The Court of Appeal has removed a condition requiring Pat and Sheila Meade to pay €10,000 to Bank of Ireland as the price of defending its claim for more than €639,000 in residual mortgage debt. It otherwise upheld the High Court’s decision to let the case proceed to a plenary hearing, where the disputed defence can be tried.
The bank’s claim concerns five apartments bought by the Meades in Sligo in 2003 with loans from ICS Building Society. The loans and mortgages were later transferred to Bank of Ireland. The apartments were sold voluntarily in 2015, and the bank received the net sale proceeds. It says the Meades remain liable for the unpaid balances. The Meades dispute that, saying the bank had agreed to accept the sale proceeds in settlement of the debt.
In April 2023, the High Court found that the Meades had raised an arguable defence. The judge said the affidavits presented a stark factual dispute that could not fairly be resolved on paper alone. The judge also considered it at least arguable that the rule in Pinnel’s case, concerning payment of less than an existing debt, might not answer the Meades’ defence. Those were preliminary conclusions on whether the case could be defended, not findings that an agreement had been made.
The High Court nevertheless made the Meades’ leave to defend conditional on paying €10,000 within three weeks. They did not pay. At a later hearing, the court ordered payment within two weeks, with judgment for the bank if they defaulted. The bank’s updated claim was €639,590.05, plus continuing interest and costs.
The Court of Appeal said the payment condition cut across the basis for granting leave to defend. The High Court had recognised that requiring payment as a condition could obstruct the right to defend, but then imposed that condition. The Court of Appeal held that the judge erred in doing so and in making the later order based on non-payment.
The Meades’ first appeal, which sought dismissal of the entire action, failed. The Court of Appeal deleted the €10,000 condition and otherwise affirmed the High Court’s order allowing the action to proceed. It dismissed the bank’s cross-appeal against leave to defend. The Meades’ second appeal succeeded, and the order made on 6 July 2023 was set aside. The underlying dispute over whether the bank agreed to waive the residual debt remains for trial.