Corcoran and Another v Permanent TSB Plc and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Conor Dignam
• Judgment Date: 07 June 2024
• Neutral Citation: [2024] IEHC 345
• Court: High Court
• Docket Number: Record No. 2020/6178P

Between

Joseph Corcoran and Katherine Corcoran

Plaintiffs

and

Permanent TSB Plc, Start Mortgages DAC, Tom O'Brien and Hilary Larkin of Mazars

Defendants

[2024] IEHC 345

Record No. 2020/6178P

THE HIGH COURT

Judgment ofMr. Justice Conor Dignamdelivered on the 7 ^th day of June 2024

INTRODUCTION

1 By Notice of Motion, the second, third and fourth named defendants (“the applicants”) seek (i) an Order pursuant to Order 19 Rule 28 of the Rules of the Superior Courts and/or the Court's inherent jurisdiction striking out the plaintiffs' proceedings on the basis that they are unsustainable, frivolous, vexatious and/or bound to fail, (ii) an Order pursuant to Order 19 Rule 27 of the Rules of the Superior Courts and/or the Court's inherent jurisdiction striking out pleas which are unnecessary or which will prejudice or delay the fair trial of the action, and (iii) an Order pursuant to section 123 of the Land and Conveyancing Law Reform Act 2009 vacating a lis pendens registered by the plaintiffs.

2 At the hearing, Counsel for the applicants indicated that the application relief (i) was not being moved under Order 19 Rule 28 and they were only relying on the Court's inherent jurisdiction on the grounds that the proceedings are unsustainable, frivolous, vexatious and/or bound to fail.

FACTS

3 The facts in summary are as follows.

4 In late 2007, the plaintiffs obtained three loans from the first-named defendant (“permanent tsb”), as follows:

• (i) By letter of approval of the 22 ^nd October 2007, the plaintiffs were offered a loan of €631,000 subject to a number of special conditions (to which I return). This offer was accepted by the plaintiffs on the 24 ^th October 2007. The security for this loan was a first charge over two apartments (“the IFSC apartment” and “the Mountjoy apartment”). This loan account was numbered 90211668 and I will refer to it as the “1668 loan”.

• (ii) By letter of approval of the 28 ^th November 2007, the plaintiffs were offered a loan of €406,000 also subject to a number of special conditions. This was accepted by the plaintiffs on the 19 ^th December 2007. The security was a mortgage over an apartment in Dún Laoghaire (“the Dún Laoghaire apartment”). This loan account was numbered 90226497 and I will refer to it as the “6497 loan”.

• (iii) By letter of approval of the 30 ^th November 2007, the plaintiffs were offered a loan of €500,000 also subject to a number of special conditions. This offer was accepted by the plaintiffs on the 19 ^th December 2007. The security for this loan was a mortgage over a property in Castlegregory (“the Castlegregory house”) and a further charge over the IFSC apartment and the Mountjoy apartment. This loan account was numbered 90226616 and I will refer to it as “the 6616 loan”).

5 These loans were accepted by the plaintiffs by signing a separate “Acceptance of Loan Offer” in respect of each of them. These signatures were witnessed by their solicitor. They were stated to be accepted on the terms and conditions set out in (i) the letter of approval, (ii) the General Mortgage Loan Approval conditions, and (iii) the permanent tsb Mortgage Conditions.

6 Each of the letters of approval contained the following Special Condition (I am quoting from the 1668 loan):

“ permanent tsb will accept monthly repayments, as set out in the letter of approval, representing repayment of interest only (as may be varied from time to time and including insurance premiums where applicable) for the first five years from the date of cheque issue or such other period as permanent tsb may decide.permanent tsb reserves the right to review the deferral of the repayment of principal at any time during the term of the loan, including the first five years of the term and may require the applicant to cease the interest only repayment and require the repayment of principal and interest and the applicant will immediately arrange to pay the revised monthly repayment comprising the repayment of principal and interest calculated over the remaining term so that the principal and interest will be discharged within the existing term of the loan.”

7 The Special Condition was identical in each loan except that in the case of both the 6497 loan and the 6616 loan the interest-only period referred to was three years rather than five years.

8 On the 11 ^th January 2008, the plaintiffs executed a deed of mortgage in respect of the IFSC apartment and the Mountjoy apartment which expressly incorporated the clauses set out in the PTSB Mortgage Conditions 2002.

