Start Mortgages DAC v Mc Namara

• Jurisdiction: Ireland
• Judge: Ms Justice Power
• Judgment Date: 07 April 2020
• Neutral Citation: [2020] IEHC 187
• Date: 07 April 2020
• Docket Number: Record Number: 3287S/2010
• Court: High Court

BETWEEN

START MORTGAGES DAC

PLAINTIFF

- AND -

JOSEPH MC NAMARA

AND

JOSEPH HARRIS

DEFENDANTS

[2020] IEHC 187

Power J.

Record Number: 3287S/2010

THE HIGH COURT

Summary judgment – Want of prosecution – Inordinate and inexcusable delay – Defendant seeking to dismiss proceedings for want of prosecution and on the grounds of inordinate and inexcusable delay – Whether the balance of justice required that the proceedings be dismissed

Facts: Irish Life and Permanent PLC t/a Permanent TSB brought an unsuccessful claim for summary judgment against the defendants, Mr McNamara and Mr Harris, in the sum of €311,355.71. During the proceedings, Start Mortgages DAC was substituted as the plaintiff. The second defendant (the applicant) applied to the High Court seeking to dismiss the proceedings for want of prosecution and on the grounds of inordinate and inexcusable delay.

Held by Power J that, having had regard to the parties’ constitutional rights of access to justice and to fair procedures and having applied the relevant principles emanating from the case law on the issue of delay and want of prosecution, the given facts of this case led her to conclude the delay in question had caused serious prejudice to the applicant and gave rise to a substantial risk of unfairness should this matter go to trial. Power J was satisfied that the balance of justice required that these proceedings be dismissed for want of prosecution and on the grounds of inordinate and inexcusable delay.

Power J held that the relief sought by the applicant would be granted and that the proceedings would be dismissed.

Application allowed.

JUDGMENT of Ms Justice Power delivered on the 7th day of April 2020

1 The second named defendant (‘the applicant’) is the moving party in this application wherein, essentially, he seeks to dismiss the proceedings for want of prosecution and on the grounds of inordinate and inexcusable delay. These proceedings began life with the plaintiff's predecessor, Irish Life and Permanent PLC T/A Permanent TSB bringing an unsuccessful claim for summary judgment against both defendants in the sum of €311,355.71. During the procedural history of the proceedings, Start Mortgages DAC was substituted as the plaintiff (see para. 4 below). Throughout this judgment, I shall refer to the plaintiff and its predecessor as ‘the bank’ - unless the context otherwise requires.

Background

2 The history of events which led to the application now before the Court is as follows:

▪ Summary Summons issued against the defendants on 13 July 2010;

▪ a return date before the Master was on 3 June 2011;

▪ a further return date before the Master on 22 July 2011;

▪ a further return date before the Master on 14 October 2011;

▪ a further return date before the Master on 2 December 2011;

▪ a further return date before the Master on 3 February 2011;

▪ the matter was adjourned for plenary hearing by the Master to the Judges' List on 30 April 2012; and

▪ a return date in the Common Law Motion List was given for November 2013.

The applicant contends that no further activity or proceedings of any kind, nature or description occurred after November 2013. The bank points out, however, that an Order for Discovery was made against the applicant on 11 November 2013 directing him to make discovery of certain documents within six weeks of that date. It is common case between the parties that the applicant did not comply with the Order for Discovery. In any event, no further steps were taken after November 2013 until the applicant brought the application herein.

3 By Notice of Motion dated 14 February 2019 the applicant seeks the following reliefs:

(1) An Order dismissing the bank's claim against him for want of prosecution pursuant to Order 122, rule 11 of the Rules of the Superior Courts 1986 (as amended) and/or pursuant to the inherent jurisdiction of the Court;

(2) An Order dismissing the bank's claim against him on the grounds of gross, inordinate and inexcusable delay pursuant to the inherent jurisdiction of this Honourable Court; and

(3) An Order dismissing the bank's claim against him pursuant to Order 19, rule 28 of the Rules of the Superior Court 1986 (as amended) on the basis that the bank's claim fails to show any sustainable cause of action against him and/or is frivolous and vexatious.

(4) Further or other relief.

(5) An Order providing for the applicant's costs to be taxed in default of agreement.

