The High Court allowed Anthony and Miriam Freeman to continue claims concerning the securitisation of their mortgage loans and alleged non-compliance with Central Bank codes, but struck out most of their other claims against Bank of Scotland (Ireland) Limited and two other defendants.
Mr Justice Gilligan’s ruling on 31 May 2013 concerned the defendants’ application to dismiss the action as frivolous or vexatious, as disclosing no reasonable cause of action, or as bound to fail. It was an application about whether claims could proceed, not a final determination of the remaining securitisation and code issues.
The Freemans had obtained loans secured on six properties in 2006. After they fell into arrears, the bank appointed a receiver in February 2012. A third defendant was instructed to sell some of the properties, with net proceeds sent to the bank. The couple, who represented themselves, alleged, among other things, that securitisation deprived the bank of the right to enforce the loans and security, and that the bank had failed to obtain their consent or meet code requirements. The defendants denied their allegations.
The judge said the law on the status and effect of the relevant Central Bank codes was not absolutely clear and could depend on the circumstances. At this stage, he was not deciding the Freemans’ prospects of ultimately succeeding. He found that the securitisation and code issues were sufficiently substantial to proceed and could not be said, on the law then before the court, to be bound to fail.
The court struck out claims alleging that the bank’s insolvency invalidated the cross-border merger or receiver’s appointment, and that the merger had been obtained through fraudulent misrepresentation. It accepted that there was no solvency requirement for the merger at issue, would not interfere with the orders approving it, and found the fraud allegations inadequately particularised. The court also struck out the challenge based on repealed legislation, holding that the bank’s power to appoint a receiver arose under the mortgage deed.
Claims that the bank created rather than lent the money, and allegations of criminal offences under the Theft and Fraud Offences Act 2001, were also struck out. The judge attached no weight to an affidavit sworn in unrelated United States proceedings and said criminal allegations were for the relevant authorities.
The claim against the third defendant concerning its alleged duty of care and role in selling 55 Huntstown Wood was allowed to proceed because it was linked to the unresolved receiver-appointment issues. The court directed that an amended statement of claim should set out the securitisation and code allegations and the remaining claim against that defendant. The judgment does not determine those surviving claims.