KBC Bank of Ireland v Brennan

• Jurisdiction: Ireland
• Judge: Mr. Justice MacGrath
• Judgment Date: 25 February 2020
• Neutral Citation: [2020] IEHC 247
• Docket Number: [2018 No. 325 CA]
• Court: High Court
• Date: 25 February 2020

BETWEEN

KBC BANK IRELAND PLC

PLAINTIFF

AND

COLIN BRENNAN

DEFENDANT

[2020] IEHC 247

MacGrath J.

[2018 No. 325 CA]

THE HIGH COURT

Order for possession – Property – Grounds of defence – Plaintiff seeking order for possession – Whether the defendant had made out any arguable grounds of defence

Facts: The defendant, Mr Brennan, appealed to the High Court from the decision and order of Judge Comerford made on the 24th July, 2018 whereby the plaintiff, KBC Bank Ireland plc, was granted an order for possession of the defendant’s home at Rosslough, Carrick Road, Dundalk Co. Louth. A stay was placed on execution for a period of nine months. Points of defence which Mr Brennan advanced were that: (i) there was no entity known as KBC Bank Ireland plc and no valid transfer of title or of the loan or mortgage; (ii) the Circuit Court had no jurisdiction to hear the application because the property was not his principal private residence; (iii) the contract contained unfair terms in breach of the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 (S.I. 27/1995); (iv) he cancelled the contract in January, 2017 in exercise of his rights under the European Communities (Cancellation of Contracts Negotiated Away From Business Premises) Regulations 1989 (S.I. 224/1989) which implemented Directive 85/577/EEC; (v) proceedings by way of summary application for possession under s. 62(7) of the Registration of Title Act 1964 breached his rights to a fair hearing under the European Convention on Human Rights; and (vi) the Code of Conduct on Mortgage Arrears was not complied with by the plaintiff prior to the institution of the proceedings.

Held by MacGrath J that the plaintiff had established its entitlement to possession of the premises and that the defendant had not made out any arguable grounds of defence.

MacGrath J held that the appeal would be refused and that the plaintiff was entitled to the order for possession of the subject premises.

Appeal refused.

JUDGMENT of Mr. Justice MacGrath delivered on the 25th day of February, 2020.

1 This is an appeal from the decision and order of His Honour Judge Comerford made on the 24th July, 2018 whereby the plaintiff was granted an order for possession of the defendant's home at Rosslough, Carrick Road, Dundalk Co. Louth. A stay was placed on execution for a period of nine months.

2 By letter of loan offer dated 14th August, 2008, the plaintiff's predecessor in title, IIB Homeloans Limited, agreed to advance €340,000 to the defendant. He signed the form of acceptance on the 19th August, 2008. The agreement provided for repayment over a 35 year period. Monies were advanced on 27th August, 2008. A deed of mortgage was executed on the 29th August, 2008.

3 Although a matter of contention, which I shall address later, the plaintiff maintains that the loan and security were transferred to it in the following manner. By special resolution of 2nd October, 2008, IIB Homeloans, changed its name to KBC Mortgage Bank. A certificate of incorporation of change of name was issued by the Companies Registration Office on the 24th October, 2008. Further to a Scheme of Transfer signed on the 26th February, 2009, approved under s. 33 of the Central Bank Act 1971 and evidenced by S.I. 125 of 2009, KBC Mortgage Bank transferred its banking business to KBC Bank Ireland plc on the 26th June, 2009. On the 4th April, 2012 a charge was registered in the Land Registry in the name of the plaintiff, KBC Bank Ireland plc, against the interest of the defendant in the property.

4 A Civil Bill for Possession issued on 31st July, 2014. The plaintiff seeks the order for possession pursuant to s. 62(7) of the Registration of Title Act 1964 (“ the Act of 1964”). The County Registrar granted the plaintiff an order for possession on the 3rd May, 2016. This was appealed by the defendant, incorrectly as it transpires, to the Master of the High Court and affidavits were submitted in support of that application. Thereafter, the defendant made application to extend time for appeal from the County Registrar to His Honour Judge Griffin who, on the 28th November, 2017, granted that application. The appeal was heard by His Honour Judge Comerford on the 24th July, 2018 who acceded to the plaintiff's application and made the order for possession.