4 The application is grounded upon an affidavit sworn by the applicant on 12 February 2019. Donal O'Kelly, on behalf of the bank, swore a replying affidavit on 22 March 2019. When the motion to dismiss the claim had issued, the bank, on 24 April 2019, then served a Notice of Intention to Proceed. On 27 May 2019 the title of the pleadings was amended by the High Court to reflect the fact that the interest of Irish Life and Permanent PLC T/A Permanent TSB had been transferred to Start Mortgages DAC subsequent to the commencement of the proceedings. A further affidavit was sworn by the applicant on 18 June 2019 to which the bank's deponent replied on 12 July 2019. A third affidavit was sworn by the applicant on 17 October 2019 and a third replying affidavit was sworn on behalf of the bank on 13 December 2019.

Evidence

5 In his grounding affidavit of 12 February 2019, the applicant explains that he had and continues to have a number of loan facilities with the bank all of which are serviced and up to date and, save for the loan in issue in these proceedings, the applicant is in good standing with the bank. He claims that the bank's case against him is fundamentally flawed and his explanation may be summarised as follows. Originally, a loan in the sum of €1,000,000 was given, jointly, to him and to the first named defendant by the bank on 1 June 2006. That sum was borrowed under mortgage account number 990764-98967180 (‘the mortgage account’). The loan was for 20 years and was to facilitate the purchase of four properties, namely, Nos. 215, 216, 218 and 219 Coille Tire, An Fiodan, Doughiska, Galway. The two defendants were acting in partnership at the time when they entered into the loan agreement with the bank. However, subsequently, the partnership was partitioned, and the debt was severed between the defendants. The ‘Dissolution of Partnership’ agreement dated 20 November 2006 resulted in each partner taking the benefit of two of the four properties. Numbers 215 and 216 became the sole property of the first named defendant and Numbers 218 and 219 became the sole property of the applicant. The bank was notified of the severing of the debt and the dissolution of the partnership. The applicant had conversations with three named bank personnel. Towards the end of November 2006, the applicant entered into a re-financing arrangement with the bank - Permanent TSB Retail. The re-financing agreement enabled the applicant to draw down €3,000,000.00 on an account number that was different to the mortgage account. Condition 34 of that re-financing agreement provided for the partial redemption of €500,000.00 on the mortgage account. The applicant accepted this loan offer and conditions which had the specific object of paying off his portion of the original €1,000,000 debt with the first named defendant being responsible for dealing with his portion of the debt. When the €500,000.00 was paid, the bank deducted administration and other fees with the result that the sum of €462,547.28 was credited to the loan account. The payment of this amount is confirmed in a letter from the bank dated 5 January 2007 and refers to the payment lodged as having been transferred ‘off principal’.

6 The applicant claims that when these facts emerged before the Master of the High Court, it was evident that the matter required to be sent to plenary hearing. It was also clear that the bank no longer had faith in its own case knowing that the debt had been severed and that the applicant's liability had been dealt with by way of the re-financing agreement. Thereafter, the bank never pursued its case against the applicant. The first named defendant has left the country and no longer works or resides in Ireland.

7 In addition to claiming gross inordinate and inexcusable delay in the prosecution of these proceedings, the applicant claims that the bank has no sustainable cause of action against him and proceedings ought never to have issued against him. After several years of inactivity, his solicitors wrote to the bank on 10 September 2018 calling upon it to serve a Notice of Discontinuance. He claims to have received no reply to that letter nor was any Notice of Intention to Proceed served. In these circumstances, the applicant claims that the proceedings are, effectively, dead. However, they remain extant and he wants to move on with his life without this case ‘hanging over him’ as matters currently stand.

8 The bank's deponent, Mr. Donal O'Kelly, solicitor, swore a replying affidavit on 22 March 2019. He referred to the Order for Discovery made on 11 November 2013 and how on 5 March 2019 (after the present application had been brought) he had written to the applicant's solicitors seeking the affidavit of discovery. Mr. O'Kelly swears that the bank has always denied that it was aware of or on notice of or accepted or acquiesced in the alleged severance of the alleged partnership between the applicant and the first named defendant.

9 The second affidavit sworn by the applicant on 18 June 2019 sets out the prejudice which he claims to have suffered as a result of the bank's delay and procrastination in the period 2013-2019 when the proceedings were never advanced. His evidence may be summarised as follows. He has always been involved in business, generally, and, more particularly, in the property business as an investor. The outstanding proceedings continue to affect his credit rating. The loan facility, the subject matter of these...