Pentire Property Finance Designated Activity Company v Corrigan
| Jurisdiction | Ireland |
| Judge | Mr. Justice Michael MacGrath |
| Judgment Date | 03 April 2020 |
| Neutral Citation | [2020] IEHC 254 |
| Docket Number | [2016 No. 753 S] |
| Court | High Court |
| Date | 03 April 2020 |
AND
[2020] IEHC 254
Michael MacGrath J.
[2016 No. 753 S]
THE HIGH COURT
Summary judgment – Loan facility – Plenary hearing – Plaintiff seeking summary judgment – Whether arguable grounds of defence had been advanced
Facts: The plaintiff, Pentire Property Finance Designated Activity Company, applied to the High Court for summary judgment for sums due in respect of the alleged liability of the defendants, Mr and Ms Corrigan, on foot of a loan facility provided by the dissolved Bank of Scotland (Ireland) Limited. The plaintiff alleged that through a series of transactions it enjoyed rights under the facility and sought to enforce them. These alleged rights were contested and the application for summary judgment was opposed. One of the issues raised by the defendants related to interest. From the outset, and in order to progress the application, counsel for the plaintiff advised the court that the plaintiff restricted its claim for summary judgment to the capital sum advanced and that issues concerning interest, its amount and method of calculation, should be transferred to plenary hearing. The capital sum claimed was €925,000.
Held by MacGrath J that no arguable grounds of defence had been advanced other than on the issue of quantum, the breakdown between capital and interest and as to the liability of the defendant for interest.
MacGrath J held that the proceedings should be transferred to plenary hearing.
Case transferred to plenary hearing.
This is an application by the plaintiff for summary judgment for sums due in respect of the defendants’ alleged liability on foot of a loan facility provided by the now dissolved Bank of Scotland (Ireland) Limited (“ BOSI”). The plaintiff alleges that through a series of transactions it enjoys rights under the facility and seeks to enforce them. These alleged rights are contested and the application for summary judgment is opposed. One of the issues raised by the defendants relates to interest. From the outset, and in order to progress this application, counsel for the plaintiff, Mr. Gorman B.L., advised the court that the plaintiff restricts its claim for summary judgment to the capital sum advanced and that issues concerning interest, its amount and method of calculation, should be transferred to plenary hearing. The capital sum claimed is €925,000.
By facility letter dated 20th November, 2007, BOSI offered a loan facility to the defendants in the sum of €925,000 (“ the loan”). The offer was made in accordance with the terms of a facility letter and on the basis of BOSI's general conditions. The loan was accepted. The facility letter was signed by the defendants on 27th November, 2007. The defendants also entered into a deed of mortgage with BOSI. This was executed on the 28th February, 2008. The sum of €925,000 was drawn down. No issue arises in relation to the execution of the loan agreement by the defendants. The defendants dispute the alleged transfer of the loan and contest the validly and legality of a number of transfers and transactions whereby the plaintiff alleges that it became entitled to the benefits and rights under the loan agreement.
The transfers leading to the plaintiff's claimed entitlement to the benefit of the loan.
No evidence has been produced to the court of any account transaction or dealing that may have taken place between execution of the mortgage/charge and an arrangement, known as the cross- border merger, which took place on 31st December, 2010.
The plaintiff claims that, by virtue of a cross-border merger pursuant to the European Communities (Cross-Border Mergers) Regulations 2008 (Ireland) and the Companies (Cross-Border Mergers) Regulations 2007 (United Kingdom), approved by the High Court on 22nd October, 2010 and by the Scottish Court of Session on 10th December, 2010, all of the rights and obligations of BOSI under the loan and the mortgage were vested in Bank of Scotland plc (“ BOS”) with effect from 11.59 p.m. on 31st December, 2010. BOS is incorporated under the laws of Scotland. Through a further series of transactions, it is alleged that the interest of BOS in the loan was transferred to the plaintiff. These include a purchase agreement between BOS and CarVal Investors UK Limited (“ CarVal”), a deed of novation made between CarVal, Pentire Property Finance Limited (“ Pentire”), and BOS and a deed of assignment between BOS and Pentire.
