Start Mortgages Designed Activity Company v Gilmore and Another

• Jurisdiction: Ireland
• Court: High Court
• Judge: Ms. Justice Siobhán Phelan
• Judgment Date: 20 February 2024
• Neutral Citation: [2024] IEHC 93
• Docket Number: [Record No. 2023 / 92 CA]

Between:

Start Mortgages Designated Activity Company

Plaintiff

and

Gary Gilmore and Eileen Gilmore

Defendants

[2024] IEHC 93

[Record No. 2023 / 92 CA]

THE HIGH COURT

CIRCUIT APPEAL

JUDGMENT Of Ms. Justice Siobhán Phelan, delivered on the 20th day of February, 2024.

INTRODUCTION

1 . On this appeal against an order of the Circuit Court (His Honour Judge O'Connor) made on the 21 ^st of April, 2023 refusing the Second Named Defendant/Appellant's application to set aside an Order for Possession made on the 5 ^th of June, 2019 (Her Honour Judge Linnane), I am concerned with the finality of a court order made in reliance on consent confirmed to the court through a solicitor on record. It is now denied that consent was given and the solicitor then on record confirms in evidence never having met or spoken with the Second Named Defendant to take instructions. Juxtaposed against the Second Named Defendant's right to constitutional justice in the decision-making process, which she claims has been denied, are broader administration of justice concerns because the finality of orders is core to the administration of justice and the rule of law. As an alternative to an order setting aside the Order for Possession, the Second Named Defendant seeks an extension of time within which to appeal against the said Order.

BACKGROUND

Loan and Mortgage

2 . The Defendants' family home in County Dublin is recorded on the Land Registry Folio as having been registered in their joint names on the 4th of July, 2003. An Indenture of Mortgage and Charge dated the 10 ^th of September, 2007 was created as security in respect of loan facilities advanced in September, 2007 on foot of a loan agreement entered into by the Defendants on the acceptance in August, 2007 of a loan offer made by Nua Mortgages Limited (hereinafter “Nua”) by letter dated the 17 ^th of July, 2007. The charge in favour of Nua was registered on the 16 ^th of December, 2009. The Second Named Defendant has since confirmed that the purpose of the loan and re-mortgage was to release equity from the family home to purchase a residential property in Portugal.

3 . The sum advanced under the loan agreement was €1,985,000.00 and agreed monthly repayments were in the sum of €10,834.79 for a term of 38 years. Under the conditions applying to the loan agreement, the lender became entitled to demand payment of the loan and all outstanding interest and costs should there be an event of default defined, inter alia, as including a breach of any of the terms or conditions of the letter of offer (Condition 14(A)). A separate clause provided for an event of default where there was a default by the borrower in payments under the loan agreement and “ the default continued for” without then specifying the period. Under the Mortgage and Charge the Defendants covenanted that they would, on demand in writing made to them by Nua, or its successors and assigns, pay or discharge all monies and liabilities due, owing or incurred by the Defendants.

4 . A number of judgment mortgages were subsequently registered on the property in proceedings brought by several different creditors in separate proceedings. By Deed of Transfer executed by Nua on the 4 ^th of December, 2014, right, title and interest in the loan agreement between the Defendants and Nua was transferred to the Plaintiff. The Plaintiff is now registered as the owner of the Nua charge.

Pre-Litigation Correspondence

5 . In circumstances where the loan was in significant arrears and following some engagement in this regard, by letter dated the 8 ^th of September, 2015, the Plaintiff wrote to the Defendants notifying them that they had completed an assessment of the case and advising that their mortgage fell outside the Mortgage Arrears Resolution Process (MARP) and was considered unsustainable. They were afforded an opportunity to consider their options which included voluntary surrender, trading down, voluntary sale or mortgage to rent. The Defendants were advised to seek independent legal and financial advice and referred to the Money Advice and Budgeting Service (MABS) and referred to information on the Insolvency Services of Ireland and processes under the Personal Insolvency Act, 2012. They were advised of a right to appeal the decision that they fell outside the MARP and a right to consult a Personal Insolvency Practitioner.

6 . On the 31 ^st of March, 2016, Solicitors acting on behalf of the Plaintiff wrote to the Defendants by individual and separate letters and demanded payment within 10 days of the loan, the balance of which then stood at €2,393,033.70 including arrears in the sum of €502,935.36.

