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Cite as: [2012] IESC 30
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Judgment Title: Danske Bank A/S v Hegarty Neutral Citation: [2012] IESC 30 Supreme Court Record Number: 327/09 High Court Record Number: 2007 917 SP Date of Delivery: 15/05/2012 Court: Supreme Court Composition of Court: Denham C.J. Clarke J. MacMenamin J. Judgment by: Clarke J. Status of Judgment: Approved
Outcome: Dismiss | |||||||||
THE SUPREME COURT [Appeal No: 327/2009]
Denham C.J.
Between/
Danske Bank A/S Plaintiff/Respondent and Patrick (otherwise Paddy) Hegarty Defendant/Appellant
Judgment of Mr. Justice Clarke delivered the 15th of May, 2012. 1. Introduction 1.1 This case arises out a banking relationship between the parties. As far back as 2002 the plaintiff/respondent ("Danske") brought summary summons proceedings against the defendant/appellant ("Mr. Hegarty") claiming sums due arising out of that banking relationship. Those proceedings bore record number 2002 no. 222S. After the proceedings were issued a motion for judgment was served which motion remained in the Master's Court for a period of approximately three years between December 2002 and December 2005. At that time Mr. Hegarty was represented by a firm of solicitors but also, it would appear, on some occasions appeared in person. 1.2 In any event the matter was sent forward to the Judges' List in December 2005. The case was ultimately dealt with by McKechnie J. on the 6th March, 2006. The order of McKechnie J., made on that day, notes that the case came on for hearing in the presence of counsel for both parties. The order also notes that counsel intimated that the case had been settled on the terms of a consent "reduced to writing" and "executed by the parties (and their counsel)". The operative part of the order directed that the written consent be (“the settlement”) annexed as a schedule to the order, received and made a rule of court and that all further proceedings save as might be necessary for the purposes of enforcing the agreement be struck out on the terms of that settlement. 1.3 It will, in due course, be necessary to return to the terms of that settlement. However, what ultimately happened was that Danske filed a judgment mortgage affidavit (“the judgment mortgage”) in the Land Registry on the 30th August, 2007 in respect of lands comprised in Folio 103404F Co. Cork and Folio 25425F Co. Cork (“the lands”). Subsequently these proceedings were issued by special summons in which Danske seeks the usual form of well charging order and various ancillary reliefs arising out of the judgment mortgage. 1.4 In circumstances to which it will be necessary to turn, Mr. Hegarty contends that the settlement did not permit Danske to register the judgment mortgage. On that basis Mr. Hegarty opposed Danske's claim in these proceedings. The matter came on for hearing before Dunne J. in the High Court who ruled against Mr. Hegarty on the 13th July, 2009 and made a well charging order together with orders which provided for the possibility of Mr. Hegarty disputing the amounts said to be due and for the usual accounts and inquiries that are directed when a well charging order is made. Mr. Hegarty maintains that Danske was not entitled to register the judgment mortgage which forms the basis of Danske's well charging order and that Dunne J. was wrong, therefore, in allowing Danske's claim in these proceedings. Mr. Hegarty appeals to this Court against the order of the trial judge. Against that background it is necessary to say a little more about the terms of the settlement.
2. The Settlement 2.1 The settlement is handwritten and is headed with the title of the summary summons proceedings which was the subject of compromise. The settlement is signed by Mr. Hegarty and provides that there is to be no order as to costs and liberty to apply. However, the operative part of the settlement is to be found in para. 1 which, in full, reads as follows:- "Judgment shall be entered in the sum of €60,000.00 with a stay of execution for 12 months from the date hereof, provided however, that the plaintiff shall be at liberty to register a judgment mortgage forthwith against the defendant's property being all that & those the lands at 45 Belmount Park, Ballinlough in the County of Cork, but to take no steps whatever in the enforcement or execution thereof for a period of 12 months from the date hereof."
