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Cite as: [2025] IEHC 326

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THE HIGH COURT

[2025] IEHC 326

Circuit Court Record No.: 2019/00185

High Court Record No.: H.CAT. 2024/009

SOUTH WESTERN CIRCUIT                                                         COUNTY OF CLARE

 

BETWEEN

EVERYDAY FINANCE LIMITED

PLAINTIFF

AND

 

THOMAS MARSH

DEFENDANT

AND

 

LINDA MARSH

NOTICE PARTY

 

JUDGMENT of Ms. Justice Stack delivered 3 June, 2025.

1.                  This is an application pursuant to Order 5B of the Rules of the Circuit Court for possession of land in Kilbane, Broadford, County Clare ("the Property"), of which the defendant is sole owner and which comprises the family home of the defendant and the notice party. The property is unregistered and was acquired by Mr. Marsh for an estate in fee simple by Indenture of Conveyance made 20 September, 1999, between St. Flannan's (Killaloe) Diocesan Trust Ltd of the one part and Thomas Marsh of the other part.

2.                  The lands so acquired are defined in the Conveyance to Mr. Marsh by reference to the map attached to the earlier conveyance to the vendor, which was dated 29 June, 1999. There was some reliance at hearing on the fact that the reference to the map attached to that earlier conveyance for the purposes of identifying the Property of which possession was claimed in the Civil Bill was an error and it was said that the wrong deed had been identified. But this argument is misconceived as it is entirely standard in the conveyancing of unregistered lands to identify the lands the subject of the conveyance by reference to the parcels of an earlier conveyance in the chain of title, in this case the conveyance to the Vendor dated 29 June, 1999, and indeed this definition of the Property is the same as in the parcels to the Conveyance to Mr. Marsh. The definition of the Property in the Civil Bill therefore restates its description in Mr. Marsh's own document of title and is entirely appropriate and correct.

3.                  By letter of demand dated 4 January, 2019, the plaintiff ("Everyday") demanded the payment of €244,595.83, said to be due and owing on foot of three separate loans, each of which is discussed further below. Everyday then demanded possession of the Property by letter dated 24 January, 2019. As of 3 November, 2022, the sum said to be due and owing was €295,441.97, of which €265,021.70 was said to be arrears.

4.                  It is averred on behalf of Everyday, and not denied by Mr. and Mrs. Marsh, that the debt was originally dealt with in accordance with the Code of Conduct on Mortgage Arrears, but Mr. and Mrs. Marsh were ultimately classed as not cooperating and the protections of the Mortgage Arrears Resolution Process no longer apply. Statements of account in respect of all three loans have been exhibited and they show that no repayments have been made since at least October, 2016, in relation to any of the three loans.

5.                  Mr. and Mrs. Marsh were married on 30 July, 2004, and it is common case that, from that date, the Property has comprised their family home within the meaning of the Family Home Protection Act, 1976.

The 1999 Mortgage, the three Facility Letters

and the terms and conditions applicable to the three loans

 

6.                  Possession is sought by Everyday as successor in title of the original mortgagee named in an Indenture of Mortgage made 20 September, 1999, between the defendant of the one part and National Irish Bank Limited of the other part ("the 1999 Mortgage"). This is an "all sums due" mortgage and clause 4 (1) contains a covenant on the part of Mr. Marsh to pay on demand any sums secured by the 1999 Mortgage (which include any monies due and owing on any joint account).

7.                  Clause 6 (1) of the Mortgage provides that the monies secured by the Mortgage shall be deemed to have become due, inter alia, immediately on demand for payment being made by the bank or its solicitor for the time being. Clause 6 (2) provides that the power of sale and the power to appoint a receiver which are conferred on mortgagees by the Conveyancing Act, 1881, shall apply to the Mortgage with the variation that the same shall be exercisable by the bank at any time after demand is made in compliance with the terms of the mortgage and notwithstanding that the notice required by s.20 of the 1881 Act has not been given.

8.                  There are three facility letters relevant to the proceedings. The First Facility Letter is dated 9 January, 2003, and was accepted by Mr. Marsh as the sole borrower on 13 January, 2003. By virtue of this agreement, he borrowed the sum of €63,500 over a term of seventeen years subject to variable interest. The Property is identified as security for the loan, which was, in effect, a further advance secured on the Property by virtue of the 1999 Mortgage. The terms of the letter relating to security specifically say that an existing first legal mortgage over the property will satisfy the bank's requirements as to the security to be provided but "you must pay the stamp duty on it (if any) required to cover the increased sum lent."

9.                  Clause (2) of the terms and conditions provides that drawdown will be permitted on the undertaking of Mr. Marsh's solicitor to, inter alia, furnish the mortgage "duly stamped". The undertaking is said to be one in standard form and there is no evidence that Mr. Marsh's solicitor ever gave that undertaking. The defendant now says that the 1999 Mortgage is not admissible in evidence because the 1999 Mortgage was not in fact stamped to cover the further advances made on foot of the First Facility Letter or indeed any of the subsequent advances for the recovery of which Everyday now seek possession of the Property.

10.              Clause (8) of the standard terms and conditions provides that "any legal or equitable Mortgage or Charge ... secures the balance from time to time outstanding by you under this Agreement together with:-

(i)                 Any other Housing Loans as defined in the Consumer Credit Act, 1995 (the 1995 Act) which we may make to you;

(ii)              Any of your present or future liabilities for which the Mortgage/Charge may be valid security."

This is material to whether the sums advanced on foot of the Third Facility Letter, discussed further below, are in fact secured on the Property.

