The High Court found that Joanne Phelan had an arguable defence to a possession claim based on alleged mortgage interest overcharging. It did not finally decide whether interest had been overcharged or whether the bank’s demand for repayment was valid. The court invited further submissions on those questions and on any stay.
The case is an appeal from a Circuit Court order for possession of Ms Phelan’s principal private residence in County Meath. The order, made on 4 April 2019, included a 12-month stay. The High Court judgment, delivered by Mr Justice Michael MacGrath on 21 July 2020, considered the appeal on a summary basis.
The Governor and Company of the Bank of Ireland said Ms Phelan had fallen into arrears and that it demanded repayment of the full loan balance in January 2016. The bank’s evidence put the arrears at €96,914.16. Ms Phelan disputed the amount, relying on a report that alleged €113,486.54 in excess interest charges up to September 2018. The bank’s witnesses disagreed with her experts about how the loan’s tracker rate clause operated after the European Central Bank changed its refinancing tender procedure in 2008.
Justice MacGrath found that the competing expert evidence and legal arguments could not be resolved safely on affidavit evidence alone. He said the alleged overcharging issue was not unarguable and required further hearing. He rejected other grounds advanced by Ms Phelan, including objections to the Circuit Court’s jurisdiction, the summary procedure and the fairness of the loan terms.
The court also considered whether the January 2016 demand could stand if Ms Phelan ultimately succeeded on her overcharging argument. Although the bank submitted that the alleged excess charges were less than the arrears at the time of demand, the judge said the demand’s validity could be affected if the amount claimed exceeded what was owed. The parties had not expressly addressed that issue, so the court requested submissions on whether it could be determined on a summary application.
The judgment did not make a final determination on the validity of the demand, the overcharging claim, or the appropriate stay. The parties were invited to exchange further submissions electronically within four weeks, or a longer period by agreement.