5 The application is grounded on the affidavit of Ms. Lisa Mahony, a solicitor and employee of the plaintiff. She has exhibited the documents of title, the letter of offer and the mortgage and avers that as at the date of swearing of her affidavit, the sum due and owing by the defendant was €349,081.75, inclusive of arrears of €31,833.85. A demand was made to deliver up possession of the premises on the 28th November, 2013.

6 Ms. Mahony avers that the plaintiff complied with the Code of Conduct on Mortgage Arrears (“ CCMA”). On 13th February, 2014 the plaintiff wrote to the defendant and notified him that he would be classified as ‘not cooperating’ under the CCMA unless he undertook certain actions within 20 business days. On 18th March, 2014 he was informed by letter that he had been classified as ‘ not cooperating’, that legal proceedings would commence immediately and that the Mortgage Arrears Resolution Process (“ MARP”) prescribed by the code no longer applied. He was also informed of his right to appeal his not co-operating status; and although instructed to issue proceedings immediately, he was encouraged in the letter to engage with the plaintiff.

7 The plaintiff maintains that by the 26th April, 2016 arrears had increased and the last payment having been made on the 25th February, 2015, when €700 was paid. While there is a dispute regarding the payment of an additional 40 smaller payments, they do not significantly reduce the arrears. There is also no dispute that there has been default in repayments, which in the initial stages was ascribed to the downturn in the economy, reduction in wages and ill – health.

8 A number of affidavits have been filed by the defendant in defence of the claim including an affidavit sworn on the 22nd May, 2019 following the service of the notice of appeal. He avers in these affidavits that he purchased the property through a broker, with his then fiancée in 2006. The transaction took place when he was in a coffee shop in Dublin and was financed through IIB Homeloans. He describes the breakup of their relationship in 2008, at which time he assumed sole liability for the mortgage through the same broker/financial services company. The interest rate increased from 3.2% to 5.4% and was based on an income of a basic salary of €45,000 per annum, €23,000 overtime and a bonus of €4,000. However, in 2011, his experienced a reduction in his income. He outlines how he met with an official of the plaintiff to discuss options including the re-scheduling of repayments and the delivering up to the plaintiff of certain other property which he owned in County Limerick. He avers that this was done in order to secure his home the subject matter of these proceedings. He missed work because of stress and this had a further impact on his ability to repay. In December, 2011 he contacted his original broker of JKR Financial Services with a view to negotiating on his behalf with the plaintiff. He states that all financial requests from his agent were ignored. He engaged with the Money Advice and Budgeting Service (“ MABS”) in Dundalk. In 2012 he contacted an official of the plaintiff, informed him that he would be returning to work and inquired whether a tracker mortgage might be available. He states that he did not receive a response to this request. He alleges that in 2012 he received what he describes as threatening phonecalls from the plaintiff and contends that the plaintiff failed to acknowledge his previous meeting with the bank official. In January, 2013, he returned to work and in February, 2013 he contacted another official and confirmed that he would pay €700 per month, as had been agreed with the official with whom he had previously spoken. He refers to further engagement with the bank throughout 2014 and 2015. In February, 2015, he was out of work again because of stress and he makes complaint that the bank refused to acknowledge that meetings had taken place between the parties. In March, 2015 he ceased paying the €700 per month. He was by then in receipt of illness support of €168 per week. He had a further bout of ill – health in 2015 because of an accident. A receiver was appointed to his property in Limerick. A principal complaint of the defendant was that the interest rate was too high. Then, in 2016, the property in Limerick was sold but he states that the plaintiff is now seeking to recover the balance of sums due in respect of that property, even though he believed there was an agreement that he would walk away from the Limerick property, focus on the Dundalk property and that the mortgage in respect of this would be restructured.

9 Further points of defence which Mr. Brennan advances are:

i. There is no entity known as KBC Bank Ireland plc and no valid transfer of title or of the loan or mortgage.

ii. The Circuit Court had no jurisdiction to hear the application because the property is not his principal private residence. It is his only permanent place of abode rather than his principal private residence.

iii. The contract contains unfair terms in breach of the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 (S.I. 27/1995). He invites the court to examine the contract to determine whether it contains unfair terms. It is argued that he is a consumer and that the contract contains non-individually negotiated terms and is governed by the Regulations of 1995 and the Directive on which they are based. He relies in support on what he considers to be the complicated language of the contract, the variation of interest rates and what he alleges is...