11.              The Second Facility Letter is dated 22 March, 2005, and therefore post dates the defendant's marriage to the notice party. The sum of €64,000 was borrowed over a term of 25 years subject to variable interest rates. The security for the loan was said to be:-

"(a) A First Legal Mortgage/Charge over the Property already held by us (upstamped to cover the Loan)."

12.              The "Property" is defined as the Property the subject matter of this application and the phrase "upstamping" refers to the payment of additional stamp duties on a mortgage when additional advances come to be secured on lands on foot of a preexisting security such as the Mortgage executed in this case. As already stated, it seems that those additional stamp duties were never paid.

13.              One of the terms and conditions applied to this Second Facility Letter was, at clause (1):

 "Family Home Protection Act Declaration Consent:

Prior to drawdown of the Loan - you must furnish the statutory declaration re marital status and consent to the loan being secured by the existing mortgage/charge over the property. This statutory declaration and consent is required in order to comply with the requirements of the Family Home Protection Act, 1976. The required form of statutory declaration and consent is enclosed herewith and completed by you before a Commissioner for Oaths or a Peace Commissioner. You should obtain advice of your solicitor before completing this document." [Emphasis added.]

It is common case that this declaration was never furnished but the loan was nevertheless drawn down.

14.              Two issues therefore arise in relation to the Second Facility Letter. The first is that the 1999 Mortgage Deed was never "upstamped" to cover the additional advance of €64,000. Secondly, Mrs. Marsh did not provide a prior written consent within the meaning of s. 3 of the 1976 Act to these additional monies becoming secured on her family home.

15.              The Third Facility Letter is also dated 22 March, 2005, and was accepted by the defendant and notice party on 24 March, 2005. This agreement records the advance of €80,000 over a term of fifteen years from drawdown. Very importantly, the "Property Mortgaged" as defined in the Schedule to this facility letter is stated to be a property known as Fahymore, O'Briens Bridge, County Clare ("the O'Brien's Bridge property"). This is a separate property which was sold in 2013 by a receiver who had apparently been appointed by Everyday's predecessor in title in about 2009.

16.              The schedule to the Third Facility Letter provided that the security for this third loan was to be a first legal charge over the O'Brien's Bridge property. However, the following was also listed as a security:-

"Any other security now or in the future held by us for your liabilities in general will be security for any liabilities under this Agreement."

17.              Everyday relies on this provision for the proposition that, as the 1999 Mortgage was a "security for [Mr. Marsh's] liabilities in general", it also provided security for this third loan.

18.              I think this argument is misconceived as "you", while not specifically defined in the Third Facility Letter (unlike "we", which is said to refer to the bank), clearly refers to both Mr. and Mrs. Marsh. The 1999 Mortgage was not executed by Mrs. Marsh and relates to lands in which she holds no interest. It therefore seems that the 1999 Mortgage is not "security now .... held by us for your liabilities in general" as the 1999 Mortgage is not security for Mrs. Marsh's liabilities.

19.              It also seems that the 1999 Mortgage could not be security for the monies advanced on foot of this Third Facility Letter as Clause (8) of the First Facility Letter, referred to above, provided that the 1999 Mortgage would only be security for further advances insofar as either those later advances were a "housing loan" within the meaning of the Consumer Credit Act, 1995, or where the 1999 Mortgage was a valid security for those further advances. There is no evidence that the third loan was a "housing loan" within the meaning of the 1995 Act and indeed it seems that may not have been the case as the O'Brien's Bridge property seems to have been an investment property, though this is not entirely clear. The defendant also says that any attempt to secure the third loan on the Property is invalid by reason of the failure to obtain the prior written consent of Mrs. Marsh to the provision of her family home as security for this loan. I discuss that argument further below but, in essence, my conclusion is that the 1999 Mortgage is not valid security for the third loan.

20.              In any event, Clause (10) of the terms and conditions applicable to the third loan is headed "Prior consent of spouse" and provides:

"Where you include a husband and wife, by accepting the terms hereof you declare that you are the lawful spouses of each other and irrevocably consent for the purposes of the Family Home Protection Act, 1976 to the Undertaking to be given by your solicitor and to the Mortgage/Charge to be given by each of you over the Property."

This cannot be a consent to the provision of the family home as security as it relates only to the "Property" as defined in the Third Facility Letter and therefore to the O'Brien's Bridge property. Furthermore, Ms. Marsh was not giving any "Mortgage/Charge" over the Property the subject of this application as she did not hold any interest in it. This Clause therefore could only have applied to the security to be given over the O'Brien's Bridge property and not to the family home.

21.              An Order for possession was made by His Honour Judge Comerford on 11 October, 2024, but the learned Circuit judge limited his Order by saying that it operated only "in respect of any interest arising from the liabilities identified in the facility letter dated 9 January, 2003 (reference 0007605) and in the facility letter dated 12th March, 2003 (reference 00084955)". There was a stay on the execution of the Order for possession for a period of six months and in the event of an appeal. He also awarded a portion of the costs of the proceedings, up to but not including 11 October, 2024, to Everyday.

22.              I am not aware of any facility letter dated 12 March, 2003, but the reference quoted (00084955) is the reference on the Second Facility Letter. I will hear the parties on this when making the Orders that follow from this judgment.

23.              By Notice of Appeal dated 16 October, 2024, and filed on 24 October, 2024, the defendant appealed the whole of the Order of His Honour Judge Comerford to this Court.

