Kearney -v- Bank of Scotland Plc

• Jurisdiction: Ireland
• Judge: Ms. Justice Máire Whelan
• Judgment Date: 05 August 2020
• Neutral Citation: [2020] IECA 224
• Court: Court of Appeal (Ireland)
• Docket Number: Record Number: 2018/371
• Date: 05 August 2020

BETWEEN/

THOMAS KEARNEY

APPELLANT

-AND-

BANK OF SCOTLAND PLC

AND

PATRICK HORKAN

RESPONDENTS

[2020] IECA 224

Baker J.

Whelan J.

Collins J.

Record Number: 2018/371

THE COURT OF APPEAL

Isaac Wunder order – Lites pendentes – Appointment of receiver – Appellant seeking to appeal from the judgment and orders of the High Court – Whether the trial judge erred in making an Isaac Wunder order against the appellant

Facts: The appellant, Mr Kearney, issued proceedings by way of plenary summons on 13th December, 2017. Subsequently, the respondents, Bank of Scotland PLC (BOS) and Mr Horkan, issued motions seeking the dismissal of the appellant’s claim. The appellant’s statement of claim encompassed the following claims: (i) that a charge was not registered in the name of Bank of Scotland (Ireland) Ltd (BOSI) in the Land Registry, and such registration was required before the charge could be transferred to BOS; (ii) that the sums claimed on foot of a mortgage were not lawfully due and owing to any person or entity; and (iii) the appointment of the receiver was invalid due to BOS not having registered itself as the owner of the charge. On 4th May, 2018, the High Court (McGovern J) dismissed the appellant’s proceedings, made an order pursuant to s. 123(b)(i) of the Land and Conveyancing Law Reform Act 2009 that lites pendentes registered by the appellant against two folios be vacated and further imposed an Isaac Wunder order against him. The appellant appealed to the Court of Appeal from the judgment and orders of the High Court. On 8 April 2020 the court’s unapproved judgment in the appeal was delivered electronically. A number of consequential issues fell to be addressed including: (1) Mr Kearney’s notice of motion seeking a review of the unapproved judgment; (2) two amendments sought by the receiver under O.28, r.11 RSC (the slip rule); (3) the terms of the Isaac Wunder order to be made by the court; (4) the terms of the issue remitted to be tried by the High Court; (5) costs; and (6) a stay in respect of any costs order made pending final determination of the proceedings.

Held by Whelan J that Mr Kearney’s application for review ought to be refused as each of the points raised by Mr Kearney amounted to an impermissible application to re-litigate the appeal on the merits. The receiver identified two points requiring clarification at paras. 7 and 106 of the unapproved judgment which were minor factual inaccuracies requiring amendment under the slip rule and Whelan J granted the application. The appellant succeeded in having the terms of the Isaac Wunder order made by the High Court varied; the terms of the order were set out in an appendix to this judgment. With regard to the single issue remitted to the High Court for determination, the terms of the order were set out in an appendix to this judgment.

Whelan J held that, regarding the motion to transfer the appeal, the Court of Appeal was disposed to make no order in regard to those costs as the application did not detain the court unduly. With regard to the substantive hearing in the High Court, it encompassed far reaching assertions and the respondents succeeded in obtaining significant orders many of which had either not been appealed at all or unsuccessfully appealed against; in the circumstances, Whelan J held that the respondents were each entitled to 75% of their costs in the High Court as against the appellant. With regard to this appeal, Whelan J held that, in all the circumstances, the most equitable approach having particular regard to the clear terms of the written and oral submissions of all parties was that no order as to costs should be made. Whelan J held that a stay would be granted on the execution of the aforesaid order as to costs in the usual terms pending conclusion of the proceedings; otherwise, no valid basis had been made out by the appellant for the court making any orders as could interfere with the receivership pending determination of the proceedings.

Appeal dismissed in part.

JUDGMENT of Ms. Justice Máire Whelan delivered on the 5 ^th day of August 2020

Introduction

1 On 8 April 2020 the court's unapproved judgment in the above appeal was delivered electronically.

2 A number of consequential issues fall now to be addressed including:

(1) Mr. Kearney's notice of motion seeking a review of the unapproved judgment:

(2) two amendments sought by the receiver under O. 28, r. 11 (“the slip rule”);

(3) the terms of the Isaac Wunder order to be made by the court:

(4) the terms of the issue remitted to be tried by the High Court:

(5) costs: and,

(6) a stay in respect of any costs order made pending final determination of the proceedings.

