National Asset Loan Management Ltd v Barden
| Jurisdiction | Ireland |
| Judge | Mr Justice Charleton |
| Judgment Date | 04 February 2013 |
| Neutral Citation | [2013] IEHC 32 |
| Court | High Court |
| Docket Number | [2012 No. 2762 S] |
| Date | 04 February 2013 |
Between
And
[2013] IEHC 32
The High Court
PRACTICE AND PROCEDURE
Summary judgment
Defence - Bona fide defence - Whether bona fide defence - Whether defence had foundation - Whether judgment should be granted - Contract law - Construction of loan facility - Business efficacy - Intention of parties - Standstill arrangement - Forbearance to sue - Promissory estoppel - Appointment of receiver - Whether loan repayable on demand - Whether promise final and irrevocable - Whether reasonable notice given - Whether appointment of receiver unlawful - Judicial review - NAMA - Public law remedy - Time limits for institution of proceedings - Statutory interpretation - Legislative intention - Whether statutory competence question for judicial review - Whether substantial issue for court's determination - Aer Rianta cpt v Ryanair Ltd [2001] 4 IR 607; Association of General Practitioners Ltd v Minister for Health [1995] 1 IR 382; Bank of Ireland v AMCD (Property Holdings) Ltd [2001] 2 All ER (Comm) 894; Bank of Ireland v Educational Building Society [1999] 1 IR 220; Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130; [1956] 1 All E.R. 256; Danske Bank v Durkan New Homes Ltd [2010] IESC 22, (Unrep, SC, 22/4/2010); Harrisrange Ltd v Duncan [2003] 4 IR 1; McGrath v O'Driscoll [2006] IEHC 195, [2007] 1 ILRM 203; Moran v AIB Mortgage Bank [2012] IEHC 322, (Unrep, McGovern J, 27/7/2012); O'Donnell v Dún Laoghaire Corporation [1991] ILRM 301 and Zurich Bank v McConnon [2011] IEHC 75, (Unrep, Birmingham J, 4/3/2011) considered - Rules of the Superior Courts 1986 (SI15/1986), O 84 - Conveyancing Act 1881 (44 & 45 Vict c 41), s 20 - Statute of Limitations 1957 (No 6) - National Asset Management Act 2009 (No 34), s 193 - Illegal Immigrants (Trafficking) Act 2000 (No 29), s 5 - Planning and Development Act 2000 (No 30 ), s 50 - Planning and Development (Strategic Infrastructure) Act 2006 (No 27), s 13 - National Asset Management Agency Act 2009 (No 34), ss 10, 84, 85(4), 96, 119 to 122, 193 - Judgment entered (2012/2762S - Charleton J - 4/2/2012) [2013] IEHC 32
National Asset Loan Management Ltd v Barden
Facts: The plaintiff, the National Asset Management Agency, an organisation established to acquire bad debts off Irish banks and address ill-judged loans, made a motion for summary judgment against the defendant, who had loans advanced to him for the purpose of property development.
The court first considered the contractual arguments upon which the defendant sought to outline a defence. An understanding was claimed to exist whereby no money became repayable from the loan advanced, save the borrower was successful in the sale of each house. Charleton J held this was a radically different view of the lender borrower relationship to that contained in the facility letter; the commercial arrangement had to be given business efficacy in accordance with the intention of the parties as expressed in their agreement.
The bank had exercised forbearance, the standstill arrangement could however be brought to an end by reasonable notice, allowing the bank to rely upon legal entitlements as set out in the contract between the parties ( Association of General Practitioners v Minister for Health [1995] 2 ILRM 481 and Zurich Bank v Jim McConnon [2011] IEHC 75 considered).
The facility letter correctly described a contract of loan repayable on demand (Bank of Ireland v AMCD [2001] 2 All ER Comm 894 considered and applied).
The plaintiff contended that the appointment of the receiver was unlawful and the repayment term had not been properly activated. The power of sale was therefore held to be exercisable without restriction ( Moran v Moran v Allied Irish Bank [2012] IEHC 322 considered and applied).
Scrutiny of the powers of National Asset Loan Limited could not take place as the deliberately short time limits contained in the National Asset Management Agency Act 2009 to apply for judicial review or plenary summons had been exceeded.
Judgment was entered for amount claimed in summary proceeding; the court would stay judgment and costs if notice of appeal was going to be entered.