24.              A variety of legal issues were raised in defence to the application for possession, which was heard over two days in May, 2025. At the conclusion of the second day, I indicated that I would not be disposed to grant an order for possession on a summary basis due to the failure of Everyday to supply the necessary proofs to show that it is the successor in title of the original mortgagee, an issue which affects all three loans.

25.              I indicated that I would give more detailed reasons for that decision and on the remaining issues in the case at a later time, and that I would also consider the submission of Everyday that, were I not to grant the application for summary possession of the Property, I should consider whether I should remit some or all of the issues in proceedings to plenary hearing pursuant to O. 5B, r. 8, of the Rules of the Circuit Court. The purpose of this written judgment is to give those more detailed reasons.

26.              Given the multiplicity of issues which were raised by the defendant and the notice party, I think it is convenient to begin with the issues which relate to all three facility letters, before moving to the issues which relate only to one or two of the facility letters.

 

Whether Everyday has shown title to the 1999 Mortgage

 

27.              This was the reason for which I already indicated in the ex tempore ruling at the conclusion of the hearing that I would not order possession of the Property on a summary basis insofar as any of the three facility letters were concerned. As already stated, the original mortgagee was National Irish Bank Limited. The grounding affidavit in support of the application for possession was sworn by Mr. Donal O'Sullivan, a director of Promontoria (Pluto) Ltd ("PPL"), the plaintiff originally named in these proceedings.

28.              At para. 19 of this affidavit, Mr. O'Sullivan refers to S.I. No. 29/2007. That is a reference to the Central Bank Act 1971 (Approval of Scheme of National Irish Bank and Danske Banke A/S) Order 2007, by virtue of which the Minister for Finance approved a scheme of transfer of the business of National Irish Bank to Danske Banke A/S. Mr. O'Sullivan says that he believes that the business which was transferred to Danske Bank A/S included the three loan facility letters and the 1999 Mortgage. No issue was taken on behalf of Mr. Marsh at the hearing of the appeal on whether the reference to the 2007 Order, was, in the absence of proof of any underlying Agreement or transfer of assets, sufficient proof of the transfer of the 1999 Mortgage.

29.              At para. 25 of his affidavit, Mr. O'Sullivan then refers to a deed of assignment from Danske Bank A/S and he refers to "a redacted copy of the said Deed of Assignment dated the 21st October, 2016". At para. 21 he says that the copy of the Deed of Assignment exhibited to his affidavit "is a true copy of the original Deed of Assignment but it has been redacted for reasons of commercial sensitivity as well as client confidentiality".

30.              There has been some judicial scrutiny in recent years of the redaction of deeds of this nature by the successor-in-titles to original mortgagees who sought to enforce security in the Circuit Court and the High Court. I believe that it is clear from the Court of Appeal decision in Farrell v. Everyday Finance DAC [2024] IECA 16 that redaction of deeds of this kind must be properly justified on affidavit. In that case, extensive redactions originally made to the copies furnished to the High Court were ultimately unredacted in accordance with the directions of this Court. On appeal, the Court of Appeal (per Whelan J.) stated (at para. 94):

"[T]he redacted operative parts of the Global Deeds were entirely relevant and highly material to a number of key matters in question in the litigation and as such prima facie met the Peruvian Guano test. The justifications advanced for the redactions as including commercial sensitivity/confidentiality/irrelevance would not withstand even the most cursory scrutiny and were potentially misleading. However, there is no cross-appeal on the issue."

In that case, it was found that much of the redacted portions should not have been redacted but were in fact highly relevant as (for example) including relevant definition sections necessary for the proper understanding of the unredacted portions of the Deed.

31.              Looking at the redacted Deed of Assignment from Danske Bank to PPL in this case, it should first be noticed that all of the recitals are redacted. Only the one line explanation already referred to above has been given and it is unclear why anything other than the schedules to the Deed, which list numerous loans and securities relating to other borrowers who are entirely unconnected with the proceedings, would attract any kind of confidentiality in the interests of third parties. Neither it is clear how the recitals to a deed affecting many loans and securities would constitute commercially sensitive information.

32.              Similarly, Clause 1.1, which relates to definitions, has been redacted and no justification whatsoever was given as to how these could be commercially sensitive. Clause 5, which is headed "Governing Law and Jurisdiction", is largely redacted, and only clause 5.1 has been left unredacted. There is then a blacked out portion of the remainder of the page and, perhaps more significantly, pages 3 and 4 of the deed have not been redacted but have simply been entirely omitted. This means that the deponent's description of the document he is exhibiting as a "redacted copy" is inaccurate as it is a redacted copy of only a portion of the Deed.

33.              The portion omitted includes Schedule 1 to the deed. It appears from Clause 1.2 and the definition of "Property Transfer Deeds" that Schedule 1 identifies the Property Transfer Deeds in question. As that Schedule has been entirely omitted, these Deeds have therefore not been identified.

34.              That in turn is material to the operative clause, Clause 2.1, which provides:

"The Seller unconditionally, irrevocably and absolutely grants, conveys, assigns, transfers and assures to the Purchaser, insofar as these are not otherwise granted, conveyed, assigned, transferred and assured pursuant to the Property Transfer Deeds, all such rights, title and interest as the Seller may, have in and to the Purchased Assets (including without limitation all the seller's rights under the agreements and other instruments listed in Schedule 2 (facility letters) and Schedule 3 (security documents) with effect from the Assignment date."

35.              While the Assignment Date is identified in Clause 1.2 as being the date of the deed itself, i.e., 21 October, 2016, clause 2.1 appears to assign the right to the loans granted in accordance with the facility letters and the securities comprised in the security documents, only insofar as they have not already been assigned by the Property Transfer Deeds.