7 . The Solicitors for the Plaintiff wrote to both Defendants again by separate and individual letter on the 12 ^th of April, 2016 calling upon them to deliver up vacant possession of the family home.

8 . The only response to this correspondence was a letter from Carley & Associates, Solicitors, dated 8 ^th of April, 2016 referring to the letter of 31 ^st of March, 2016 and confirming authority to accept service of proceedings in respect of their “ clients' home at [address of family home given]” (underlining added). Both Defendants' names were given as clients.

Possession Proceedings — Service of and Entry of Appearance

9 . A Civil Bill for Possession issued on the 1 ^st of December, 2016 seeking possession and claiming periodic default by the Defendants in the payment of monies and had accumulated arrears in the sum of €521,640.20 with a total claimed balance due on the loan of €2,407,602.52. The Civil Bill for Possession was served on Carley & Associates, Solicitors, on foot of their previously confirmed authority to accept service of the proceedings communicated by letter dated the 8 ^th of April, 2016. Carley & Associates also endorsed acceptance on service on the Civil Bill on behalf of “ our clients” on the 16 ^th of June, 2016 in the following terms:

“We hereby accept service of the within proceedings on behalf of our clients and undertake to file an appearance to same.” [underlining added]

10 . Two blank “ Entry of Appearance” forms accompanied the Civil Bill as served. Despite indicating that they had authority to accept service of proceedings on behalf of both clients and further undertaking to enter an appearance on their behalf, there was some ambiguity on the face of the Appearance entered in this regard. The Appearance as entered to the proceedings expressed itself to be on behalf of the First Named Defendant only, but reference was also made to the Defendants in the plural stating that the Appearance was entered in respect of the Civil Bill served on “ them” and “ the said defendants intend to defending this proceeding” [underlining added]. The Appearance filed bears a Circuit Court stamp dated the 17 ^th of June, 2016 but seemingly unaware that an Appearance had been filed solicitors for the Plaintiff wrote on the 6 ^th of July, 2016 pointing out that an Appearance had yet to be filed and providing a letter consenting to the late filing of an Appearance.

11 . Thereafter, the matter seemingly came before the County Registrar on three occasions and was adjourned in accordance with a practice direction relating to principal private residences before being transferred to the Judge's List. In the Judge's List it was adjourned generally with liberty to re-enter in November, 2017 because an amendment to correct an error in the Civil Bill was required. An application to re-enter proceedings was made in September, 2018 and after two appearances before the County Registrar this application was transferred to the Judge's List where the matter was listed before Her Honour Judge Linnane on the 30 ^th of April, 2019.

12 . The Notice of Motion seeking re-entry on foot of which the matter came before Judge Linnane was served on Carley & Associates who were described on the face of the Notice of Motion as “ Solicitors on behalf of both of the Defendants”. In the Affidavit grounding the application to re-enter sworn in March, 2019 it was confirmed that the account was 72 months in arrears. It was further confirmed that the matter had not been re-entered earlier because the Plaintiff had received a telephone call from the Defendants' solicitor advising that a meeting had been scheduled with the Defendants to discuss the options available to them. A proposal was expected but following a subsequent telephone call with the solicitor, the Plaintiff concluded that it could not offer an alternative repayment arrangement or restructuring of the mortgage due to the then financial circumstances of the Defendants. The Statutory Declaration of Service in respect of the Notice of Motion and grounding affidavit referred to service being by registered post on the solicitor acting on behalf of the “ above named defendants”.

13 . On the 30 ^th of April, 2019, when the motion to re-enter came before the Circuit Court, there was no appearance in Court on behalf of either of the Defendants. The Judge (Her Honour Judge Linnane) noted that an Appearance had been entered for only one of the two defendants, the First Named Defendant. She was referred by counsel for the Plaintiff to the endorsement on the Civil Bill whereby Carley & Associates accepted service. In response she pointed out that notwithstanding having endorsed service and given an undertaking:

“if they don't enter an appearance then you have to go back to square one and serve the defendants themselves.”

14 . She further observed, however, that solicitors were properly on record for the First Named Defendant and should be in attendance in that capacity in any event. She let the matter stand while enquiries were made and directed that confirmation be sought that they were in fact acting for “ both defendants.” The DAR of the hearing on the 30 ^th of April, 2019 confirms that when the matter was re-mentioned having been left stand the Court was...