Thomas Morrin v Michael Condon and Ronald Weisz
| Jurisdiction | Ireland |
| Judge | Ms Justice Faherty,Haughton J.,Murray J. |
| Judgment Date | 03 April 2020 |
| Neutral Citation | [2020] IECA 81 |
| Docket Number | Record Number: 2018/91 |
| Court | Court of Appeal (Ireland) |
| Date | 03 April 2020 |
[2020] IECA 81
Faherty J.
Haughton J.
Murray J.
Record Number: 2018/91
THE COURT OF APPEAL
Declaratory relief – Fraud – Unconscionable bargain – Appellant seeking declaratory reliefs – Whether the respondents were guilty of fraud or deceit
Facts: The plaintiff/appellant, Mr Morrin, appealed to the Court of Appeal from the order of the High Court (O’Connor J) dismissing the appellant’s claims for declaratory reliefs in relation to lands comprised in Folios 24835F and 12327 County Kildare. The plaintiff, in his written and oral submissions, advanced arguments which were not canvassed before the High Court. These were, in summary: (i) that one or other of the defendants/respondents, Mr Condon and Mr Weisz, are guilty of fraud or deceit; (ii) that the Deed of Charge represents an unconscionable bargain and should be set aside; (iii) that the defendants are in breach of the Consumer Credit Act 1995 and the European Union (Unfair Terms in Consumer Contracts) Regulations 1995; and (iv) that Secured Property Loans Ltd (SPL) could not sub-charge without the knowledge of the plaintiff. In his grounds of appeal, the plaintiff also raised the issue of the lands having been sold at an undervalue and that his consent of 18 May 2011 was executed under duress.
Held by Faherty J that while duress was pleaded in the statement of claim, it was not a matter that was pursued at the trial. As far as the allegation of a sale at undervalue was concerned, she noted that this claim was expressly withdrawn by counsel for the plaintiff on day two of the hearing. Accordingly, she was satisfied that under the principles enunciated in Lough Swilly Shell fish Growers Co-op Society Ltd v Bradley [2013] 1 IR 227, the plaintiff was debarred from raising either of those issues. She found that the height of the plaintiff’s argument on the issue of fraud constituted an invitation to the court (with reference merely to the Criminal Justice (Theft and Fraud Offences) Act 2001) to find that the trial judge erred in failing to deduce fraud or unconscionability on the part of the second defendant. She held that there was no merit in this argument absent any evidence of fraudulent conduct being furnished to the court and, more particularly, in the absence of any explanation as to why the alleged fraud was not canvassed in the court below. She agreed with the view expressed by the trial judge that the plaintiff had no standing to advance the issue of the sub-charge, which was a matter more particularly for the defendants, qua purchasers of the lands, to raise with SPL; in any event, in coming to his decision, the trial judge took account of the second defendant’s testimony that his security in respect of SPL’s security over the lands had been satisfied. She agreed with the trial judge that if there was any flaw in the Deed of Transfer by dint of the plaintiff’s possession argument, that was a matter for the purchasers to take up with SPL; any such flaw could not assist the plaintiff. She was inclined to agree with the defendants’ argument that the plaintiff was not a consumer for the purposes of the 1995 Act. She held that, even if the plaintiff were to be considered a consumer for the purposes of the 1995 Act, he had not shown how his status as a consumer had any impact on the Deed of Transfer of 8 November 2013, in circumstances where she had rejected the arguments put forward on his behalf that the Deed of Charge should be set aside.
Faherty J held that the appeal would be dismissed.
Appeal dismissed.
JUDGMENT of Ms Justice Faherty dated the 3rd day of April 2020
This case is an appeal of the Order of the High Court (O'Connor J.) dismissing the appellant's claims for declaratory reliefs in relation to lands comprised in Folios 24835F and 12327 County Kildare. For ease of reference, I will refer to the appellant as the plaintiff and the respondents as the defendants.
The plaintiff was the registered owner of lands comprised in Folios 24835F and 12327 County Kildare. In December 2009, he borrowed €320,000 from Secured Property Loans Limited (hereinafter “SPL”). The second named defendant herein was at all material times SPL's managing director. SPL is a retail credit company authorised by the Central Bank. Its business is the provision of short-term loans of twelve months to borrowers who own property.