36.              However, it is not possible to see what the Property Transfer Deeds are, because the Schedule identifying them has been omitted entirely from the purported "copy" of this Deed. It is therefore not possible to identify what has been excluded and whether the loans and security relevant to this case have been transferred by this deed or by the Property Transfer Deeds which have not been exhibited.

37.              As already stated, pp. 3 and 4 are entirely missing, so it is not possible to hazard a guess as to whether these might be relevant. However, the one line explanation in the affidavit for the redactions made could not meet the requirements of the Court of Appeal decision in Everyday v. Farrell for redaction of a deed of this kind. It therefore seems that the copy Deed furnished should not be accepted in evidence.

38.              Everyday were substituted as plaintiff in place of PPL, by order of His Honour Judge Comerford on 5 October, 2023. The defendant appealed that Order to this Court, and on 19 March, 2024, this Court (Cregan J.) dismissed that appeal, on the undertaking of Everyday to furnish a "less redacted version of the Global Deed of Transfer with clear headings". That undertaking was presumably required by the Court as it was not satisfied with the documents submitted on this issue. However, Everyday do not seem to have put that less redacted version of that Deed on affidavit for the purposes of the application for possession. Indeed, they did not put the Deeds showing the transfer of the loans and mortgage to them on affidavit in the application for possession but simply put the papers dealing with the substitution application in the booklet for the appeal. Insofar as that is not the correct approach, I think it is preferable to take a pragmatic approach to the matter and admit the papers for the substitution application as evidence in the appeal, as there is no unfairness to the defendant and notice party, who have been served with all of those papers in advance of the appeal.

39.              Looking at those additional papers, the copy of the Irish Law Deed of Conveyance & Assignment (Unregistered Property - Mortgages) made 2 December, 2022, between PPL of the first part, Promontoria (Oyster) Designated Activity Company of the second part, Promontoria (Field) Designated Activity Company of the third part and Everyday of the fourth part, which has been exhibited for the purpose of showing that the 1999 Mortgage has been conveyed and assigned to Everyday does not in fact appear to identify the 1999 Mortgage as one of the securities transferred. On a preliminary point, the relevant Schedule has been extensively redacted to exclude details of other mortgages, borrowers and properties, and this is appropriate in the interests of the confidentiality of third parties.

40.              However, in the copy made available to me, which is a redacted copy of what I presume is said to be the relevant extract from the Schedule, the headings of the various columns in the Schedule are entirely illegible. The address of the Property is given in the second column but the first column contains the date 15 April 2006 and a reference number, the significance of which is entirely unclear. Neither is there any explanation of the reference in the fourth column. There is no reference anywhere to the date or parties to the 1999 Deed. It is not entirely clear but it appears that this may be the Deed which the Order of 19 March, 2024, directed would be "less redacted".

41.              As Everyday has failed to prove the transfer to it of the 1999 Mortgage, that is sufficient, at least at this stage, to refuse to grant the application for possession on a summary basis pursuant to Order 5B.

42.              Before turning to the application of Everyday to remit some or all of the issues in the proceedings for further hearing, it is convenient now to deal with the other issues raised, as the nature of these issues are material to the exercise of any discretion to remit the matter to plenary hearing for trial, in lieu of dismissal of same, as sought by the defendant.

 

Whether Family Home Protection Act consent was required for

the second and third facility letters

 

43.              It was submitted at the hearing that Family Home Protection Act consent was not required for either of the further advances made pursuant to the second and third facility letters. First, it was said that the Mortgage had already been executed prior to marriage (which is true) and that, as all sums due by Mr. Marsh were already secured on the lands, no consent for the purposes of the 1976 Act was required. Secondly,  it was submitted that as Mrs. Marsh was party to the loan agreements evidenced by the second and third facility letters, her separate consent to the additional liability attaching to the family home was not required in accordance with Nestor v. Murphy [1976] IR 326.

44.              The first of these propositions is incorrect having regard to the Supreme Court decision in Bank of Ireland v. Purcell [1989] I.R. 327. This is clear authority for the proposition that additional advances secured on a mortgage previously executed are "conveyances" within the meaning of s. 3 of the 1976 Act and there must be a prior consent for each of those advances. As explained by Henchy J. in Nestor v Murphy, the advancement of additional sums affects the equity of redemption of a borrower and therefore his or her interest in the family home. As a result, such advancements constitute a "conveyance" within the meaning of the 1976 Act.

45.              The logic of that judgment is obvious: there might be a very limited loan outstanding on a mortgage executed prior to marriage. However, if the owning spouse then proceeded to take out significant additional loans without the consent of the non-owning spouse, the family home could be put at risk by reckless additional borrowings undertaken by the owning spouse without the consent of the non-owning spouse. Although not the situation which has occurred here, it is exactly the kind of situation which the 1976 Act was designed to prevent and informs the correct interpretation of the Act.

46.              It is therefore clear that the prior written consent to the furnishing of the family home as security for those additional advances was required in this case, in relation to both the second and the third loans. However, it is common case that such consent was not provided and therefore s. 3(1) provides that the Second or Third Facility Letters cannot be relied upon for the purpose of contending that the second and third loans are charged on the Property.

47.              Of course, in this case, there is a significant additional issue as Mrs. Marsh was in fact a co-borrower so far as the second and third loans are concerned, and presumably drew down the sums involved, along with her husband. As a result, Everyday submits that the situation is outside the purpose of the 1976 Act and, on the authority of Nestor v. Murphy, it was not necessary for Mrs. Marsh to have given her prior written consent for the purposes of the 1976 Act as she was a co-borrower with Mr. Marsh.

