The Governor and Company of the Bank of Ireland v Matthews
| Jurisdiction | Ireland |
| Judge | Mr. Justice Maurice Collins |
| Judgment Date | 31 July 2020 |
| Neutral Citation | [2020] IECA 214 |
| Date | 31 July 2020 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Court of Appeal Record Number: 2018/298 |
[2020] IECA 214
Noonan J.
Power J.
Collins J.
Court of Appeal Record Number: 2018/298
High Court Record Number: 2016/502SP
THE COURT OF APPEAL
Order for possession – Land and Conveyancing Law Reform Act 2013 s. 3 – Statute barred – Appellant appealing against an order for possession – Whether the trial judge was wrong to conclude that proceedings should not have been instituted in the Circuit Court
Facts: The appellant, Ms Matthews, appealed to the Court of Appeal from the judgment and order of the High Court (Costello J) of the 8th and 15th June, 2018 respectively whereby the Court granted an order for possession of the premises known as 16, The Glen, Inse Bay, Laytown, County Meath, which were alleged by the appellant to be her principal private residence. In her notice of appeal, the appellant raised two grounds, first that the trial judge was wrong to conclude that proceedings should not have been instituted in the Circuit Court and secondly that the trial judge erred in determining that the proceedings were not statute barred. In that respect, the appellant contended that there was a conflict between clause 1 of the mortgage and clauses 6 and 7 which should have been determined in favour of the appellant by virtue of the contra proferentem rule. The appellant contended that the accrual of the cause of action did not require the making of a demand for payment.
Held by Noonan J that the expression “mortgagor” in the Land and Conveyancing Law Reform Act 2013 must be construed by reference to its natural and ordinary meaning, being the person who created the mortgage; clearly that could not be the appellant. Even adopting a more expansive definition of the kind to be found in the Land and Conveyancing Reform Act 2009, it was to Noonan J’s mind clear that the appellant could not on any reasonable interpretation of the expression be regarded as a “mortgagor” for the purposes of the 2013 Act. Accordingly, he held that s. 3 of that Act did not apply to the appellant and that the first ground of appeal failed. He held that it was only following upon the making of the demand for payment on the 16th August, 2016 that the facts were in place which, if proved, would have entitled the respondent to judgment; it follows therefore that the cause of action only accrued on that date and was not a cause of action that was pending at the date of Mr Melsop’s death or one that survived against his estate. Noonan J held that the claim was therefore not statute barred and that the second ground of appeal also failed.
Noonan J held that the appeal would be dismissed.
Appeal dismissed.
JUDGMENT of Mr. Justice Maurice Collins delivered on 31 July 2020
I agree with the judgment given by Noonan J and with the order that he proposes.
I would like to add some brief observations on the second issue in this appeal, namely whether the Plaintiff's claim is statute-barred.
The Appellant does not question the correctness of Bank of Ireland v O' Keefe [1987] IR 47. Accordingly, if on the proper construction of the mortgage here, the principal monies became due only upon demand – as the High Court (Costello J) held was the case – it would follow that the Bank's cause of action arose only upon demand first being made for payment of the principal monies in August 2016. If that is so, then it would follow further that, Mr Melsop having died in February 2013, the Bank's cause of action was not one that “ survived” against his estate and section 9(2) of the Civil Liability Act 1961 would therefore have no application to the Bank's claim.
As it happens, the question of when monies secured by a mortgage become due is one that has received significant judicial attention in this jurisdiction in the past 10 years, arising from the fallout from the repeal of section 62(7) of the Registration of Title Act 1964 by the Land and Conveyancing Law Reform Act 2009 and the absence from the 2009 Act of any specific transitional regime in respect of mortgages/charges entered into prior to 1 December 2009 (when the 2009 Act commenced). That resulted in a series of cases, commencing with Start Mortgages v Gunn [2011] IEHC 275, where the mortgagee/charge holder argued that their right of action had “ accrued” before 1 December 2009 and thus that, by virtue of section 27(1) (and in particular section 27(1)(c)) of the Interpretation Act 2005, they were entitled to rely on section 62(7) notwithstanding its repeal. Many of these cases were referred to in the submissions in this appeal.
