The High Court has set aside an order allowing Start Mortgages Limited to enter final judgment against Shane Hanley for just under €386,000 plus costs, finding he had an arguable defence to the lender’s claim.
In a judgment delivered on 14 June 2016, Mr Justice Max Barrett declined to grant summary judgment and referred the case to a plenary hearing. The court did not decide whether Hanley’s defence would ultimately succeed or determine the debt claim at that hearing.
The Master of the High Court had made the original order on 3 November 2015. Hanley, representing himself, appealed, and the appeal was heard as a fresh hearing of the summary judgment application.
Hanley’s case was that he had not received the demand for payment that led to the proceedings. The court accepted that the notice had gone to another person named Hanley, with whom the defendant said he had no connection and whom he had not known before the case began. He argued that the mistake deprived him of time for further negotiations before legal proceedings started.
The lender argued that the loan agreement did not require a demand, that the summons itself could serve as one, and that another clause allowed it to begin proceedings when it chose. The court rejected those arguments for the purpose of deciding whether the claim could proceed by summary judgment.
Justice Barrett interpreted clause 12 of the agreement as requiring the lender to give seven days’ written notice before demanding repayment following missed instalments. Start Mortgages had not met that requirement, the court found. It also rejected the contention that a court summons was equivalent to a demand letter, noting that a summons begins legal proceedings rather than warning that they may follow.
The court considered the lender’s reliance on clause 4, which it said might be read as allowing proceedings regardless of clause 12. It noted Hanley’s contention that such an interpretation could make the term unfair under consumer contract regulations. The court did not decide whether clause 4 was unfair; it concluded that the interaction between the clauses supported an arguable defence.
The judgment said Start Mortgages could restart the recovery process with a fresh demand. The court also said it had no discretion to order payment through the summary process where an arguable defence existed. It encouraged the parties to seek an amicable resolution while the case proceeds.