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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Byrne & Anor -v- Coyle [2014] IEHC 475 (14 October 2014)
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Cite as: [2014] IEHC 475
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Judgment Title: Byrne & Anor -v- Coyle Neutral Citation: [2014] IEHC 475 High Court Record Number: 2014 7937 P Date of Delivery: 14/10/2014 Court: High Court Composition of Court: Judgment by: Keane J. Status of Judgment: Approved |
Neutral Citation: [2014] IEHC 475 THE HIGH COURT [2014 No. 7937 P] BETWEEN GERALDINE BYRNE AND GERARD BYRNE PLAINTIFFS/APPLICANTS AND
SIMON COYLE DEFENDANT/RESPONDENT JUDGMENT of Mr. Justice Keane delivered on the 14th of October 2014 Introduction The proceedings The background 4. While the averments made on the applicants' behalf are terse and the documentation exhibited is, at best, an incomplete record of the interactions between the applicants and the bank, it would seem that the applicants began to experience difficulty in repaying the relevant loans in 2009. There appears to have been an extensive correspondence between the applicants and the bank since then concerning the possible restructuring of the applicant’s indebtedness to the bank. Some parts of that correspondence are exhibited to the grounding affidavit of the applicants' solicitor. From that patchy record, it appears that the applicants and their solicitor take the view that the bank has not provided all of the documentation and information sought from it on the applicants' behalf for the purpose of that process, whereas the bank takes the view that it has responded to all of the queries raised with it by, or on behalf of, the applicants. The bank has acknowledged that there was a delay on its part in dealing with certain queries and has apologised for that delay. 5. The applicants' solicitor avers that he filed a complaint with the FSO on the applicants' behalf on the 13th August 2014 and exhibits the relevant letter. That letter states, in relevant part:
1. Provide satisfactory response to my client's communications dating as far back as 2009; and 2. Failure to provide requested documentation." 7. The applicants' solicitor swore a further affidavit on their behalf on the 3rd October 2014. At paragraph 3 he avers as follows:
9. It seems that, for the purpose of the present interlocutory application, the Court is being invited to conclude that the applicants have raised a real or bona fide issue concerning whether, as they contend, the bank has failed to seek to agree an approach that will assist them as personal consumers in resolving their arrears, contrary to Provision 8.3 of the 2012 Consumer Protection Code. 10. However, as already noted, the applicants have exhibited only a portion of the correspondence evidencing the extensive interaction that they have had with the bank. Although the applicants have exhibited a lengthy letter that the bank wrote to their solicitor on the 10th June 2014, they have not exhibited substantial parts of the prior correspondence referred to in that letter. For example, the letter recites that it is written in response to an undated letter from the applicants' solicitor, received on the 10th January 2014, which, it would appear, has not been exhibited. Perhaps more significantly, the letter contains a summary or recital of the extensive prior correspondence between the applicants and the bank, including: a letter that the applicants' solicitor wrote to the bank on the 4th August 2013, putting forward a proposal in respect of the restructuring of the applicants' indebtedness to the bank; the bank's reply of the 5th September 2013, outlining the information it would require from the applicants to allow it to assess that proposal; a letter from the bank to the first named applicant, dated the 26th September 2013, warning her of the consequences of not cooperating with the bank's requests for a proposal and supporting financial documentation in respect of the relevant loan accounts; and a letter from the bank of the 29th October 2013 demanding full repayment of three of the four loan accounts associated with the two properties at issue. None of this documentation is exhibited, despite its obvious materiality to the case that the applicants make i.e. that the bank has failed to seek to agree an approach that will assist them as personal consumers in resolving their arrears, contrary to Provision 8.3 of the Consumer Protection Code. 11. Moreover, for reasons that are entirely unclear, the applicants have elected not to make the bank a party to these proceedings. Instead, they seek relief solely against the respondent and the sole relief that they seek in the proceedings, as well as in the present application, is an injunction restraining the respondent from taking any steps in relation to those properties until the determination of the applicants' complaint to the FSO against the bank Yet the applicants accept, as their solicitor has averred, that they do not query the validity of the respondent's appointment as receiver. Indeed, the respondent has sworn an affidavit on the 25th September 2014, to which he has exhibited a copy of his deeds of appointment by the bank in respect of the relevant properties, each of which is dated the 20th August 2014. 12. The incongruity of this situation is nowhere better illustrated than in the following averment of the applicants' solicitor:
