Governor and Company of the Bank of Ireland v Matthew Wales
| Jurisdiction | Ireland |
| Judge | Mr. Justice Garrett Simons |
| Judgment Date | 15 March 2021 |
| Neutral Citation | [2021] IEHC 134 |
| Docket Number | 2013 No. 2633 S |
| Court | High Court |
| Date | 15 March 2021 |
[2021] IEHC 134
2013 No. 2633 S
THE HIGH COURT
Summary summons – Leave to amend – Pleadings – Plaintiff seeking leave to amend the special indorsement of claim in summary summons proceedings – Whether the proposed amendments were necessary
Facts: The plaintiff, the Governor and Company of the Bank of Ireland, sought to recover monies said to be owed by the defendant, Mr Wales, pursuant to two loans entered into with ICS Building Society. The hearing before the High Court (Simons J) on 1 March 2021 was confined to an application to amend the pleadings. The application was said by the plaintiff to have been necessitated as a result of the judgment of the Supreme Court in Bank of Ireland Mortgage Bank v O’Malley [2019] IESC 84. The judgment in O’Malley clarified the manner in which a claim in summary summons proceedings should be pleaded and particularised. The Supreme Court held that the special indorsement of claim should specify the manner in which the amount said to be due is calculated, and whether it includes surcharges and/or penalties as well as interest.
Held by Simons J that the proposed amendments were necessary to ensure that the real questions of controversy in the litigation were before the court. Simons J held that the making of the proposed amendments did not give rise to any prejudice to the defendant. Simons J held that an order would be made granting the plaintiff leave to amend the pleadings in accordance with the draft amended indorsement of claim exhibited in the grounding affidavit of 4 November 2020.
Simons J held that the defendant had a prima facie entitlement to his costs of the motion in circumstances where the necessity for the application to amend arose as a result of shortcomings in the initial pleading of the case by the plaintiff.
Leave granted.
Nevin Powell for the plaintiff instructed by Fieldfisher Solicitors
Conor E. Byrne for the defendant instructed by Wales & Co. Solicitors
JUDGMENT of Mr. Justice Garrett Simons delivered on 15 March 2021
This judgment is delivered in respect of an application for leave to amend the special indorsement of claim in summary summons proceedings. The amendment application has been made in light of the Supreme Court judgment in Bank of Ireland Mortgage Bank v. O'Malley [2019] IESC 84; [2020] 2 I.L.R.M. 423 (“ O'Malley”). The judgment in O'Malley has clarified the manner in which a claim in summary summons proceedings should be pleaded and particularised. Relevantly, the Supreme Court held that the special indorsement of claim should specify the manner in which the amount said to be due is calculated, and whether it includes surcharges and/or penalties as well as interest.
The within proceedings were instituted by way of summary summons issued on 16 August 2013. The plaintiff in the proceedings had initially been ICS Building Society.
The Minister for Finance subsequently approved a scheme of transfer between ICS Building Society and the Governor and Company of the Bank of Ireland (“ Bank of Ireland”) by way of statutory instrument made pursuant to the Central Bank Act 1971 ( S.I. No. 257 of 2014). Thereafter, by order dated 9 November 2020, the High Court (Simons J.) directed that the title of the present proceedings be amended so as to substitute the Governor and the Company of the Bank of Ireland as plaintiff. The order further directed that the amended title of the proceedings be duly entered in the Central Office of the High Court with the proper officer. These orders were made consequent upon section 41 of the Central Bank Act 1971, and in accordance with the principles set out in the judgment of the Supreme Court in First Active Plc v. Cunningham [2018] IESC 11; [2018] 2 I.R. 300.
Save where necessary to distinguish between ICS Building Society and Bank of Ireland, the term “ the plaintiff” as used in this judgment should be understood as referring to whichever of the two financial institutions had carriage of the proceedings at the relevant time.
As appears from the special indorsement of claim, the proceedings seek to recover monies said to be owed by the defendant pursuant to two loans entered into with ICS Building Society. These loans are said to have been made pursuant to loan offer letters dated 1 August 2006, and 2 August 2006, respectively. It is pleaded that the loan offers were accepted in writing by the defendant on 7 August 2006, and that the monies on both loan accounts were duly drawn down by the defendant on 26 September 2006.
