Eoin Fannon v Tom O'Brien and Promontoria (Oyster) DAC and by Order Ulster Bank Ireland DAC

• Jurisdiction: Ireland
• Judge: Mr. Justice Keane
• Judgment Date: 28 April 2021
• Neutral Citation: [2021] IEHC 301
• Docket Number: [2018 No. 2658P]
• Court: High Court
• Date: 28 April 2021

Between

Eoin Fannon

Plaintiff

and

Tom O'Brien and Promontoria (Oyster) DAC and by Order Ulster Bank Ireland DAC

Defendants

[2021] IEHC 301

[2018 No. 2658P]

THE HIGH COURT

CHANCERY

Joinder – Reasonable cause of action – Bound to fail – Defendant seeking the dismissal of the claims brought against it by the plaintiff – Whether the plaintiff’s claims disclosed no cause of action and were bound to fail

Facts: The plaintiff, Mr Fannon, sought damages for breach of contract, negligence, trespass and defamation against the third defendant, Ulster Bank Ireland DAC (Ulster). In its motion, Ulster sought one of the following three reliefs: (a) an order pursuant to Order 19, rule 28 of the Rules of the Superior Courts (the RSC) or the inherent jurisdiction of the High Court, or both, dismissing Mr Fannon’s claim against Ulster on the grounds that it failed to disclose any reasonable cause of action and was bound to fail; (b) an order pursuant to O. 19, r. 27 of the RSC or the inherent jurisdiction of the court, or both, striking out the plenary summons and statement of claim, or portions of them, as unnecessary or failing to disclose any reasonable cause of action; or (c) an order pursuant to O. 15, r. 13 of the RSC or the inherent jurisdiction of the court, or both, striking out Mr Fannon’s claim against Ulster on the ground that Ulster’s joinder and presence before the court was not necessary.

Held by Keane J that Ulster had failed to persuade him that Mr Fannon’s claims against it were bound to fail. Were it necessary to place the potential for litigious disadvantage on the scales of justice in this case, Keane J concluded that it would weigh significantly against the dismissal of Mr Fannon’s claims against Ulster. As no other basis in law had been identified for its alternative contention that Keane J should strike out Mr Fannon’s proceedings against it, under O. 15, r.13 of the RSC, because it had not been properly joined as a necessary defendant, Keane J refused that application also. Keane J did not propose making any order under O. 19, r. 27 of the RSC on this application.

Keane J held that the application for the reliefs set out in the notice of motion would be refused.

Application refused.

JUDGMENT of Mr. Justice Keane delivered on the 28 April 2021

Introduction

1 The third defendant, Ulster Bank Ireland DAC, moves for the dismissal of the claims brought against it by the plaintiff, Eoin Fannon, as disclosing no cause of action and being bound to fail.

Background

2 Mr Fannon and his wife borrowed the sum of €501,500 from First Active plc (‘First Active’) pursuant to an agreement signed on 17 April 2007 (‘the loan agreement’), to purchase an apartment in the Dublin docklands (‘the property’). As security for the loan, Mr Fannon and his wife executed a deed of mortgage over the property in favour of First Active on 31 May 2007 (‘the mortgage’).

3 In 2009, the loan was transferred to Ulster Bank Ireland Limited, now Ulster Bank Ireland DAC (‘Ulster’).

4 By deed of transfer, dated 19 December 2016, Ulster assigned the loan and transferred the mortgage security to Promontoria (Oyster) DAC (‘Promontoria’). On 9 March 2017, Promontoria was registered as the owner of the charge on the property.

The pleadings

i. the original claim

5 A plenary summons issued on behalf of Mr Fannon on 26 March 2018, and he delivered a statement of claim on the same date. The defendants he identified were Tom O'Brien and Promontoria.

6 In that statement of claim, having acknowledged the existence of the loan agreement and mortgage, and having put Promontoria on proof that it has assumed the rights and interests of the mortgagee of the property, Mr Fannon pleads in material part as follows.

7 On or about 14 November 2014, Ulster offered him a new loan repayment schedule, which he accepted on 20 November 2014. That was a distinct agreement (‘the repayment agreement’) – by implication separate from, or collateral to, the original loan agreement of 17 April 2007.

8 The repayment agreement provided: (a) that Mr Fannon was to repay the sum of €958 monthly for three years; (b) that the principal and interest repayment obligations under the loan agreement were to be suspended on that basis; and (c) that the repayment agreement was to supersede any and all previous agreements.

9 At the time of the purported transfer of his mortgage loan to Promontoria, Mr Fannon was notified that ‘… there is nothing in this notice that changes your contractual obligations to Ulster Bank DAC in respect of these borrowings.’

