Hosey v Ulster Bank Ltd

• Jurisdiction: Ireland
• Judge: Ms. Justice Irvine
• Judgment Date: 12 October 2017
• Neutral Citation: [2017] IECA 257
• Date: 12 October 2017
• Court: Court of Appeal (Ireland)
• Docket Number: Neutral Citation Number: [2017] IECA 257 High Court Record No. 2014/3015P Court of Appeal Record No. 2016/388

[2017] IECA 257

THE COURT OF APPEAL

Irvine J.

Peart J.

Irvine J.

Whelan J.

Neutral Citation Number: [2017] IECA 257

High Court Record No. 2014/3015P

Court of Appeal Record No. 2016/388

BETWEEN/

MARGARET HOSEY

PLAINTIFF / RESPONDENT

- AND -

ULSTER BANK IRELAND LIMITED

1ST NAMED DEFENDANT / APPELLANT

- AND -

BRENDAN WELDON PRACTISING UNDER THE STYLE AND TITLE OF BRENDAN WELDON AND COMPANY

2ND NAMED DEFENDANT / APPELLANT

Cause of action – Bound to fail – Inherent jurisdiction – Appellant seeking an order dismissing the respondent's claim as disclosing no cause of action – Whether there was room for doubt about the evidence

Facts: The respondent, Mrs Hosey, as against the first appellant, Ulster Bank, sought declaratory and injunctive relief concerning a loan facility which Ulster Bank maintained she entered into on the 22nd April, 2008. As against the second appellant, Weldon & Co., she claimed, inter alia, damages for negligence and also an indemnity both in respect of any monies lawfully payable by her to Ulster Bank on foot of the said loan facility and such costs as she may incur in defending proceedings brought against her by Ulster Bank in relation to the said facility. Weldon & Co. brought an application seeking, inter alia, an order dismissing the respondent's claim as disclosing no cause of action. The High Court (Murphy J) refused that application. Weldon & Co. appealed to the Court of Appeal against that judgment.

Held by Irvine J that Mrs Hosey's case fell comfortably within the class of case which Fennelly J in Delahunt v Players and Wills (Ireland) Limited [2006] IESC 21 advised should not be dismissed; Fennelly J had stated that the inherent jurisdiction vested in the court to dismiss a claim as bound to fail is suitable only for use in cases where there is no room for doubt about the evidence. In circumstances where there were complex and difficult issues of law and fact to be decided, Irvine J held that the jurisdiction should not be exercised.

Irvine J held that she would dismiss the appeal of Weldon & Co.

Appeal dismissed.

JUDGMENT of Ms. Justice Irvine delivered on the 12th day of October 2017

1 This judgment concerns an appeal brought by the second named defendant, a firm of solicitors ('Weldon & Co.') against the judgment and order of the High Court (Murphy J.) dated respectively the 7th June and the 12th July, 2016. By her judgment, the High Court judge refused the application brought by Weldon & Co. seeking, inter alia, an order dismissing the plaintiff's claim as disclosing no cause of action.

Background

2 Mrs. Hosey commenced her claim by plenary summons dated the 7th March, 2014. Mrs. Hosey proceeded to deliver a statement of claim on the 28th May, 2014. As against Ulster Bank Ireland Limited ('Ulster Bank'), she seeks certain declaratory and injunctive relief concerning a loan facility which Ulster Bank maintains she entered into on the 22nd April, 2008. As against Weldon & Co., she claims, inter alia, damages for negligence and also an indemnity both in respect of any monies now lawfully payable by her to Ulster Bank on foot of the said loan facility and such costs as she may incur in defending proceedings brought against her by Ulster Bank in relation to the said facility.

3 By notice of motion dated the 20th May, 2015, Weldon & Co. made an application to the High Court to dismiss Mrs. Hosey's claim as then pleaded on the grounds that it disclosed no cause of action. In the alternative, the court was asked to make an order requiring her to furnish replies to a notice for particulars dated the 22nd September, 2014.

4 The aforementioned motion was ultimately heard by the High Court on the 19th February, 2016 by which time not only had the parties to the motion exchanged affidavits but Mrs. Hosey had, with the court's agreement, furnished an amended statement of claim which is dated the 16th February, 2016. The application was unsuccessful in that Murphy J. refused to strike out the proceedings.

5 In its notice of expedited appeal dated the 2nd August, 2016, Weldon & Co. asserts that the trial judge misdirected herself in law in determining that the pleadings disclosed a cause of action.

Relevant uncontested facts.

6 For the purpose of considering whether the trial judge erred in law in her decision not to dismiss Mrs. Hosey's claim, I consider it necessary to identify the uncontested background facts as well as those facts which were disputed by the parties in their affidavits.