14. Under s. 57BK of the Central Bank and Financial Services Authority of Ireland Act 2004 ("the 2004 Act"), the principal function of the FSO is to deal with complaints "by mediation and, where necessary, by investigation and adjudication." Under s. 57CA of the 2004 Act the FSO is required, on receiving a complaint, to try to resolve it by mediation. Accordingly, an invitation to mediate is a component part of the statutory complaints process, rather than a discretionary recommendation on the part of the FSO. Moreover, it is the complaint that is to be the subject of the relevant mediation- in this instance, primarily the allegation that the bank failed to seek to agree an approach to assist the applicants in resolving their arrears, contrary to Provision 8.3 of the Consumer Protection Code. It is no part of the statutory role or function of the FSO to seek to mediate an agreement between the applicants and the bank concerning the applicants' loan arrears. The arguments 16. The applicants rely on a number of disparate propositions in support of that argument. The first is that any breach of a code of conduct promulgated under s. 117 of the Central Bank Act 1989 may prevent a financial institution from taking possession of a property, where it is otherwise entitled to do so: Irish Life and Permanent plc v. Duff [2013] IEHC 43, applying Stepstone Mortgage Funding Ltd. v. Fitzell [2012] IEHC 142; cf Zurich Bank v. McConnon [2011] IEHC 75. Of course, both Duff and Fitzell concerned breaches of the quite separate Code of Conduct on Mortgage Arrears. Both of those cases involved a finding (rather than an allegation) that the code had been breached. In both of those cases, the breach concerned was relied on in defence of an application for possession, rather than as the basis of a separate claim against a party not governed by the code. And in both of those cases the financial institution that was alleged to be in breach of the code concerned was a party to the relevant proceedings. 17. The second proposition relied on by the applicants is that, as receiver of their mortgaged properties, the respondent is their agent. That proposition is entirely uncontroversial and is not in dispute. Section 24(2) of the Conveyancing Act 1881 expressly provides that a receiver appointed under a mortgage deed "shall be deemed to be the agent of the mortgagor; and the mortgagor shall be solely responsible for the receiver's acts or defaults, unless the mortgage deed otherwise provides." In this case, each of the relevant mortgage deeds contains a clause that "any receiver appointed by the [m]ortgagee under the power to appoint a receiver shall be deemed to be the agent of the [m]ortgagor and the [m]ortgagor shall be solely responsible for the acts, omissions or defaults of such receiver...." 18. In Bula Ltd v. Crowley [2003] 2 ILRM 401 (at p. 424), Denham J. adopted the following statement of the law by Fox LJ in Gomba Holdings (UK) Ltd v. Minories Finance Ltd [1989] BCLC 115 Fox LJ (at p. 117):
20. In response to the applicants' arguments, the respondent contends that the plenary summons in the proceedings discloses no cause of action against him and, in consequence, not only that the present application should be refused but also that the proceedings should be struck out as manifestly ill conceived and bound to fail. The test 22. Even if that were so, the Court would have a number of concerns. In assessing whether the applicants have raised a fair bona fide question to be tried, I cannot ignore the fact hat the applicants have disclosed only a portion of the correspondence that they have had with the bank. Nor can I ignore the fact that the bank is not a party to these proceedings and has not been given an opportunity to be heard in the matter. Either the applicants are arguing that the mere fact that they have made a complaint to the FSO entitles them to injunctive relief against a party other than the bank without any consideration whatsoever of whether their complaint raises a fair or bona fide issue concerning the bank's compliance with the 2012 Consumer Protection Code, or they are arguing that this Court should address that question at the interlocutory stage without affording the bank an opportunity to be heard. Neither argument is especially attractive. 23. Assuming, arguendo, that the applicants have raised a "fair bona fide question" in the circumstances just described, under the Campus Oil guidelines the Court would next have to consider whether an award of damages would be an adequate remedy for either party. It is plain that damages would be an adequate remedy for the applicants in respect of any loss or damage occasioned by any action of the receiver in relation to their North Dublin investment property. In respect of the West Cork property, they contend that it has an irreplaceable sentimental value for the first named applicant and is currently being used as temporary accommodation by the second named applicant, such that damages would not be an adequate remedy, were the receiver to sell it. 24. On the other hand, the applicants have not offered any undertaking as to damage. Even if they were to proffer such an undertaking at this stage, the applicants' professed inability to service each of the loan agreements now at issue in accordance with its terms, makes it impossible to conclude that any undertaking as to damages given by the applicants would be likely to adequately compensate the respondent, if the applicants do not succeed in the substantive action. I pause here to note that it is unsatisfactory that there is no evidence before me from the applicants themselves concerning their personal or financial circumstances that would allow the Court to properly assess the position. 