2.2 There is very little more to be said about the settlement. It was entered into in those terms. Both sides were represented and advised by counsel and the settlement was, with the agreement of the parties, made a rule of court. No application has ever been brought to seek to set the settlement aside. Indeed it is fair to say that no factual basis was put before either Dunne J. in the High Court or before this Court which could conceivably provide a basis for seeking to set the settlement aside. Against that background it is next necessary to turn to the case made by Mr. Hegarty both before the High Court and this Court. 3. Mr. Hegarty's Case 3.1 To ground its application before the High Court, Danske filed an affidavit sworn by a Brian McGuinness, one of its managers. Mr. McGuinness dealt with certain formal matters and exhibited the consent order to which reference has been made including the annexed written terms of settlement which I have already cited. Mr. McGuinness then went on to refer to the registration of the judgment mortgage over Mr. Hegarty's lands and produced evidence to verify the formalities of that registration. Mr. McGuinness then went on to indicate that the sum of €60,000.00 as per the judgment on the 6th March, 2006 had, by virtue of the application of Courts Act interest at 8%, grown to €67,666.85 by the 10th October, 2007. Mr. McGuinness also made reference to a demand for payment coupled with an averment that no payment of any sort had been made. 3.2 In a replying affidavit Mr. Hegarty suggested that the settlement was executed by him in circumstances where he was under severe financial pressure at the time but, perhaps more importantly, also stated that the settlement was signed by him "on the absolute understanding that it constituted comprehensive, indivisible agreement." He went on to say that the consent was executed by him only on the basis that a judgment mortgage could be registered against the property at 45 Belmount Park and against that property only. On that basis he complained that Danske were not entitled to register a judgment mortgage on any other properties generally and, thus, specifically not on the lands over which the judgment mortgage was actually registered. Mr. Hegarty went on to contend that he had a good defence to the summary summons proceedings based, in particular, on an allegation of overcharging. Mr. Hegarty also complained that the actions of Danske Bank deprived him "via the Statute of Limitations" of any right of action "that he might have been advised of in relation to overcharging and fraud". 3.3 In reply an affidavit from a Colman Curran, solicitor, was filed on behalf of Danske which set out the history of the summary summons proceedings before the court. Mr. Curran also deposed to the fact that he had searches carried out in respect of 45 Belmount Park but that he could not establish that Mr. Hegarty had any interest in that property. Mr. Curran took issue with Mr. Hegarty's interpretation of the settlement. As that is the issue which is at the heart of these proceedings it is one to which I will return in due course. Mr. Curran noted that the allegation of overcharging had been raised as a defence in the summary summons proceedings and that that allegation must, therefore, be taken as having been settled when the proceedings as a whole were settled. 3.4 Mr. Hegarty filed a further affidavit which principally took issue with the proper interpretation of the settlement. So far as the question of overcharging was concerned he linked that issue to the settlement by suggesting that the reason why he could not now raise the defence of overcharging was because, in his words, he gave it away in the settlement, which, in his view, was to the effect that the judgment could be enforced against "45 Belmount and 45 Belmount only". Mr. Hegarty also accepted that he was legally advised on the settlement but nonetheless said that he was not happy with it. 3.5 It is clear, therefore, that the issue between the parties in these proceedings before the High Court was one as to the proper interpretation of the settlement. Did it, as Danske alleged, entitle the bank to register a judgment mortgage over the lands (after twelve months had elapsed from the time when the settlement had been made a rule of court) or did it, as Mr. Hegarty alleged, prevent Danske from registering a judgment mortgage over any property other than 45 Belmount Park. Against that background it is next necessary to turn to the ruling of the trial judge. 4. The Trial Judge's view 4.1 The Court has received counsel's note of the ex tempore judgment of Dunne J. delivered on the 13th July, 2009 which was approved by her. In a key passage from that note Dunne J. is recorded as saying the following:- "What that Settlement gave was the right to register a Judgment Mortgage over a specific property, 45 Belmount Park, Ballinlough, an agreement that no other enforcement would be pursued for a period of 12 months. The purpose of this is to allow someone, in this instance the Bank, to secure priority by registering a Judgment Mortgage. Once the Stay elapsed the Plaintiff was entitled to register against any property and there is nothing in the Order precluding this." 4.2 Dunne J. clearly, therefore, agreed with the interpretation of Danske and ruled that the settlement terms did not preclude the bank, provided that twelve months had elapsed from the date of the settlement, from pursuing any form of execution including the registration of a judgment mortgage over any property. 