The Governor and Company of The Bank of Ireland v Carey and Another

• Jurisdiction: Ireland
• Court: Court of Appeal (Ireland)
• Judge: Ms. Justice Máire Whelan
• Judgment Date: 16 October 2024
• Neutral Citation: [2024] IECA 245
• Docket Number: Court of Appeal Record Number: 2023/267

Between/

The Governor and Company of the Bank of Ireland

Respondent

and

Timothy Carey and Finola Colgan Carey

Appellants

[2024] IECA 245

Whelan J.

Pilkington J.

O'Moore J.

Court of Appeal Record Number: 2023/267

High Court Record Number: 2022/113 SP

THE COURT OF APPEAL

Commercial law – Lease agreements – COVID-19 restrictions – Applicant seeks to enforce a judgment in its favor against Carey, who had challenged the ruling – Whether the Bank of Ireland can enforce a judgment against the respondents

Facts : In this case, the Bank of Ireland (the applicant) sought to enforce a judgment against the respondents, C. and G., following a prior financial dispute. The respondents appealed the original decision, arguing that the judgment should not be enforced. The bank sought relief to uphold the original ruling. The appellants’ defense was based on claims of errors in the legal process or factual findings. The respondents contested the judgment, seeking to overturn it on the grounds of alleged errors in law or fact. In defense, the respondents argued errors in the legal process or factual findings and contested the enforcement of the judgment.

Held by Mr. Justice Whelan that the appellants did not present sufficient legal grounds to overturn the original judgment. He relied on principles from Nash v DPP [2017] IESC 51, which emphasized the need for clear grounds to disturb decisions, and Promontoria (Oyster) DAC v Greene [2021] IECA 93, which addressed the enforcement of financial judgments. The appeal was dismissed, affirming the Bank of Ireland’s right to enforce the judgment. The judge found no error in the application of law or facts, granting no relief to the appellants.

Whelan J concluded that the appeal lacked sufficient grounds to overturn the prior judgment. The original ruling in favor of the Bank of Ireland was upheld, and the appellants were granted no relief. The bank is entitled to enforce the judgment as originally decided.

Application dismissed.

NO REDACTION NEEDED

JUDGMENT of Ms. Justice Máire Whelan delivered on the 16th day of October 2024

1 . This is an appeal against orders of Mulcahy J. made in the High Court on 21 July 2023 and thereafter perfected on 18 September 2023. The said orders firstly declared valid a lien arising by virtue of an equitable deposit by the first appellant with the bank in 2008 of the land certificate to the lands comprised in Folio 2639 of the Register County Westmeath, which the bank registered as a lien on Part 3 of the Folio on 4 November 2008 pursuant to s.73(3) of the Registration of Deeds and Title Act 2006 (“the ROTDA 2006”). The court declared that sum of €597,435.44 together with €396 in respect of costs (“the judgment debt”), being the sum due on foot of a judgment obtained by the Bank against both appellants on 12 September 2016 (“the 2016 judgment”) in proceedings 2013/4066S together with interest at the rate of 2% per annum from 12 September 2016 until payment, stood well charged on the first respondent's interest in the said lands. Secondly, the Court declared that the judgment debt sum stood well charged on the appellants' respective interest in the lands comprised in Folios 2639, 16939F and 2997 of the Register County Westmeath. It was further ordered that in default of payment of the judgment debt the said lands and premises be sold and the respective proceeds be distributed in accordance with the priority of the burdens affecting same. The Bank was granted an order for costs against the appellants jointly and severally to be adjudicated in default of agreement. A stay was granted in the event of an appeal.

2 . The Bank instituted separate proceedings (2022/114SP) against the appellants in respect of the same indebtedness seeking orders for possession over a dwelling house and lands comprising two further folios 7693F and 2513 of the Register County Westmeath over which the Bank held register mortgages/charges. The said claim (2022/114SP) was heard and determined by the High Court at the same time as the within proceedings and both were the subject of a single written judgment of the High Court delivered on 7 July 2023. The appellants also appeal the said decision by Appeal 2023/268.

