Permanent TSB Plc v Spillane and Another
| Jurisdiction | Ireland |
| Judge | Mr. Justice Dignam |
| Judgment Date | 16 November 2023 |
| Neutral Citation | [2023] IEHC 652 |
| Court | High Court |
| Docket Number | [Record No.] 2013 9648 P |
[2023] IEHC 652
[Record No.] 2013 9648 P
THE HIGH COURT
Judgment of Mr. Justice Dignam delivered on the 16 th day of November 2023 .
This is my judgment in respect of an application by Start Mortgages Designated Activity Company (“Start”) to substitute Permanent TSB plc as sole plaintiff in these proceedings. The application is brought pursuant to Order 17 Rule 4 of the Rules of the Superior Courts which provides:
“4. Where by reason of death, or any other event occurring after the commencement of a cause or matter and causing a change or transmission of interest or liability, or by reason of any person interested coming into existence after the commencement of the cause or matter, it becomes necessary or desirable that any person not already a party should be made a party, or that any person already a party should be made a party in another capacity, an order that the proceedings shall be carried on between the continuing parties, and such new party or parties, may be obtained ex parte on application to the Court upon an allegation of such change, or transmission of interest or liability, or of such person interested having come into existence.”
The application is brought in the following circumstances. By Plenary Summons of the 10 th September 2013 Permanent TSB, the current plaintiff, issued proceedings against the defendants. A Statement of Claim was delivered on the 27 th June 2014 and a Defence was delivered on the 25th September 2015. An Amended Plenary Summons was issued on the 6 th March 2017 and an Amended Statement of Claim was delivered on the 9th March 2017. An Amended Defence was delivered on the 4 th April 2017. The claim that is made in these pleadings is a detailed one and the defence is similarly detailed. It is not necessary to deal with the claim and defence in any great detail in the context of this motion.
In summary, the claim that is made is that on the 27th September 2007 Permanent TSB issued a letter of approval to the first-named defendant approving a loan to him in the sum of €2,575,000. It was a condition of the loan that it would be used to refinance an existing loan that was believed by Permanent TSB to be between Mr. Spillane and Bank of Ireland and that it would be secured by a first charge over the lands in Folio 36448F County Cork, also known as no's 1–8 Mallabraka Cottages. On the 4 th October 2007 Mr Spillane accepted the loan offer and on the 11 th October 2007 drew down the monies and executed an Indenture of Mortgage Charge. He failed to make payments on foot of the loan and on the 25 th July 2012 Permanent TSB obtained judgment against him in the sum of €2,684,687.29 plus costs. Mr. Spillane has not satisfied the judgment.
Permanent TSB claims that Mr. Spillane misrepresented to Permanent TSB that the Bank of Ireland loan was in his sole name and that he was the sole owner of the secured property when in fact the Bank of Ireland loan was to both Mr and Mrs Spillane, the property was owned by them jointly and the Bank of Ireland loan was charged on both of their interests in the property. The basis of the claim of misrepresentation is particularised in the Amended Statement of Claim but for the most part these particulars are not relevant to the Court's current exercise. One aspect of this claim is important to note however. It is pleaded that ownership of the property was registered in Mr Spillane's sole name from 11 th March 1985 to 11 th July 2007 and on that date the property was registered in the names of both Mr. Spillane and Mrs. Spillane but this was not notified to Permanent TSB. The charge in favour of Permanent TSB was registered in the Land Registry on the 17 th April 2009 and is stated to apply to Mr. Spillane's interest in the property only.
It seems the monies were used to pay off the Bank of Ireland loan. It is claimed that in the circumstances monies which were advanced by Permanent TSB to Mr. Spillane were therefore used to repay a loan with the Bank of Ireland in the name of both of the defendants and the charge in favour of the Bank of Ireland was discharged which means that Mrs. Spillane now enjoys an interest in the property unencumbered by the charge registered against the interest of Mr. Spillane. It is claimed as a result that Mrs. Spillane has been unjustly enriched at the expense of Permanent TSB “ in that her liability on the Bank of Ireland loan was extinguished and the Bank of Ireland charge on her interest in the property was discharged and she was left with an encumbered moiety of the property”, that she is bound by the charge in favour of Permanent TSB over the property and that she holds her legal and beneficial interest (if any) subject to that charge and holds it on trust for Permanent TSB.
