The High Court ruled for Bank of Ireland Mortgage Bank and related bank parties in a dispute over loans to Joseph and Frank “Frankie” Sheahan, finding that the bank validly demanded repayment and appointed a receiver over properties securing the loans.
In a judgment delivered on 19 June 2015, Ms Justice Iseult O’Malley rejected the Sheahans’ claims that the bank had promised to renew interest-only periods as a matter of course, or had agreed to apply property-sale proceeds first to loans backed by guarantees. She also found that the bank’s acceptance of some cheques tendered by Joseph Sheahan did not create agreements to bring accounts up to date or withdraw them from litigation and receivership.
The proceedings concerned multiple loans made between 2005 and 2008. The Sheahans accepted that they had entered the loan agreements and drawn down the money. They disputed the validity of the repayment demands and receiver appointments, and argued that oral assurances altered the written loan terms. The bank denied those assurances.
The judge found the alleged automatic extensions inconsistent with the signed loan agreements and concluded that the borrowers knew the bank’s decision-makers had not agreed to be bound by those terms. She also rejected the alleged “loan pool” arrangement, finding the bank witnesses’ account more persuasive. She noted that evidence on the guarantee issue had been limited because related proceedings remained pending.
The court accepted oral evidence that the bank employee who authorised the enforcement decisions had authority to do so, and that the case manager was authorised to send the demand letters. It found that the bank’s seal had been affixed by an authorised person and that the bank’s conduct showed an intention to treat the receiver appointment deeds as legally effective. The judge criticised the practice of leaving deed dates and times blank for the receiver to fill in speculatively, but held that this did not invalidate the appointments in this case.
The judge also rejected the argument that a possible error in the Beechgrove arrears figure invalidated the demand. The Sheahans had conceded that the account was in arrears by November 2011 on any version of the figures. The court held that a demand did not fail merely because it overstated the amount due, and said it was not for the court to second-guess the bank’s enforcement decision on the evidence presented.
The judgment concluded: “In the circumstances I find for the bank parties.” It resolved the issues tried in these proceedings; the separate guarantor proceedings had been held over, although the parties agreed that a specific arrears question would bind them there.