HARRISRANGE LTD v DUNCAN 2003 4 IR 10
DANSKE BANK A/S (T/A NATIONAL IRISH BANK) v DURKAN NEW HOMES & ORS UNREP SUPREME 22.4.2010 2010/10/2392 2010 IESC 22
MCGRATH v O'DRISCOLL 2007 1 ILRM 203
ASSOCIATION OF GENERAL PRACTITIONERS LTD v MIN FOR HEALTH 1995 2 ILRM 481
ZURICH BANK v MCCONNON UNREP BIRMINGHAM 4.3.2011 2011/50/14278 2011 IEHC 75
BANK OF IRELAND v AMCD (PROPERTY HOLDINGS) LTD & ORS 2001 2 AER (COMM) 894
MORAN v AIB MORTGAGE BANK & ORS UNREP MCGOVERN 27.7.2012 2012 IEHC 322
NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S85(4)
NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S193
WHELAN & ORS THE NATIONAL ASSET MANAGEMENT AGENCY ACT 2009: A REFERENCE GUIDE DUBLIN 2011 752
DODD & CARROLL NAMA: THE LAW RELATING TO THE NATIONAL ASSET MANAGEMENT AGENCY DUBLIN 2011 1278
O'DONNELL v DUN LAOGHAIRE CORP 1991 ILRM 301
PLANNING & DEVELOPMENT ACT 2000 S50
PLANNING & DEVELOPMENT (STRATEGIC INFRASTRUCTURE) ACT 2006 S13
NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S10
NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S84
NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S96
NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 PART X
Mr Justice Charleton delivered on the 4th day of February 2013
1. The plaintiff is an entity within the National Asset Management Agency, the statutory body set up pursuant to the National Asset Management Agency Act 2009 to acquire the bad debts of Irish banks and manage them over a long-term period in an attempt to realise some value while at the same time freeing the banks of the impairment of their ill-judged loans. The defendant is a property developer. In this motion for summary judgment, the plaintiff seeks judgment against the defendant for €10,072,856. This sum represents the loans advanced to him and three others for the development of property in Co Wexford. There are three relevant loans, two of which were made by the Bank of Ireland and the other by Allied Irish Banks. The Bank of Ireland loan is evidenced in a facility letter dated 8 September 2004 and was rolled over by a similar letter on 16 September 2009 and accounts for approximately €2.7 million of the debt. It is the Allied Irish Banks loan with which this application is most concerned. This was granted by way of a facility letter on the 5 February 2007 and accounts for approximately €7.4 million of the debt.
2. Two separate defences are advanced as to why summary judgment should not be granted. The defendant argues, firstly, that the acquisition of the loans from the various banks by the National Asset Management Agency was unlawful. In addition, the defendant also claims as a substantive defence to the repayment of the debt that it is not due under the terms of the contract of loan.
3. Summary judgment is an exception to the ordinary procedures of the High Court whereby no damages are awarded against any defendant save on the reception of credible oral evidence, or exceptionally affidavit evidence, and where the defendant has an equal right to be heard in live testimony. In the summary judgment procedures, the plaintiff proves the debt on affidavit and, again on affidavit, the defendant sets out the basis of the testimony that would be given; this by way of a plea that instead of granting summary judgment, the court should remit the matter to plenary hearing in the ordinary way. This procedure has given rise to many decided cases as to the circumstances in which it ought to be exercised. In Harrisrange Limited v. Michael Duncan [2003] 4 I.R. 1, McKechnie J. analysed the previous authorities. He stated that the power to grant summary judgment should "be exercised with discernible caution" and usefully proposed a set of principles as follows at pages 7-8:
(ii) In deciding upon this issue the court should look at the entirety of the situation and consider the particular facts of each individual case, there being several ways in which this may best be done,
(iii) In so doing the court should assess not only the defendant's response, but also in the context of that response, the cogency of the evidence adduced on behalf of the plaintiff, being mindful at all times of the unavoidable limitations which are inherent on any conflicting affidavit evidence,
(iv) Where truly, there are no issues or issues of simplicity only or issues easily determinable, then this procedure is suitable for use,
(v) Where however, there are issues of fact which in themselves are material to success or failure, then their resolution is unsuitable for this procedure,
(vi) Where there are issues of law, this summary process may be appropriate but only so, if it is clear that fuller argument and greater thought, is evidently not required for a better determination of such issues,
(vii) The test to be applied, as now formulated is whether the defendant has satisfied the Court that he has a fair or reasonable probability of having a real or bona fide defence; or as it is sometimes put, 'is what the defendant says credible?', which latter phrase I would take as having as against the former an equivalence of both meaning and result,
(viii) This test is not the same as and should be not elevated into a threshold of a defendant having to prove that his defence will probably succeed or that success is not improbable, it being sufficient if there is an arguable defence,
(ix) Leave to defend should be granted unless it is very clear that there is no defence,
(x) Leave to defend should not be refused only because the court has reason to doubt the bona...
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