The High Court has refused Pepper Finance Corporation (Ireland) DAC’s application for summary judgment against three defendants over a claimed outstanding loan balance of €366,410.20, remitting the case for a plenary hearing.
Mr Justice Cian Ferriter delivered the judgment on 25 November 2021. He said the defendants had “just about” surmounted the low hurdle of showing an arguable defence. The court did not decide whether their defences would ultimately succeed or determine the amount due.
The claim concerns a €402,000 loan made in 2008 by Bank of Scotland (Ireland) Limited, Pepper’s predecessor in title. The defendants did not deny taking the loan or that a significant balance remained outstanding. Their central defence was that the bank agreed in 2010 to accept monthly payments of €1,200 until further notice.
Yvonne Kenny, the first named defendant, said in affidavits that she and Eddie Kenny attended a bank meeting with an employee introduced as Patrick. She said the revised payment arrangement followed her inability to meet the then monthly instalments of about €2,283.09. The plaintiff accepted that, without evidence from a Bank of Scotland witness involved at the time, it had to take the defendants’ account of the alleged agreement at its height for the application.
The plaintiff argued that the alleged arrangement was not an enforceable variation, including because the defendants had identified no consideration and no written memorandum. It also relied on the rule that accepting less than the full debt does not necessarily prevent a lender from later seeking the balance. The defendants argued there was an arguable binding variation, that the bank received a collateral benefit, and that its acceptance of payments after missed instalments could support an estoppel defence. They also relied on alleged failures to follow the loan terms’ notice procedure before enforcement.
The judgment noted that more than 25 payments were missed between 2013 and 2018 under the schedule the defendants said had been agreed. Pepper met the defendants in October 2017, demanded the outstanding sums in December 2017, and proceedings began in May 2018.
Justice Ferriter said the evidence raised conflicts about the character of the 2010 arrangement and whether the defendants relied to their detriment on the bank’s alleged forbearance. He considered that further procedures, such as discovery, might clarify whether there was a binding variation or other viable defence. The matter was remitted to a plenary hearing. The judge reserved the question of the costs of the summary judgment application for further submissions, allowing either side to apply within 10 days for a different costs order.