Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Vesta Mortgage Investments Ltd -v- Devine & anor [2014] IEHC 109 (06 March 2014)
URL: http://www.bailii.org/ie/cases/IEHC/2014/H109.html
Cite as: [2014] IEHC 109
[New search] [Help]
Judgment Title: Vesta Mortgage Investments Limited -v- Devine & anor Neutral Citation: [2014] IEHC 109 High Court Record Number: 2013 2653 S & 2013 189 COM Date of Delivery: 06/03/2014 Court: High Court Composition of Court: Judgment by: McGovern J. Status of Judgment: Approved |
Neutral Citation: [2014] IEHC 109 THE HIGH COURT COMMERCIAL [2013 No. 2653 S]
[2013 No. 189 COM] BETWEEN VESTA MORTGAGE INVESTMENTS LIMITED PLAINTIFF AND
PAUL DEVINE AND MARY DEVINE DEFENDANTS JUDGMENT of Mr. Justice Brian J. McGovern delivered on the 6th day of March 2014 1. This is an application brought by the plaintiff against the defendants for summary judgment in the sum of €18,872,399.47 together with continuing interest. 2. The debt was incurred by the defendants on foot of facilities granted to them by EBS Building Society (“EBS”). EBS was converted into a private limited company (EBS Ltd.) on 1st July, 2011. On 30th November, 2012, the plaintiff (“Vesta”) purchased from EBS Ltd. the facilities together with related security and other rights. 3. Because this is an application for a summary judgment, the principles set out by the Supreme Court in Danske Bank v. Durkan New Homes [2010] IESC 22 apply. If the judge hearing the application is satisfied that the defendant has a real or bona fide defence, whether based on fact or on law, he is bound to afford the defendant an opportunity of having the issue tried in the appropriate manner. In Aer Rianta cpt. v. Ryanair Ltd. [2001] 4 IR 607, Hardiman J., having reviewed the Irish cases on the subject, said at p. 623:
5. The defendants in this case have adopted something of a “scattergun approach” in defending the claim. They have raised the following issues in defence of the application for summary judgment:
(ii) the plaintiff’s capacity to claim interest as it is not a bank; (iii) whether the requirements of the Bankers Books Evidence Act 1879 and 1959 have been complied with; (iv) whether the plaintiff is estopped from maintaining these proceedings on the basis of an alleged undertaking by an employee of EBS that the loans would not be sold; (v) whether a partnership agreement existed between the EBS and the defendants in connection with the purchase of property in Germany; (vi) whether the plaintiff has breached the Data Protection Acts; (vii) whether the first named defendant was an employee of the EBS; (viii) whether the plaintiff was obliged to take into account certain tax implications arising for the defendants if the loans are called in; (ix) whether the debt is ascertained. 6. These proceedings arise out of a series of twelve loan facilities advanced to the defendants by EBS Building Society between 1998 and 2008. On 1st July, 2011, EBS Building Society was converted into a private limited company named EBS Ltd. That conversion occurred under an Acquisition Conversion Scheme which was confirmed and registered by the Central Bank pursuant to s. 104 of the Building Societies Act 1989. The plaintiff acquired the facilities from EBS Ltd. under a Deed of Assignment dated 30th November, 2012. 7. Clause 2 of EBS Standard Conditions provided that the facilities are “subject to the Rules of EBS except where the security documentation and/or Offer Letter provide otherwise”. Clause 7(1)(d) of the Rules entitles EBS to transfer, assign or dispose of any of its loans, whether absolutely or by way of security or otherwise. The requirements of s. 28(6) of the Supreme Court of Judicature Act (Ireland) 1877 for a valid legal assignment of a debt have been met in this case. The Deed of Assignment expressly provides at clause 2.1 for the absolute assignment of the facilities to the plaintiff. The Deed of Assignment is in writing and has been sealed by EBS Ltd. in the presence of two authorised signatories. The defendants were notified in writing of the assignment. I am satisfied, therefore, that there was a valid assignment of the defendants’ loans with EBS to the plaintiff. The Plaintiff’s Capacity to Claim Interest Have the Provisions of the Bankers Books Evidence Act been complied with? Alleged Undertaking by EBS through Ms. Emer Finnan that the Facilities would not be sold by EBS 11. Furthermore, the Rules of the EBS prohibited Ms. Finnan from entering into the agreement contended for by the defendants as clause 12(4) provides that the Board of EBS is the entity which can, in agreement with a borrower, vary the terms of repayment of a loan facility. The Defendants agreed to accept the facilities on those terms. The plaintiff also argues that even if the agreement contended for by the defendants existed that it could not affect the plaintiff’s title to the facilities having acquired them for value and without notice of any such agreement. While it might potentially give rise to a claim by the defendants against EBS, it could not affect the plaintiff’s title to the facilities. 