48.              I do not accept that argument. While it is clear that Mrs. Marsh was a co-borrower, the relevant question is whether she can be taken from that fact alone to have consented to the family home becoming security for the loans. There is a significant difference between a secured loan and an unsecured loan. A borrower might wish to borrow money but might not want to put their family home at risk. They might also choose to put forward a different security for the loan (as appears in fact to have occurred so far as the third loan is concerned). And, very significantly - and I am told by counsel for the defendant and notice party that they both rely on this point - the Statute of Limitations fixes a six year period for the recovery of sums advanced on foot of an unsecured loan, whereas there is a 12 year limitation period for the recovery of sums secured by the mortgage, as the first defendant has entered into a covenant to pay those sums.

49.              On the facts of this case, Mrs. Marsh never entered into a covenant to repay the loans, though, by accepting the loan offers on the terms of the second and third facility letters, she certainly agreed to repay them. Insofar as her liability is concerned, it seems that the six year limitation period applies to all payments.

50.              However, the question for determination in this application for possession is whether it can be said that the Property is security for Mr. Marsh's covenant to repay.

51.              The ratio of Nestor v Murphy was that both spouses were co-owners and both had entered into a contract to sell the lands. The Supreme Court (per Henchy J.) applied a purposive interpretation to s. 3 of the 1976 Act and found that, while the terms of the provision literally applied, the facts of that case were outside the purpose of the Act which was to protect a non-owning spouse. There was no non-owning spouse in that case and both spouses were fully protected from alienation of the family home by the other as they were joint tenants and no such alienation could take place unless they joined in the conveyance themselves.

52.              In this case, Mrs. Marsh holds no interest in the family home. The pre-existing mortgage was signed by Mr. Marsh some years before the couple married. She herself (unlike the spouse in Nestor v. Murphy) did not sign the 1999 Mortgage nor did she ever given any form of written consent to the provision of the family home as security for the loans in question. She accepted the terms of the Second Facility Letter but these included a term that she would expressly consent for the purposes of the 1976 Act and it is common case that she never did that.

53.              The acceptance of the terms of the Third Facility Letter is even further from compliance with the 1976 Act as it does not explicitly mention the family home at all. As set out above, the specific term dealing with the 1976 Act relates only to the O'Brien's Bridge property and not to this Property.

54.              Given the significant difference between drawing down an unsecured loan and offering the family home as security for the borrowings, I do not think it can be said that, by accepting the terms of the Second and Third Facility Letters, Mrs. Marsh implicitly consented in some way for the purposes of the Act or that a finding that those loans are not secured on the family home is to slavishly apply the literal terms of the 1976 Act in circumstances which were outside its intended purpose. This situation is distinguishable from that which arose in Nestor v. Murphy where both spouses, being joint owners of the family home in question, entered into a written contract for sale. It could not be said that either spouse in that case had not consented to the outright sale of the family home as they had both entered into a binding agreement to sell it in their capacity as co-owners.

55.              This is so a fortiori in the case of the third Facility Letter which offered the O'Brien's Bridge property as security and where the family home is not expressly identified anywhere as being additional security for the loan. The provisions relied upon by Everyday are very much buried in what would colloquially be referred to as "the small print", that is, less obvious terms drafted in highly technical or legal language. The whole purpose of s. 3 of the 1976 Act in requiring the prior written consent of the non-owning spouse is to ensure that that consent is express, not implied. The facts of Nestor v. Murphy are, in my view, distinguishable because in that case both spouses had signed a binding contract for the sale of the family home and, in doing so, were no doubt advised and well knew the precise effect of what they were doing. Even if an implied consent for the purposes of the Family Home Protection Act were acceptable as a matter of law - which it is not - it would be very difficult to imply such a consent from the terms of the Third Facility Letter.

56.              As a result, it seems to me that the loans the subject of the Second and Third Facility Letter are not secured on the Property and those facility letters cannot be relied upon in order to seek possession of the Property.

57.              It is therefore the case that, even if Everyday were able to prove that it was now entitled to recover the sums due under the loans and that it was the mortgagee for the time being within the meaning of the 1999 Mortgage, it could not seek possession of the Property for the purposes of recovering the sums due and owing under the Second and Third Facility Letters.

 

Whether the 1999 Mortgage Deed is admissible in evidence

 

58.              A second defence raised which affects all three loans is the question of whether the 1999 Deed should have been "upstamped" in order to cover the additional sums advanced on foot of the three loans and counsel for the defendant and notice party relied on s. 58 of the Stamp Duties Consolidation Act, 1999. In fact, that provision was commenced on 15 December, 1999, just after the execution of the 1999 Mortgage, which it seems was governed initially by s. 88 of the Stamp Act, 1891. Section 58 (2) in effect provided for "upstamping" by requiring that, where a mortgage was security for an unlimited amounts (as the 1999 Mortgage is), each additional advance is deemed to be a new and separate instrument.

59.              Counsel for the defendant and notice party relied on s. 127 of the Stamp Duties Consolidation Act, 1999, which provides that an instrument chargeable with stamp duty may only be received in evidence if it is sufficiently stamped.  

60.              While the 1999 Mortgage was stamped at the time of its execution, s. 58 of the 1999 Act which deemed each new advance on foot of an "all sums due" mortgage to be a new and separate instrument, and therefore additional stamp duty could fall due and owing as the amounts secured by the mortgage were increased by the making of further advances. That was not done when any of the three later loans were advance although, given my conclusions on the 1976 Act, only the first loan is now in issue.