9 A Registry of Deeds search discloses registration of a mortgage and charge dated the 11 ^th January 2008 in respect of the IFSC and Mountjoy apartments on the 9 ^th December 2012. The IFSC apartment is registered land. A charge in favour of permanent tsb was registered on Folio 94464L (the IFSC apartment) on the 8 ^th November 2012. A curious feature of the case is that the plaintiffs appear to have also executed an Irish Banking Federation Housing Loan Mortgage in favour of permanent tsb in respect of the IFSC apartments, as when the applicants obtained copies of the application for registration from the Property Registration Authority this is what was attached to the application for registration on Folio 94464L. This application bears the same dealing number as the relevant entry in the Folio. This mortgage deed was stated to be version 1.1.2011 of the Irish Banking Federation's Standard Mortgage but was executed three years earlier, on the 11 ^th January 2008. The defendants are not relying on this. It also appears to be accepted by the plaintiffs that this is not the relevant mortgage deed because in the course of their submissions they referred to this as being the wrong mortgage conditions.

10 By notices dated the 1 ^st December 2010 the plaintiffs were informed that the interest-only period would end on the 1 ^st April 2011 and that the loans would convert to repayments of principal and interest from that date. This is central to the dispute between the parties. This particular issue was a source of very significant confusion and lack of clarity as to precisely what the plaintiffs case is because their claim as pleaded seems to be premised on similar notices having been received in respect of all three loans, including the 1688 loan, but the only notices adduced in evidence relate to the 6497 and 6616 loans (the three year interest-only loans). I return to this below when considering the plaintiffs' claim.

11 As it happened, the notice in respect of the 6616 loan was sent to the wrong address (nothing turns on this). When the plaintiffs received the notice in respect of the 6497 loan (which was sent to the correct address) they engaged in correspondence with permanent tsb in relation to an extension of the interest-only period. This correspondence ended up applying to both the 6497 and the 6616 loans. Permanent tsb's position was that remaining on interest-only at that stage would be a re-negotiation of the contract “ and the terms and conditions, mortgage product and rate may change and your current tracker mortgage will move to a variable rate and your tracker rate and price promise would no longer be applicable to you.” It seems that an extension was not agreed at that stage (other than from the 1 ^st April to the 1 ^st June 2011 due to the notification in relation to the 6616 loan having been sent to the wrong address) and the loans converted to capital and interest repayments.

12 It seems that by January 2013 the plaintiffs were in arrears in respect of the 6497 and 6616 loans and on the 6 ^th March 2013 agreement was reached to capitalise the arrears and that there would be a three year interest-only period in respect of those loans from that point on.

13 It seems that the plaintiffs began to be in arrears in respect of the 1668 loan from about July 2011 and were in arrears in the amount of approximately €13,000 in June 2013. By letter of offer permanent tsb offered to capitalise the arrears and extend the interest only-period for three years. This was accepted by the plaintiffs on the 19 ^th June 2013.

14 It is appropriate to pause to note that a central part of the plaintiffs' case is that the only reason they were in arrears was because some (or all) of their loans had been wrongfully converted to principal and interest repayments on foot of the notices of the 1 ^st December 2010 and that they were essentially wrongfully compelled to agree to capitalising the arrears to an in interest-only period of just three years.

15 By letters of the 24 ^th February 2016 in respect of the 6497 and 6616 loans, the plaintiffs were informed that the three year interest-only period agreed in 2013 was due to expire on the 1 ^st March 2016 but it was being extended for a further five months, and then by letters of the 2 ^nd August 2016, permanent tsb confirmed that the mortgage repayments on those loans had changed to principal and interest.

16 In relation to the 1668 loan, permanent tsb informed the plaintiffs by letter dated the 12 ^th July 2016 that the interest free period was due to expire on the 1 ^st August 2016 and that it was being extended for a further four months.

17 It seems that there was some contact between the plaintiffs and permanent tsb about the three accounts because there is an internal permanent tsb email dated the 18 ^th August 2016 referring to the three accounts and recording that the first-named plaintiff had told the bank official that he would be unable to satisfy his August repayments if they were converted to capital and interest from interest-only repayments. There was subsequently correspondence between the plaintiffs and the bank including the provision by the first-named plaintiff of a statement of affairs.

18 On the 1 ^st November 2016, permanent tsb informed the plaintiffs that the interest-only facility in respect of the 1668 loan was due to expire...