Danske Bank a/s Trading as Danske Bank v Miley

• Jurisdiction: Ireland
• Judge: Ms. Justice Baker
• Judgment Date: 23 February 2016
• Neutral Citation: [2016] IEHC 105
• Docket Number: [2013 No. 2973 S]
• Court: High Court
• Date: 23 February 2016

BETWEEN

DANSKE BANK A/S TRADING AS DANSKE BANK

PLAINTIFF

AND

ETHEL MILEY

DEFENDANT

[2016] IEHC 105

Baker J.

[2013 No. 2973 S]

THE HIGH COURT

Banking & Finance – Summary judgment – Non-payment of loan – Bona fide defence – S. 2 of the Consumer Credit Act 1995

Facts: Following the setting aside of the order of the Master of the High Court giving liberty to the plaintiff to enter judgment for the amount claimed by consent of the parties, the defendant had now filed an application seeking permission to defend the proceedings on the basis of a bona fide defence. The defendant asserted that at the time of the grant of the loan facilities by the plaintiff, she was a consumer under s. 2 of the Consumer Credit Act 1995 and that she had no direct involvement in that loan transaction. The defendant contended that the said loan was taken by her deceased husband in her name for refinancing an already existing loan.

Ms. Justice Baker granted an order for summary judgment in favour of the plaintiff. The Court held that in an application for summary judgment, the Court should assess the credibility of defence. The Court observed that the purpose for which the loan was taken characterised it as commercial or private and not the involvement of a person in the concerned loan transaction. The Court held that there should be an objective assessment in relation to the purpose for which the loan was taken and not the subjective intention of the borrower. The Court found that the defendant had specifically made a representation to the effect that she was not a consumer and the said loan was taken to refinance the already existing commercial loan. The Court found that the needs of the defendant were allied to the needs of her deceased husband and the defendant was a direct beneficiary under the said loan.

JUDGMENT of Ms. Justice Baker delivered on the 23rd day of February 2016.

1 The plaintiff seeks summary judgment against the defendant in the sum of €1,063,448.12 pursuant to the terms of a facility letter dated 18th January, 2012. The matter came before me by way of appeal from an order of the Master of the High Court, who on the 6th November, 2014 gave liberty to the plaintiff to enter judgment in the stated amount. The parties consented to the setting aside of the order of the Master and the matter proceeded by way of motion for judgment before me. This judgment is given with regard to the argument by the defendant that she be permitted to defend the proceedings.

2 The test applicable to the exercise by the Court of its jurisdiction to grant summary judgment is well established, and the judgment of Hardiman J. in Aer Rianta CPT. v. Ryanair Ltd. [2001] 4 IR 607 is accepted as setting out the applicable legal principles, namely that a defendant ought to be permitted to defend unless it is ‘very clear’ that the defendant has no case, or as is sometimes said, only if the affidavits of the defendant ‘fail to disclose even an arguable defence.’

3 It is also established by the case law that the court is entitled to assess the ‘credibility of a defence’ as explained by Clarke J. in Irish Bank Resolution Corporation (in special liquidation) v. McCaughey 2014 IESC 44 (Unreported, Supreme Court, 11th July, 2014), and that the Court is entitled to consider whether the legal argument proffered by a defendant would provide a defence if determined in favour of the defendant.

4 Finally, it is also established that a mere assertion on the part of a defendant with regard to a state of affairs is not sufficient to raise an arguable defence, and the Court is entitled to look to whether such assertion is borne out by some evidence and whether it is credible in the circumstances.

5 The defendant pleads that she has a defence on a number of grounds and I will deal with each in turn.

The defendant is a consumer

6 The defendant argues that at the time of the 2012 facility she was a consumer within the meaning of s. 2 of the Consumer Credit Act 1995 as amended, as she was ‘a natural person’ acting outside her business. It is asserted that the plaintiff breached the provisions of the Consumer Credit Act 1995 (as amended) inter alia by failing to provide to the defendant the cooling off period required by s. 30(2), and that the plaintiff was in breach of all of the requirements in s. 38 of that Act.

7 It is common case that the defendant and her now deceased husband borrowed money from the plaintiff in or around the year 2006, and that the borrowings were used by the late Mr. Miley to invest in property both in Ireland and abroad. She does not deny that she was a party to the first loan, and it is the restructuring of that loan in 2012, after the death of her husband, that is the subject matter of these proceedings. It is also not denied by Mrs. Miley that the 2006 facility was not repaid.

8 The defendant argues that her trade, business or profession, both in 2006 and in 2012 when she refinanced the loan in her own name, was that of running a licensed premises, and she was not an investor in property. She argues that she was required to be a party to the 2006 borrowings because the loan was secured on property held in their joint names. The money, she says, was ‘not really’ for her use but for that of her husband, and the fact that she joined in the loan was because of the Bank's security requirements. Mrs. Miley asserts that she did not have any ‘commercial interest in or direct involvement with the loan transaction’, and that she had no ‘direct interest or involvement with the business operation of Seamus Miley, a sole trader’.

9 Mrs. Miley does not suggest that her husband invested in the purchase of property in China, or made other investments solely for his own benefit, and at best what she says is that she had no direct involvement with the investments. I consider her affidavit to be carefully framed, not to suggest that she gained no benefit from the loans or the investments, or that the investments themselves and any profits from them were solely for the benefit of her late husband, and furthermore, she does not deny that she or her family obtained the benefit of the monies borrowed, or the proceeds of the investments.

10 The affidavit evidence gives no information as to the estate of the late Mr. Miley, and whether the defendant is the sole beneficiary. The property at Miley's Bar was in their joint names and may have passed to her by survivorship. This information may have given a more complete picture of the financial elements of the relationship between Mrs. Miley and her late husband. The absence of information in this regard is an omission of note.

11 I consider that Mrs. Miley has not made out a prima facie case that she was a consumer for the purposes of the 2012 loan, because the purpose of the loan is quite clearly to...