Havbell DAC v Harris

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice Richard Humphreys
• Judgment Date: 21 February 2020
• Neutral Citation: [2020] IEHC 147
• Docket Number: [2018 No. 53 S]
• Date: 21 February 2020

BETWEEN

HAVBELL DAC

PLAINTIFF

AND

DAVID HARRIS

AND

RITA HARRIS

DEFENDANTS

[2020] IEHC 147

Richard Humphreys J.

[2018 No. 53 S]

THE HIGH COURT

Summary judgment – Adjournment – Costs – Plaintiff seeking summary judgment – Whether an amendment to the summary summons should be allowed

Facts: The plaintiff, Havbell DAC, contended that on 30th November, 2004, Permanent TSB entered into a facility with the defendants, Mr and Ms Harris, for a commercial interest-only loan in the sum of €422,000. Those funds were drawn down. The defendants claimed that in 2013 Permanent TSB changed the facility from an interest-only loan to one requiring both repayment and interest. The plaintiff said this was not unilateral but was by agreement. On 19th June, 2015, Permanent TSB’s rights under the facility were conveyed to Havbell Ltd. The plaintiff contended that on 23rd June, 2015, the defendants were notified of the transfer. On 16th September, 2016, Havbell Ltd converted to a DAC. The plaintiff contended that on 1st November, 2017, its solicitors demanded repayment of the sum of €113,778.04, being the amount alleged to be due and owing at that time. A summary summons was issued on 16th January, 2018 and a notice of motion for summary judgment followed on 17th May, 2018. On 23rd November, 2018, the Master of the High Court made an order remitting the case to plenary hearing. On 28th November, 2018, the plaintiff issued a motion to set aside the order of the Master under O. 63 r. 9 of the Rules of the Superior Courts. The Master’s order was set aside on 28th January, 2019 by consent. On 29th November, 2019, the Supreme Court gave judgment in Bank of Ireland Mortgage Bank v O'Malley [2019] IESC 84 to the effect that the summary summons and supporting affidavit should provide “at least some straightforward account of how the amount said to be due was calculated and whether it includes surcharges and/or penalties as well as interest” (para. 6.7). On 13th February, 2020, the plaintiff issued a further motion seeking to amend the summary summons in the light of that judgment.

Held by Humphreys J that the amendment should be allowed in the interests of justice and to allow the real issues in controversy to be addressed. As sought in para. 2 of the notice of motion of 13th February, 2020, he held that he would, by consent, dispense with the requirement to re-serve the amended summary summons. In line with the approach taken by Clarke J, as he then was, in Porterridge Trading Ltd v First Active [2008] IEHC 42 at para. 4.5, it seemed appropriate to Humphreys J to award the costs of the application to amend to the defendants, being the respondent to the application to amend. Humphreys J found that the somewhat meagre particulars of interest pleaded in the special summons were inadequate to support an application for summary judgment. He held that the jurisprudence is clear that the amount claimed must be explained and indeed explained precisely and that the endorsement of claim did not explain how the amount was calculated. Given the jurisprudence as to clarity as to how the sum due is made up, he held that it would not be appropriate to allow summary judgment in this case on foot of pleadings that assert an interest-only loan and make no reference to the restructuring of the facility.

Humphreys J held that he would adjourn the matter for six weeks with a view to consolidating the proceedings on the basis that the defendants would communicate with Permanent TSB. He held that that there was a benefit in staying the execution of the costs until the determination of the proceedings, because that may save costs and be more convenient overall given the number of moving parts and the potential for further orders. As regards the costs of the unsuccessful application for a summary judgment, he noted that the normal rule is that such costs be costs in the cause: ACC Bank Plc v Hanrahan [2014] IESC 40, at para. 3.5 per Clarke J as he then was. In all the circumstances, Humphreys J did not see sufficient reason to depart from that in this case.

Amendment allowed. Motion dismissed.

JUDGMENT of Mr. Justice Richard Humphreys delivered on the 21st day of February, 2020

1 The plaintiff contends that on 30th November, 2004, Permanent TSB entered into a facility with the defendants for a commercial interest-only loan in the sum of €422,000. Those funds were drawn down. The defendants claim that in 2013 Permanent TSB changed the facility from an interest-only loan to one requiring both repayment and interest. The plaintiff says this was not unilateral but was by agreement.