61.              The purpose of s. 127 is to promote the enforcement of the law requiring stamp duty to be paid. As far as I am aware, the practice used to be that, if a Deed was proffered in evidence which had not been stamped, there would be an undertaking given by the party seeking to rely on the deed in question to pay the stamp duty and any penalty arising and the court would proceed on that basis.

62.              Before the matter goes any further, therefore, it seems that the 1999 Mortgage should be stamped to cover the additional advances. While it was said in submissions for Everyday that it was the borrower's obligation to stamp the Mortgage Deed, this was based on the reference to the terms and conditions applicable to the First Facility Letter on foot of which monies were advanced to the defendant in his sole name. Those made it the obligation of the defendant to pay the additional stamp duties.

63.              However, even if the terms and conditions made the mortgagor liable to reimburse the mortgagee for the stamp duty payable on foot of the further advance, that does not alter the identity of the "accountable person" as a matter of law. I received no submissions from either party as to who the accountable person is where a further advance attracts stamp duty, but Donegan, Friel and Comyn, Irish Stamp Duty Law, (Tottel Publishing, 2009) 5th ed., state at para. 9.32, that it is the mortgagee (National Irish Bank Limited) or the transferee (which Everyday claims to be) who is the accountable person. If the 1999 Mortgage has been inadequately stamped, therefore, it seems that it is Everyday, as the person claiming to be entitled to the mortgagee's interest, who is liable for the stamp duty.

64.              That begs the question as to whether there is any stamp duty payable. The authors of Irish Stamp Duty Law confirm that stamp duty was payable on further advances, albeit subject to certain ceilings which do not appear to have been reached here as the 1999 Mortgage is stamped in the sum of IR£35.00.

65.              It would therefore appear that the further advance made on foot of the First Facility Letter was stampable by virtue of s. 58 of the Stamp Duties Consolidation Act, 1999, and this is now the only material facility letter given that the sums advanced by the later facility letters were never secured on the Property due to non-compliance with the 1976 Act. However, from the copy of the 1999 Mortgage which is in evidence, it appears that this stamp duty was never paid and s. 127 requires that it would be paid prior to any final Order being made.

66.              It therefore seems that Everyday should now stamp the 1999 Deed to cover the additional advances. It seems likely that any sums paid by them would appear to be recoverable as part of the first loan, but that is a matter between the parties.

 

Whether the plaintiff is required to give full details of the monies said to be due and owing

 

67.              Mr. and Mrs. Marsh also argued that the requirements for particulars of the loan were inadequate having regard to the Supreme Court judgment in Bank of Ireland v. O'Malley [2019] IESC 84, [2022] 2 I.R. 487. Given my conclusions in relation to the second and third loans, this issue now requires to be examined only in relation to the first loan. The particulars given commence with a statement of an opening balance as of 22 October, 2016, and are fully particularised thereafter. It seems that Everyday do not have any information as to how the opening balance was originally calculated and, certainly insofar as the sum said to have accrued by 2016 is concerned, the particulars required by Bank of Ireland v. O'Malley have not been given.

68.              It is clear from the details which have been given that no payments have been made from 2016. However, there is no evidence from either side as to what payments were made before that time and, in particular, when they ceased. Clause 4 (h) of the terms and conditions attached to the First Facility Letter provides that the entire loan may become immediately due and payable on demand on the occurrence of any of the events of default set out in the Appendix to the terms and conditions. The first event of default as defined in the Appendix is where the borrower is in default for two months in making any payment.

69.              It is clear that such an event of default has occurred, but it is not clear when it occurred. It seems that Everyday is not in a position to identify when such a default occurred as it does not have any details of payments prior to 2016.

70.              The defendant wishes to rely on the Statute of Limitations as a defence but it is not apparent that the application to recover possession is statute-barred as the Statute prescribes a limitation period of 12 years and these proceedings were instituted in 2019. (I assume the delay in prosecuting them was caused by the apparent sale of the loan book by the original plaintiff.) In order to rely on this defence, the defendant would have to show that the cause of action accrued in 2007. However, in the absence of further evidence, it is not possible to say when the cause of action accrued. A defence pursuant to the Statute is generally a matter for a defendant to raise. However, the Supreme Court in O'Malley made it clear that the onus to supply the necessary details was a matter for a plaintiff.

71.              Everyday relies on Flynn v. National Asset Loan Management Limited [2014] IEHC and Start Mortgages DAC v. Clarke [2024] IEHC 310 for the proposition that the decision in O'Malley does not apply to an application for possession. This also seems to have been the view of the Court of Appeal in Start Mortgages DAC v. Gawley [2020] IECA 335, per Donnelly J. at para. 38, albeit that that seems to have been obiter as an Order for possession had in fact been made in that case and the application was one for leave to issue execution.

72.              Flynn not only pre-dated the Supreme Court authority of O'Malley by several years but it is concerned with the question of whether a letter of demand is invalid for failure to specify the correct amount in circumstances where there is no real doubt that there has been default in payment in accordance with the terms of the loan. That is separate and distinct from the issue in O'Malley, which was concerned with identifying the proofs required to enter summary judgment for a liquidated amount.

73.              Various letters of demand commencing with one sent by PPL on 4 January, 2019, are in evidence in this case and their validity is not in issue. Nor it is disputed, as I understand it, that monies are due and owing under the loans or indeed that an event of default has occurred. Flynn, therefore, does not seem to be on point.