5. The Appeal 5.1 As indicated it is against that judgment and order of the High Court that Mr. Hegarty appeals to this Court. In his notice of appeal Mr. Hegarty seeks an order that the judgment mortgage should not have been registered against the relevant Folios "as the agreement between the parties was that the said bank could only register a mortgage in respect of said judgment against the defendant/respondent's interest in 45, Belmount Park, Ballinlough, Cork in the County of Cork". 5.2 In his grounds of appeal Mr. Hegarty refers to the order of McKechnie J. of the 6th March, 2006 and quotes the text of the settlement. He asserts that the registration of the judgment mortgage was in breach of the settlement and, therefore, it is said, the order of McKechnie J. In addition Mr. Hegarty suggests that the trial judge was not correct in law in "not placing full reliance on the contents of the affidavits" which he swore. Against the background of that notice of appeal it is next necessary to turn to the argument on the appeal. 6. The Argument on the Appeal 6.1 Mr. Hegarty appeared in person. In those circumstances he was not obliged to file written submissions. However, in oral submissions at the hearing Mr. Hegarty made a number of points which, it has to be recorded, were presented in a courteous and rational way. First Mr. Hegarty returned to the question of overcharging to which reference has already been made. It was accepted by counsel on behalf of Danske that there had been overcharging. It would appear that the overcharging in question arose out of the somewhat notorious circumstances in which National Irish Bank (the predecessor in title to Danske) was the subject of significant investigation and publicity. It also appears from the affidavit sworn by Mr. Hegarty in the summary summons proceedings that he was paid a sum of IR£15,000 by Danske, or its predecessors in title, in respect of that overcharging. It does also need to be noted that, as counsel for Danske argued, the question of overcharging and its consequences for Mr. Hegarty were raised by him in his replying affidavit in the summary summons proceedings. On that basis Danske argues that Mr. Hegarty is no longer in a position to raise questions arising out of the undoubted overcharging which occurred on the basis of, it is said, the acceptance by Mr. Hegarty of IR£15,000 in full and final settlement of any claim which he might have and the additional fact that the summary summons proceedings were compromised when the question of the consequences of overcharging had been brought into the case by Mr. Hegarty. 6.2 There can be little doubt but that Mr. Hegarty has an understandable grievance against Danske arising out of that overcharging. The question of whether that grievance has any relevance to these proceedings is one to which I will return. 6.3 Second, Mr. Hegarty complained about the failure of Danske to register a judgment mortgage against 45 Belmount Park and questioned the explanation given in affidavit evidence before the High Court on behalf of Danske as to why that registration did not take place. It was said on behalf of Danske that a search carried out on behalf of the bank did not establish that Mr. Hegarty owned the property in question. The explanation given was that the relevant lands are unregistered lands so that the only form of registration applicable is that all deeds executed in respect of the lands are required to be registered in the Registry of Deeds. It would appear that Mr. Hegarty purchased the property some considerable period of time ago and has never, in fact, himself executed any deed in respect of same, so that, it is said, there are no acts by Mr. Hegarty registered in the Registry of Deeds which would show up on a search against his name. Mr. Hegarty, in reply, indicated that he had been advised by his solicitors that it had not proved impossible for law searchers whom they had instructed to find evidence of the registration in question. 6.4 Third, Mr. Hegarty made a suggestion that, as a result of the problems which he had with Danske, he was forced to sell property at an undervalue. Counsel on behalf of Dankse noted that no issue of that type had been raised before the High Court by Mr. Hegarty and further submitted that, in any event, any issues under that heading could have no relevance to the question of the validity or otherwise of the judgment mortgage registered in this case. 6.5 Fourth, and finally, Mr. Hegarty suggested that the registration of the judgment mortgage occurred some two months after any claim which he might have in respect of both the undoubted overcharging by Danske and any consequences which flowed from same, was statute barred. Counsel for Danske argued that the bank's entitlement to register a judgment mortgage arose out of the judgment entered into by consent in the summary summons proceedings to which reference has already been made and was not precluded by the terms of the settlement of those proceedings. On that basis it was argued on behalf of Danske that the question of whether any claim which Mr. Hegarty might have had (and for the reasons already addressed Danske suggests that any such claim could no longer be pursued) was statute barred was irrelevant to these proceedings. 