The immediate background to this application is set out in the grounding affidavit of Ms. Eva McCarthy, litigation manager for Start. She deposes that Start has acquired the loan facility and mortgage security, the subject matter of the proceedings, from Permanent TSB by way of a Deed of Transfer, Conveyance and Assignment which was executed by Permanent TSB on 1 st February 2019 whereby Permanent TSB “ transferred all its right, title, interest, estate, benefit and entitlement (past and present) in and under” the loan referred to above to Start. She also deposes that on the same day Permanent TSB executed a Form 56 for the mortgage charge over the property and transferring to Start all its right, title, interest, estate, benefit and entitlement in the charge and the Form 56 was lodged with the Property Registration Authority. By the time Mrs. Spillane swore her replying affidavit the registration of this was complete and she exhibited the folio which recorded the transfer on the 27 th March 2019. Permanent TSB notified the first-named defendant of the assignment to Start by letter of the 1 st February 2009 and Start, by letter of the 7 th February 2009, notified the first-named defendant of the transfer and that it had been completed on the 1 st February 2009.
On that basis, it is claimed that Permanent TSB's right to recover on foot of the loan facility and to enforce the mortgage and the associated choses in action including this current cause of action have been transferred to Start and that it is appropriate that Start be substituted for Permanent TSB as the plaintiff. Permanent TSB consents to the making of this application by Start.
A particular feature of this case is that Mr. Spillane sadly died suddenly and unexpectedly on the 16 th April 2022.
The legal principles applicable to applications of this type under Order 17 rule 4 are well-established at this stage and in fact there was no real dispute between the parties as to the applicable principles.
In Stapleford Finance Limited v Lavelle & Ors [2016] IECA 104 the Court of Appeal confirmed that Order 17 Rule 4 of the Rules may be relied upon for this type of application. Costello J said at paragraph 16 “This Court is of the opinion that the learned High Court Judge was correct in her conclusion that the assignment amounted to a change in interest within the meaning of the rule.”
Simons J said in Permanent TSB v Burns [2020] IEHC 24:
“Secondly, it was held that the phrase “change … of interest” was not confined to an interest in land, but embraced an assignment of a chose in action. It was further held that there was no distinction in this regard between the assignment of a chose in action and the assignment of an existing cause of action. The Court of Appeal held that the legislative intent of the Supreme Court of Judicature Act (Ireland) 1877 would be defeated if it were not possible to substitute the assignee as a party.
“Since the Supreme Court of Judicature Act (Ireland) 1877 it has been possible legally to assign a chose in action. The intent of the statute is to do away with the formal necessity of joining the assignor in any proceedings brought by the assignee to enforce the chose in action. The legislative intent is defeated if the rules of court do not provide for of the substitution of the assignee of the chose in action as plaintiff in proceedings commenced by the assignor.”
Barniville J said in AIB v McKeown [2020] IEHC 155 at paragraphs 4 and 55 of his judgment in respect of an application by Everyday Finance (this is the paragraph numbering in the copy of the judgment handed in to Court):
“54. It is now well established that the appropriate provision of the RSC under which an application of the type made by Everyday to substitute or add a party in circumstances where an event occurs after the commencement of the proceedings which causes a change of interest, is O. 17, r. 4 and not O. 15, r. 14. This is clear from the judgment of Baker J. in the High Court in Irish Bank Resolution Corporation Limited (In Special Liquidation) v. Lavelle [2015] IESC 321 (“ Lavelle”). Having considered the relevant authorities, Baker J. held that O. 17, r. 4 permits an application to be made to add or substitute a party who has taken a legal assignment of a loan book from the original plaintiff in proceedings. The Court of Appeal upheld that judgment on appeal in Stapleford Finance Limited (As Substituted) v. Lavelle [2016] IECA 104. The Court of Appeal held that Baker J. was correct in her conclusion that the assignment in question amounted to a change in interest within the meaning of O. 17, r. 4. The Court of Appeal concluded that Baker J. was correct in holding that she had the power to substitute the relevant party as the sole plaintiff in the proceedings under that provision and that she had not erred in law in making the order under it.
55. I am satisfied, therefore, that the relevant provisions of the RSC under which to consider Everyday's application...
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