Irish Bank Resolution Corporation v Raftery
Jurisdiction | Ireland |
Judge | MR. JUSTICE MICHAEL PEART |
Judgment Date | 17 July 2019 |
Neutral Citation | [2019] IECA 215 |
Date | 17 July 2019 |
Court | Court of Appeal (Ireland) |
Docket Number | Neutral Citation Number: [2019] IECA 215 Record Number: 2014/641 Record Number: 2014/642 |
[2019] IECA 215
THE COURT OF APPEAL
Peart J.
Peart J.
Edwards J.
McGovern J.
Neutral Citation Number: [2019] IECA 215
Record Number: 2014/641
Record Number: 2014/642
Banking & finance – Mortgage – Possession of premises – Appeal against High Court order for possession
Facts: The appellants had taken a mortgage on a property in County Roscommon but had fallen into serious arrears. Under the terms of the mortgage the respondent’s predecessor was entitled to possession. The appellant had made several denials by way of defence and her husband had raised a counterclaim. The High Court had ordered that the property be repossessed by the respondent, and the matter now came on appeal.
Held by Peart J, that the appeal would be dismissed. It was clear that the High Court had correctly assessed the matter before it and that the conclusions reached were open to him on the evidence before it. The Court commented that it was not necessary to make a ruling on the estoppel point put before it.
This is an appeal from an order of the High Court (Hedigan J.) made on the 3rd October 2012 whereby it was ordered, inter alia, that the appellants deliver up possession of certain premises comprised in Folio 1769F of the Register of Freeholders County Roscommon to the respondent which were the subject of a deed of mortgage in favour of Irish Nationwide Building Society (‘INBS’) bearing the date 12th November 1992, thereby providing security to that bank for certain borrowings applied for by, and granted to, the appellants by letter of loan approval dated 18th December 1991.
When the proceedings commenced by special summons issued on the 28th March 1996, the way forward would have seemed straightforward to INBS given that there was no dispute that the repayments required to be made by the appellants had fallen into serious arrears, and under the terms of the mortgage the INBS was entitled to possession of the premises.
However, following the filing of a replying affidavit by the second named defendant in which she raised certain matters by way of defence, namely that the secured property was the family home of her and her husband, the first named defendant, that it was registered in his sole name at the time the mortgage was entered into, and that she had not given any consent to the registration of the said mortgage as a charge on the property, and that she had not been advised of the effect, meaning or consequences of the charge, and had not received independent legal advice in relation thereto, the High Court (Shanley J.) adjourned the case to a plenary hearing and directed the delivery of pleadings by the parties, and ordered discovery to be made by all parties. A brief statement of claim was duly delivered by INBS on 8th August 1996 to which a defence was delivered by the second named defendant only, on the 10th September 1996. The first named defendant did not enter an appearance until the 16th November 2005, and thereafter on the 19th April 2006 he eventually delivered a defence and counterclaim.
In her defence delivered on the 10th September 1996, the second named defendant made a number of denials:
• that INBS granted a bridging loan to her;
• that she agreed a repayment arrangement with INBS;
• that INBS advanced the sum of £69,000 to her;
• that the mortgage was registered on the folio against her interest in the folio;
• that she was in breach of covenants and the agreement as alleged; and
• that INBS was entitled to the reliefs claimed.
In addition to these denials, the second named defendant pleaded that if (which was denied) she entered into the said mortgage she did so without the benefit of independent legal advice, and that she was not informed or advised as to the meaning and effect and consequences of the said mortgage. She pleaded that she had not given her consent to the registration of the mortgage as a burden on the folio, and further that she was not afforded the benefit of independent legal advice or advised as to the consequences leading from the fact that the property the subject of the said mortgage was her family home. Finally, she pleaded that the mortgage and its registration as a burden on the folio were null and void for want of compliance with the Family Home Protection Act, 1976.
Some years passed thereafter with various notices of intention to proceed being filed by INBS. Eventually the first named defendant delivered a defence having been given time to do so under order of the High Court made on the 7th November 2005 following the hearing of a motion for judgment in default of defence against him on that date.
