EBS Mortgage Finance and Another v Bedford and Another

• Jurisdiction: Ireland
• Judge: Ms. Justice Mary Rose Gearty
• Judgment Date: 01 July 2024
• Neutral Citation: [2024] IEHC 407
• Court: High Court
• Docket Number: [2019 No.248 CA]

Between

EBS Mortgage Finance and Mars Capital Finance DAC

Plaintiffs

and

Dwayne Bedford and Nicola Bedford

Defendants

[2024] IEHC 407

[2019 No.248 CA]

THE HIGH COURT

CIRCUIT APPEAL

JUDGMENT ofMs. Justice Mary Rose Geartydelivered on the 1 ^st day of July, 2024

1. Introduction

1.1 This is a summary application for an order for possession of a principal private residence. The Plaintiffs claim to be the owners, one succeeding the other, of loans secured by way of registered charge upon the property the subject matter of the application (“the Property”). The Defendants in the Circuit Court are now Appellants, appealing an order for possession made in the Circuit Court on 7 ^th May, 2019.

1.2 An ex parte application to add Mars Capital Finance DAC as co-respondent to the appeal was made in advance of this hearing. This appeal is heard by way of a full rehearing from the Circuit Court whereby the Plaintiffs must again establish that they are entitled to the summary order sought and the Defendants may point to an issue which provides a full defence or which requires a plenary hearing.

1.3 For clarity, the parties will continue to be referred to as Plaintiffs and Defendants, Mars Capital DAC is now a co-Plaintiff, effectively. It is this Plaintiff who seeks the order for possession, having purchased loans from an entity called EBS DAC which, as EBS Limited, owned the initial Plaintiff, EBS Mortgage Finance (“EBS MF”). I will refer to this party, Mars Capital, as “the Plaintiff”. EBS MF was not separately represented.

1.4 The Defendants appeared as litigants in person and are a married couple. They bought the Property in 2004 and challenged the Plaintiff's right to possession on several grounds, including that they did not have sufficient information in relation to the transfer or sale of the loans to various entities. Arguments in relation to employee status were not repeated at the hearing, nor was there a positive submission that no money was received. In this Court, the Defendants emphasised that they had no dealings with EBS Mortgage Finance, EBS Limited or this Plaintiff but dealt with EBS Building Society. Accordingly, they challenge the right of the Plaintiff to possession.

1.5 It is not seriously disputed that EBS Building Society lent money to the Defendants and that the Defendants' principal private residence was the security for several such loans. The proceedings issued when there had been defaults in payment on the primary loan, which EBS MF argued triggered its right to possession of the property under the mortgage deed. This Plaintiff must show that it has obtained valid title to that loan and the consequent right to seek possession.

1.6 The Plaintiff submits that the Defendants obtained a mortgage in 2003 from EBS Building Society, which became EBS Limited. EBS Limited assigned the loans to EBS MF, the initial Plaintiff, which was a wholly owned subsidiary of EBS Limited, created in 2008. In 2014, in accordance with the Companies Acts, EBS Limited became EBS DAC. The loans were transferred from EBS MF to EBS DAC in 2020. The Defendants' loans were then assigned, as part of a loan book, by EBS DAC to Mars Capital Finance DAC in 2021 and, as a result, the Plaintiff was joined to these proceedings.

1.7 The conversion of the EBS Building Society to EBS Limited has been established by the Plaintiff. As for all the steps between that event and the transfer of a loan book from EBS DAC to this Plaintiff, in particular the role played by EBS MF, there is little evidence. The purpose of giving notice to the borrower in the event of a sale or assignment of a charge is to ensure that borrowers are given sufficient information about the identity of every entity involved so as to be confident that they are paying their mortgage instalments to the right party. While the entity in this case may have borne the same title, in various guises, until it transferred its loan book to this Plaintiff, this is not sufficient proof that it is the same entity or that it acquired the same loans.

1.8 The rights and obligations of EBS Limited are identical to those of EBS DAC, but the latter is a separate legal entity to EBS MF. The original lender had every right to sell or assign its loans, but the borrowers must be reassured as to the identity of the purchaser or assignee. Likewise, the Court must be satisfied that EBS DAC was the owner of the relevant loans and thus entitled to transfer ownership to this Plaintiff and that the loans (or any one of them) in respect of which there has been a default event are those underlying the charge registered in the name of the Plaintiff, entitling that entity to an order for possession.

