The High Court has dismissed an appeal by Reginald and Teresa Hayes against an order granting AIB Mortgage Bank possession of their family home at Rathpeacon, Mallow Road, Cork.
Mr Justice Noonan delivered judgment on 25 October 2017. The appeal concerned a Circuit Court order made on 8 February 2017. The High Court concluded that the bank was entitled to possession and upheld that order.
The couple entered into a £70,000 endowment mortgage in 1991, with a term of 20 years and three months. They also took out an insurance policy whose benefit was assigned to the bank. When the policy matured in 2011, it was worth about €55,000, while the mortgage capital due was then about €100,000.
During discussions in March 2013, Mr Hayes proposed paying the policy proceeds and a further €4,000 in full and final settlement. The bank conceded on appeal that its officer, Paul Byrne, had agreed to the proposal, but argued that he lacked authority and that the agreement was unenforceable for want of consideration. The court identified lack of consideration as the sole point in the appeal.
The judge rejected the borrowers’ argument that the bank received a collateral benefit because it would receive the insurance proceeds. The bank was already entitled to those proceeds under the policy assignment, so the proposed payment did not provide a new benefit. The additional €4,000 was, in the court’s view, part payment of a larger debt.
The couple also argued that the bank should be prevented, on equitable estoppel grounds, from withdrawing from the acknowledged agreement. The judge accepted that they believed they had reached a final agreement, but found no evidence in the affidavits that they had acted on it or suffered detriment as a result. He said the bank’s conduct was regrettable and had caused the couple unnecessary worry and distress, but concluded that the bank was not bound by the agreement in law or equity.
The High Court therefore dismissed the appeal. The judgment upheld the Circuit Court’s finding that the bank was entitled to an order for possession; it does not state that possession was carried out.