Governor and Company of The Bank of Ireland v McMahon

JudgeMr. Justice Noonan
Judgment Date24 October 2017
Neutral Citation[2017] IEHC 600
Docket Number[2013 No. 1853 S.]
CourtHigh Court
Date24 October 2017



[2017] IEHC 600

Noonan J.

[2013 No. 1853 S.]


Banking & Finance – Repayment of loan – Securitisation of loan – Bonafide defence – Abuse of process of law.

Facts: The plaintifffiled the present application for seeking an order for summary judgment against the defendants. The plaintiff contended that the defendants had failed to make repayment ofthe borrowed loan facilities. The defendants objected to the grant of summary judgment on various grounds such as securitisation of loan by the plaintiff, violation of unfair terms in consumer contractsand discovery of documents, etc.

Mr. Justice Noonan granted the relief sought by the plaintiff. The Court stated that the defendants themselves had given their consent to the securitisation of loan and had no bona fide defence to the claim of the plaintiff. The Court held that the entire objective of raising such multiple issues was an attempt to postpone and abuse the court process.

JUDGMENT of Mr. Justice Noonan delivered on the 24th day of October, 2017

This is a simple claim by the plaintiff (the Bank) for repayment of a loan. There is no dispute that the money was advanced to Mr. and Mrs. McMahon and that they have not repaid it. It remains a simple claim despite the very best efforts of the McMahons to make it an extremely complex one.


By letter of the 12th April, 2006, ICS Building Society offered a mortgage loan to the McMahons in the amount of €960,000 for a term of 25 years. The loan offer document comprised three parts, the first being the statutory loan details, the second identifying additional loan details including the property being purchased, 1 Park Lodge, Castleknock, Dublin 15 for €1.2 million and the third part comprising general and special conditions. The final part of the document entitled 'Borrowers Acceptance and Consents' was executed by the McMahons on the 21st April, 2006. The full amount was drawn down on the 26th April, 2006.


By early 2011, the repayments due on foot of the mortgage account had fallen into arrears of some €12,000 and by letter of the 13th April, 2011, ICS Building Society wrote to the McMahons seeking payment of the arrears in default of which proceedings for possession would issue. By mid 2013, the arrears had grown to almost €120,000 and solicitors acting for ICS Building Society wrote to the McMahons on the 2nd May, 2013 demanding repayment of the full amount of the loan.


This was followed up by the issue of a summary summons on the 11th June, 2013, seeking the amount then outstanding of some €970,000. It was not possible to serve the summons on the defendants and an order for substituted service was made on the 13th January, 2014. The McMahons entered an appearance on the 30th January, 2014, as litigants in person. A motion seeking liberty to enter a final judgment was issued on the 24th June, 2015. As appears from the grounding affidavit of Sean Buckley, an arrears manager in the arrears support unit of the Governor and Company of the Bank of Ireland, on the 12th June, 2014, pursuant to S.I. No. 257 of 2014, the Minister for Finance, under the powers granted to him pursuant to s. 33 of the Central Bank Act, 1971, as amended, made an order entitled the Central Bank Act, 1971 (Approval of Scheme of Transfer between ICS Building Society and the Governor and Company of the Bank of Ireland) Order 2014 transferring all of the assets and liabilities of ICS Building Society, including the loan the subject matter of these proceedings, to the Governor and Company of the Bank of Ireland with effect from the 1st September, 2014.


Arising from this, an ex parte application was made by the plaintiff to amend the title to name the Governor and Company of the Bank of Ireland as plaintiff and an order to that effect was made by this court on the 13th July, 2015. The McMahons brought a motion seeking to set aside that order which ultimately came on for hearing before the court on the 11th January, 2016, and was dismissed. Subsequently the McMahons brought a motion seeking discovery of documents which was heard on the 11th July, 2016, and dismissed. The McMahons then brought a plainly misconceived application before the court to set aside its previous order of the 11th July, 2016, on a variety of grounds but primarily on the grounds that the judge refused the McMahons' application for an adjournment on that date. That application appears to have been unsuccessful also.


The within application came on for hearing before me in July, 2017, over four years after the summons was issued. In response to the claim, the McMahons have filed a number of lengthy and detailed affidavits raising a multitude of issues. I was informed by counsel for the plaintiff in opening the case that he had identified some 35 such discrete issues. In the course of the hearing, I had the benefit of extensive oral submissions from Mr. McMahon. As the matter proceeded into a second day, Mr. McMahon having been on his feet for some hours, I indicated to him that I would allow him a further one hour to conclude his reply to the plaintiff's submissions on the second day of the hearing. It seemed to me that this was a necessary case management measure to ensure that the matter finished within the time allotted to it and would give more than sufficient time to Mr. McMahon to conclude his submissions, most of which were in any event already contained in the lengthy affidavits sworn by the defendants.


Although Mr. McMahon protested that this would put him under pressure of time, to his credit he concluded his submissions well within the allotted timeframe. It would appear that Mr. McMahon had in that regard taken on board the judgment of the High Court delivered a few days earlier in McMahon v. Bank of Scotland [2017] IEHC 438. Those proceedings arose out of another loan transaction entered into by the McMahons with a different entity and Twomey J. delivered judgment on a motion brought by the defendants to strike out the claim as being frivolous and vexatious and bound to fail. Twomey J. dismissed the plaintiffs' claim and it is fair to say, levelled some fairly trenchant criticism at the McMahons in the course of his judgment essentially for wasting court time with what he described as nonsensical claims. Some of the issues raised in those proceedings are very similar to those raised in the instant case. In addition to dismissing the claim, Twomey J. also of his own motion made an Isaac Wunder order against the McMahons.


I propose to deal with what appear to me to be the main issues raised by the McMahons in these proceedings. If there are any so called issues with which I have not dealt, that is not because I have overlooked them but because in my view they are non-issues that require no analysis.


One of the main themes explored at length by the McMahons is the issue of securitisation of their loan. They allege that their loan was part of a bundle of securities sold by Bank of Ireland to an entity known as Kildare Securities Ltd. The defendants allege that the Bank securitised approximately €3 billion of its loans to this entity in 2008. There is no evidence that this ever actually happened, other than a mere assertion by the McMahons that it did. However, assuming for a moment that it did, as far as I can understand the argument, the McMahons are suggesting that this means in some way that the Bank has lost its title to the loan and can no longer enforce it against them.


They say also that they never consented to the securitisation of their loan and this also renders it non recoverable. A similar argument was made in the proceedings before Twomey J. which he rejected out of hand, holding that issues such as securitisation had long since been determined in previous proceedings and could not be relitigated by the McMahons. Among the authorities referred to by Twomey J. as support for this proposition was Freeman v. Bank of Scotland [2014] IEHC 284 where McGovern J. approved an earlier judgment of this court (Peart J.) on the issue of securitisation:

'[12.] In Wellstead v. Judge Michael White [2011] IEHC 438, Peart J. rejected an argument that a lending bank was not entitled to the benefit of an order for possession that had been made in favour of the lender because the relevant housing loan had been securitised. The learned judge said:

"The applicant is also seeking leave to argue that Ulster Bank have no longer any entitlement to benefit from the order for possession because as part of some unspecified securitisation agreement the bank has sold the applicant's mortgage, and is therefore no longer owed anything on foot of the mortgage herein


His grounding affidavit characterises the action by Ulster Bank in seeking repossession in circumstances where it no longer owns the mortgage and has been repaid the money lent to the applicant is (sic) fraudulent, misleading and premeditated.


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