Start Mortgages Designated Activity Company v Thomas Ryan and Eileen Ryan

• Jurisdiction: Ireland
• Judge: Mr. Justice Woulfe
• Judgment Date: 18 November 2021
• Neutral Citation: [2021] IEHC 719
• Court: High Court
• Docket Number: High Court Record No. 2020/175 CA

Between

Start Mortgages Designated Activity Company

Plaintiff/Appellant

and

Thomas Ryan and Eileen Ryan

Defendants/Respondents

[2021] IEHC 719

High Court Record No. 2020/175 CA

Circuit Court Record No. 2014/986

THE HIGH COURT

Possession – Defence – Strike out – Appellant seeking possession of premises – Whether the respondents had made out credible grounds of defence

Facts: The appellant, Start Mortgages Designated Activity Company, appealed to the High Court against the order of the Circuit Court (Judge Comerford) made on the 15th October, 2020. By that order the Circuit judge ordered that the appellant’s claim for an order for possession proceed to a plenary hearing, and that the action be transferred to the High Court and he reserved costs. The respondents, Mr and Ms Ryan, were litigants in person before the Circuit Court and the High Court. Shortly before the hearing date for the appeal the first respondent issued a notice of motion seeking an order striking out the proceedings on the grounds of double jeopardy/res judicata, an order striking out the appellant’s application for possession because the appellant had no legal interest in the respondents’ mortgage, an order striking out the appellant’s claim as it had no locus standi, and an order for the appellant to show the Court who owned the respondents’ mortgage. The motion was adjourned to the appeal hearing in circumstances where the Court would be canvassing the same issues.

Held by Woulfe J that the appellant had established its entitlement to possession of the premises and the respondents had not made out any credible grounds of defence. Therefore, he allowed the appeal. He proposed granting an order for possession pursuant to s. 62(7) of the Registration of Title Act 1964. He held that a stay of six months would be placed on that order to allow the respondents time to arrange alternative accommodation. As the appellant had been successful in the appeal, his provisional view was that the appellant was entitled to its costs of the appeal.

Woulfe J held that the points raised by the first respondent in his notice of motion, and in his supplemental affidavit sworn on the 29th April, 2021 grounding the motion, were identical to grounds of defence advanced by him and rejected by Woulfe J. In the circumstances Woulfe J refused to grant the orders sought. As regards the costs of the motion, he proposed making no order as to costs, given the overlap with the costs of the appeal.

Appeal allowed.

Judgment of Mr. Justice Woulfe delivered on the 18th day of November, 2021

Introduction

1 This is the appellant's appeal against the order of the Circuit Court (His Honour Judge Comerford) made on the 15th October, 2020. By this order the learned Circuit judge ordered that the appellant's claim for an order for possession proceed to a plenary hearing, and that this action be transferred to the High Court and he reserved costs.

2 The respondents were litigants in person before the Circuit Court and the High Court. Shortly before the hearing date for this appeal the first named respondent issued a notice of motion seeking orders to strike out the proceedings on various grounds, and certain other reliefs. The motion was adjourned to the appeal hearing in circumstances where the Court would be canvassing the same issues, and the motion is considered later as part of this judgment.

3 The respondents have been married since September, 1994. In 1993/94 the first named respondent built a house known as Ballybuninabber, Termon, County Donegal, which since then has been their family home where their three children have grown up. In early 2007 the first named respondent was seeking funding to undertake a property development consisting of the construction of four residential town houses on land next to business premises which were in his name.

4 It appears that the first named respondent was introduced to the appellant, formerly known as Start Mortgages Limited, who sanctioned a loan facility to the respondents of €410,000, subject to the terms and conditions contained in a letter of offer dated the 24th January, 2007. The loan facility was subject to interest at a variable rate, and was repayable in monthly instalments over a term of 30 years. Crucially, the loan was to be secured by way of a first legal charge over the respondents' family home, being the property comprised in Folio 38752F of the Register County Donegal. The respondents signed a form of acceptance dated the 16th April, 2007, stating that they accepted the offer of an advance made to them by the appellant on the terms and conditions set out in, inter alia, the letter of offer.

