Permanent TSB Plc formerly Irish Life v Fox

• Jurisdiction: Ireland
• Judge: Ms. Justice Faherty
• Judgment Date: 20 April 2018
• Neutral Citation: [2018] IEHC 292
• Docket Number: [2016 No. 185 C.A.]
• Court: High Court
• Date: 20 April 2018

BETWEEN

PERMANENT TSB PLC FORMERLY

IRISH LIFE & PERMANENT PLC

PLAINTIFF

AND

SEAN FOX

AND

BERNADETTE FOX

DEFENDANTS

[2018] IEHC 292

[2016 No. 185 C.A.]

THE HIGH COURT

Order of possession – Consumer Credit Act 1995 – Contributory negligence – Plaintiff seeking order of possession – Whether the plaintiff satisfied the Court that the provisions of the Consumer Credit Act 1995 had been complied with

Facts: The defendants, Mr Fox and Ms Fox, appealed to the High Court against the order of the Circuit Court that the plaintiff, Permanent TSB Plc, recover possession of the property comprised in folio 94681F Co. Dublin. On foot of the pleadings, and the submissions advanced on behalf of the defendants, five issues arose for consideration in this case: 1) the alleged failure of the plaintiff to satisfy the Court that the provisions of the Consumer Credit Act 1995 have been complied with; 2) the alleged contributory negligence on the part of the plaintiff; 3) the alleged unfair terms in the mortgage contract; 4) the alleged failure of the plaintiff to satisfy the Court that there has been default on the part of the defendants; and 5) the defendants' particular circumstances.

Held by Faherty J that the plaintiff had made out its case for an order of possession.

Faherty J held that she would dismiss the appeal and affirm the order of the Circuit Court.

Appeal dismissed.

JUDGMENT of Ms. Justice Faherty delivered on the 20th day of April, 2018

1 This is the defendant's appeal of the order of the Circuit Court that the plaintiff recover possession of all that and those the property comprised in folio 94681F Co. Dublin, more commonly known as 2 Glenlyon Grove, Ballycullen Road, Knocklyon, Dublin 16.

Background

2 By letter of 21st September, 2006, the plaintiff agreed to make a loan facility to the defendants, namely a variable rate home loan of €270,000 repayable by monthly instalments over 27 years. On 29th September, 2006, the defendants acknowledged their acceptance of their loan. On 27th October, 2006, the sum of €270,000 was advanced to the defendants by the plaintiff. The acceptance letter stated that the defendants accepted the offer on the terms and conditions set out in the Letter of Approval, the General Mortgage Loan Approval conditions and the Permanent TSB mortgage conditions. It also stated that the said terms and conditions had been fully explained to the defendants by their solicitor. The defendants' signatures were witnessed by Eamonn M. O'Beirne, solicitor.

3 By way of security for the loan, the defendants executed a Deed of Mortgage on 27th October, 2006 over the premises. The defendants' signatures were witnessed by Mr. O'Beirne. The charge was duly registered as a burden on folio 94681F in favour of the plaintiff on 3rd November, 2006.

4 Pursuant to para. 7.1 of the 'Mortgage Conditions', it was a term of the mortgage contract that if the defendants defaulted in the making of two monthly repayments or for two months in the payment of any other monies payable under the mortgage, the total debt would become immediately payable to the plaintiff.

5 In his affidavit sworn 20th November, 2014, Mr. James O'Brien, Assistant Manager with the plaintiff, avers that the defendants defaulted in the terms of the loan facility and in particular that the defendants have failed to make repayments on the loan since on or about 28th October, 2014. At the time of the swearing of Mr. O'Brien's affidavit, the arrears stood at €26,327.95.

6 On 6th October, 2014, the plaintiff wrote to the defendants requesting the discharge of the mortgage debt, then standing at €261,862.07.

7 By letter dated 16th October, 2014, the plaintiff's solicitor wrote to the defendants calling on them to deliver up vacant possession of the mortgaged premises within seven days, in default of which the plaintiff would issue proceedings for possession.

8 At para. 15 of his affidavit, Mr. O'Brien avers that by virtue of the repeated default on the part of the defendants, the plaintiff is desirous of exercising its statutory power of sale conferred by the provisions of the Conveyancing Acts 1881 to 1911.

9 At para. 18 he avers as follows:

'I say that the Plaintiff is fully in compliance with the [Code of Conduct on Mortgage Arrears (CCMA)] in that since the Defendants have gone into arrears we have at all times pro-actively encouraged the Defendants to engage with the Plaintiff regarding the Defendants financial difficulties and kept in regular written contact with them and we have made every reasonable effort to put in place an alternative repayment arrangement with them, which has unfortunately not led to a successful outcome.'

