Sean Mcguinness v Allied Irish Banks Plc

• Jurisdiction: Ireland
• Judge: Mr. Justice Gilligan
• Judgment Date: 27 February 2014
• Neutral Citation: [2014] IEHC 191
• Court: High Court
• Date: 27 February 2014

[2014] IEHC 191

THE HIGH COURT

[No. 8395 P/2013]

McGuinness v Allied Irish Banks PLC

No Redaction Needed

BETWEEN:

No Redaction Needed

SEAN MCGUINNESS

PLAINTIFFS

AND

ALLIED IRISH BANKS PLC

DEFENDANTS

CENTRAL BANK ACT 1989 S117

CENTRAL BANK ACT 1942 PART IIIC

CENTRAL BANK & FINANCIAL SERVICES AUTHORITY OF IRELAND ACT 2004 S10

IRISH LIFE & PERMANENT PLC v DUFF UNREP HOGAN 31.1.2013 2013 IEHC 43

STEPSTONE MORTGAGE FUNDING LTD v FITZELL 2012 2 IR 318 2012/43/12851 2012 IEHC 142

BRESLIN & SMITH BANKING LAW 2ED 2007 PARA 3.56

IRISH LIFE AND PERMANENT PLC (T/A PERMANENT TSB) v FINANCIAL SERVICES OMBUDSMAN UNREP HOGAN 3.8.2012 2012 IEHC 367

DELLWAY INVESTMENTS LTD & ORS v NATIONAL ASSET MANAGEMENT AGENCY & ORS 2011 4 IR 1

WOOLF & ORS DE SMITHS JUDICIAL REVIEW 6ED 2007 356

SWEENEY v DUGGAN 1997 2 IR 531 1997 2 ILRM 211 1997/6/2236

FREEMAN v BANK OF SCOTLAND (IRL) LTD & ORS UNREP GILLIGAN 31.5.2013 2013 IEHC 371

CONSTITUTION ART 15.2.1

CITYVIEW PRESS LTD & FOGARTY v AN CHOMHAIRLE OILIUNA & ORS 1980 IR 381

CONSTITUTION ART 15.2

FRIENDS FIRST FINANCE LTD v CRONIN UNREP HERBERT 15.2.2013 2013 IEHC 59

CARNA FOODS LTD & MALLON v EAGLE STAR INSURANCE CO (IRL) LTD 1995 1 IR 526 1995 2 ILRM 474 1995/16/4172

CAMPUS OIL LTD & ORS v MIN FOR INDUSTRY & ORS (NO 2) 1983 IR 88 1984 ILRM 45

EBS BUILDING SOCIETY v HEFFERON & KEARNS UNREP MCGOVERN 2.10.2012 2012/14/3848 2012 IEHC 399

AMERICAN CYANAMID CO v ETHICON LTD (NO 1) 1975 AC 396 1975 2 WLR 316 1975 1 AER 504

Application for Interlocutory Injunction - Breach of Contract - Compliance with Bank Code of Conduct on Mortgage Arrears - Mortgage Arrears Resolution process - Appeal-Damages

Facts: The plaintiff sought a declaration that in its” adoption of the procedures approved by the Central Bank Code of Conduct on Mortgage Arrears 2010(‘code’) the defendant bank was obliged to act fairly towards the plaintiff; a declaration the defendant was purporting to act in breach of contract; a declaration that the defendant was not entitled to take enforcement action against the plaintiff pending compliance by the defendant with the provisions of the Code; a declaration that the defendant was estopped from taking enforcement proceedings, damages for breach of contract, an order restraining the defendant from taking enforcement action against the plaintiff”s principal private residence which was mortgaged to the defendant. The plaintiff sought an order restraining the defendant from taking enforcement action against the property pending the resolution of the plaintiff”s appeal under the Mortgage Arrears Resolution Process (MARP) and an order extending the time to make an appeal under the MARP. The crucial issue was the correspondence which followed the letter dated 15 ^th April 2013 between the parties in which the defendant stated he had a right to appeal the decision taken on his initial application for resolution of his difficulties through the MARP process. The Plaintiff”s Counsel submitted the plaintiff requested an extension of time for the submission of an appeal to the Appeals Board in his letter of 7 ^th June 2013. The plaintiff complained of non compliance with the code and asserted relief was originally refused under the MARP scheme as the Bank Arrears Support Unit was not satisfied that the proposed arrangements would be suitable in the plaintiff”s financial circumstances and was an insufficient reason to refuse. Plaintiff”s Counsel submitted the plaintiff should have been awarded an injunction as there was a fair issue to be tried, namely the plaintiff”s right to have the defendant bank comply with the Code provisions and that the plaintiff should have had the benefit of fair procedures while his interests were considered through the MARP. The defendant submitted there was no breach of the Code as the plaintiff was granted an extension of time to make an appeal despite there being no provision in the Code to grant such an extension and that the Code terms did not envisage that a borrower was only permitted to make one application and one appeal under the Code procedure. The defendant”s Counsel also submitted the implication of fair procedures into the terms of the Code would be a departure from the statutory basis of the Code.