It is also pleaded that the respective loans had been secured by way of a legal charge over two properties, namely, 21 Roebuck Castle, Clonskeagh, Dublin 14 in the case of the first loan; and 50 Whitethorn Road, Clonskeagh, Dublin 14 in the case of the second loan (“ the mortgaged properties”).
It may be of assistance to the reader in understanding the arguments which the parties make on the amendment application to explain now that the two mortgaged properties have been sold, and that the sale proceeds have been credited against the debt. The manner in which the sale proceeds have been treated is a matter of considerable controversy between the parties. One of the many grounds upon which the defendant seeks leave to defend the proceedings is that he did not consent to accepting liability for any shortfalls whatsoever on the sale of both properties, and that the plaintiff, in allowing the sales to proceed, tacitly agreed that the defendant had no obligation for any shortfalls.
It should also be explained that the sale of the mortgaged properties and the corresponding reduction in the outstanding debt is not reflected in either the original nor the draft amended version of the summary summons. The special indorsement of claim seeks judgment in the sum of €620,781.84, together with interest from 2 August 2013. By contrast, the sum in respect of which it is sought to enter judgment is €159,035.74 (together with interest). This sum is significantly less than that claimed in the special indorsement of claim.
The plaintiff issued a notice of motion for liberty to enter final judgment on 20 February 2018. To date, that motion has not yet been heard. The application for liberty to enter final judgment had been grounded on an affidavit of Mr. Gerard Browne (sworn on 13 February 2018). This affidavit does not explain the significant discrepancy as between the amounts sought in the special summons, and notice of motion, respectively, other than referring to “all just credits and allowances” having been made.
The defendant, in his replying affidavit of 23 April 2018, criticises this lack of detail as follows.
“11. As appears from the Plaintiff's Notice of Motion, I say that the Plaintiff seeks to now enter judgment in the sum of €159,035.74, and as appears from paragraphs 18 and 28 thereof I say and believe that it appears that this sum is comprised of €112,555.96 in respect of account number 1537572 and €46,479.78 in respect of account number 1538941. I say and believe that this is a fundamentally different claim than what is claimed in the Summary Summons, and I say and believe that the Plaintiff has not explained adequately or at all how the sum now claimed is due and owing, other than baldly stating its composition as between account numbers 1537572 and 1538941.”
At paragraph 25 of the same affidavit, the defendant describes the plaintiff bank's grounding affidavit as “woefully inadequate” insofar as Mr. Browne has failed to depose to the sale of the properties against which the loans the subject of these proceedings were secured.
In response to these criticisms, a more detailed explanation has been provided, belatedly, by the plaintiff bank. See the second affidavit of Mr. Gerard Browne (sworn on 18 April 2019) as follows.
“7. Thereafter the Borrowers engaged with the Plaintiff with a view to completing voluntary sales of the properties. The sale of the Whitethorn Road property closed in May 2013 and the net proceeds of sale, being €845,150.00 were applied to the Defendant's account 1538941 on the 17th day of May 2013. In this regard I beg to refer to the copy statement of account in respect of account number 1538941, which is at TAB 2 of the booklet of exhibits.
8. The sale of 21 Roebuck Castle closed in July 2014 and the net proceeds of sale, being €477,176.34 were applied to the Defendant's account 1537572 on 29 July 2014. In this regard I beg to refer to the copy statement of account in respect of account number 1537572, which is at TAB 3 of the booklet of exhibits.”
It should be explained that, in addition to seeking liberty to defend on the basis of what might be described as an implied waiver of the shortfall in the sale proceeds, the defendant also makes a more general argument that the summary summons proceedings are incorrectly pleaded in circumstances where the mortgaged properties have been sold. In particular, it is said that the securities, as pleaded against him in the original version of the summary summons, are “extinguished”.
Separately, the defendant has issued a motion seeking to dismiss the present proceedings for want of prosecution and/or on the grounds of inordinate and inexcusable delay. That motion was issued on 23 April 2018. Again, that motion has not yet been heard.
The hearing before me on 1 March 2021 was confined to the application to amend the pleadings. This application is said by the plaintiff to have been necessitated as a result of the judgment of the Supreme Court in O'Malley.
Order 28, rule 1 of the Rules of the Superior Courts provides as follows.
“The Court may, at any stage of the proceedings, allow either party to alter or amend his indorsement...
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