25. Were the Court to apply the Campus Oil guidelines in the usual way, it would next have to consider the balance of convenience. For all of the reasons set out in the preceding paragraphs, it would be difficult to avoid the conclusion that the balance of convenience does not favour the grant of an injunction in the terms sought. 26. However, in this case it is clear that the grant of an interlocutory injunction would have the practical effect of determining the proceedings as a whole because the applicants would then have obtained in advance of trial the very relief that they are seeking at the trial of the action. 27. As I recently had occasion to point out in Rogers v. An Post [2014] IEHC 412, in Jacob v. Irish Amateur Rowing Union Ltd [2008] 4 IR 731, Laffoy J. addressed a broadly analogous situation. The plaintiff sought an order Ireland in the single scull class at the 2008 Olympic Games. The plaintiff argued that he had three separate causes of action against the defendant: a public law claim of legitimate expectation; a private law claim for breach of contract; and a constitutional claim that he had been deprived of his constitutional right to fair procedures. The defendant submitted that the ordinary principles in relation to interlocutory relief did not apply where the grant of interlocutory relief would effectively resolve the matter in favour of the plaintiff. 28. Laffoy J. noted that in American Cyanamid v. Ethicon Ltd [1975] AC 396, the starting point for Lord Diplock's analysis of the principles applicable to the determination of an application for an interlocutory injunction was that the grant of an interlocutory injunction is both temporary and discretionary 29. Laffoy J. next pointed to the following observations with which O'Higgins C.J. prefaced his analysis in Campus Oil v. Minister for Industry (No.2), supra, of the principles applicable for an interlocutory injunction (at pp. 105-106 of the report):
"[T]he overriding test for present purposes is that, if an injunction is granted, the effective contest between the parties is likely to have been finally decided summarily in favour of the plaintiffs." 31. Laffoy J. went on to quote the following passage from the judgment of May L.J. (at p. 238):
It may well be that the same ultimate consideration that the court has in mind, namely the question whether it is likely to do an injustice. Where a plaintiff brings an application for an injunction, I think that it is, in general, an injustice to grant one at the interlocutory stage if this effectively precludes a defendant from the opportunity of having his rights determined at a full trial. There may be cases where the plaintiff's evidence is so strong that to refuse an injunction and to allow the case to go through to trial would be an unnecessary waste of time and expense and indeed do an overwhelming injustice to the plaintiff. But those cases would, in my judgment, be exceptional." Conclusion
(b) In this case, the temporal scope of the interlocutory injunction sought is that the respondent should be restrained from taking any steps on foot of his appointment as receiver pending the determination of the applicants' complaint against the bank to the FSO. It is not an injunction pending trial. That fact illustrates what the papers in the case confirm; that the injunction now sought on an interlocutory basis is in precisely the same terms as the injunction that forms the principal substantive relief sought at trial. That in tum suggests very strongly that the case is not one that is likely to go to trial at the instance of the plaintiffs, should they obtain the relief that they seek in these proceedings on an interlocutory basis in advance of the trial of their claim to that relief. (c) It follows that the grant of an interlocutory injunction is not appropriate in this case as a means of maintaining the status quo pending such trial, since, if the injunction sought is granted, the effective contest between the parties is likely to have been finally decided summarily in favour of the applicants. (d) In the premises, it would be an injustice to grant the injunction now sought at the interlocutory stage, as there is a very great likelihood that this would effectively preclude the respondent from the opportunity of having his rights determined at trial. (e) I am unable to conclude that this is an exceptional case in which the plaintiff’s evidence is so strong that to refuse an injunction and allow the case to go to trial would be an unnecessary waste of time and expense, or that it would do an overwhelming injustice to the plaintiff. It is not possible for the court to reach a meaningful conclusion on the strength or weakness of the applicants' case in view of the partial record relied upon by the applicants for the purpose of the present application and the fact that the bank has not been afforded an opportunity to be heard in response to the applicants' claims. (f) In light of the conclusions that I have reached and in view of the fact that a complaint is pending before the FSO, it is important to emphasise that I have not purported to finally decide any factual or legal aspects of the applicants' claim. I fully appreciate that, as Hardiman J. observed in Dunne v. Dun Laoghaire Rathdown Co Council [2003] 1 IR 567 (at 581), it would not be appropriate to do so when, at trial, the evidence may be different and more ample and the law will be debated at greater length. |