The High Court has dismissed Eugene McDermott’s claim challenging the transfer and enforcement of a mortgage over land in Co. Kildare, finding that the action disclosed no reasonable cause of action and was an abuse of process.
The judgment, delivered by Mr Justice Brian J. McGovern on 18 July 2017, followed an application by Ennis Property Finance DAC to dismiss the proceedings. The application relied on the claim being bound to fail, abuse of process and the rule in Henderson v. Henderson. The court granted dismissal under Order 19, rule 28 and its inherent jurisdiction, and made an order in the terms of paragraphs 1 and 3 of the defendant’s motion. It did not make an order under the Henderson rule.
The dispute arose from four loan facilities Bank of Scotland (Ireland) Limited made available to Mr McDermott between 2005 and 2008. A 1996 mortgage over registered land secured the borrowing. Mr McDermott sought declarations challenging the defendant’s entitlement to hold or enforce the mortgage, including arguments about a cross-border merger, transfer of the loan and security, and appointment of a receiver. At the hearing, he withdrew a lack-of-consent argument concerning the 2015 transfer. The court said the scope of a separate withdrawn securitisation point was unclear.
The judge said the mortgage provided for appointment of a receiver and transfer of its benefit, while the loan conditions allowed assignment or transfer without the borrower’s prior consent. The court considered documentary evidence that Bank of Scotland (Ireland) Limited vested in Bank of Scotland plc following a cross-border merger in 2010, and that the defendant was the registered holder of the charges. It said the defendant’s evidence about appointment and novation of the receiver’s deed was uncontroverted. The judge also noted that the claim sought declarations against Bank of Scotland plc and the receiver, neither of whom was a party to these proceedings.
The judgment referred to other litigation arising from the loans and security. A separate plenary case remained extant, the Scottish proceedings had been struck out, and the judgment described the status of separate summary judgment proceedings as uncertain: a 2013 judgment for €6,971,856.49 had been set aside in February 2017, with that decision under appeal. The court said it was not satisfied that the defendant had shown the Henderson rule applied while other proceedings remained unresolved.