Irish Nationwide Building Society v Con Heagney

• Jurisdiction: Ireland
• Judge: Mr. Justice Allen
• Judgment Date: 14 January 2022
• Neutral Citation: [2022] IEHC 12
• Court: High Court
• Docket Number: [2006 No. 628Sp.]

Between

Irish Nationwide Building Society

Plaintiff

and

Con Heagney

Defendant

[2022] IEHC 12

[2006 No. 628Sp.]

THE HIGH COURT

Order for possession – Leave to issue execution – O. 42, r. 24 of the Rules of the Superior Courts – Applicant seeking an order granting leave to issue execution on foot of an order for possession – Whether the lapse of time since the making of the order for possession was irrelevant

Facts: Mars Capital Ireland DAC applied to the High Court for an order pursuant to O. 42, r. 24 of the Rules of the Superior Courts granting leave to the applicant to issue execution on foot of an order for possession which was made on 23rd November, 2009, and, if necessary, an order pursuant to the inherent jurisdiction of the court for the amendment of the order for possession by replacing the words “Irish Nationwide Building Society” with the words “Mars Capital Ireland DAC”. The applicant argued that the lapse of time since the making of the order for possession was irrelevant in circumstances in which there had been a change in the party entitled to execution.

Held by Allen J that on an application under O. 42, r. 24 for leave to issue execution on foot of a judgment or order where six years have elapsed since the judgment or order and in which there has been a change in the parties entitled or liable to execution, the applicant – in the same way as the original party to the judgment or order – must advance some explanation or grounds so as to engage the discretion of the court to grant or refuse leave. Allen J could discern no such explanation or grounds in this case.

Allen J found that the discretion of the court had not been engaged and refused the application.

Application refused.

JUDGMENT of Mr. Justice Allen delivered on the 14th day of January, 2022

Introduction

1 This is an application by Mars Capital Ireland DAC for an order pursuant to O. 42, r. 24 of the Rules of the Superior Courts granting leave to the applicant to issue execution on foot of an order for possession which was made on 23rd November, 2009, and, if necessary, an order pursuant to the inherent jurisdiction of the court for the amendment of the order for possession by replacing the words “ Irish Nationwide Building Society” with the words “ Mars Capital Ireland DAC”.

2 The application raises a novel issue as to the correct interpretation of O. 42, rule 24. In a nutshell, the applicant argues that the lapse of time since the making of the order for possession is irrelevant in circumstances in which there has been a change in the party entitled to execution.

3 The motion was issued on 29th January, 2020, originally returnable for 24th February, 2020 but was adjourned generally when the Chancery Summonses list was suspended by reason of COVID-19 restrictions. The motion was revived and transferred to the Chancery list on 13th July, 2021 and eventually came on for hearing on 7th October, 2021.

Background

4 These proceedings were commenced by special summons issued on 1st December, 2006. The plaintiff, Irish Nationwide Building Society (“ Irish Nationwide”), claimed an order for possession of a property at Tully House, Eyre Court, Ballinasloe, County Galway, which had been mortgaged by the defendant by deed made 5th October, 2005.

5 In order that the background and arguments can be fully understood it is necessary at this point to say that the mortgaged property was described in the mortgage and shown on a map annexed as a plot of 7.1886 ha or thereabouts outlined in red, excluding an area of 0.0352 ha outlined in blue and marked with the latter “ D”. As explained by Mr. Heagney in his affidavit of 30th August, 2021 filed in response to this application and shown on the copy map exhibited, the excluded area is a building or part of a building owned and occupied by his mother.

6 Precisely when and in what circumstances this came about is unclear, but the effect of the mortgage was that Irish Nationwide has a mortgage over a 17.763 acre plot, excluding a 0.087 acre island, more or less in the middle. All the appearances are that when Mrs. Heagney's house was carved out of the original much larger holding there was not reserved for the benefit of her house any express right of way leading from the public road to Tully House or any easement to drain into the septic tank serving her house.

