The High Court has struck out Donal Hurley’s claim that a loan used to buy a site and build a house was unenforceable under the Consumer Credit Act 1995 because the lender did not provide required cooling-off information.
Mr Justice Allen ruled on 20 May 2022 that the original statutory definition of a “housing loan” did not require the house to exist when the loan agreement was made. The court dismissed the action on Pepper Finance Corporation (Ireland) DAC’s motion, finding that Mr Hurley had no prospect of showing that the Act’s Part III requirements applied to his loan.
Irish Nationwide Building Society offered Mr Hurley IR£112,500 in November 2001, repayable over 25 years. The stated purpose was to purchase a principal private residence, with a first legal mortgage over the intended home at 10 Tallon Heights, Castletownbere, County Cork. Separate agreements covered the purchase of the site for IR£35,000 and construction of a house for IR£90,000. The loan and mortgage were later transferred to Pepper, which became registered as holder of the charge in 2019.
For the motion, Pepper accepted that there was no building on the site when the loan agreement was made and admitted that the requirements of section 30 had not been met. The issue was whether those requirements applied. Section 29 excludes housing loans from Part III; section 38 generally prevents enforcement of a credit agreement or its security when Part III requirements have not been met.
Pepper argued that a loan’s purpose could be to provide a house by building one, although the house did not yet exist. Mr Hurley argued that the statutory definition required an existing house. The judge treated the application as one under Order 19, rule 28 to strike out the statement of claim, and acknowledged the high threshold for ending a case without a full hearing. The parties agreed the statutory question could be determined summarily.
Mr Justice Allen concluded that the agreement’s purpose, rather than whether a house was already present, determined whether it was a housing loan. The loan offer was executory: drawdown depended on completion of the security, and the court noted that a house might have existed by then. The judge held that “provide” could include building a house that did not yet exist.
The court ordered the statement of claim struck out and the action dismissed. It did not determine costs at that hearing; the matter was listed for mention on 31 May 2022 to hear submissions on costs. The judgment records that Pepper had waited until after the action was set down for trial before bringing its motion and that the case had been one of three materially identical cases listed together.