7 Mr. and Mrs. Hosey jointly own two properties. The first of these I will refer to as the Brooklawns property and the second as the Rutland property. In 2002, Mrs. Hosey and her husband borrowed €152,000 from First Active, now Ulster Bank, on terms set out in a letter from First Active dated the 8th October, 2002. These borrowings are the subject matter of a loan account bearing the last four digits 9401 ('the 9401 account').

8 It is not disputed that on the 2nd October, 2002, Mrs. Hosey gave written irrevocable authority to Weldon & Co. to register First Active as the owners of the first legal charge over the Brooklawns property as was required by way of secturity pursuant to the terms of the loan facility.

9 Accordingly, by solicitor's undertaking dated the 2nd October, 2002, Mr. Weldon undertook, in consideration of the bank meeting its obligations as lender, to procure the execution by Mr. and Mrs. Hosey of a deed of mortgage in favour of First Active.

10 Mrs. Hosey does not deny executing a deed of mortgage in respect of Brooklawns to secure the aforementioned borrowings. However, Mr. Weldon did not register the mortgage deed in respect of Brooklawns prior to the drawdown of the aforementioned funds as agreed.

11 On the 10th May, 2004, Mr. Weldon, at the request of Mr. Hosey, asked First Active to provide redemption figures in respect of a second loan account bearing the last four digits 9402 ('the 9402 account'). That account was secured on the Rutland property. First Active, for reasons which are not entirely clear, furnished redemption figures for both loan accounts. The redemption figure for account 9401, that being the account which was to have been supported by a deed of mortgage over the Brooklawns property, was €145,402 and €88,749.09 for account 9402, that being the account that was supported by a mortgage on the Rutland property.

12 Mr. Weldon later forwarded a cheque to First Active for €145,402 which, according to a letter from First Active dated the 20th February, 2008, was applied to the Brooklawns account (9401) given that it matched the redemption figures which had been furnished for that account.

13 In early 2008, Mr. Weldon, then acting solely on behalf of Mr. Hosey given that his relationship with Mrs. Hosey had broken down and they were living apart, advised First Active that it had been the intention of Mr. Hosey back in May 2004 to redeem the Rutland mortgage (account no 9402) and not the Brooklawns account (9401) and asked that the error earlier made be rectified.

14 By letter dated the 20th February, 2008, First Active, believing that Mr. Weldon was acting on the instructions of both Mr. and Mrs. Hosey, stated that it would be willing to re-activate the Brooklawns mortgage account (9401) but pointed out that his clients 'should consider their options carefully' as what was proposed would leave them with a larger mortgage debt than they had at the time and there would be substantial arrears as no payments had been made since 2004.

15 In a further letter of the 9th April, 2008, First Active wrote to Mr. Weldon, once again in respect of his clients Mr. and Mrs. Hosey, confirming it would re-activate the Brooklawns account. In this regard, they called upon him to comply with his undertaking earlier given to register the mortgage deed against Brooklawns. Mr. Weldon, who had in his possesion the deed of mortgage which had been executed by Mr. and Mrs. Hosey at the time in relation to the 9401 account, duly complied with his undertaking.

16 By letter of the 2nd December, 2008 addressed to Mr. and Mrs. Hosey at their Brooklawns address, First Active advised that a new account with a number bearing the final four digits 9403 ('the 9403 account') had been set up to correct the error in the redemption of the 9401 account that had occurred in May, 2004. The letter records that in April, 2008 First Active had reached a final agreement with Weldon & Co. to set up this new account which involved the reinstatement of a mortgage over Brooklawns.

17 On the 15th February, 2010, Ulster Bank became entitled to all of the interests of First Active in the loans and securities hereinbefore mentioned.

18 Due to their failure to meet their liabilities on foot of the 9403 account, on the 1st August, 2013, Ulster Bank commenced Circuit Court proceedings against Mr. and Mrs. Hosey seeking possession of the Brooklawns premises. In those proceedings, Ulster Bank maintains it is entitled to possession on foot of a deed of mortgage signed by Mr. and Mrs. Hosey on the 8th March, 2008 in circumstances where they had failed to meet its demand for repayment of the sum of €137,904.17 which it had made on the 4th July, 2013.

Mrs. Hosey's affidavits

19 The background facts as set forth above are supported by the documentation exhibited in the affidavits sworn by the parties. However, because of the prevailing jurisprudence to which I will later refer, it is also important to consider the facts upon which Mrs. Hosey seeks to rely and which are outside the contractual documentation and correspondence earlier mentioned.

20 Mrs. Hosey maintains that there was no mistake or error made when the loan intended to be secured on the Brooklawns property (9401) was redeemed by her husband in 2004. She makes clear at paragraph 7 of her second affidavit that there was an agreement between herself...