10 It is further averred that the defendants have no bona fide defence to the plaintiff's claim either at law or on the merits.

11 On 23rd June, 2015, the defendants jointly swore a replying affidavit. They averred therein to the fact of the first defendant having been made redundant from his job in October, 2010, as a result of which his net income was reduced from €700 per week to €210 per week. For a period, the first defendant's redundancy money discharged the monthly mortgage repayments.

12 It is not disputed that following the first defendant's redundancy the defendants made contact with the plaintiff seeking a forbearance arrangement as a result of which they were given a moratorium on mortgage repayments for three months.

13 Between 1st February, 2011 to 1st October, 2013 the defendants were given six forbearance arrangements which the defendants say they had adhered to and honoured. This is not disputed by the plaintiff.

14 As set out in the defendants' affidavit, in or about May, 2013, the first defendant was beset with serious health problems as a result of the stress of his not being able to find work. As a consequence, the defendants were not able to make any mortgage repayments between January, 2014 and August, 2014. The defendants aver that at this time they were dealing with demands for payment in respect of secondary debt. With assistance their secondary debt was restructured and they made cuts to their household budget to create conditions for mortgage repayment.

15 From September, 2014 they recommenced monthly mortgage repayments of €300 which were increased to €500 per month in January, 2015. The defendants say that they were unable to increase these repayments any further and duly sought a further forbearance arrangement from the plaintiff. They aver that the plaintiff was unwilling to agree to any further arrangement.

16 The defendants aver that they did not set out to default on their mortgage repayments but that their situation was foisted on them through unemployment and ill health.

17 The defendants refute Mr. O'Brien's suggestion that they did not actively engage with the plaintiff. Specifically they state that they 'upheld and adhered to each and every Forbearance Arrangement afforded us between February 2011 to October, 2013' and that subsequent application for a further arrangement was 'rejected out of hand on every occasion'.

18 As of June, 2015, the defendants were urging the Circuit Court to allow them to apply for the Mortgage to Rent ('MTR') scheme which, they averred, would allow them to continue to live in their family home. The defendants were contending that their property valuation satisfied the criteria for the MTR scheme.

19 On 18th September, 2015, Ms. Niamh McGee, Assistant Manager with the plaintiff, swore an affidavit acknowledging the six forbearance arrangements which were in effect from February, 2011 to October 2013.

20 In response to the defendants' contention that the plaintiff refused to enter any further forbearance arrangement, Ms. McGee avers as follows:

'I say that as of the 1st day of July, 2013, the Central Bank of Ireland revised the [CCMA]. I further say that in line with the revised CCMA requirements, the Plaintiff was unable to offer the Defendants a further forbearance agreement as same was deemed to be an unsustainable Alternative Repayment Arrangement.'

21 It is acknowledged by the plaintiff that the defendants sought to enter into forbearance arrangements in the form of a Standard Financial Statement ('SFS') on 2nd December, 2013, 14th October, 2014 and 20th March, 2015.

22 Ms. McGee avers that the outcome of the December, 2013 SFS was the plaintiff's offer to assist the defendants in an 'Assisted Voluntary Sale'. This offer was declined by the defendants.

23 Thereafter, the plaintiff wrote to the defendants on 6th March, 2014, advising that the plaintiff had not received the defendants 'Alternative Repayment Arrangement documents' and stating that the deadline for the submission of same was by then overdue. The defendants were advised that if no contact was received the plaintiff would take the view that the defendants had decided not to enter into an Alternative Repayment Arrangement. The letter continued:

'As you have not accepted this Offer within the agreed timeline, you are now considered outside the Mortgage Arrears Resolution Process (MARP). Your account will no longer benefit from the protection of the MARP and you are required to repay any outstanding arrears and return to your original contractual monthly repayments.'

24 The defendants were also advised that '[l]egal proceedings may commence three months from the date of this letter or eight months from the date the arrears arose on your account, whichever date is the later.' In order to avoid legal action, the defendants were requested to talk to the plaintiff about other options that may be available to them.

25 Ms. McGee avers that on 14th October, 2014, the defendants' next SFS was assessed by the plaintiff. The loan was deemed to be unsustainable. On 1st December, 2014, the defendants' authorised third party advisor wrote to the plaintiff advising, inter alia, that the defendants would be...