The High Court has allowed the Governor and Company of the Bank of Ireland to amend its claims and enter judgment against Paul Lynch and Paul and Anne Lynch in two proceedings over an unpaid loan. The court said it would list the matter for a further hearing to make final orders and address costs.
In a judgment delivered on 24 April 2023, Ms Justice Bolger said the defendants had not identified an arguable defence to repaying the loans. The applications concerned a loan taken out in October 2005 to buy two investment rental properties.
The defendants said they had a verbal “gentleman’s agreement” with the bank’s predecessor that repayments would remain interest-only for the life of the mortgage and be met from rental income. The judge said they offered no evidence to corroborate that account and did not identify who had made the alleged agreement. The written facility letter provided for interest-only payments for three years, followed by 214 monthly instalments of interest and principal.
The court found that later bank documents referring to interest-only payments related to the agreed three-year period. It also noted that after the loan fell into arrears, the defendants accepted a short extension of interest-only payments and acknowledged that principal and interest repayments would follow. The judge said this undermined their claim to a continuing legal entitlement to interest-only terms.
The defendants also relied on proposals they had made to the bank, the Central Bank Code of Conduct on Mortgage Arrears, and alleged delay in selling the properties. The judge said the properties were investment properties, so provisions of the Code concerning a borrower’s principal residence did not apply. She was not satisfied that the alleged sale delay or errors in calculating interest and sale proceeds had merit; in any event, she said delay could affect costs but not the bank’s right to repayment.
The bank sought to amend its claim following the Supreme Court’s decision in Bank of Ireland Mortgage Bank v O’Malley. The judge allowed the amendment, finding it would clarify the figures without changing the bank’s case. She rejected the defendants’ objections concerning service, documents, hearsay, and alleged prejudice from not having information about O’Malley.
The judge concluded that the defendants had not identified evidence they intended to present through witnesses or discovery and that their assertions could not realistically improve at trial. She allowed both applications: amendment of the proceedings and judgment in the terms sought in the notices of motion.
The judgment did not set out the final orders or decide costs. The matter was listed for mention on 9 May 2023, with the judge making no findings on whether delays or document confusion should affect costs pending submissions.