2 On 19th June, 2015 Permanent TSB's rights under the facility were conveyed to Havbell Ltd. The plaintiff contends that on 23rd June, 2015, the defendants were notified of the transfer. On 16th September, 2016 Havbell Ltd converted to a DAC. The plaintiff contends that on 1st November, 2017, its solicitors demanded repayment of the sum of €113,778.04, being the amount alleged to be due and owing at that time. A summary summons was issued on 16th January, 2018 and a notice of motion for summary judgment followed on 17th May, 2018. On 23rd November, 2018 the Master of the High Court made an order remitting the case to plenary hearing. On 28th November, 2018 the plaintiff issued a motion to set aside the order of the Master under O. 63 r. 9 of the Rules of the Superior Courts. The Master's order was set aside on 28th January, 2019 by consent.

3 On 29th November, 2019 the Supreme Court gave judgment in Bank of Ireland Mortgage Bank v. O'Malley [2019] IESC 84 (Unreported, Supreme Court, Clarke C.J. (Charleton and Ní Raifeartaigh JJ. concurring), 29th November, 2019) to the effect that the summary summons and supporting affidavit should provide “at least some straightforward account of how the amount said to be due was calculated and whether it includes surcharges and/or penalties as well as interest” (para. 6.7). On 13th February, 2020 the plaintiff issued a further motion seeking to amend the summary summons in the light of that judgment.

4 I have now received helpful submissions from Mr. Keith Rooney B.L. for the plaintiff and from Mr. Jerry Healy S.C. (with Mr. Vincent Nolan B.L.) for the defendants. The matters addressed in the present judgment were dealt with in four short modules or tranches when the original rulings were given, and there were further oral submissions between each tranche; but for simplicity's sake, all of the rulings have been consolidated into the present single written version. The four issues were:

(i). should the plaintiff's amendment be allowed?;

(ii). costs and consequential issues on the amendment application;

(iii). should summary judgment be granted?; and

(iv). costs and consequential issues on the issue of summary judgment.

Should the amendment be allowed?

5 The ostensible purpose of the amendment is to particularise the debt in accordance with the judgment in Bank of Ireland Mortgage Bank v. O'Malley. The proposed particulars are as follows:

“ Opening balance €302,308.20

Interest €43,283.11

Credits (payments) €50,679.98

Credits (sale of property) €181,133.29

Total due €113,778.04”

6 This breakdown has already been provided in the sense that the statement of account is exhibited in the grounding affidavit seeking summary judgment.

7 The law on amendment of pleadings has not always been the most consistent area of Irish jurisprudence. But it is important constantly to seek to refocus that area back to first principles, which are firstly the interests of justice, and secondly ensuring that the real issues in controversy are addressed. In that regard, Geoghegan J. in Croke v. Waterford Crystal Ltd [2004] IESC 97, [2005] 2 I.R. 383 at 401, referred to the power to amend as being a “ liberal rule,” a dimension stressed in the discussion in Hilary Delany, Declan McGrath & Emily Egan McGrath, Delany and McGrath on Civil Procedure, 4th ed, (Dublin, Round Hall 2018) at pp. 281 to 282.

8 In B.W. v. Refugee Appeals Tribunal [2017] IECA 296, [2018] 2 I.L.R.M. 56, at para. 78, Peart J. for the Court of Appeal, approved the three-fold test for amendments - arguability, explanation and lack of irremediable prejudice. While that was discussed in the judicial review context, those three criteria are of wider relevance to amendments generally.

9 As far as arguability, the amendment is clearly arguable. Whether the claim as so amended succeeds is obviously a separate question.

10 In terms of explanation, the amendment was clearly prompted by the significant refinement of the requirements of pleading introduced by the Supreme Court in O'Malley. That was a tangible modification to the previous law. The concept of some breakdown in the sum sought in a summary summons was envisaged in Allied Irish Banks Ltd v. The George Ltd (Unreported, High Court, Butler J., 21st July, 1975), but that obligation was read quite restrictively by Hogan J. in A.I.B. v. Pierce [2015] IECA 87 (Unreported, Court of Appeal, 22nd April, 2015), an approach that has been superseded now by the Supreme Court decision in O'Malley (I noted the tension between The George and Pierce previously at para. 29 of Crowley v Allied Irish Banks Plc T/A AIB Credit Card Services [2016] IEHC 154 (Unreported, High Court, 18th March, 2016)). In such circumstances, I think it is fair to say that there has been a certain element of inconsistency or at least development in the caselaw; and it seems unfair to visit the inconsistencies of the legal system on litigants in general or the plaintiff here in particular.

11 Mr. Healy stresses that in Porterridge Trading Ltd v. First Active Plc [2007] IEHC 313 (Unreported, High Court, 7th September, 2007), Clarke J., as he then was, noted the need for an explanation for not having pleaded the point raised in an amendment at an earlier stage. But that was in the context of the overall exercise...