On the 29th November, 2014, BOS entered into a purchase deed (“ the purchase agreement”) with CarVal, a company incorporated in England, whereby BOS agreed to sell to CarVal the “ purchase assets” and for CarVal to take over the “ assumed obligations” on the terms and conditions of that deed. It is contended by the plaintiff that by virtue of this agreement CarVal acquired a portfolio of loans then on the loan book of BOS, which included the loan advanced to the defendants, at which time the amount stated to be due and owing was €1,305,921. A second ‘loan’ in the amount of €19,719 was transferred and the name Simon Davidson is referred to in connection with this.
A deed of novation was executed on the 12th December, 2014 between CarVal, as transferor, Pentire Property Finance Limited (“ Pentire”), as transferee, and BOS as the continuing party. Pentire's address is described as “ C/O Carval Investors UK Limited, 25 Great Pulteney Street, London.” This was supplemental to the purchase agreement between CarVal and BOS and provided for CarVal to novate to the plaintiff the entirety of its rights and obligations under the purchase deed on the effective date. BOS agreed to the novation. The “ effective date” is the date of the deed, the 12th December, 2014.
By virtue of Clause 3.1 of the deed of novation the parties agreed that, as and from the date of the agreement, the transferee:-
“… shall be and is hereby substituted in place of the transferor as a party to the purchase deed and that the purchase deed shall be treated in all respects as if the transferee had been, from the date of execution, the original party to the purchase deed instead of the transferor.”
By deed executed on the 20th April, 2015 BOS transferred the loan facility and assigned its interests in the loan and mortgage to Pentire.
On the 9th March, 2015, Pentire wrote to the defendants advising them of the deed of purchase and informed them that the rights, title and interest in the facility letter were transferred to Pentire. The amount then owing was stated to be €1,496,231.69 representing the principal sum together with accrued interest and a demand for payment was made.
On the 20th March, 2015, BOS sent to the defendants what is known as a ‘ goodbye letter’ informing them of the sale. The defendants were also advised that Pepper Finance Corporation (Ireland) Limited t/a Pepper Assets Servicing (“ Pepper”) had been appointed to provide portfolio and asset management services on behalf of the purchaser and that Pepper might contact them in relation to the facilities.
In April, 2015, Pepper wrote to the defendants advising them of their involvement and of their role, which included collecting payments, attending meetings, establishing and maintaining lines of communication and gathering relevant information in relation to any proposals which might be made or considered.
A statement of account dated 20th April, 2015, prepared by BOS was sent to the defendants. This recounted transactions which had taken place since the 28th April, 2013. The opening balance at that time was €1,178,317.25. Sums in respect of interest and arrears of interest were debited to the account so that at the time of the statement, the amount stated to be due was €1,387,819.76.
Pepper prepared a statement of account showing that the closing balance as of the 4th July, 2016 was €1,532,273.67. The opening balance in the statement was €1,387,819.76. This matches the closing balance on the BOS statement. In the Pepper statement to Mr. Corrigan, the entry of the 20th April, 2015 is described as “ Opening arrears balance transferred from Lloyd's as at 20th April” (emphasis added). The defendants contend that this is not evidence that this sum represents the amount or any amount owing and due by them, given the reference to Lloyd's in the statement. It is to be noted, that in a statement issued to the second defendant, no reference is made to Lloyd's.
This is an application for summary judgment. The onus of proof lies, in the first place, on the plaintiff to establish prima facie evidence of debt. The test as to whether judgment ought to be entered, or whether the defendant be given liberty to defend, is that which was succinctly summarised by Hardiman J. in Aer Rianta cpt v. Ryanair Limited [2001] 4 I.R. 607 at p. 623:-
“In my view, the fundamental questions to be posed on an application such as this remain: is it “very clear” that the defendant has no case? Is there either no issue to be tried or only issues which are simple and easily determined? Do the defendant's affidavits fail to disclose even an arguable defence?”
This was expanded on by McKechnie J. in Harrisrange Ltd v. Duncan [2003] 4 I.R. 1. who stated that the power to grant summary judgment should be exercised with discernible caution. He amplified the applicable principles which at p. 7:-
“From these cases it seems to me that the following is a summary of the present position:-
(i) the power to grant summary...
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