Cheldon Property Finance DAC -v- Hale & anor, [2017] IEHC 432 (2017)

Party Name:Cheldon Property Finance DAC, Hale & anor
Docket Number:2017 123 S
 
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THE HIGH COURT

COMMERCIAL [2017 No. 123 S.]

BETWEEN

CHELDON PROPERTY FINANCE DAC PLAINTIFFAND

JOHN HALE AND MARY HALE DEFENDANTS

JUDGMENT of Mr. Justice Brian J. McGovern delivered on the 4th day of July, 2017.

  1. The plaintiff has applied for summary judgment against the defendants in the sum of €1,930,393.86, arising out of a loan made on 21st November, 2005, by Permanent TSB (“the bank”) to the defendants in the sum of €1,901,000.00. The bank transferred the loan to the plaintiff on 14th October, 2013.

  2. The loan facility was subject to the terms and conditions set out in the facility letter including the bank’s General Terms and Condition for Commercial Loans. The term of the loan facility was 240 months repayable by way of monthly instalments. The loan facility was repayable on demand. The defendants accepted the terms and conditions applicable to the loan facility by signing the facility letter on 24th November, 2005, and subsequently drew down the full amount of €1,901,000.00 and have had the benefit of that sum to their own use. The purpose of the loan facility was to fund renovations on a crèche premises owned by the defendants.

  3. On 8th July, 2015, the bank exercised its contractual entitlement to sell the loan facility to the plaintiff. A deed of transfer was executed on 14th October, 2015.

  4. On the date of transfer, there were arrears of €390,439.14, on the loan facility. These arrears continued to accumulate until 25th January, 2016, when the plaintiff demanded repayment of the sum then outstanding of €1,882,561.94. Although some negotiations took place between the parties with a view to settling the indebtedness of the defendants, no agreement was reached and the plaintiff commenced these proceedings on 26th January, 2017.

  5. The matter was entered into the Commercial List. The defendants filed an affidavit setting out the basis of their defence and a hearing date was fixed for an application for summary judgment.

  6. The defendants raised three grounds of defence to the application for summary judgment, namely:-

    (a) they allege that the court ought to imply a term into the loan facility to the effect that the bank was precluded from transferring the loan facility to the plaintiffs;

    (b) they assert that an incorrect interest rate was charged by the bank during the currency of the loan facility; and,

    (c) they contend that the application of default interest (at a rate of 2%) by the plaintiff is unlawful.

  7. In the course of the summary judgment hearing, the plaintiff informed the court that it was prepared to waive its claim for default interest so it is not necessary for the court to consider any arguments raised on that ground.

  8. The legal test to be applied by the courts in an application for summary judgment is well established and can be found in First National Commercial Bank plc. v. Anglin [1996] 1 I.R. 75; Banque de Paris v. de Naray [1984] 1 Lloyds Law Rep. 21; Harrisrange Ltd. v. Duncan [2003] 4 I.R. 1; McGrath v. O’Driscoll [2007] 1 I.L.R.M. 203; and Aer Rianta cpt. v. Ryanair Ltd. [2001] 4 I.R. 607. As the law on this topic is now so well established, it is unnecessary to set out in any great detail the principles arising from these cases. I will set out some of these principles which are relevant to this case,

  9. The starting point is that, in applications of this kind, the power to grant summary judgment should be exercised with discernible caution. Where there are no real issues or the issues are simply disposed of and easily determinable then this procedure can be used. The court has to consider whether the defendants have satisfied the court that they have a fair or reasonable probability of having a real or bona fide defence. Having considered the evidence, is it clear that the defendants have no defence? The mere assertion in an affidavit of a situation said to give rise to a defence does not of itself provide leave to defend. The court has to look at the whole situation to see whether such an assertion is backed up by credible evidence so that it can be said that the defendants have satisfied the court...

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