The High Court stayed Bank of Ireland Mortgage Bank’s latest case seeking possession of a Dublin family home, but only until the bank vacates an earlier Circuit Court possession order.
Mr Justice Coffey ruled on an appeal from a Circuit Court decision that had refused the borrowers’ application to strike out, dismiss or stay the case on several preliminary grounds. He found that the bank’s withdrawal of earlier proceedings and later issue of a new case was not for an improper purpose. However, the earlier order for possession had never been set aside, preventing the bank from succeeding in the preliminary hearing.
The bank’s case concerns No. 78 Heytesbury Lane, Ballsbridge, which Richard and Audrey Farrington bought in 2006 for €2.6 million. The bank advanced them two loans totalling €2 million, secured by a mortgage over the property. It was common ground that the borrowers had defaulted and that a substantial sum remained owing.
The bank first brought possession proceedings in 2010. The Circuit Court granted possession in December 2011, and the borrowers appealed. While that appeal was pending, the bank purported to discontinue the proceedings in July 2014, before the High Court had determined a legal question referred to the Supreme Court. The High Court proceedings were then struck out by consent, but no order vacated the Circuit Court’s possession order. The current possession case began in July 2015.
The borrowers argued that bringing a fresh case after withdrawing the earlier one was oppressive, an abuse of process and contrary to the rule in Henderson v Henderson. They also raised estoppel and other grounds. The bank relied on a Supreme Court decision concerning discontinued litigation and argued that its purpose was to pursue its security under the Land and Conveyancing Law Reform Act 2013.
Justice Coffey said the 2014 notice of discontinuance had no legal effect because it was served after judgment, while an appeal was pending. It therefore did not receive the automatic protection that rules governing valid discontinuances can provide against a defence in later proceedings. Even so, he concluded that the bank had withdrawn and reissued the proceedings to avail of the 2013 Act, not for an improper purpose. He said the Henderson rule did not apply on these facts.
The court identified a separate procedural obstacle: the Circuit Court’s 2011 possession order remained extant. The judge said the bank already had an order for possession, making the matter res judicata for the purpose of the preliminary issue. As both sides had acted in good faith on the mistaken assumption that the earlier proceedings had been entirely set aside, he allowed the borrowers’ appeal and stayed the new proceedings only until the bank vacates that order. The judgment did not finally determine the new possession claim.