Some time after the enactment of the 2009 Act, the Oireachtas enacted the Land and Conveyancing Law Reform Act 2013 the effect of which was to reanimate ( inter alia) section 62(7) of the 1964 Act in respect of pre-1 December 2009 mortgages. The terms of section 3 of the 2013 Act give rise to the first issue in this appeal which has been addressed by Noonan J and I have nothing to add to his analysis.
As explained by Clarke J (as he was then) in his judgment in Irish Life & Permanent plc v Dunne [2015] IESC 46, [2016] 1 IR 92 (with which judgment Denham CJ and O' Donnell, Laffoy and Charleton JJ agreed):
“ The first port of call for determining whether those monies had become due is to identify the terms of the contract between the lender and borrower as to when the entire principal can be said to fall due. Terms in that regard can, and do in practice, differ. It may be that, on a proper interpretation of the contractual documents in one case, a demand for payment following some form of default may be necessary. It might, however, be the case that, in other circumstances and in the light of the terms contained in a particular mortgage deed, the full sum may become due without demand in certain, specified circumstances.” 1
In Dunne, the relevant provisions of the mortgage provided that the total mortgage debt would become “ immediately payable” if the mortgagor defaulted in making two monthly repayments. Thus no letter of demand was necessary. To the extent that such a term might be regarded as “ harsh”, Clarke J emphasised that, in the absence of any statutory provision depriving such a provision of effect or conferring a jurisdiction on the court to consider the merits of any particular contractual clause, “ lending contracts are no different to any other form of contract and simply mean what they say.” 2
The same essential point was made by Lord Hoffman in a case referred to in argument, West Bromwich BS v Wilkinson [2005] UKHL 44, [2005] 1 WLR 2303. While noting that that mortgages “come to us laden with old equitable doctrines which mean that the legal effect of the document sometimes has to be qualified”, in his view, “ that does not mean that they are subject to special artificial rules of construction. The document must be construed in the same way as any other co conveyancing transaction.” 3
Paragraph 4(b) of the ICS loan offer of 23 March 2005 states clearly that “ in the event of any payment not being made on the due dates or any of them, or any breach of the Conditions of the Loan or the covenants or conditions contained in any of the security documents referred to in clause 2(a), the Society may demand an early repayment of the principal and accrued interest or otherwise alter the Conditions of the Loan.”
A first legal mortgage or charge over Mr Melsop's Laytown property is one of the security documents referred to in clause 2(a) of the loan offer and a mortgage and charge was duly executed on 27 April 2005 (“ the Mortgage”).
Clause 1 of the Mortgage (headed “ Covenants for Payment”) 4 is in very clear terms. By Clause 1.01, the Mortgagor covenants to pay the secured moneys “ on demand” (my emphasis). Clause 1.02 provides that “[a]ll moneys remaining unpaid by the Mortgagor to the [Bank] and secured by this Mortgage shall immediately become due and payment on demand to the [Bank] on the occurrence” of any of the events set out at (a) – (c), where (a) refers to “ the happening of any event of default other than an event specified in paragraph (i) of sub-clause 7.01” (again, my emphasis). Clause 1.02 then goes on to recite that the Mortgagor “ HEREBY FURTHER covenants with the [Bank] to pay to the [Bank] forthwith the sum so demanded together with further interest … until the same shall have been repaid in full and shall be payable after as well as before any judgment or order of the Court.” (once again, my emphasis). Clause 1.03 warrants being set out in full:
“ The demand herein referred to shall mean a demand for payment of the secured moneys made by the [Bank] or on behalf of the [Bank] by any law agent or solicitor, Secretary, manager or other officer of the Society upon the Mortgagor and may be made when or at any time after the Society becomes entitled to call for payment of the moneys and separate demands may be made in respect of separate accounts at different times.” (my emphasis)
Although not expressly stipulated in Clause 1, Clause 10 of the Mortgage clearly envisages that any demand will be in writing. The last reference to demand in Clause 1 is in Clause 1.4, by which the Mortgagor “covenants to pay to the Society on demand the expenses on the basis of a complete unlimited and unqualified indemnity of the Society by the Mortgagor” (my emphasis).
While the Appellant invokes...
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