The High Court has refused Niall Hade and Joyce Hade’s request for a separate preliminary hearing on whether three loan and mortgage terms were unfair.
Ms Justice Faherty ruled that the issue could not be decided in isolation because Bank of Ireland Mortgage Bank disputes that the defendants were consumers. Whether they had consumer status must be litigated in due course, she said. The court denied the relief sought on the motion; it did not decide whether the terms were unfair or whether the bank is entitled to judgment in the underlying proceedings.
The bank is seeking judgment on two loans. It alleges that a €2.7 million facility accepted in 2006 was used to refinance borrowing secured against several properties, and that a second facility of €1.237 million was offered to Niall Hade in 2007 to refinance borrowing on four units at 24 St Maelruans Park, Old Bawn, Tallaght. The bank says the loans fell into arrears, repayment was demanded in September 2011 and receivers were appointed over the properties. It claims balances of €2,085,708.67 and €1,354,346.62, with daily interest accruing on each. Those are the bank’s claims, not findings made on this motion.
The defendants sought to have a preliminary issue heard under the Rules of the Superior Courts and the EU Unfair Terms Directive. They challenged a loan term giving the bank discretion over repayment amounts and dates, a mortgage term providing for a receiver’s appointment, and a term limiting the remedy for irregularities in a receiver’s sale to damages.
Niall Hade alleged that the bank called in a joint account one month early, when it was not in arrears, and that a repayment had been applied early. He also alleged that the receiver had acted negligently, sold properties below value, left some unrented and allowed damage to occur. The bank disputed the relevant facts. These allegations were not determined in the judgment on the motion.
Justice Faherty said a preliminary issue is appropriate only in limited circumstances, where a discrete legal question can be decided on agreed facts and would dispose of, or substantially advance, the proceedings. Here, the defendants’ argument depended on their being consumers, while the bank denied that status. The court concluded the legal question could not be decided without resolving that factual dispute. The underlying claims and counterclaim therefore remain for later determination.