The High Court gave AIB Mortgage Bank judgment on seven disputed mortgage loans, but stayed enforcement of the judgment on four of them for three months to give William and Sheila Moran an opportunity to pay. The stay was intended to put the defendants in the position they would have been in had they received a period of notice before repayment was demanded.
The judgment, delivered by Mr Justice Brian J. McGovern on 27 July 2012, followed a hearing on affidavit evidence. The parties had agreed that the application for summary judgment would be treated as the trial of the action. The judge therefore heard the dispute as a full hearing, rather than deciding only whether there was an arguable defence.
The bank sought repayment under seven loan accounts. The defendants argued that three loans had not been preceded by sufficient notice of breach and that no prior notice had been given for the other four. They relied on a loan term requiring due notice before the lender could demand early repayment after an unremedied breach. The bank argued that a letter about arrears was sufficient notice for the first three loans and that a mortgage term separately made secured sums due on demand after a failure to pay other sums owed to the bank.
The judge found that the contracts did not define “due notice”. He said ambiguity between the loan terms and mortgage provisions should be resolved in the borrower’s favour, and concluded that the defendants should have received reasonable notice of default before the demand. However, they did not dispute that the loans had been advanced and had indicated they lacked the funds to repay the disputed sums, even if given time.
For the three loans where an arrears letter had been sent, the defendants had no good defence based on insufficient notice, given their inability to repay. For the other four, the judge accepted that the defendants had a technical point because no prior notice had been given. He nevertheless found, on the balance of probabilities at the full hearing, that they had no answer to the bank’s claim on the merits. He said notice was irrelevant to whether the debt could be recovered in the circumstances, while recognising that a different view would have been appropriate at a summary judgment hearing if the matter had not been tried in full.
The court allowed the claim on the three loans and gave judgment on the remaining four, staying that part of the judgment for three months. Earlier, separate orders had already given the first plaintiff judgment for €14,848,290.06 and the second plaintiff judgment for €2,776,290.18, both against the defendants jointly and severally.