The loan obtained by the plaintiff in December 2009 comprised an amalgamation of loans previously taken out with SPL, including arrangement fees and interest due on those loans. The Commitment (Facility) letter which issued to the plaintiff and which was signed by him on 18 December 2009 provided that the loan was to be for a period of twelve months with the plaintiff undertaking to make monthly interest repayments of €4,800 per month with the principal sum to be paid off at the end of that period. At para. 19 of the Commitment letter the plaintiff was cautioned to obtain legal advice before agreeing to the terms and conditions contained therein. The plaintiff's signature to the letter was witnessed by Mr. Fearghal White Solicitor of Coughlan White O'Toole Solicitors. According to evidence given by the plaintiff at trial, he took out the loans for the completion of property projects and to pay the Revenue.
By Deed of Charge dated 21 December 2009, the €320,000 loan advanced to the plaintiff was secured on Folio 24835F by way of a fixed charge to SPL, and on Folio 12327 by way of a second charge to SPL after a lien in favour of Ulster Bank. Ulster Bank held the lands certificate in respect of Folio 12327 for monies advanced to the plaintiff. The Deed of Charge contained a provision enabling SPL's powers as mortgagee to become immediately exercisable in the event of the failure of the plaintiff to discharge his obligations. As was the case with the Commitment letter, the plaintiff's signature on the Deed of Charge was witnessed by his solicitor Mr. White of Coughlan White O'Toole.
The charges created by the Deed of Charge in favour of SPL were duly registered in the Property Registration Authority (“PRA”) on 5 January 2010 against both Folios as burdens owned by SPL.
It is common case that by 21 December 2010 the plaintiff was in arrears in respect of his repayments and, pursuant to the terms of the Mortgage Deed, the security held by SPL immediately became enforceable, including the entitlement of SPL to exercise its power of sale and other powers accruing to it pursuant to the provisions of the Land and Conveyancing Law Reform Act 2009 (hereinafter “the 2009 Act”).
It is the case, however, that as of October 2010, the plaintiff was endeavouring to sell the lands and/or otherwise secure monies to pay off his indebtedness to SPL. An attempt by him to sell the lands by auction was unsuccessful. The plaintiff's aspiration was a sale of the lands with a buy back option for himself. His efforts in this regard were made known to the second defendant on 15 October 2010.
Discussions subsequently ensued between SPL and the plaintiff in the course of which it was indicated to him that SPL intended to go into possession of the lands. Ultimately, the plaintiff executed a suite of documents on 18 May 2011 whereby he consented to SPL taking possession of the lands. The documents included a Consent executed on 18 May 2011. The Consent was in the following terms:
“I, Thomas Morrin, … HEREBY CONFIRM AND ACKNOWLEDGE that I am the Registered owner of Folio No. 24835F County Kildare and No. 12327 County Kildare. I say that by a Deed of Mortgage made on the 21st day of December 2009, a mortgage all of the lands and premises comprised and described in Folio No. 24835F County Kildare and Folio No. 12327 County Kildare to Secured Property Loans Limited having its registered office at Drumcoura, Derrygoan in the County of Leitrim. I say that as a result of my default of the interest payments and past due date of the redemption of the said Loan to Secured Property Loans Limited, I am desirous of giving possession of the lands and premises comprised and described in Folio No. 24825F County Kildare and Folio No. 12327 County Kildare to the said Secured Property Loans Limited. I HEREBY FORMALLY CONSENT to the said Secured Property Loans Limited entering into possession of the lands and premises comprised and described in [Folios ] 24835F County Kildare and 12327 County Kildare and HEREBY ACKNOWLEDGE that when the said Secured Property Loans Limited enter into possession of same, they will be accordingly duly entitled to exercise immediately all their powers as a mortgagee in possession including the entitlement to sell the said property in order to discharge all sums due to them.”
By way of “Acknowledgement” also dated 18 May 2011, the plaintiff acknowledged that he was giving vacant possession to SPL and that it was entitled to exercise its powers of sale. He accepted that having given vacant possession to SPL, he was debarred from returning or entering upon the lands. He undertook to cooperate with SPL in its attempts to sell the lands.
The plaintiff also signed a further document on 18 May 2011 entitled “To Whom it May Concern” wherein he confirmed and acknowledged that of “[his] own free will and volition” he had offered to give voluntary possession of the lands to SPL. He went on to state that he had taken legal advice in relation to the matter and was satisfied “in the light of the said legal advice taken, to voluntarily give possession to [SPL]”. He acknowledged that SPL “will be entitled to exercise immediately all their powers as Mortgagee in possession including the entitlement to sell the property in order to discharge all sums due to them…”
For the purposes of the “Consent”, “Acknowledgment” and the “To Whom it May Concern” documents...
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