The Supreme Court has handed down an instructive judgment in a case in which a County Registrar had granted a possession order against the borrowers.
The borrowers sought an extension of time from the High Court in respect of the County Registrar’s decision. The High Court refused the extension and the borrowers appealed to the Supreme Court.
The basis of the appeal
The borrowers relied on a previous decision that a County Registrar must, before granting an order to allow repossession of a property, review the mortgage agreement for unfair terms. Unfair terms are dealt with in regulations in Ireland which give effect to an EU directive, the Unfair Terms in Consumer Contracts Directive.
Brian and Christina Cannon also argued that there were indeed unfair terms in their mortgage agreement:
The “transfer of rights” clause. The Supreme Court held there was no evidence that this was an unfair term and transfer of rights clauses are uncontroversial and standard
The “acceleration” clause. This would be unfair if it purported to allow the lender to all in the entire loan as a consequence of one missed payment. However, this was not the case and could not happen for the lender had to abide by the Central Bank code of conduct and was obliged to serve various notices on the borrowers
The “price variation” clause. There is an exemption in the Regulations which allows the lender to change interest rate without notice if there is a valid reason. In any event, the lender must adhere to the 2016 Consumer Mortgage Credit Agreements Regulations which obliges the lender to serve a notice of change of interest rate on the borrower.
The Country Registrar’s role
The County Registrar’s role was clarified in the decision and it was held that this role involved considering the terms of the mortgage to ascertain if any potential defence was open to the borrower. If it is then the case must be transferred to the Circuit Court Judge to deal with it.
Since the property crash in 2007 some hard pressed property owners, who had judgments registered against them, have used various ploys and ruses to block and thwart the holders of judgment mortgages from selling their property against their wishes.
ACC obtained judgment for €1,301,344.44 against William and Vanda Fryday in 2009 and registered this judgment as a judgment mortgage in 2011 on certain property folios of the Frydays. In 2012 ACC sought a court order to the effect that the judgments were “well charged” on the folios in question.
The Frydays had sworn affidavits in December 2012 and January 2014 as part of the legal proceedings and did not make any suggestion or assertion that anybody else had an interest-beneficial or legal-in the property.
Then, in April 2014 and December 2014 the mother (Lavinia) and brother (Richard) of the first defendant (William) registered with the Property Registration Authority two inhibitions on the properties in question. These inhibitions were based on the mother and brother claiming to have an interest in the property and were lodged with the consent of the registered owners (William and Vanda, a married couple) of the property.
ACC had obtained a well charging order and an order for sale of the properties and now sought to have these inhibitions cancelled. Naturally, the Frydays opposed this application. ACC argued that these inhibitions were only registered by the notice parties, Lavinia and Richard, to thwart and prevent the bank from selling the property and to frustrate the bank in enforcing the judgment it had obtained against William and Vanda Fryday.
The Court, having considered the timeline set out above, held that the inhibitions claiming an interest by the Frydays (Lavinia and Richard) were only claimed when the bank went to enforce its judgment and seek the well charging order with a view to sale. The Court ordered the cancellation of the inhibitions as it found that the sole purpose of the inhibition was to prevent the bank from enforcing its well charging order.
The use of lis pendens, cautions and inhibitions by property owners against whom judgment has been obtained is quite common. The problem from the lender’s perspective arises when he wishes to sell and needs to cancel or vacate these burdens on the folio. It can be costly and slow to do so but the registration of such burdens is relatively straightforward with an application to the Property Registration Authority being the route to take, pursuant to the Registration of Title Act 1964.
The chilling effect of an inhibition, caution, or lis pendens is to discourage interest in potential purchasers of the property on which the burden has been registered.
What happens if a judgment mortgage is granted against one owner of a property held as a joint tenancy. How is the other owner affected, if at all?
The High Court looked at this question in the case of ADM Mersey PLC v Bergin and Another  IEHC 3, a decision handed down in January, 2020.
In this case property in Kilkenny was jointly owned by a father and son.
The son had borrowing difficulties and a lender obtained judgment in 2010 against the son and his wife and registered this judgment as a judgment mortgage on the property jointly owned by the son with his father.
