The High Court declined Allied Irish Banks plc’s application for summary judgment against Anthony McNamara over a loan debt of more than €113,000, finding that his claim arising from the bank’s loss of title documents raised an arguable defence. The court remitted the proceedings to a plenary hearing, where the issues can be examined in full.
In a judgment delivered on 5 April 2016, Mr Justice Max Barrett said AIB had lost Registry of Deeds documents and land registry certificates provided through Mr McNamara’s solicitor as security for the loan. The security related to lands in County Clare. AIB later began reconstructing the title documentation, but the court noted that this could lead to problems.
AIB had agreed in August 2009 to lend close to €116,000, and advanced just over €111,000 later that month at an annual percentage rate of 5.22%. The loan was repayable over 13 months, including a final payment of just over €112,000 due on 30 September 2010. After Mr McNamara defaulted, AIB terminated the facility and demanded repayment in January 2015. It sought summary judgment for just over €113,000.
Mr McNamara argued that the bank’s loss of the title documents could affect the sale of his property, potentially making it largely unsaleable or forcing a reduced price. He claimed the resulting cross-claim could be set off against the debt. AIB disputed that the loss gave him a defence to the debt claim.
The court applied the test for summary proceedings: whether the defendant had a fair or reasonable probability of a real defence, rather than having to prove that the defence would probably succeed. It held that the loan and security arrangements were linked, since provision of security was a condition of the loan. Given the undisputed loss of the documents, a prima facie basis for the asserted cross-claim appeared to exist.
The ruling did not determine the final value or success of any set-off, or resolve the debt claim. It held only that the claim was arguable and should be considered at a plenary hearing. The judge also encouraged the parties to consider whether they could reach a compromise, but left how to proceed to them.