Issue One - Application for review

3 In his affidavit of 12 June 2020 seeking a review of the unapproved judgment Mr. Kearney deposed at para. 2: -

“… From the outset I make this application in full knowledge of my dependence on the forbearance of this Honourable Court. I say, I am mindful of the Court's remit as regards matters of general public importance and constitutional matters.”

4 A written submission was filed by Mr. Kearney in support of his application for review “on the grounds of constitutional justice in what are exceptional circumstances involving property rights and equality rights” (para. 27). Mr. Kearney in his submission acknowledges at para. 8: “Obtaining the relief sought requires this appellant to discharge a very heavy onus.” In his submissions he placed reliance on the jurisprudence including the recent decision in Launceston Property Finance DAC v. Wright [2020] IECA 146 which reviewed the earlier case law.

5 The complaints made by the appellant include, in relation to para. 33 of the judgment. that the words used:-

“…did not represent this applicant's presentation in written submissions which were provided to all parties including the Court. The Court has applied the words ‘can only be interpreted to mean’. The written document provided to the Court expressly stated ‘must be interpreted to mean’. The submission presented by this applicant referenced a preliminary decision of the Court of Justice (Third Chamber) and the written opinion of the Advocate General which was provided to the Court of Justice for its ruling in; K.A. Finanz AG v. Sparkassen Versicherung AG Vienna Insurance Group Case - 483/14.”

Mr. Kearney contends that para. 33 of the judgment “does not reflect what was presented”. He complains that the judgment does not refer to the opinion of the Advocate General in K.A. Finanz (Case C-483/14), EU:C:2015:757, or the CJEU decision, EU:C:2016:205. He states that he relied upon K.A. Finanz at the hearing to make the argument that the Central Bank Act 1971, rather than the European Communities (Cross-Border Mergers) Regulations 2008 (S.I. No. 157/2008), was the law chosen by the parties at the time when the contract was first concluded. It should be noted, however, neither in his notice of appeal nor the written submissions filed on 26 March 2019 did the appellant expressly refer to the opinion of the Advocate General or the decision of the CJEU in K.A. Finanz or the Central Bank Act 1971. These new points were first raised by Mr Kearney at the hearing of the appeal. Mr Kearney did not elaborate on the significance of the Advocate General's opinion, or the 1971 Act. to the issues on appeal.

6 The appellant takes issue with paras. 87 and 88 of the unapproved judgment contending inter alia that they do not reflect verbatim the submissions he made to the court.

7 The appellant takes issue with paras. 134 to 136, inclusive, of the judgment. With regard to para. 134 he states:-

“… this appellant submits that I did not deny the availability of Directive 2005/56 EC to facilitate the cross-border merger. At no point was a submission of that nature put to the Court.”

8 Regarding para. 135 of the judgment the appellant states:-

“This applicant did contend that the Irish regulations in particular 19(1)(g) and (h) were an example of interference in private contracts which were signed prior to their enactment”.

It was also argued inter alia, “Such actions as carried out by BOS plc are an attack on past decisions of the Supreme Court which shall be referred to in due course.”

9 It was further argued that para. 136 of the judgment “completely misunderstands the position of this applicant”. The applicant asserts he “never suggested… that the mortgages vanished or ceased to exist following the 31 ^st December 2010.” With regard to the Supreme Court decision in Kavanagh v. McLaughlin [2015] IESC 27, [2015] 3 I.R. 555 the appellant asserts that the decision:-

“…binds this Court in relation to certain aspects of this merger. However, the decision centred on the contractual right of BOS plc to appoint a receiver when not registered as owner of the charge. The court found albeit in the obiter comments of Laffoy J. that as a matter of contract BOS plc was entitled to appoint a receiver, however the receiver, absent registration, had no power of sale.”

10 Mr. Kearney states: -

“This applicant does not or did not suggest the Irish Regulations cannot be imposed on contracts signed following the date of their enactment on the 26 ^th May, 2008. This submission is confined to this contract which was signed prior to this referenced date of the 26 ^th May, 2008. Reference is made to past decisions of the Supreme Court in relation to retrospective legislation.”

He placed reliance on the decisions in Dublin City Council v. Fennell [2005] IESC 33, [2005] 1 I.R. 604 and Hamilton v. Hamilton [1982] I.R. 466 and asked the court to permit the review on the grounds of constitutional justice in what he characterised as “exceptional circumstances involving property rights and equality rights.”

11 The respondents oppose the application for review of the judgment.

Determination on Mr. Kearney's application for review

12 I am...