Pepper Finance Corporation Ireland DAC v Patrick Farrelly and Kathleen Murtagh
| Jurisdiction | Ireland |
| Judge | Mr. Justice Mark Heslin |
| Judgment Date | 26 April 2022 |
| Neutral Citation | [2022] IEHC 272 |
| Court | High Court |
| Docket Number | 2019/396 CA |
[2022] IEHC 272
2019/396 CA
THE HIGH COURT
CIRCUIT APPEAL
Order for possession – Mortgaged property – Defence – Plaintiff seeking possession of mortgaged property – Whether the defendants had any bona fide defence to the plaintiff’s claim
Facts: The defendants, Mr Farrelly and Ms Murtagh, appealed against an order for possession which was made by the Circuit Court (Judge McDonnell) on 16 October 2018 whereby that Court ordered inter alia: “That the Plaintiff do recover from the Defendant possession of ALL THAT AND THOSE the property at 21 Reask Green, Navan, Co. Meath and comprised in Folio 24061 F County Meath”. The first defendant submitted that the plaintiff’s application should be refused, and the matter should proceed to a full plenary hearing. The central contention made in opposition to the plaintiff’s claim was that, in circumstances where the plaintiff was ‘merely’ the owner of legal title to the mortgaged property, they were not entitled to enforce rights as mortgagee.
Held by Heslin J that there was no outstanding issue to be resolved because the attempts made to oppose the claim of the plaintiff, Pepper Finance Corporation Ireland DAC, fell short of anything which might constitute stateable grounds of defence. He found that there was no possibility of the defendants having any bona fide defence to the plaintiff’s claim; the plaintiff’s claim was unanswerable. He held that the plaintiff had made out its proofs and had done so comprehensively and in a way which ruled out a legal or factual basis upon which any future trial judge could dismiss the plaintiff’s claim. He was satisfied that it was appropriate to order possession of the property to be delivered to the plaintiff and he so ordered. He held that the evidence before the court entitled him to hold that the application was made bona fide with a view to realising the relevant security, which the defendants granted in favour of the plaintiff, over the mortgaged property. He held that the monies were secured, and were due, and the plaintiff was entitled to the relief sought. He was satisfied that the plaintiff was entitled to possession of the mortgaged property.
Heslin J’s preliminary view was that the costs of the entirely successful plaintiff fell to be met by the entirely unsuccessful defendants.
Application refused.
Judgment of Mr. Justice Mark Heslin delivered on the 26th day of April 2022
This case concerns an appeal against an order for possession which was made by the Circuit Court (Her Honour Judge McDonnell) on 16 October 2018 whereby that Court ordered inter alia: “That the Plaintiff do recover from the Defendant possession of ALL THAT AND THOSE the property at 21 Reask Green, Navan, Co. Meath and comprised in Folio 24061 F County Meath …”.
The matter proceeded as a de novo hearing which took place on Friday 1 April 2022. Counsel appeared for the Plaintiff. The First Named Defendant appeared as a litigant in person to oppose the application. There was no appearance by the Second Named Defendant.
The present proceedings were commenced by way of a Civil Bill for Possession, which was issued by “Pepper Finance Corporation (Ireland) Ltd.” as Plaintiff, on 10 August 2015. The special indorsement of claim describes the Plaintiff as a limited liability company, gives its address and states that the name of the Plaintiff was changed from “GE Capital Woodchester Home Loans Ltd.” to “Pepper Finance Corporation (Ireland) Ltd.”. It goes on to plead inter alia that, by means of a loan offer letter dated 23 January 2006, the Plaintiff offered to advance to the Defendants a loan facility of €150,000 (“loan facility” or the “Loan”) upon terms which included (i) that the loan facility term was a period of 30 years; (ii) that repayment of the loan facility was to be in the form of monthly instalments of principal and interest; (iii) that interest would apply to the loan facility at a variable rate, which was 6.80% as of the date of the letter of approval; and, (iv) that, in the event of any repayment not being made on the relevant due dates, or any breach of the conditions of the Loan, or of any covenants or conditions contained in any of the security documents, the Plaintiff may demand an early repayment of the principal and accrued interest or otherwise alter the conditions of the Loan.
The special indorsement of claim goes on to plead that the terms of the loan facility were accepted and signed by the Defendants on or about 3 February 2006; that the sum of €150,000 was advanced to the Defendants on or about 15 February 2006; and that the loan facility was secured by a first legal mortgage dated 3 February 2006 (“the Mortgage”) over 21 Reask Green, Navan, Co Meath (the “Mortgaged Property”) situate within the court's jurisdiction.