10 While Mr Fannon complied with the terms of the repayment agreement, Promontoria breached them by appointing Tom O'Brien as receiver over the property.

11 Further, in communicating with the tenant of the property that Mr Fannon was in default on his mortgage loan; that Mr O'Brien had been properly appointed receiver of the property; and that the rent for the property should be paid to Mr O'Brien and not Mr Fannon, the defendants are liable for the torts of trespass and defamation against Mr Fannon.

12 Thus, Mr Fannon claims an entitlement to various declarations and injunctions against Mr O'Brien and Promontoria, as well as damages against them for breach of contract, breach of duty, defamation and trespass.

ii. the defence of the original defendants

13 Mr O'Brien and Promontoria delivered their joint defence on 18 April 2019. Having placed reliance on the original loan agreement; the transfer of First Active's interest in that agreement to Ulster and then Promontoria; and the registration of Promontoria as the owner of the mortgage charge on the property, they go on to deny the existence of any separate repayment agreement. More specifically, they plead that the contents of subsequent letters from Ulster to Mr Fannon and his wife are inconsistent with the existence of any such separate agreement.

14 Mr O'Brien and Promontoria then plead as follows. Mr Fannon and his wife were in default of their obligations under the loan agreement for significant periods between 2012 and 2017. Under clause 2(a)(i) of the mortgage, the mortgagors were required to repay the balance due on the mortgage loan to the mortgagee on the provision of one month's notice in writing to that effect. Promontoria gave such notice in writing on 24 November 2017, when the balance then outstanding on the mortgage loan was €473,858.62. Mr Fannon and his wife failed to repay that sum and Promontoria appointed Mr O'Brien as receiver over the property on 1 February 2018, pursuant to its entitlement to do so under the mortgage.

15 Hence, Mr O'Brien and Promontoria deny that Mr Fannon is entitled to the relief that he claims, or any relief, against either of them.

iii. the joinder of Ulster

16 By order of Reynolds J, made on 14 October 2019, Ulster was joined as a co-defendant in the proceedings and Mr Fannon was given three weeks to serve an amended plenary summons and statement of claim upon it. By further order of Reynolds J made on 14 January 2020, the period allowed for serving those documents on Ulster was extended by fourteen days from that date. The plenary summons recites that it was amended on 23 January 2020.

iv. the amended claim

17 In his amended statement of claim, ostensibly delivered on 1 November 2019, Mr Fannon includes the following additional pleas.

18 Having regard to what Mr O'Brien and Promontoria have pleaded in their defence, Ulster failed to inform Promontoria of the existence of the repayment agreement. That was an agreement between Mr Fannon and Ulster and not, as originally pleaded, one between Mr Fannon, on one side, and Mr O'Brien and Promontoria, on the other.

19 In consequence, Promontoria's wrongful appointment of Mr O'Brien as receiver over the property was caused by the breach of contract, negligence and breach of duty of Ulster in failing or neglecting to notify Promontoria of the existence and terms of the repayment agreement.

20 Thus, Mr Fannon seeks damages for breach of contract, negligence, trespass and defamation against Ulster.

v. Ulster's defence

21 Ulster delivered its defence on 13 February 2020. As a preliminary objection, it pleads that Mr Fannon's claims against it do not disclose a reasonable cause of action and are bound to fail. That preliminary objection is, of course, the subject of the motion at hand.

22 Without prejudice to that preliminary objection, Ulster goes on to plead, in essence, as follows.

23 It did not enter a separate, or any, repayment agreement with Mr Fannon in November 2014. In consequence, the pre-existing interest-only repayment arrangement under Mr Fannon's mortgage loan came to an end in December 2014, after which he was required to repay interest and capital in accordance with the terms of the loan but failed to do so.

24 In consequence, Ulster is not liable to Mr Fannon for any breach of contract, negligence, breach of duty or wrongful conduct of any kind.

25 In particular, Ulster has no liability to Mr Fannon for defamation of any sort, which claim is, in any event, barred under s. 11 of the Statute of Limitations, as amended by s. 38 of the Defamation Act 2009.

26 Thus, Mr Fannon has no entitlement to the relief he claims, or any relief, against Ulster.

vi. Mr Fannon's voluntary discovery request to Ulster

27 On 16 April 2020, the solicitors for Mr Fannon wrote to those for Ulster seeking voluntary discovery of all documentation concerning the mortgage of the property from the creation of the mortgage to the present, including all correspondence, all records of correspondence, and all recordings of telephone calls between Ulster and Mr Fannon concerning that mortgage.

28 The solicitors for Ulster replied on 21 April 2020, reiterating its position that it is not a necessary party to the action and threatening to apply to have the proceedings against it dismissed should Mr Fannon...