74.              What is being put in issue by the defendant is whether the right to possession of the plaintiff under the 1999 Mortgage has become statute-barred. The right to possession of a mortgagee of unregistered land  enjoyed by reason of the mortgagee's estate in the lands and, in this case, the mortgagee enjoys a leasehold estate as the 1999 Mortgage takes the form of a mortgage by demise insofar as freehold unregistered lands are concerned. But the right to possession as holder of that leasehold estate is not entirely unregulated or unconstrained. As stated by the Supreme Court (per Baker J.) in Bank of Ireland v. Cody [2021] 2 I.R. 381 (at para. 40):-

"...[A] mortgagee of unregistered land takes an assurance of the legal title (whether by the conveyance of the fee simple or by creation of an interest by sub demise), and the legal estate carries with it the right to possession, albeit constrained by the terms of the security, including an agreement either express or implied that possession will not be taken if the terms of the security are met." [Emphasis added.]

75.              In other words, the leasehold estate was granted as security for the loan, and the right to possession is exercisable only where the monies have become due, so as to permit the mortgagee to realise its security. The right to possession would therefore seem only to arise on the happening of an event of default and is subject to a 12 year limitation period: see s. 13 (2) (a) of the Statute. The defendant in this case says that the case is statute barred, though he has not tendered any evidence to support that proposition.

76.              The net legal issue which arises, then, is whether the plaintiff bears the burden, on an application for possession pursuant to Order 5B of the Rules of the Circuit Court, of demonstrating when the right to possession accrued or whether that is a matter for the defendant as a defence under the Statute. In considering this issue, it must be borne in mind that the plaintiff has shown that the right to possession has accrued because there is proof of demand from at least January, 2019, and that is sufficient to demonstrate that the right of the mortgage to possession accrued prior to issue of the proceedings on 17 June, 2019. Indeed, as I understand it, it is not denied that the right to possession arose, but it is said that it is statute-barred.

77.              In those circumstances, it is the defendant who bears the onus of demonstrating that the right to possession has become statute-barred. Mr. Marsh has no doubt been given statements from the original lender and any of its successors-in-title throughout the lifetime of the 2003 loan. If it is not possible for him now to identify the sum borrowed and the applicable interest rates and amounts throughout the relevant period, so as to contest the amount claimed, this will be due to his own failure to keep records.

78.              For the purposes of the application for possession, therefore, it seems that the burden falls on Mr. Marsh to demonstrate that Everyday are precluded by the Statute from obtaining possession.

79.              Having said that, there does seem to be a very real issue as to whether the sums claimed are lawfully due and owing as the Statute of Limitations provides the limitation period for recovery of any principal sum secured on lands is 12 years (section 36 (1) (a) of the Statute), while the limitation period applicable to any claim for interest is only six years: see section 37 (1).

80.              One of the issues which I think is thrown into relief by this application is that there is in fact no action to recover the sums due and owing and, indeed, Everyday relies on this for the proposition that it does not have to give a breakdown of the sum said to be owing so as to identify the principal, interest and penalties as required by O'Malley.

81.              However, Everyday seeks possession presumably for the purpose of selling the Property in order to recover the sum said to be due and owing. It is surely not contended that Everyday could simply sell the Property and retain the proceeds over and above what is charged on the Property. Given the findings I have made in relation to the second and third loans, this is now a very live issue as it seems likely that the value of the Property may well exceed the sums due and owing on foot of the First Facility Letter. Of course, in any sale by the mortgagee, there will also be costs incurred. Even taking those into account, there is every likelihood that there will be a surplus as the sum claimed on foot of the first loan as of 4 November, 2022, was €79,239,75.  It is entirely possible that the Property is worth in excess of that figure. It was suggested at the hearing that it would be for the defendant to litigate the application of the proceeds if he was dissatisfied with it. However, it is by no means clear how that can be done if he does not have sufficient information to query the sums said to be due and owing in the first place. Furthermore, the tenor of Everyday's argument is that they simply do not have that information.

82.              The rationale of O'Malley, as stated by Clarke C.J. at para. 23 of that judgment "goes back at least 140 years, to the passage from the judgment of Cockburn C.J. in Walker v. Hicks (1877) 3 Q.B.D. 8. 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'."

83.              I find it difficult to see how a defendant to an application for possession is not entitled to be given details sufficient to allow him or her to pay the sums claimed, so as to protect what is in this instance a family home, or to resist the application for possession on the basis either of miscalculation of the amounts or the possible extinguishment of some or all of the debt by operation of the Statute. However, it seems on the authority of Clarke, that this is a matter to be determined on other proceedings and not on this application. No submission was made to me on the basis of the well-known Worldport criteria as to why I should not follow Clarke and therefore it is for the defendant to seek an account from Everyday of any proceeds of sale, and if necessary to litigate that issue in the context of Everyday's duty to account for the proceeds.

 

Whether the proceedings or any particular issues should be remitted to plenary hearing

 

84.              The parties' submissions on this point were made at a high level only, with counsel for the defendant and notice party submitting that I should dismiss the proceedings in their entirety and counsel for Everyday submitting that I should remit for plenary hearing.

85.              The leading authority on this issue is Bank of Ireland v. Cody [2021] 2 IR 381. The essence of the Supreme Court's decision in that case was that this Court had a discretion to adjourn some or all of the issues in a case to plenary hearing but that there was no obligation on this Court to do so where either Everyday had failed to establish its proofs or the defendant had positively established a defence.

