About this case:

• Citation:
  [2024] IEHC 556
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Ms Justice Marguerite Bolger

Delivering judgment for the High Court, Ms Justice Marguerite Bolger found that the draft agreement exhibited by the plaintiff’s negotiator seemed “incapable of execution in its present format and cannot, therefore, evidence the bona fides of what the plaintiff claimed on 24 July was her attempt to exercise her right of redemption”.

Background

The plaintiff, along with her estranged husband, were the joint owners of a property in Galway purchased in 1999 with a mortgage. The mortgage was later acquired by the first defendant in 2018. 

The plaintiff claimed that following her separation from her husband in 2012 she moved into the property permanently and that it was her principal private residence (PPR).

The plaintiff had defaulted on her mortgage repayments for many years, causing the second defendant receiver to be appointed in 2020. The second defendant sold the property at public auction on 24 July 2024. 

The plaintiff sought an injunction to prevent the completion of the sale and to restrain the defendant from denying her right to redeem the mortgage on the basis that the property was her PPR, that the sale was unlawful as the defendant did not comply with the Central Bank’s Code of Conduct on Mortgage Arrears (CCMA) and that the defendant unlawfully refused to allow her to exercise her right of redemption.

The defendants alleged that the property was not the plaintiff’s PPR and highlighted that the proceedings before the court were the fifth set brought by the plaintiff since the appointment of the receiver and the second injunction, the first of which was struck out by consent with costs to the defendant in April 2024.

The defendants also asserted that the plaintiff had not exercised her right of redemption bona fide.

High Court

Considering the PPR point, Ms Justice Bolger noted in respect of the plaintiff’s settled injunction: “That application (a copy of which was exhibited in this application) covered, in almost identical terms, the same issues, averments and evidence in relation to the PPR as the plaintiff seeks to move on in these proceedings.”

As to the plaintiff’s contention that the application before the court was different insofar as she pleaded a denial of her right of redemption, the judge opined “insofar as the plaintiff seeks to move on the stand alone PPR point, which she already sought to litigate and chose to settle with legal advice by way of the consent orders of April 2024, I follow the decision of the Court of Appeal in Small v. The Governor and Company of The Bank of Ireland & Ors [2018] IECA 393 and find that aspect of this application to constitute an abuse of process”.

Moving to consider the plaintiff’s right of redemption, the court examined email correspondence between the plaintiff’s negotiator, Mr Seery, and the defendants, and examined a draft loan agreement exhibited by Mr Seery which he alleged confirmed that funds were secured and available prior to the auction on 24 July.

The correspondence revealed that on the morning of the auction, Mr Seery stated that the plaintiff was in funds to pay the balance of the mortgage, but had not been able to confirm to the defendants that the plaintiff was in a position to transfer the redemption sum prior to 12pm and so the sale had gone ahead. 

Ms Justice Bolger emphasised: “The plaintiff’s right of redemption is exactly that, the right to redeem the mortgage upon payment of the debt…No repayment was made by or on behalf of the plaintiff prior to the auction on 24 July. It seems that she made an offer to redeem, which is different to a repayment.”

The judge determined that the dicta of Daniel Alexander QC in Shearer v. Spring Capital Ltd [2013] EWHC 3148 (Ch) — “In order for a tender to be valid, the sum for payment must not just be tendered: it must be set aside in some way so that it is, in an effective way, treated as the mortgagee’s money to be had on demand” — was a sensible analysis “of what is required for a situation falling short of an actual transfer of monies to potentially establish the exercise of a right of redemption”.

Having examined the draft agreement, the court was satisfied that what took place was not a repayment nor a tender of a sum of money that could have been treated as the plaintiff’s money to be had on demand, rather “an indication of monies that were potentially available to the plaintiff subject to various requirements including the execution of an agreement between the plaintiff and the special purpose vehicle that the offer of funding by Hibernian Capital required to be ‘established for the purpose of acquiring the property’”.

The court also highlighted that the draft agreement made no reference to the joint owner of the property, finding it “difficult to see how the plaintiff could provide an enforceable Declaration of Trust or conveyance in favour of the lender that the agreement requires”.

Conclusion

Accordingly, the High Court found that the plaintiff had not established a fair question to be tried and refused her application.

Ewins v Promontoria Scariff DAC & Anor [2024] IEHC 556