6.6. It should again be recorded that Mr. Hegarty is to be commended for the succinct and logical way in which he presented his arguments to the court. I now turn to a discussion of the issues which arise on this appeal. 7. Discussion 7.1 It is important at the outset to record with some precision what this appeal is about. I fully understand the grievance which Mr. Hegarty holds towards Danske arising out of the undoubted and serious overcharging to which he was subjected. However, it seems to me that this case is not about that overcharging. Whether, as Danske argues, Mr. Hegarty is now prevented from bringing any claim in respect of overcharging by reason of his acceptance of IR£15,000 in what is said to be full and final settlement and his compromise of the summary summons proceedings, is not a matter which arises in these proceedings and is not, therefore, a matter for this Court. The fact remains that there is a judgment of the High Court in being for a sum of €60,000 together with accrued interest which has not been discharged. Whether or not Mr. Hegarty might be able to maintain a claim in respect of overcharging and whether or not any such claim might, in the light of the IR£15,000 already paid, be capable of success, even if permitted to be brought does not affect the existence of a current valid judgment against Mr. Hegarty. 7.2 Likewise it does not seem to me that the issues concerning the registration (or more accurately the lack of registration) of a judgment mortgage against 45 Belmount Park are of any relevance to this case. On the basis of Mr. Hegarty's argument, Danske was only entitled to register a judgment mortgage on 45 Belmount Park and against no other property. If Mr. Hegarty is correct in that argument then it really does not matter why Danske did not register a judgment mortgage over 45 Belmount Park for Danske would have been, in any event, precluded from registering a judgment mortgage over any other property. Likewise, Danske argues that, on a proper interpretation of the settlement, there was no barrier to any form of execution in order to recover the agreed amount of the judgment provided that twelve months elapsed. On that basis, if Danske be right, there was no barrier to the registration of a judgment mortgage on any property owned by Mr. Hegarty after a twelve month period irrespective of whether Danske had or had not managed to, in the intervening period, register a judgment mortgage against 45 Belmount Park. Danske did not argue that its entitlement to register against other properties was because it had failed to register against 45 Belmount Park. Rather Danske argued that it had, at all times on the basis of the settlement, an entitlement, once twelve months had elapsed, to register a judgment mortgage against any property owned by Mr. Hegarty. 7.3 It follows that the question of why Danske did not feel able to register a judgment mortgage against 45 Belmount Park is not an issue in these proceedings. It is not relevant irrespective of whether the settlement is interpreted as Mr. Hegarty argues or whether it is in interpreted as Danske suggests. In either eventuality the entitlement of Danske to register a judgment mortgage over the lands is dependant on the proper interpretation of the settlement and not on whether Danske had or had not a good reason for not registering a judgment mortgage as against 45 Belmount Park. That being said, on the evidence which was before the trial judge, it is difficult to disagree with Danske's decision not to register against 45 Belmount Park. 7.4 However, in any event, for the reasons already analysed, it seems to me that this case turns, as it did before the trial judge, on the proper interpretation of the settlement. Before turning to that question I should note that, as Mr. Hegarty was a litigant in person, the Court did afford him some licence in raising arguments which were not fully (or in some cases at all) raised before the High Court or were based on evidence which was not put before the High Court. It does not need to be emphasised that this Court, in exercising its appellate role from the High Court, is confined to considering whether the High Court judgment was correct, based on the case made before the High Court, the evidence presented to that Court and the decision of the trial judge. There would, therefore, have been significant difficulty with this Court entertaining some of the points made by Mr. Hegarty, even if they were considered relevant, precisely because those points had not been made before the High Court and all evidence relevant to the points in question placed before that Court. However, in any event, I have concluded that the only real issue in this case is the question of construction of the settlement to which I now turn. 7.5 As pointed out by the authors of Delaney and McGrath Civil Procedure in the Superior Courts at para. 17-10 "A settlement agreement is a contract and, as such, it is interpreted in accordance with the general rules governing the interpretation of contracts". 