Reference is made to certain express terms in the Mortgage including, inter alia, (i) that the Defendants would pay the monies secured at the times and in the manner provided in the Mortgage without deduction; (ii) that, to secure the payment of the secured monies, the Defendants would grant, convey, charge and demise unto the Plaintiff, their interest in the Mortgaged Property, subject to the right of redemption in the event that the secured monies were repaid to the Plaintiff pursuant to the Mortgage covenants; (iii) that the Defendants would pay the secured monies, on demand, to the Plaintiffs; (iv) that all monies remaining unpaid by the Defendants would immediately become due and payable on demand to the Plaintiff on the occurrence of any event of default as defined; (v) that the secured monies were deemed to have become due within the meaning and for all purposes of the Conveyancing Acts on the execution of the Mortgage; (vi) that, at any time after the execution of the Mortgage, the Plaintiff could, without any further consent from or notice to the Defendants, enter into possession of the Mortgaged Property; and (vii) the power of sale would be exercisable by the Plaintiff without the restrictions on its exercise imposed by s. 20 of the Conveyancing Act 1881.
It was pleaded that the Mortgage terms were duly accepted and signed by the Defendants on or about 3 February 2006, and that, on or about 13 July 2010, the said Mortgage was duly registered with the Land Registry.
It was pleaded that (i) in breach of the terms of the Mortgage and of the loan facility, the Defendants failed to pay the monthly instalments as they fell due; (ii) that the Plaintiff wrote to the Defendants and demanded full payment of the entire balance due and owing; (iii) that, when such demand was not met, the Plaintiff's solicitor wrote again; and (iv) that, despite letters of 6 May 2014 and 30 May 2014, the Defendants have failed to repay the secured monies or any part thereof, or deliver up possession of the Mortgaged Property.
The special indorsement of claim went on to plead that the Plaintiff's power to take possession of and to sell the Mortgaged Property has arisen and become exercisable; and that, as of 31 July 2015, the monies due by the Defendants to the Plaintiff pursuant to the loan facility amounted to €195,337.53, including arrears of €61,072.05.
It was pleaded that the Mortgaged Property comprises the principal private residence of the Defendants within the meaning of the Land and Conveyancing Law Reform Act 2013; and that, insofar as the Code of Conduct on Mortgage Arrears issued by the Central Bank of Ireland (“CCMA”) applies to the loan facility, the Plaintiff has complied with the Mortgage Arrears Resolution Process (“MARP”) set out therein, and is not precluded from seeking possession of the Mortgaged Property.
The Plaintiff's claim was clearly stated to include “(a) An order for possession of the Mortgaged Property, a description of which was contained in the first schedule of the civil bill for possession, namely, ‘ALL THAT AND THOSE’ the property comprised in Folio 3412L Co. Meath and more commonly known as 21 Reask Green, Navan, Co. Meath (now comprised in Folio 24061 F Co. Meath)”.
The affidavit grounding the Plaintiff's application for possession was sworn by a Ms. Caroline Loftus, Operations Manager in Pepper Finance Corporation (Ireland) Ltd., on 5 August 2015, who averred, at para. 1 thereof, that she is an employee of the Plaintiff and makes her affidavit on its behalf, being duly authorised so to do. She also averred that her affidavit was made from facts within her own knowledge and from a careful examination of the books and records of the Plaintiff, save where otherwise appears, and where so otherwise appearing, she believes the same to be true.
At para. 3, it was averred that the Plaintiff offered the Loan facility to the Defendants and a copy of the Loan facility comprised Exhibit “A” to her affidavit. I have considered its contents.
As well as clearly specifying inter alia the amount of the credit advanced (€150,000); the period of the Agreement (30 years); the number of repayment instalments (360); the cost of credit; the relevant interest rate; the effect of a 1% increase in interest rate, etc., the loan offer is plainly addressed to the Defendants (identified therein as “the borrower”) and the terms governing the Loan facility are set out. Standard conditions comprise Part 2 of the Loan facility. Part 3 sets out General Conditions. Part 4 comprises General Terms and Conditions and among these are 4(b) which, under the heading “Repayment” states the following:-
“(b) In the event of any repayment not being paid on the due dates or any of them, or of any breach of the Conditions of the Loan or any of the covenants or conditions contained in any of the security...
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