About this case:

• Citation:
  [2024] IEHC 321
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Liam Kennedy

Delivering judgment for the High Court, Mr Justice Liam Kennedy considered that “even if there were a procedural basis for his application”, the plaintiff had failed to establish a prima facie case as against the defendants and it could not be contended that their case was “in any respect frivolous, vexatious or bound to fail”.

Background

The plaintiff contested the validity of the appointment of receivers over his property in Co Waterford. The defendants claimed that Ulster Bank Ireland Ltd provided overdraft facilities and loans to the plaintiff in 2009 secured by a deed of mortgage over the property, with the first defendant becoming entitled to Ulster Bank’s interest following a transmission of interest in 2016.

The plaintiff alleged inter alia that his former accountant and/or solicitor had fraudulently mortgaged the property in his name. The said accountant was the subject of a regulatory or criminal investigation. The plaintiff also speculated that his former solicitor may have transferred the monies borrowed to the plaintiff’s brothers, or a company under their control, rather than investing them in properties as agreed.

The plaintiff further alleged that the defendants were attempting to steal the property, and that the deed of mortgage and the receivers’ instrument of appointment were fabricated. On 13 October 2021, the defendants were granted an order vacating the lis pendens registered by the plaintiff, and sold the property in August 2022.

The defendants’ discovery was produced for inspection by the plaintiff on 19 May 2023. The plaintiff subsequently issued a motion seeking default judgment on the basis of the defendants’ alleged lack of evidence, alleging that the discovered documents were fabricated and that a credit servicing firm such as the first defendant could not sue or issue demands in their own name.

The defendants submitted, inter alia, that the motion had no basis in law and that a plaintiff could not simply apply for default judgment without making out its own case, and relied upon the registration of the first defendant’s interest in the property in the corresponding folio as prima facie evidence in their favour.

The High Court

Mr Justice Kennedy considered that at trial, the plaintiff is entitled to pursue any claim based on alleged fraud, fabrication of documents, lack of evidence or in respect of legal issues such as whether a credit servicing firm has a right to sue, noting that “all such claims must be properly pleaded in accordance with the Rules of the Superior Courts. For example, detailed particulars would be required in respect of any plea of fraud, forgery or fabrication in particular, if the Plaintiff were to pursue any such claims at trial.”

The court further highlighted: “The Plaintiff will have to establish the basis on which the alleged fraud on the part of his own advisors gives him a basis to pursue a claim against the Defendants, in circumstances in which he has very properly acknowledged that they were not party to any such fraud.”

Mr Justice Kennedy recognised that the documents contended by the plaintiff as supporting his position did not provide conclusive evidence in that regard and so there was no basis to curtail the trial process and to deprive the defendants of their constitutional rights to defend themselves.

The judge also found it “remarkable” that the plaintiff’s current position was not ventilated in the course of the defendants’ application to vacate the lis pendens in 2019 nor in the plaintiff’s statement of claim delivered in November 2021, in circumstances where the documents that the plaintiff claimed to have seen for the first time following the inspection in May 2023 and upon which he now relied had already been exhibited to the defendants’ 2019 application.

Accordingly, the court determined that the plaintiff had failed to establish a prima facie case, “even if there were a procedural basis for his application”. Mr Justice Kennedy reiterated that on the basis of the limited evidence tendered by the plaintiff, “I am not convinced by his claim that, because the monies advanced were not allocated to their intended purposes, that means that no monies were advanced or that there was no mortgage.”

Finding that to the contrary, the defendants had a strong arguable defence on the basis of the evidence tendered by them, the court considered that even without evidence of the registration of a charge in favour of Ulster Bank and subsequently in favour of the first defendant in the folio to the property, the court would be disposed to dismiss the application.

Conclusion

Accordingly, the High Court refused the plaintiff’s application.

Hayes v Promontoria (Oyster) DAC & Ors [2024] IEHC 321