86.              In my view, the defendant has established a defence to any application to recover possession so as to recover the sums due on foot of the Second and Third Facility Letters, as it is common case that Mrs. Marsh did not give her prior written consent to the creation of a security over the Family Home. I am in a position to make a final determination on that issue, and I will therefore refuse to adjourn the application for possession to plenary hearing insofar as it relates to those two Facility Letters.

87.              Insofar as the first Facility Letter is concerned, it seems to me that Everyday has not put forward the necessary proofs, in particular its chain of title to the 1999 Mortgage or indeed the underlying loan. Bank of Ireland v. Cody is authority for the proposition that the application can therefore be dismissed at this point, albeit that the matter is within my discretion.

88.              In exercise of that discretion, and given that it is clear that the monies which were the subject of the first loan were lawfully secured on the Property (subject of course to Everyday being in a position to procure the stamping of the 1999 Mortgage to cover that advance), in my view the justice of the case and Everyday's rights in particular are best vindicated by directing that the application for possession insofar as it relates to the liabilities in the First Facility Letter should be determined by way of a further hearing.

89.              However, in exercising my discretion in favour of Everyday in this fashion, it is only fair that an equal measure of latitude would be afforded to the defendant and the notice party. Their counsel sought at the hearing of the appeal to argue that the loan advanced on foot of the First Facility Letter was now statute barred. The fact that a receiver was appointed in 2009 over the O'Brien's Bridge property was mentioned in submissions and it was submitted that the appointment of a receiver indicated that demand for payment of the third loan had previously been made. I was asked to take judicial notice of the fact that banks generally demand all sums due and owing in or about the same time. In my view, these matters are not ones of which I can take judicial notice and they require proof in the normal way, which means that they should be have been put on affidavit. In any event, given that these proceedings were instituted in 2019, it is not at all obvious to me that the application for possession is statute-barred, even if it was the case that default occurred some time prior to the appointment of the receiver in 2009.

90.              However, as Everyday is being afforded an opportunity to mend its hand, then in my view the defendant should also have been afforded an opportunity to put on affidavits those facts which would permit him to argue that the first loan was now statute barred. This presumably will include the establishment in evidence of the date upon which demand was first made in respect of the monies the subject of the First Facility Letter by Everyday's predecessor-in-title.

91.              While it is in everyone's interest that a prompt decision would be made on an application for summary judgment, given the findings I have made to the effect that two of the three loans underlying the security are not in fact charged on the Property, and given that I am not in any event satisfied as to the proofs tendered by Everyday in support of its application, in particular as to its entitlement to the mortgagee's interest under the 1999 Mortgage, it is my view that the defendant should be afforded an opportunity to tender further evidence on the question of whether this application is statute-barred. Any further argument as to the precise amounts claimed can be dealt with at the further hearing that will now, unfortunately, become necessary.

92.              In the circumstances, it is not necessary to deal with the arguments of the defendant and notice party to the effect that the terms and conditions of the second and third loan were void having regard to the Unfair Terms in Consumer Contracts Regulations, 1995, which, it has to be said, were not very fully developed. The essential point as I understood it, however, was that any provision of the terms and conditions of the second and third loans which could be relied upon to avoid the application of the 1976 Act was void and unenforceable. Beyond that, no specific argument was made which would justify further hearing of this matter.

93.              Finally, a very general objection was made to the Everyday's proofs on the basis that they were hearsay. However, there was no reference to s. 14 of the Civil Law (Miscellaneous Provisions) Act, 2020, or any suggestion that those proofs fell outside those deemed admissible by that provision. Insofar as the existing exhibits are concerned, therefore, the defendant has not raised any defence on this point. The defendant is at liberty, if appropriate to make arguments on this basis at any future hearing in relation to any further evidence that might be tendered by Everyday.

94.              As regards the other matters, it seems to me that I have a very wide discretion under Order 5B. The justice of the case would be best met by listing the matter in early course for the purpose of making directions:

i.                    To give Everyday an opportunity to exhibit documents to prove its ownership of the loan advanced on foot of the First Facility Letter and of the mortgagee's interest pursuant to the 1999 Mortgage;

ii.                  To permit the defendant to put on affidavit such evidence as he may wish to rely on for the purposes of any defence pursuant to the Statute of Limitations, 1957, insofar as the first loan is concerned,

iii.                To make arrangements for the payment of that stamp duty.

iv.                To permit the defendant to put on affidavit any evidence he has as to the accrual of the cause of action for possession and for the recovery of principal and interest on the first loan. This is without prejudice to Everyday's entitlement to argue that the issues relating to the sums due do not in fact fall for determination in these proceedings.

95.              In exercise of my discretion under Order 5B, I find that these issues can continue to be dealt with on affidavit and it is not necessary to remit the matter to plenary hearing for determination of those issues. The relevant additional evidence will all be documentary in nature and submissions can thereafter be made on the conclusions to be drawn from that evidence.

96.              However, I am in a position to determine now that the second and third loans have not been secured on the Property and in the event that Everyday ultimately succeeds in obtaining possession and in selling the Property, the proceeds cannot be used to discharge any sums due other than those due on foot of the First Facility Letter. I am making no finding that Everyday is not entitled to recover any sums that may be said to be due and owing on those loans and the liability of Mr. and Mrs. Marsh (if any) for the payment of those sums should be determined in proceedings to recover the said sums as unsecured loans.

 

 

 

 

Appearances

For the plaintiff: John Monahan BL, instructed by Ivor Fitzpatrick & Co.

For the defendant and notice party: Gearóid Costelloe BL, instructed by Messrs. James N. Nash & Co.

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