In 2013 the father changed his will to leave the land in question to his two grandchildren.
Then the father and son changed the ownership of the land from a joint tenancy to a tenancy in common. The purpose of this move was to ensure the father’s interest in the land could not be attacked by the son’s creditors as both father and son would now have a clear, divided interest in the property with each one owning a certain percentage.
Joint tenants versus tenants in common
It is important to understand the significant difference between land owned as joint tenants and as tenants in common.
If land is owned in a joint tenancy by two parties and one passes away the land passes automatically to the other joint tenant by reason of the doctrine of survivorship. However, if the land is owned as tenants in common the interest of the deceased owner can go anywhere he chooses. In this case, the father chose to leave it to his grandchildren.
The father died and his interest in this property then passed, in accordance with his will, to his two grandchildren.
ADM Mersey plc sought to enforce their judgment and they argued that when they registered their judgment mortgage the property was a joint tenancy and the entire property should have passed to the other joint tenant-the son-when the father passed away.
In effect, they were arguing that the purported passing of the father’s interest to the grandchildren should have been ignored as their judgment mortgage was in place first.
Mr Justice Allen decided there was nothing wrong with the father attempting to put his interest in the land beyond the reach of ADM Mersey plc.
He held that the judgment mortgage only attached to the son’s interest in the land, the tenant in common interest.
He also held that the judgment registered against the son did not affect the father’s interest in the land, who was a joint tenant at the time of registration of the judgment.
Also, the judgment mortgage did not attach to the lands at Kilkenny but only to the son’s interest in those lands.
The judgment mortgage did not sever the joint tenancy nor did it prevent the father from doing so.
The severing of the joint tenancy by the father and son in 2013 was effective in creating a tenancy in common and ADM Mersey PLC’s judgment mortgage only attached to the son’s interest as a tenant in common. Thus, the grandchildren’s interest was unaffected.
Even if a judgment mortgage is registered against one owner of a property that is held in a joint tenancy that joint tenancy can still be severed and converted to a tenancy in common. This allows the non debt owing owner to put his interest in the property out of reach of the lender who has the judgment against the other owner.
A Supreme Court decision of November 2019 provides some hope for anyone facing a summary summons action against them to have a debt judgment awarded.
The case is Bank of Ireland Mortgage Bank and Joseph O’Malley and involved a vitally important decision of the Supreme Court as to the level of detail the lender must provide in setting out its claim in the Summary Summons.
This case was Mr O’Malley’s appeal against the decision of
the High Court to grant judgment against him in the sum of €221,795.53,
together with the costs of the proceedings. Mr O’Malley appealed to the Supreme
Mr O’Malley had borrowed €225,000 in 2008 but experienced financial
difficulty soon after. It was not disputed that Mr O’Malley received the money
from the bank.
A summary summons was issued on behalf of the bank and the
summons stated that he had neglected to pay the entire sum due of €221,795.53.
The bank issued a motion seeking judgment and the case came
before the High Court. Mr O’Malley’s defence was that the pleadings of the Bank
of Ireland in the case were defective insofar as the Bank had failed to provide
sufficient details as to how the figure of €221,795.53 was arrived at. Mr
O’Malley argued that he should have been able to see any bank surcharges being
pursued and any penalties. He had sought a detailed breakdown from the bank and
argued that he was entitled to a calculation from the bank showing how it
arrived at the figure claimed and the bank had simply furnished a statement of
The High Court granted judgment against Mr O’Malley, however
on the basis that the statement of account was sufficient, notwithstanding the
recognition that the bank had not particularised principal and interest in the
amount claimed. Mr O’Malley appealed this decision to the Supreme Court.
The Supreme Court
The Supreme Court first recognised the general principle and
test in a summary judgment case as follows:
“the fundamental questions to be posed on an application
such as this remain: is it “very clear” that the defendant has no
case? Is there either no issue to be tried or only issues which are simple and
easily determined? Do the defendant’s affidavits fail to disclose even an
The Supreme Court recognised that a dispute had emerged in
this O’Malley case as to whether the claim was sufficiently particularised in
the summary summons, in accordance with the rules of the superior courts.