1.9 There is evidence to the effect that the entity EBS MF was a wholly owned subsidiary of EBS Limited, but the averment is not entirely clear and it has not been supported by any exhibit or other evidence. There is no exhibit or detailed evidence proving the transfer of the loans, the subject matter of this case, to EBS MF, or explaining its role.

1.10 A further issue was raised on affidavit about the legitimacy of a signature on one of the acceptance letters. I asked both parties whether this issue was on affidavit but was not directed to such an averment and concluded that it was being raised for the first time at hearing. Having reviewed the papers, it is now clear that this matter was put on affidavit. I prevented the Defendants from addressing me further in that regard and they abided by that direction. In fact, the first named Defendant had sworn an averment to this effect and should be permitted to address it in submissions.

1.11 Having considered the papers, including the exhibits, and submissions made, The Plaintiff has not established the full chain of title in respect of EBS MF. It is also necessary to hear the Defendants on the issue of the signature. As there are issues on both sides which must be addressed, I will order a plenary hearing. No positive defence to the claim has been made out as yet, but the Plaintiff's evidence in respect of its claim is not sufficient for judgment to issue on a summary basis.

1.12 The early affidavits of the Defendants contained a number of spurious arguments about a potential challenge to the Constitution and allegations of perjury on the part of the deponents for the Plaintiffs and their lawyers. The former points were expressed to be an attempt by Start Mortgages to fast track the Defendants out of their home. As that entity had no part in these proceedings, and the arguments were not repeated in the High Court, I will not deal with them further.

1.13 The allegations of perjury appeared in the affidavits of 1 ^st November 2016 and 14 ^th of July 2017 which alleged criminality on the part of a deponent on two grounds: errors in comparing one figure with another and failing to expressly consider that an averment regarding a signature might constitute evidence of forgery.

1.14 In his affidavit of 14 ^th July 2017, the first Defendant suggests that the lawyers involved have either offered flawed proofs or have not read the papers and concludes that, in either case, they are in breach of their duties to the court. This position appeared to be moderated to an extent in 2018 when the same deponent confirmed that his suggestion that one employee may have been creating an affidavit with another signing it “ was not an accusation of any kind” but pointed to inconsistencies and credibility issues. To be clear, saying: “this is not an accusation” does not affect the character of these averments, it merely attempts to change the tone from direct accusations of perjury to disguised accusations which amount to the same thing.

1.15 When the matter proceeds to hearing, any accusations must be founded on established facts. In cases such as this, where the allegations in respect of deponents made to date appear to affect the reliability of the witnesses rather than their credibility, it may be sensible to avoid making such allegations at all. That said, the effectiveness of the questioning and the impression created in the mind of the decision-maker are matters for the person conducting the cross-examination. Where allegations of fraud are made, these must be pleaded, if they are to be pursued further.

2. The Test for Possession and the Land Register

2.1 This is an application for possession of a property under section 62(7) of the Registration of Title Act 1964. The Plaintiff must establish that the money secured by a charge on the property has become due and that it is entitled to an order for possession. The relevant Circuit Court Rules envisage a summary application on affidavit evidence alone but the Circuit Court and, in turn, the High Court, is given a discretion in terms of directing a full plenary hearing, requiring additional evidence or granting the order sought. If, therefore, there is a matter which has not been established on the evidence or if a defence has been raised, this is a case in which a further affidavit or a further hearing can be directed in order to consider the matter in more detail and to hear witness evidence, if that is required.

2.2 The test to be applied in exercising this discretion was set out in Bank of Ireland Mortgage Bank v. Cody[2021] IESC 26, [2021] 2 I.R. 381 by Baker J., who explained that there are many cases which fall between the situation in which a plaintiff establishes its right to possession and that in which a defendant can establish a defence, noting:

“Many applications for summary judgment would fall between these two extremes and will involve the proffering of evidence or argument by a defendant … which is not sufficient to rebut the evidence of the plaintiff to enable the judge to make a positive finding against the plaintiff, but which offers enough doubt as to the truth or completeness of the plaintiff's evidence, or credibly...