5 It appears that the appellant duly advanced the respondents the loan facility in the sum of €410,000 on or about the 6th June, 2007, and that the respondents' executed a mortgage over their family home to secure this loan by mortgage deed dated the 20th July, 2007. It appears that the respondents initially made a number of monthly repayments, but that they later ran into financial difficulties, in common with many other people in this jurisdiction and elsewhere during the severe financial recession, and that they defaulted in the repayments.

6 By letter dated the 21st June, 2011, the appellant, through its solicitors, stated that the total amount due on the mortgage was €449,977.52 as of the 16th June, 2011, and called upon the respondents to redeem the full amount due on the mortgage within seven days. Subsequently by letter dated the 26th March, 2012, the appellant, through its solicitors, demanded possession of the mortgaged property.

The Circuit Court Proceedings

7 These proceedings were commenced by the appellant (then known as Start Mortgages Limited) issuing a civil bill for possession dated the 21st November, 2014. A series of affidavits or other documents were exchanged between the parties during the course of the proceedings. In her first affidavit sworn on behalf of the appellant on the 18th November, 2014, Ms. McCarthy set out the basic facts regarding the loan facility and the mortgage and exhibited the relevant documents to evidence same. She also exhibited a copy of Folio 38752F of the Register of Freeholders County Donegal which showed the appellant as the registered owners of a charge for present and future advances. She also averred as to the defendants having defaulted in repayment and exhibited a statement of arrears showing a total balance of €556,877.53 due and owing, inclusive of arrears in the amount of €142,998.56, as of the 31st October 2014.

8 The second named respondent delivered an unsworn defence/statement dated the 6th December, 2016. She did not deny the basic facts regarding the loan and the mortgage, and confirmed that the signatures on the relevant documents were her signatures. However, she stated that she did not sign these documents in the presence of the solicitor who had purported to attest same, who she said she had never met. She also stated that she was not told that she should obtain independent legal advice before signing the documents, and she argued that the appellant should have stipulated that independent legal advice must be taken.

9 The appellant made an ex parte application to the County Registrar in County Donegal on the 19th November, 2018, to amend the title of the then plaintiff in the proceedings from “Start Mortgages Limited” to “Start Mortgages Designated Activity Company”. The County Registrar made an order to that effect on that date, and also ordered that all future proceedings herein be carried on between Start Mortgages Designated Activity Company as plaintiff and Thomas Ryan and Eileen Ryan as defendants. During the course of the appeal hearing counsel for the appellant made reference to s.63(12) of the Companies Act 2014, which provides that the re-registration of an existing private company as a designated activity company shall not affect any rights or obligations of the company or render defective any legal proceedings by the company. Counsel also referred me to the decision of the High Court in Start Mortgages Designated Activity Company v. Kavanagh [2019] IEHC 216. In that case, Simons J. was of the view that, strictly speaking, it is not necessary for a company to make a formal application to Court to reflect its change of status from a limited liability company to a designated activity company. He felt that the legal entitlement to continue proceedings following the change in status of a company is expressly provided for under s.63(12) of the 2014 Act, and that this provision appeared to be self-executing and he referred, by analogy, to First Active Plc v. Cunningham [2018] IESC 11. He added that of course, if a company does make a formal application to Court – whether out of an abundance of caution or otherwise – then the Court has an inherent jurisdiction to amend the title of proceedings. I am satisfied that the views expressed by Simons J. are correct and gratefully adopt same.

10 Mr. Nevin swore a supplemental affidavit on behalf of the appellant on the 13th February, 2019. As regards the issue of the second named respondent not having signed the relevant documents in the presence of her solicitor, he referred to the letter of offer which expressly stated:-

“PLEASE NOTE THAT THIS FORM MUST BE SIGNED IN THE PRESENCE OF YOUR SOLICITOR.”

He stated that it was regrettable that the second named respondent failed to follow this direction and, in the circumstances, he said that it was entirely reasonable for the appellant to accept that the second named respondent had followed this clear direction.

11 The first named respondent swore an affidavit on the 26th April, 2019, and made a number of brief averments. He stated that the respondents' acting solicitor failed to perfect their title that was offered for security for this mortgage, which he said was against Central Bank rules,...