7 By plenary summons issued on 14th October, 2008 Irish Nationwide commenced proceedings against Mr. Heagney and Mr. Daniel Coleman, the solicitor who had acted for Mr. Heagney in connection with his borrowings from the Building Society. By the general indorsement of claim, the plaintiff claimed an order for specific performance of a loan agreement made on 16th October, 2002 between the plaintiff and Mr. Heagney; specific performance of an undertaking in writing given by Mr. Coleman on 30th October, 2002; and damages. I do not have the statement of claim in that action, but the affidavit filed on behalf of the applicant confirmed what I think could in any event have been confidently inferred, that the loan was drawn down on the undertaking of the solicitor to provide good and marketable title to the property offered as security and a first legal charge or mortgage, and that the security given was not what Irish Nationwide thought that it was entitled to have expected. It is easy to see why Irish Nationwide hoped to fix Mr. Coleman with responsibility for the shortcoming in the security but not at all what it could have hoped to recover against Mr. Heagney over and above the debt and interest which was already covered by his covenant to repay the loan.

8 What is significant in terms of understanding the arguments now made is that the plenary summons was issued upwards of thirteen months before the special summons was heard, so that whatever difficulty there was with the security (if any) was well known by the time the order for possession was made. The indorsement of service on the plenary summons shows that it was served on Mr. Coleman on 5th March, 2009 and on Mr. Heagney on 10th October, 2009. Mr. Heagney did not enter an appearance and by order of 22nd March, 2010 judgment was given against him for such amount as might be assessed by a judge sitting alone in respect of the loan, interest thereon, and damages, as well as an order for costs.

9 The order of 22nd March, 2010 shows that Mr. Coleman, also, had failed to enter an appearance but he appeared at the hearing of the motion for judgment and the plaintiff was given leave to list the matter before the bankruptcy judge. Eventually the claim against Mr. Coleman was the subject of a settlement between him and Irish Bank Resolution Corporation Limited by which Mr. Coleman submitted to judgment for €786,920.75 which, by order of 14th November, 2011, was admitted as a debt in a scheme of arrangement which had been proposed by Mr. Coleman on 14th December, 2009. There is no evidence as to whether the scheme of arrangement proposed by Mr. Coleman was ever approved or what, if any, dividend was ever paid to the plaintiff.

10 The assessment against Mr. Heagney was never set down.

The application for leave to issue execution

11 In the meantime, as I have said, an order for possession of the mortgaged property was made by the High Court (Dunne J.) on 23rd November, 2009. That order was not executed and the applicant, as the transferee of the mortgage and loan, now seeks liberty to issue execution.

12 The affidavit of Mr. Anthony Noonan, a director of the applicant, shows that an order of possession was sent to the County Registrar for County Galway for execution. A date for execution was arranged for 19th July, 2011 but this was postponed to 15th September, 2011. There is no evidence as to why the earlier date was postponed or what, if anything, happened on the later date.

13 According to Mr. Noonan, it appears from unidentified records provided by the plaintiff to the applicant that further unquantified delays ensued at an unspecified time or times as a result of an unidentified dispute raised by the solicitors then acting for Mr. Heagney in which they questioned the validity of the order for possession made by the High Court and the plaintiff's right to enforce that order. As Mr. Noonan spells out, there was no appeal against the order for possession, so I cannot see what sensible issue might have been raised as to its validity.

14 Mr. Noonan suggests that the position between the parties at the time was also complicated by the plenary proceedings which the plaintiff “ had to take” against Messrs. Coleman and Heagney: to which I will return.

15 Mr. Noonan suggests that:- “ It appears that due to all of these issues the execution of the order for possession was not pressed and that thereafter execution was not sought as the assets of Irish Nationwide Building Society were being transferred as part of credit stabilising measures taken in the Irish banking system which ultimately resulted in the sale of the loan facilities and security relating to the defendant to the applicant herein.”

16 Mr. Noonan carefully sets out the chronology leading to the purchase by the applicant of Mr. Heagney's loan and mortgage.

17 The first step was a transfer order made by the High Court on 1st July, 2011 pursuant to s. 34 of the Credit Institutions (Stabilisation) Act, 2010, by which all of the assets of Irish Nationwide were transferred to Anglo, which, on 14th October, 2011 changed its name to Irish Bank Resolution Corporation Limited ( “IBRC”). Then, following the enactment of the Irish Bank Resolution Corporation Act, 2013, IBRC was put into special liquidation.

18 By Loan Sale Deed dated 31st March, 2014, IBRC, acting by its special liquidators, agreed to sell a number of assets, including Mr. Heagney's loan account the subject of this application, to the applicant, which was then called Sandalphon Mortgages Limited. The...