Stapleford Finance Ltd v Courtney
| Jurisdiction | Ireland |
| Court | High Court |
| Judge | Mr Justice Bernard Barton |
| Judgment Date | 14 October 2014 |
| Neutral Citation | [2014] IEHC 668 |
| Docket Number | [2012] No.219 S |
| Date | 14 October 2014 |
[2014] IEHC 668
HIGH COURT
Barton J.
[2012] No.219 S
Banking & Finance – Summary judgment – Bona fide defence – Counter claim – Defective lending practices
Facts: The plaintiff sought an order of summary judgment against the defendant for default in repayment of a loan advanced by the plaintiff for investment purposes. The defendant alleged that he suffered loss in his investment portfolio owing to faulty lending practices implemented by the plaintiff.
Mr. Justice Bernard Barton granted an order of summary judgment against the defendant but with a stay on the execution of the said judgment pending institution of a counter claim by the defendant against the plaintiff. The Court held that in order to raise the bona fide defence, the Court must look into the credibility of the evidence put forward by the defendant as well as the cogency of the evidence adduced by the plaintiff. The Court found that if there were facts in dispute which went to the core of the arguments, the summary judgment process would not be suitable. The Court opined that in order to plead counter claim, the defendant must establish that such a claim arose out of the same set of circumstances that occurred in a primary claim and that it was not an independent claim. The Court held that in the subject case, the defendant did not have a bona fide claim as it did not contest the validity of the relevant loan transactions and default made by him; however, the defendant might have a counter claim based on the fact of reduction in investment portfolio due to haphazard decisions made by the plaintiff, the fact that needed to be determined separately.
These proceedings were instituted by Irish Bank Resolution Corporation [herein after the bank] by way of Summary Summons dated the 25th January, 2012 and by which the bank claimed the sum of €117,666.80 being the balance of monies payable by the defendant to the bank by way of a loan comprised in two loan accounts numbers 02225435 and 02399895 respectively together with interest thereon until payment or judgment.
By way of legal assignment made subsequent to the date of issue of these proceedings the bank assigned its interests in this action to Stapleford Finance Limited. By order of the court made the 28th July 2014, after the hearing of the motion herein that company was given liberty to carry on these proceedings as Plaintiff.
The motion for liberty to enter a final judgment against the defendant was issued by the bank on the 30th June, 2012. A number of affidavits have been sworn on behalf of the bank in respect of its claim and to which the defendant has delivered replying affidavits.
At the time when this matter came before the court the bank claimed that the amount due in respect of principle and interest was €123,709.59.
As required by the Rules of the Superior Courts for the purpose of obtaining liberty to enter summary judgment, the bank asserts, amongst other things, that there is no bona fide defence to the bank's claim.
In response the defendant maintains that not only has he got a bona fide defence but that he has a counter claim against the bank for damages and to which I will return later in this judgment.
At the outset, however, I consider it useful to set out the legal principles to be applied on an application for liberty to enter a summary judgment.
It is now well settled that the modern law as to the principles to be applied by the Court on an application for liberty to enter a summary judgment on a Summary Summons commences with the decision of the Supreme Court in First National Commercial Bank PLC. v. Anglin (1996) 1 I.R. 75.
In that case Murphy J. stated that;
‘For the court to grant summary judgment to a plaintiff and to refuse leave to defend it is not sufficient that the court should have reason to doubt the bona fides of the defendant or to doubt whether the defendant has a genuine cause of action…..
In my view the test to be applied is that laid down in Banque de Paris v. de Naray (1984) 1 Lloyds Law Reports 21 which was referred to in the judgment of the President of the High Court and reaffirmed in National Westminster Bank PLC v. Daniel (1993) 1 W.L.R. 1453. The principle laid down in the Banque de Paris case was summarised in the head note thereto in the following terms:
‘The mere assertion in an affidavit of a given situation which was to be the basis of a defence did not of itself provide leave to defend; the court had to look at the whole situation to see whether the defendant had satisfied the court that there was a fair or reasonable probability of the defendants having a real or bona fide defence.’
In the National Westminster Bank case, Glidewell L.J. identified two questions to be posed in determining whether leave to defend should be given. He expressed the matter as follows
“I think it right to ask, using the words of Ackner L.J. in the Banque de Paris case, at p. 23, ‘is there a fair or reasonable probability of the defendants having a real or bona fide defence?”
The test posed by Lloyd L.J. in the Standard Chartered Bank case, Court of Appeal (civil division), transcript number 699 of 1990 is what the defendant says credible?, amounts to much the same thing as I see it. If it is not credible, then there is no fair or reasonable probability of the defendant having a defence.’
This statement of the principles was followed by the Supreme Court in Aer Rianta C.P.T. v. Ryanair Ltd. (2001) 4 I.R. 607. In her judgment, McGuinness J., endorsed the test laid down in the First National Commercial Bank PLC. v. Anglin and summarised it as follows
‘Thus it is for this court to decide whether in the instant case the defence set out in the affidavits of Mr O'Leary, together with the documents exhibited therewith, is credible, or in other words, whether there is a fair or reasonable probability of the defendant having a real or bona fide defence…the court does not ask whether Mr O'Leary's account of events is probable, or likely to be true; nor does it ask whether Mr Byrne's account of events is more likely. The question is rather whether the proposed event is so far fetched or so self contradictory as not to be credible.’
Hardiman J. delivered a concurring judgment in which he engaged in a comprehensive review of the authorities relating to the jurisdiction to grant summary judgment. Having reviewed the case law he expressed his own view in the following terms
‘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?.’
In Harrisrange Ltd. v. Duncan (2003) 4 I.R. 1, McKechnie J. enunciated the principles to be applied by a court in deciding whether to grant summary judgment or give a defendant leave to defend in the following way
‘(i) the power to grant summary judgment should be exercised with discernable caution,
(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 defendants 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 not be 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 that 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 fides of the defendant or has reason to doubt whether he has a genuine cause of action,
(xi) leave should not be granted where the only relevant averment in the totality of the evidence is a mere assertion of a given situation which is to form the basis of a defence and finality,
(xii) the overriding determinative facture, bearing in mind the constitutional basis of a person's right of access to justice either to assert or to respond to litigation, is the achievement of a just result whether that be liberty to enter a judgment or leave to defend, as the case may be.’
This enunciation of the approach to be taken by the court, when considering an application for liberty to enter a summary judgment, was cited with approval by Finlay Geoghegan J. in her judgment in Bank of Ireland v. Walsh delivered on the 8th of May, 2009. In...
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