12. It is of some significance that although the defendants sought and were granted liberty to issue a motion to join EBS as a third party in these proceedings they did not do so. The defendants have not raised any issue to be tried on this point. Was there a Partnership between the EBS and the Defendants? 14. Having read the voluminous amount of documents in this case and considered the pleadings and submissions, it is clear beyond any doubt that the relationship between the EBS and the defendants was one of lender and borrower. The defendants have adduced no evidence which would call into question that relationship to the extent that this is an issue which should go for plenary hearing. In Badeley v. Consolidated Bank [1888] 38 Ch. D 238, Cotton L.J. held at p. 250 that where the participation in profits arises from a clause in an agreement entered into between parties, it is wrong to say that this is prima facie evidence of a partnership “because you must look, not only to that stipulation, but all the other stipulations in the contract, and to determine whether on the stipulations of the contract taken as a whole you can come to the conclusion that there is a partnership - that there is a joint business carried on behalf of the two - or whether the transaction is one of loan between debtor and creditor, a loan secured by giving a certain interest in the profits”. 15. In this case, there is no provision for a sharing of profits or anything to suggest a partnership, and looking at the agreements as a whole, they are quite clearly agreements between a lender and a borrower. But even if the defendants were able to establish a partnership with regard to the monies advanced to purchase properties in Germany, it would not afford a defence to the plaintiff’s claim for payment of the monies due and owing on foot of the facilities granted. 16. The defendants also raise a subsidiary objection in relation to the funds advanced for the purchase of properties in Germany. They claim that a building society is not entitled to exercise its power outside the State without the approval of the Central Bank. I am satisfied on the evidence that the facilities were advanced to the defendants in this jurisdiction and did not involve the exercise by the EBS of powers outside the State, even if security was provided by the defendants over properties in Germany. The defendants have not raised any arguable defence on this basis. Data Protection Employment Relationship between First Named Defendant and EBS 19. The first named defendant never took any proceedings against EBS in relation to any breach of an employment contract and existence of any employment contract between him and the EBS is denied. He claims that the EBS or the plaintiff will have to fully address his entire employment, tax and pension rights in the context of these proceedings. It is difficult to see how this could be so. But what I have to decide is whether it meets the test for leave to defend in a summary judgment application. 20. In January 2012, the EBS varied a number of facility letters as follows:
21. Furthermore, the defendants do not deny that they have failed to make interest payments due under the facilities and therefore the first named defendant’s entitlement to retain €8,000 per month from the rental income on the secured properties ceased when the defendants failed to pay the interest. 22. Applying the Summary Judgment test outlined in para 3 above, it seems to me that the defendants have raised an arguable case and that there is an issue to be tried as to whether or not the agreement contended for by the first named defendant exists and, if so, whether there should be any set-off arising from any such agreement. Defendants’ Tax Liability Is the Debt Ascertained? 25. In an affidavit sworn on 7th February, 2014, the first named defendant conceded that he owed an unascertained amount to EBS at 30th November, 2012. The second named defendant has not repudiated that statement or said anything that would call it into question. In the same affidavit, he says that he paid €63,871.63 to the plaintiff in error in 2012. The plaintiff disputes that this was paid in error but there is sufficient dispute raised between the parties to bring the defendants within the ambit of the Danske Bank v. Durkan New Homes jurisprudence, so I will allow the defendants defend that issue at a plenary hearing. In that affidavit, the first named defendant refers to his accountant, Mr. Gerry Carron, and says that he spoke to him in February 2013, and it was agreed Mr. Carron would seek a refund from the plaintiff. There is no affidavit from Mr. Carron challenging any other sums claimed by the plaintiff from the defendants. Conclusion 27. I will allow three issues go to plenary hearing. The first is the extent (if any) to which the defendants are entitled to credits in the sum of €8,000 per month in respect of an alleged employment relationship between the first named defendant and EBS. The second issue is whether the defendants are entitled to credit for a sum of €63,871.63 which the first named defendant claims was paid in error to the plaintiff. And the third is the amount due since the 30th November 2012.
|