The court noted that the obligation was to provide sufficient
particulars in a summary claim to ensure the litigants know the case they have
Mr O’Malley’s case was that there was confusion and
uncertainty on his part as to his liability in respect of the calculation of
monies owed and that the method of calculating the principal and interest must
be clear for the plaintiff to discharge the burden of proof.
The bank argued that the interest rate applied would be easy
to calculate by any competent professional by reference to the statement of
Mr O’Malley, in support of his case, relied on Allied
Irish Banks v The George Limited (High Court, 21 July 1975) and Allied
Irish Banks v Marino Motor Works Limited  IEHC 522.
The Court then looked at two questions:
The level of detail that needed to be included
in the Special Indorsement of Claim to be compliant with the Court rules
The evidence which needs to be put forward to
justify the grant of a judgment on a summary basis within the confines of a
motion for judgment
“In my view, it is appropriate to start by going back to
the underlying rationale for the requirement as to detail. Order 4, r. 4 simply requires that “all
necessary particulars” should be stated.
What particulars are “necessary” is the real question. But the rationale goes back at least 140
years, to the passage from the judgment of Cockburn C.J. in Walker v. Hicks,
already cited above. The defendant to a
summons is entitled to have sufficient particulars to enable him “to satisfy
his mind whether he ought to pay or resist”.
The Court notes that the special indorsement of claim sets
out the terms of the loan, the fact that it was accepted and the monies were
drawn down, and the Mr O’Malley had failed to repay the monies demanded.
However, no detail was given as to how the sum of €221,795.53 was calculated.
The only evidence of this was contained in the Statement of Account. That
statement of account, however, did not indicate what interest rate was being
applied from time to time. Also, there was no indication of how the closing
balance of €221,795.53 was calculated.
But it does not seem to me to be too much to ask that a
financial institution, availing of the benefit of a summary judgment procedure,
should specify, both in the special indorsement of claim and in the evidence
presented, at least some straightforward account of how the amount said to be
due is calculated and whether it includes surcharges and/or penalties as well
as interest. Indeed, if it really is as
simple as counsel suggested, then I cannot see any reason why Bank of Ireland
should not have set out those calculations.
A person confronted with a claim or a court confronted with a question
of whether there is prima facie evidence for that claim is entitled to at least
enough detail to know the basis on which the sum claimed is calculated. The defendant is entitled to that information
to decide whether there is any point in pursuing a defence or, indeed,
potentially expending monies on procuring professional advice in that regard. The court is entitled to that information to enable
it to form an assessment as to whether there is sufficient evidence to say that
the debt has been established on a prima facie basis. Neither the defendant nor the court should be
required to infer the methodology used, unless that methodology would be
obvious to a reasonable person or is actually described in the relevant
documentation placed before the court.
I would, therefore, conclude that there was insufficient
evidence before the High Court to justify determining that Bank of Ireland had
discharged the initial onus on it to produce prima facie evidence of its
debt. That quite a significant amount of
money was likely to have been due can hardly be doubted, but a party claiming a
liquidated sum gets the benefit of the summary procedure precisely because it
is said that a specified amount of money is due. In those circumstances, it is not
unreasonable to require the plaintiff to show some basis to explain the
calculation and justify, on a prima facie basis, the sum claimed
The Supreme Court then decided, in the interests of the
case, to remit the case back to the High Court and the Bank could then apply to
amend the special indorsement of claim to include such details as they may
think appropriate in the light of this judgment and to “tender such further
evidence as may be appropriate to fill the evidential gap identified”. It
will then be a matter for the High Court Judge dealing with those applications.
The conclusions of the Supreme Court judgment are as
8.1 For the reasons analysed earlier in this judgment, I would conclude that the special indorsement of claim in this case contains insufficient details of how the sum claimed is calculated so as to meet the requirements of O.4, r.4 of the Rules of the Superior Courts to the effect that all necessary particulars be provided. The information is insufficient to allow, as the jurisprudence requires, a defendant served with a summary summons in that form to know whether they should concede or dispute the claim. In so holding, I have indicated that, in my view, it is possible to rely on documentation available to a defendant (such as bank statements or statements of account) for the purposes of providing sufficient particulars in a special indorsement of claim, but only where the document or documents in question are incorporated by reference into the text of the endorsement. No such incorporation occurred in this case and I am, therefore, of the view that, even if the Statement of Account provided sufficient particularisation of the claim, the special indorsement of claim would nonetheless be defective because that document is not referred to.
