The Governor & The Company of the Bank of Ireland v Reilly and Another
| Jurisdiction | Ireland |
| Judge | Ms. Justice Costello |
| Judgment Date | 31 July 2023 |
| Neutral Citation | [2023] IECA 196 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Court of Appeal Record Number: 2022/150 |
and
[2023] IECA 196
Costello J.
Pilkington J.
Butler J.
Court of Appeal Record Number: 2022/150
High Court Record Number: 2015 No. 1320 S
THE COURT OF APPEAL
CIVIL
JUDGMENT of Ms. Justice Costello delivered on the 31st day of July 2023
1. This is an appeal by the second named defendant (“the appellant”) from the order of the High Court of 20 May 2022 (O'Regan J.) entering summary judgment in favour of the plaintiff (“the bank”) against the defendants in the sum of €167,837.59 together with continuing interest on the principal sum from 13 April 2022 and awarding the bank the costs of the proceedings. The appellant appealed the decision by a Notice of Motion dated 16 June 2022. The first named defendant failed to appeal the judgment against him within the time allowed by the Rules of the Superior Court and his application for an extension of the time in which to appeal was refused by this Court on 24 January 2023. This judgment is confined to the appeal against the Order against the appellant.
2. The defendants are father and daughter. The appellant wished to purchase a home in County Dublin. On 15 December 2006, ICS Building Society offered the defendants a loan in the sum of €280,600 to facilitate the purchase of an apartment to be held in the sole name of the appellant. On 22 December 2006, the defendants accepted the offer. The loan was duly drawn down and the property purchased. The defendants executed a charge in favour of ICS Building Society over the property. The charge in the name of the appellant was duly registered as a burden on the relevant Folio on 22 January 2007.
3. The defendants fell into arrears from 2008 onwards. In an affidavit sworn on 22 April 2022 the appellant averred that she immediately realised that she could not afford the repayments due on foot of the loan as she was earning €30,000 per annum at the time. She said that in the early months of 2007 she was unable to improve her employment situation and so she reluctantly decided to leave Dublin “at least temporarily” to work in the United Kingdom. She moved to London in June 2007. She says that the property was rented out “and the mortgage repayments were made in full up until 2010”. This latter averment is clearly incorrect in light of the full Statements of Accounts which were exhibited and subsequently appended to the amended Summary Summons. She explained that she could not contribute to the repayments and also cover her rental payments in London.
4. At paras. 10 and 11 she averred:
“In order to address the accumulating issues with the Property, I authorise Mr. David Kane of Kane Bergin, Auditors and Accountants, to communicate with the plaintiff on my behalf in an attempt to deal with any arrears. The first named Defendant informed me that he was in regular discussions with Mr. John Feeney, a Bank of Ireland official (Bank of Ireland, of which ICS Building Society was a member) and also directly with a Mr. John Conville, another Bank of Ireland official with regards to finding a mutually acceptable agreement. The first named defendant informed me that these conversations with Mr. John Conville resulted in a new repayment agreement of €650.00 per month being agreed and accepted by the Bank. This repayment plan was put in place in or around October 2012 and it was my belief that this would remain in place until either our circumstances improved and that no further action would be taken by the bank.
11. I say that I understood this new arrangement was to remain in place until my circumstances changed materially. The repayments of €650.00 were made consistently after the agreement. Given the nature of the agreement, I had understood that while this was being honoured on the Defendants' behalf, that no legal action would be taken by the Plaintiff.” (Emphasis added)
5. The Statement of Account shows that on 19 January 2010 there was a repayment of €2,200. There was no further payment in 2010 or 2011. There was a repayment on 3 July 2012 in the sum of €560. On 10 September 2012 a lodgement in the sum of €650 is credited to the account. There were two payments of €650 on 31 October, and a further payment of €650 on 6 December 2012. In each month from January to April, the sum of €650 was lodged and on 10 May the sum of €1,660. 05 was lodged. There were no further payments in 2012, 2013 or 2014 by either of the defendants.