In his defence the first named defendant raised a counterclaim in which he levelled certain complaints against INBS. He pleaded that he was owed a duty of care and a fiduciary duty by INBS to act at all times in a manner consistent with their fiduciary duty, that INBS was under a duty to act in a reasonable and prudent manner, that INBS owed him ‘a duty of confidence’, and that INBS ‘having exercised its right of re-entry to the secured property [referring to a licensed premises which also comprised the security provided to INBS] would obtain therefore in any or all subsequent sales a fair market price reflecting the true value of the property’. He went on to plead that the said licensed premises had been sold at an undervalue, and that he had suffered loss as a consequence.
On the 30th June 2008 the second named defendant obtained an order permitting her to deliver an amended defence, and she did so on the 17th July 2008. Therein, inter alia, she pleaded that the property in Folio 1769F, County Roscommon was her family home. She maintained her existing pleas that she was not afforded relevant independent legal advice in that regard, but she deleted the plea at para. 11 of her original defence that the said mortgage and registration of the mortgage as a charge on the folio were void for want of compliance with the Family Home Protection Act, 1976. She also included a counterclaim in which she alleged breach of duty to her in relation to the failure to ensure that she received independent legal advice prior to the execution of the mortgage, and negligence around the bank's sale of the licensed premises at what she contended was an undervalue, which has caused her loss and damage.
I should note in passing, because the respondent on this appeal has drawn attention to it, that at para. 8 of the amended defence and counterclaim, the second named defendant pleaded as follows:
‘8. The Indenture of Mortgage in respect of this loan was executed on the 12th day of November 1992, purportedly securing the aforesaid loan against the investment premises and the Family Home.’
That pleading assumed some relevance on the appeal, and I will come to that in due course.
A reply to the amended defence and counterclaim was delivered in due course on the 7th December 2009, and notice of trial was served on 23rd March 2010. The matter eventually came on for hearing before the trial judge on the 18th July 2012 at which all parties were legally represented by solicitor and counsel, and oral evidence was heard, including from the second named defendant. On the 9th August 2012 the trial judge delivered his written judgment in which, having given a brief account of the background facts, and the arguments made by each side, he reached a number of conclusions, all adverse to the defendants in respect of the grounds advanced by way of defence, and the counterclaims based on an alleged sale of the licensed premises at an undervalue. He concluded that the IBRC (being the successor in title to INBS) was entitled to an order for possession of the premises comprised in the said folio.
The trial judge concluded that the mortgage did not require the consent of the second named defendant because the mortgage was one in which ‘both co-owners participated as co-owners and … it did not require the consent of the second defendant because no formal consent to her own act is required’. He referred to the judgment of Henchy J. in the Supreme Court in Nestor v. Murphy [1979] I.R. 326 from which he quoted extensively at para. 7 of his judgment.
Relevant to the second named defendant's averment in her affidavit, and to certain matters sought to be advanced on this appeal, that the family home was in the sole name of her husband at the time the loan was advanced by INBS in 1992, the trial judge stated at para. 8:
‘8. In this case, it is plainly evident that the mortgage was executed by both Mr and Mrs Raftery. They both signed it. They had on the same day previously executed a transfer whereby the house at Clonbracknagh was transferred from the ownership of the first defendant to the ownership of both of them as joint owners. This reflects the nature of their ownership of the house as represented by them to the Building Society in their application mortgage dated 22nd November, 1991. They both describe themselves in that form as owners of the house at Clonbracknagh. Moreover, in order to obtain the loan, John J Quinn & Co, solicitors, acting on behalf of the defendants and holding themselves out without contradiction from the defendants as solicitors in the transaction, gave on the defendants” instructions a formal solicitors” undertaking in the standard form in respect of the monies to be advanced. It was on the basis of that application that a letter of offer was made to both defendants and the bridging loan subsequently was afforded to them. Thus, the mortgage executed on 22nd November, 1992 was one in...
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