8.2I have also set out the reasons why I consider that Mr. O’Malley is entitled to put forward arguments based on what was said to be a lack of evidence sufficient to warrant the grant of judgment against him. I have indicated the reasons why I consider that it is necessary for a financial institution suing for a liquidated sum said to be due on foot of a loan to at least put before the court a simple account of the basis on which it is said that the precise amount claimed is due. That obligation is prior to and independent of the obligation of a defendant to put forward a positive defence. In other words, the plaintiff must establish the liquidated debt on a prima facie basis before it is necessary for the defendant to establish any defence which meets the threshold for plenary hearing.
8.3For the reasons also set out earlier in this judgment, I would hold that there was insufficient detail in the evidence submitted to provide the Court with an ability to assess whether the precise claim to the debt alleged had been established on such a prima facie basis. In my view, the observations in the summary judgment jurisprudence, which indicate that a defendant should not be given leave to defend if the basis put forward for resisting the plaintiff’s claim amounts to mere assertion, cut both ways. A plaintiff, in order that a prima facie claim to the precise debt can be established, must do more than merely assert. While the basis for there being a claim in general terms was fully set out by the Bank, it does not seem to me that the evidence as to why the precise sum claimed was said to be due amounted to anything much more than assertion. In particular, it is not clear as to what calculation led to the assertion that the sum claimed was the precise amount due, nor as to the amount of capital and interest and whether the total included surcharges and/or penalties.
8.4In those circumstances, I would allow the appeal and remit the matter back to the High Court, subject to the comments contained in the “Consequences” section of this judgment as to how the matter should proceed from then on.
The good news for Mr O’Malley is that he has successfully
prevented this application for summary judgment against him by the lender.
However, the case has been sent back to the High Court to decide how the matter
is to proceed.
You may have heard of Mr. Jerry Beades, who is a well-known
anti eviction activist and businessman.
The High Court in 2012 granted a judgment against him in
favour of the Bank of Scotland plc in the sum of €9,684,987.04 together with
costs. This judgment was in respect of a number of loans Mr. Beades had
obtained from the bank.
Mr. Beades appealed this decision to the Court of Appeal and
the case ended up in the Supreme Court who delivered a judgment on 29th
July 2019. (Read
the full decision here).
Mr. Beades represented himself in the High Court and Supreme
Court and a review of the Supreme Court decision is worthwhile on a number of
levels. Let’s take a look at the Supreme Court decision.
The legal proceedings had originally commenced by way of a
summary summons and Mr. Beades eventually filed a replying affidavit before the
case was heard in the Commercial Court.
The claim by the bank was on foot of four facility letters
and the application for judgment was grounded on sworn statements (affidavits)
of Bank of Scotland and Certus employees.
Mr. Beades swore a replying affidavit in which he made a number
That one of the bank affidavits was ‘fraudulent’
by reason of being sworn in front of a person who Mr. Beades asserted was not a
registered practicing solicitor in Ireland
The bank was in breach of its contract and its
duty of care to him
There were delays with drawdown of facilities
The bank was in breach of its own terms and
conditions by reason of its alleged failure to serve a demand letter on Mr.
Beades at his Fairview address
The High Court found against Mr. Beades, however, because he had not denied in any of his affidavits signing the loan agreements or receiving the money from the lender. Accordingly, he had not demonstrated any arguable issued to prevent judgment being granted against him and judgment was granted to the bank. (Read the High Court decision here).
Even if he had a counterclaim it would not be a defence to
the summary judgment application because Mr. Beades had put into evidence the
following extract from the bank’s terms and conditions,
‘All sums payable in respect of principal interest or
otherwise shall be payable gross without deduction on account of taxes, any
set-off or counterclaim or on account of any charges, fees, deductions or
withholdings of any nature . . .’
The substantive issue-did you receive the money?
The Judge in the High Court had asked Mr. Beades directly if
he had received the money.
