The High Court has granted Bank of Ireland Mortgage Bank liberty to enter judgment for €849,037.30 against Stephen Pearce over a mortgage loan, finding he had not produced evidence of a reasonable possibility that the bank breached obligations under the mortgage arrears code.
Mr Justice Hunt’s judgment, delivered on 23 March 2018, concerned the bank’s motion for summary judgment on a monetary debt claim. The bank was not seeking possession of the mortgaged property in these proceedings.
The €801,715 loan was advanced on 10 August 2005 and drawn down on 28 October that year. The judgment said the account fell into arrears on 20 June 2012. The bank was entitled under the loan offer to demand early repayment of the full amount on 16 July 2014, after the loan had been in default since 2012.
For Mr Pearce, counsel argued that the bank’s demand was unlawful because it had not complied with the Code of Conduct on Mortgage Arrears, including requirements to explore viable alternative repayment arrangements. The argument relied on section 44 of the Central Bank (Supervision and Enforcement) Act 2013, which provides for a customer to take action for loss or damage caused by a regulated provider’s failure to meet obligations under financial services legislation.
The judge held that the code’s restrictions on commencing repossession proceedings did not prevent a lender from demanding repayment or pursuing a monetary arrears claim. He also found the evidence did not show a fair or reasonable probability that an actionable breach had caused loss that could serve as a defence or counterclaim.
The judgment recorded that Mr Pearce said he had sought a two-year payment moratorium in 2012 and submitted a prescribed financial statement in April 2013. The bank later classified him as “non-co-operating” and told him in April 2014 that MARP protections no longer applied. But the financial statement was not before the court, and the judge said the complaints were assertions unsupported by evidence. He was also informed that no payments had been made since 2012, while Mr Pearce remained in occupation of the property.
Mr Pearce’s affidavit referred to a recent restructuring proposal involving an upfront €50,000 from family members and a split mortgage secured on his family home. The bank rejected the proposal. The judge said the evidence did not explain how future repayments would be sustained.
The order establishes the debt claimed by the bank; it does not give the bank an immediate right to take possession. Separate repossession proceedings between the parties were before the local Circuit Court. The judge said the mortgage arrears code would continue to apply to that possession claim, and that relevant complaints could be raised there. He expressed no view on how the code might apply to later steps to enforce the monetary judgment.