7.6 It follows that a settlement of court proceedings, like any other legally binding agreement between parties, is to be objectively construed in accordance with the wording chosen by the parties seen in the general context of the circumstances in which the agreement was entered into. The general context in this case is that there were proceedings in being which, in the absence of settlement, would have come on for hearing. Both parties were legally advised. There is nothing in the evidence to suggest that Danske did anything inappropriate in relation to procuring the settlement. No attempt has been made to have the settlement set aside on any grounds and it would, almost certainly, be now far too late to bring any such application. It follows that the settlement stands. The parties agreed that whatever position they might have had prior to that settlement, thereafter, and in particular on the settlement being made, by agreement, a rule of court, their rights and obligations were as per the settlement. It follows that the rights and wrongs of this case can be determined solely by answering the question as to which side is correct in its interpretation of the settlement. Is it, as Mr. Hegarty asserts, that the settlement, in its ordinary meaning prevents Danske from registering a judgment mortgage on any property other than 45 Belmount Park. 7.7 It is well established in law that the subjective views of the parties to a written agreement are not properly taken into account in its interpretation. This principle applies equally to settlements. See Dattani v. Trio Supermarkets Ltd. [1998] IRLR 23 and Rees v. West Glamorgan County Council [1994] PIQR 37. When parties choose to reduce their settlement agreement to a written form then both sides are kept to that written form. It follows that Mr. Hegarty's view as to what the settlement means is no more relevant than the view of Danske. It is for the court to interpret the settlement objectively in accordance with its terms but in context. 7.8 Any careful reading of the wording of the settlement seems to me to make absolutely clear that Mr. Hegarty is not correct in his interpretation. The settlement does not say that Danske is precluded from registering a judgment mortgage over any particular property. Rather what the settlement says is that Danske was precluded from taking any step whatsoever in the enforcement or execution of the judgment for a period of twelve months except that Danske was entitled, "forthwith", to register a judgment mortgage against 45 Belmount Park. 7.9 The agreement does not say that Danske is to "take no steps whatever" as such but rather Danske is to take no steps whatever for a period of twelve months. That is the only prohibition which the settlement provides for in respect of Danske's entitlement to enforce or execute. 7.10 Nothing could, in my view, be clearer. There is no ambiguity. Once the twelve month period had elapsed Danske was entitled to take any steps open to them in law to enforce the judgment. That included registering a judgment mortgage over any property which they might be able to discover which was owned by Mr. Hegarty or, indeed, taking any other steps legitimately open to a judgment creditor. The provision of the settlement agreement in respect of 45 Belmount Park simply enables Danske to register a judgment mortgage "forthwith" after the settlement, against that property. It goes no further and does not purport to prevent Danske from registering a judgment mortgage over any other property save to the extent that the general stay for twelve months might well be taken to have precluded any such action for twelve months, in the context of the settlement. While some forms of stay to not preclude the registration of judgment mortgages the express permission to register forthwith against 45 Belmont Park might well taken to imply that no other judgment mortgage could be registered for 12 months. However, once that stay had expired no enforcement or execution restrictions lay on Danske. 7.11 For the settlement to have the meaning suggested by Mr. Hegarty it would need to have said something like "no execution (or judgment mortgage registration) is to take place over any property other than 45 Belmount Park" or "execution, (or judgment mortgage registration) is to be confined to 45 Belmount Park". It did not say that or use any other language to like effect. 7.12 It follows that the trial judge was entirely correct in her conclusion that the settlement did not preclude Danske from registering a judgment mortgage over any property provided that that action was taken more than twelve months after the settlement date. As that period had elapsed before the registration of the judgment mortgage in this case, it follows that there was nothing inconsistent with the settlement in the registration by Danske of the judgment mortgage. It follows that the trial judge was entirely correct in making the well charging and other ancillary orders in this case. 8. Conclusion 8.1 I would, in those circumstances, dismiss the appeal and affirm the order of the trial judge.
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