Mr. Beades viewed this as an inappropriate question but the Supreme
Court agreed with Kelly J. of the High Court that this was the substantive
issue in the case.
The Supreme Court went on to point out that when you are
defending a debt claim such as this one you must pin your colours to some mast
or other. That is to say, the defendant could claim he never made the agreement,
or it is a case of mistaken identity, or an agreement was made but not
performed, or that he did not receive the money.
He could also argue that he received the money but the
agreement was breached by the lender, or that there was some issue of
illegality, or undue influence, or unconscionability, or estoppel which
This is a non-exhaustive list of issues which could have
been advanced by Mr. Beades but he did not put any of these arguments forward
and the Supreme Court went on to point to the old rule that the denial of a
debt alone is not a defence.
Moreover Mr. Beades made a number of observations at the
Supreme Court appeal which were entirely consistent with him having received
the money-for example, ‘they gave me the wrong facility’ and ‘the bank
continued to release funds for the building work. If the bank seriously thought
it had no obligation to do so, they would have cut off the flow (especially
when they had liquidity problems)’ and ‘the unfinished development at Fairview
could be finished and the bank could get its money back, why this Mexican
All of these statements were admissions that he had received
the loan monies.
The Supreme Court also noted that notwithstanding that it
was 7 years since the bank had obtained judgment against Mr. Beades he had
never put forward the argument that the bank had not lent him the money.
Mr. Beades’ Arguments
The arguments put forward by Mr. Beades were based on
technical matters relating to procedure, the admission of evidence, and the
swearing of affidavits.
Mr. Beades had also put forward the argument that had the
High Court case been heard by a different Judge there would have been a different
outcome (Mr. Beades had claimed bias against him in the High Court although did
not repeat this in the Supreme Court appeal).
The Supreme Court did not agree that a different judge would
have arrived at a different decision and judgment would have been awarded
against him based on the facts and evidence.
Mr. Beades put forward the argument that the evidence to be
offered by the bank must be sworn by a bank employee and the evidence of an
employee of Certus, who provided support services to the Bank of Scotland, was
insufficient and inadmissible. He was relying on 4 of the Bankers’ Books
Evidence Act 1879.
This argument, held the Supreme Court, was misconceived as
the section on which Mr. Beades relied referred to an entry in a book held by
the bank. This did not cover a situation where someone was giving sworn
evidence on affidavit as to facts within their knowledge.
The Supreme Court referred to Ulster Bank Ireland Ltd. v.
O’Brien  IESC 96,  2 I.R. 656 as authority for the proposition that
“an affidavit sworn by a person other than the plaintiff who can swear
positively to the relevant facts is sufficient”.(J. Laffoy)
The essential fact in this case was the Supreme Court was satisfied
that Ms Tracy, who swore the affidavit, was capable of swearing positively to
the facts showing that the Bank of Scotland was entitled to judgment.
In summary the Court held the contention that there was no
admissible evidence of the arrangements between the bank, its predecessor, and
the borrower, Mr. Beades, was misconceived.
No demand letter served
Mr. Beades also made the argument that a letter of demand
was not properly served upon him.
However, the Supreme Court held that Mr. Beades had failed
to explain why evidence of delivery of a demand letter was a necessary proof
when the original loan was for a facility for a fixed term and repayment was to
be made at the end of the facility term and the term was up.
Affidavit evidence inadmissible
Mr. Beades had also raised a question about a further affidavit
by the Bank’s side by reason of an allegation of fraud as a consequence of the
solicitor who witnessed it being allegedly not a solicitor practicing in
Ireland. He withdrew the allegation of fraud in the Supreme Court and accepted the
solicitor was a registered practicing solicitor.
The Supreme Court also held
“In any event, O. 40, r. 15 RSC provides that “the
court may receive any affidavit sworn for the purpose of being used in any
cause or matter notwithstanding any defect by misdescription of parties or
otherwise in the title or jurat, or any other irregularity in the form
If you are facing debt collection proceedings the
substantive, fundamental issue is whether you received the money or not. If you
did it is unlikely any technical defence or arguments based on alleged procedural
deficiencies will save the day for you.