Background

3 . The appellants are litigants in person. The second named appellant (the wife) conducted the appeal and advanced the arguments on behalf of both appellants. In written submissions and oral argument the wife outlined that the Bank restructured five separate loans of the appellants and offered what is characterised as a restructure facility which was “calculated to be in the sum of €532,500 at the date of the facility letter dated August 5th 2010. The principle sums contained in this facility consisted of three farm loans in the respective sums of €200,000 each advanced by way of facility letters from the plaintiff dated 1st March 2007… 12th November 2007… together with overdraft and other smaller facilities …”

4 . The restructured facility was governed by the terms specified in a facility letter dated 5 August 2010 (“the facility letter”) and the appellants duly signed same letter assenting to its terms on 2 September 2010. The appellants contend that net effect of the loan facility agreement was to consolidate into one loan the various indebtedness of the appellants to the Bank. Under its terms the date identified for the overall repayment of the sum outstanding was 31 October 2010. It is clear from the said terms that the purpose of the facility was to restructure five existing facilities. In regard to the securities held, those recited included, inter alia, a “Registered lien over the property at Toorlisnamore (Folio No: 2639 Co. Westmeath) comprising 16 acres registered in the name of Mr Timothy Carey.” The appellants contend that this lien is invalid and unenforceable for non-compliance with s73(3)(c) of the ROTDA 2006.

5 . The purpose of the facility letter is clearly stated on the first page: “to assist with the restructure of existing facilities”. Five specific account numbers of extant loans are identified. The “ Form of Acceptance” of the facility letter was duly signed by both appellants on 2 September 2010. It is not in dispute that the appellants did not discharge their liabilities by 31 October 2010. From and after 31 October 2010 no step was taken by the appellants to discharge same, although it appears some without prejudice negotiations took place between the parties. Such negotiations are not material to this appeal.

6 . On 9 October 2013, almost three years after default, a formal demand was served on both appellants. On 4 December 2013, proceedings issued by way of summary summons Record Number 2013/4066S (“the summary proceedings”) whereby the Bank sought the sum of €541,396.28 together with the interest on the principal sum and €215 in respect of costs. It is not now in dispute that the said proceedings were served on the appellants on 7 January 2014. No step was taken by either of them to enter an appearance to the summary summons as required by the Rules of the Superior Courts. The proceedings lay in abeyance for some years. On 10 August 2015 a notice of intention to proceed was filed by the Bank in the Central Office.

7 . An affidavit of debt was sworn on behalf of the Bank by Brendan Murphy on 9 August 2016. Of note in particular is para. 9 of the said affidavit wherein he deposed “I say the Plaintiff hereby waives its claim to further interest from the 9th day of August 2016.” The appellants contend that the said averment precludes the Bank from seeking court interest in respect of the sum claimed by the Bank. This argument was unsuccessfully advanced before the High Court in both proceedings 113/2022 and 114/2022 and constitutes a ground of appeal in both appeals. On 13 August 2015 a notice of intention to proceed was served on each of the appellants by the Bank's solicitors. Thereafter on 25 August 2015, an inhibition was registered on Folio 2639, County Westmeath by Claire Carey. It appears that on 25 September 2015, the said folio was also the subject of a caution registered in favour of one Bernadette Colgan.

8 . On 12 September 2016, over two and a half years after service of the summary proceedings, the Bank entered judgment in default of appearance in the Central Office for the sum of €597,435.44 together with €396 in respect of costs. The Bank registered the 2016 judgment as a judgment mortgage on Part 3 of all five of the appellants folios on 1 March 2017. It is noteworthy that no formal step was ever taken by the appellants or either of them to have the said judgment mortgages set aside on any legal basis thereafter.

9 . Meanwhile, on 25 October 2016, the appellants issued a notice of motion in the High Court seeking to set aside the summary judgment pursuant to O.13, r.11 RSC (now O.13 r.13 RSC). On 29 May 2017, the notice of motion came on for hearing before Barr J. in the High Court wherein he found in favour of the appellants, set aside the default judgment and extended time for the entry of an appearance. The Bank appealed to the Court of Appeal and same it was heard on 9 April 2018. Judgment was delivered on 23 April 2018.

Judgment of the Court of Appeal

10 . The judgment of this Court ( [2018] IECA 119) noted that it was not disputed that a copy of the summary summons had been served on the appellants on 7 January 2014. They had not entered an appearance. Extensive negotiations had been pursued between the parties in which the appellants had been represented by a financial advisor. In argument, Mrs. Colgan Carey asserted, inter alia, that they had not entered any appearance because they were aware that the summary summons served on them was not a true copy of the original summons. Further, inter alia, that the affidavit of debt filed by the Bank failed to comply with O.13, r.18. It was contended that under the 2010 facility...