from an interest only mortgage to the more usual – and less expensive — repayment mortgage that would be granted in respect of a borrower's home.
. The plaintiff says that he clearly stated to the branch manager in question that Property B was in fact to be his principal private residence and not an investment property. It is also alleged that the loan application form was signed by him and later completed by the branch manager, with whom he had previous dealings and whom he trusted. It should be noted that this application would necessarily have preceded the Loan Offer letter already referred to, with the latter issuing on consideration by INBS of the former. The terms of the Loan Offer letter would then have been accepted by the plaintiff by signing and dating it, which he did on 7 June, 2006.
. The plaintiff then drew down the monies, and executed the necessary Deed of Charge on 12 July 2006. This charge was then registered in the two relevant Folios in the Land Registry (as is evident from the Land Registry stamp on the backing page of the Deed), being the Folio in which Property B was registered and the Folio in which Property A was registered.
. According to a replying affidavit sworn by the plaintiff in repossession proceedings brought in Monaghan Circuit Court against the plaintiff and his ex-wife by the Irish Bank Resolution Corporation (“IBRC”) as successor of INBS, and bearing Record No. 75/2012 (“the 2012 Repossession Proceedings”), the couple divorced on 18 June, 2009. In July, 2009, the plaintiff approached INBS to make changes to his mortgage. He was told, apparently in a telephone call, that it was for a rental property and would attract much higher interest charges. A further affidavit in the 2012 Repossession Proceedings (which, confusingly, is headed “Defence and Counterclaim”), and his statement of claim delivered in High Court proceedings bearing record no. 2014/8038P, both assert that this exchange took place over the phone. The plaintiff, in the 2012 Repossession Proceedings, asserted that he then entered into a dispute with INBS about the alleged misrepresentations of the branch manager and of his alleged false and misleading conduct. Indeed, he asserted in the 2012 Repossession Proceedings that he instructed a solicitor to write to INBS in September, 2009, presumably referring to his complaints and seeking redress.
. The defendants submit that the plaintiff well knew in 2006 that he was being given a mortgage on terms relating to a residential investment or “buy to let” property, but their core submission in support of their application to dismiss the First Proceedings is that the plaintiff was aware from July, 2009, that the mortgage was on less favourable terms than he asserts he had been led to believe when he entered into it in 2006. They say, in essence, that the plaintiff was aware from July 2009 of the essential grounds on which he now maintains the allegation of fraudulent misrepresentation which he says vitiates the 2006 Mortgage Transaction and that these proceedings are therefore hopelessly statute-barred, such that the proceedings should be dismissed as being doomed to fail.
. I should say, in passing, that I do not think that I could dismiss the entire proceedings at this stage on the basis that the loan application form and loan offer letter were signed by the plaintiff and that a solicitor acted for him, at least in connection with the drawdown and execution of the charge (as opposed, perhaps, to the arrangement of the loan itself and the agreement of its terms). The plaintiff's case is one of verbal misrepresentation which he says was to the effect that the lender would not rely on the strict written terms of the loan offer letter. I was not referred to an “entire agreement” clause or any other basis for alleging that the case could be safely struck out at this preliminary stage, nor, in fairness to the defendants, did I understand them to press for the dismissal of the proceedings on this basis although they made reference to it as part of the context in which any claim of fraud should be considered.
. It is not in dispute that the plaintiff instructed a solicitor to write in September, 2009, complaining that the plaintiff had been told that he could not in fact change the mortgage as he wished. It is therefore clear that the plaintiff, as a result of the phone call in July, 2009, had sufficient knowledge of the terms of the loan and associated charge to instruct a solicitor to write to INBS about the matter. However, no proceedings were issued by the plaintiff until 2014. Those proceedings are referred to further below.
. By letter dated 24 April, 2012, the plaintiff wrote to Mr. Michael Brady of IBRC, which had taken over the plaintiff's loan and charge from INBS, stating that he had “strong grounds for taking legal action against the bank” and this letter states that it had been prompted by a suggestion from IBRC's solicitors that he try to resolve matters directly with IBRC rather than engage in costly litigation.
. Most of that letter is...
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