Mr. Justice Gilligan stated the implication of fair procedures into the terms of the Code would give the plaintiff a legal cause of action. Mr. Justice Gilligan also stated the question to be tried was whether the defendant and the bank complied with the Code. Mr. Justice Gilligan held on an interlocutory application, the Court must consider the judgment in American Cyanamid v Ethicon Ltd [1975] as to the limitations on the Court and that the test whether to grant an interlocutory injunction was the test set out in Campus Oil v Minister for Industry and Energy (No 2) [1983]. Mr. Justice Gilligan further held in order to award the plaintiff the injunction sought, he must establish that he has raised a fair issue to be tried, that damages would not be an adequate remedy, that the balance of convenience favoured the injunction and give an undertaking as to damages.

Held by Mr. Justice Gilligan that the plaintiff did not raise a fair issue to be tried in relation to the code nor the test, that damages would be an adequate remedy for any injury which the plaintiff may succeed in proving, that the balance of convenience favoured the dismissal of the application and that it remained open for the plaintiff to make the appeal sought.

Relief sought refused

1 JUDGMENT of Mr. Justice Gilligan delivered on the 27th day of February, 2014

2 1. This application for an interlocutory injunction comes before the Court by way of notice of motion dated 13 ^th August, 2013.

3 2. These proceedings were initiated by plenary summons issued on 6 ^th August, 2013. According to the general endorsement of claim the plaintiff seeks a number of declarations from the Court including a declaration that in its adoption of the procedures mandated by the Central Bank Code of Conduct on Mortgage Arrears 2010 (hereafter "the Code"), which is the document which covers the particular relationship between the parties to this case, the defendant bank is obliged to act fairly in respect of the plaintiff. The plaintiff also seeks a declaration that the defendant, by proposing to issue enforcement proceedings in respect of the plaintiffs principal dwelling house, is purporting to act in breach of contract in that by doing so the defendant would act contrary to the procedures set out in the Code. He also seeks a declaration that the defendant is not entitled to take enforcement action against the plaintiff pending compliance by the defendant with the provisions of the Code, a declaration that the defendant is estopped from taking enforcement proceedings by reason of its failure to properly and fairly comply with the procedural requirements contained in the Code, damages for breach of contract, an order restraining the defendant from taking enforcement action against the plaintiffs principal private residence situate at Hillsborough House, Clonee Road, Lucan, Co. Dublin pending resolution of the plaintiff's appeal under the Mortgage Arrears Resolution Process of the defendant Bank (hereafter "the MARP") and an order extending the time for the making of an appeal by the plaintiff under the MARP along with the usual ancillary orders.

4 3. The plaintiff is the owner of a property known as Hillsborough House, Clonee Road, Lucan, Co. Dublin. The property is the principal private residence of the plaintiff. He currently resides at the premises with his partner. One of his daughters also resides there part time, residing for the remainder of the time with her mother; the estranged wife of the plaintiff. Another daughter of the plaintiff previously lived with the plaintiff and his partner at the Hillsborough House property but no longer does so.

5 4. The property was mortgaged to the defendant in order to provide loan funding for its purchase. The loan was due to expire on 17 ^th December, 2029, but the plaintiff fell into arrears in 2011 in respect of the payments to be made on foot of this loan. The current debt owed to the Bank stands at something in the region of €3.6m, which is similar to the amount originally borrowed by the plaintiff, he having made some repayments in the intervening time, in 2013 the plaintiff applied for support under the MARP. On 15 ^th April, 2013, the defendant wrote to the plaintiff indicating that it would not offer alternative repayment arrangements to the plaintiff. The plaintiff now seeks, by way of notice of motion, an order restraining the defendant from taking enforcement action against the property pending the resolution of the plaintiff's appeal under the MARP and an order extending the time for the making of an appeal by the plaintiff under the MARP. The central issue in this application relates to correspondence which followed the letter of 15 ^th April, 2013, from the defendant to the plaintiff.

6 5. In that letter of 15 ^th April, 2013, the defendant made clear to the plaintiff that he had a right to appeal the decision taken on his initial application for resolution of his difficulties through the MARP process. The plaintiff was told that he had twenty days from the date of his receipt of the letter to submit an appeal to the Mortgage Appeals Officer of the defendant Bank. It is common case that the plaintiff did not avail of this opportunity within the time limit specified in this letter. However, the plaintiff met with representatives of the defendant Bank on 1 ^st May, 2013, to discuss the rejection of his proposal. In a letter from the defendant Bank to the plaintiff dated 10 ^th May, 2013, certain elements of the discussions between the parties at the meeting in question were set out.

7 6....