6. In an affidavit sworn in February 2017 the first named defendant referred to an agreement which he says he reached with Mr. John Colville on behalf of the bank in October 2012. At para. 5 of his affidavit he averred:
“Acknowledging the difficulties in making the loan repayments and in the midst of arrears in respect of the said loan, this Deponent made contact with a Mr. John Conville in Bank of Ireland (of which ICS Building Society was a member) and commenced what appeared to be agreeable discussions with a view to coming to a mutually beneficial agreement. These discussions resulted in an undertaking to restore an ‘interest only’ payment schedule for €650.00 per month which was approved by the Bank. This was an agreement by the bank to accept €650 per month and not to take any further action. This payment schedule was put in place in or around October 2012 and it was my belief that this arrangement was to remain in place until our circumstances improved.” (Emphasis added)
7. The bank disputed that any such agreement was entered into and Miss Jacinta Enright, a legal case manager in the Arrears Support Unit of the plaintiff, swore an affidavit on 15 May 2017 stating her belief that no such undertaking or agreement was entered into. She pointed to the absence of any documents evidencing the alleged agreement or undertaking and at paras. 15 and 16 of her affidavit she averred:
“15. The correct position is that on 30th October 2012, the First Defendant contacted the Plaintiff and advised that tenants for the property had been secured at a rent of €800.00 per month. The First Defendant was advised to contact the Second Defendant with a view to making up the amount necessary to repay capital and interest which at the material time was €971.71.
16. The Plaintiff could not enter into any forbearance agreement with the Defendants in the absence of Standard Financial Statements which, as previously averred, were not properly submitted or vouched by the Defendants. With regard to this latter issue, and contrary to the averment in paragraph 13 of the First Defendant's Affidavit, the correct position is that in September 2014, the Defendants provided unvouched and out of date Standard Financial Statements. When by October 2014 vouching documentation had still not been received, the Plaintiff, as it was entitled to do, took steps to appoint a receiver.”
8. No affidavit was sworn by either Mr Colville or Mr Feeney addressing the alleged agreement of October 2012.
9. There is a certain lack of clarity around events in the late spring and summer of 2013. It appears that on 8 April 2013 ICS Building Society wrote to the appellant calling in the arrears then said to be due on foot of the loan. The appellant says she received this letter on 17 April 2013 and she replied to it on 20 April 2013. In addition, a letter issued by Whitney Moore Solicitors on behalf of the building society dated 17 April 2013 demanded possession of the premises from the appellant and noted that the arrears at that time stood at €41,581.77. In her affidavit the appellant stated that she was greatly shocked by these letters and, without obtaining legal advice, she wrote directly to Mr. Conville on 20 April 2013 and she said that she could not pay for the apartment. She said that the property was rented out and she would instruct the tenants to pay the bank directly and said that her father would return the keys and that she was “irrevocably” handing back the apartment to the bank “to do with as they wish”. A partial copy of a letter dated 1 May 2013 was exhibited by the appellant, apparently emanating from the Mortgage Arrears Support Unit of the building society, which acknowledged receipt of the keys but indicated that it would not be accepting possession of the property. The appellants did not receive this letter until 12 August 2013 and she replied on 14 August 2013. She referred to the earlier correspondence and said: “All of this at a time that both I, and my father, acting on my behalf, had both been in full contact with John Conville at BOI”. She referred to her response in April “I was clearly confused and upset when I first responded, without the benefit of any professional advice, and now need to seek such advice as to how best to respond to your disappointing and clearly uncaring correspondence.” Neither she nor the first named defendant nor any adviser acting on their behalf thereafter contacted the building society asserting the existence of an agreement by the building society in October 2012 to accept reduced interest only repayments or that they had complied with or would resume complying with the agreement.
10. The building society wrote to the appellant and the first named defendant under the Code of Conduct of Mortgage Arrears (CCMA) on 3 July 2014. The letter stated that the mortgage loan was being dealt with under the Mortgage Arrears Resolution Process and set out the information which the building society sought under the MARP process. The letter stated that so far, the defendants had not provided the necessary information. The letter stated that if they did not complete a full complete standard financial statement making a full and honest disclosure of all information including relevant supporting documentation that they would be classified as “not co-operating” under...
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