Promontoria (ARAN) Ltd v O Reilly & anor [2019] IEHC 815 (29 November 2019)

JUDGMENT of Mr. Justice Tony O’Connor delivered on the 29th day of November, 2019

1. The special summons in these proceedings seeks a declaration that:-

(i) A facility letter dated 19th February, 2007, (“the facility letter”) from Ulster Bank

Ireland Limited (“Ulster”) addressed to the defendants and a Cormac O’Reilly

(ii) Two undertakings dated 6th April, 2006, and 20th June, 2006, (“the undertakings”)

from solicitors purportedly acting on behalf of both defendants to hold the title

deeds to an apartment and car parking space in the vicinity of Herbert Park, Dublin

(“the apartment”) comprised in folio 86556L, County Dublin (“the folio”) to the

order of Ulster, created and acknowledged an equitable interest in the apartment.

2. By letter of demand dated 21st September, 2016, (“the letter of demand”) the plaintiff,

as the transferee of Ulster’s interest in the debts allegedly owed by the defendants to

Ulster, demanded payment of €1,441,990.84 (“the alleged debt”) pursuant to the terms

of the facility letter. The plaintiff also seeks an order directing the sale of the apartment

in default of payment of the alleged debt.

3. The plaintiff, in the alternative, sought a receiver to be appointed but it did not pursue

that relief at the hearing of this application.

4. Orders for taking an account and directing an enquiry as to persons interested in the

apartment are sought as consequential to the declaration if it is granted.

Special summons procedure

5. The special summons procedure envisages the disposal of matters summarily by affidavit.

Plenary proceedings are preferable where there are complex factual and legal issues

because there will be pleadings and oral evidence. Order 3 of the Rules of the Superior

Courts (“RSC”) which provides for the issue of a special summons is permissive. On the

other hand, O. 72A RSC specifies applications which “shall” be commenced by special

summons. A plenary hearing may be directed in cases which are commenced by special

6. The defendants submit that if the Court is not minded to dismiss the application, the

Court should adjourn the matter to plenary hearing under O. 38, r. 9 RSC, having regard

to the significant facts in dispute that, they argue, can only be determined by way of oral

7. The following thirteen affidavits taken from the 21 affidavits in the “booklet of pleadings”

and the supplementary booklet are most relevant to this application:-

(i) The grounding affidavit of a “senior asset manager” of Capita Asset Services

(Ireland) Limited (“Capita”), which was an agent of the plaintiff, sworn on 13th

(ii) The first replying affidavit of the first named defendant sworn on 23rd March, 2017;

(iii) The affidavit of Mr. Prendville, a director of the plaintiff sworn on 30th June, 2017,

which explained inter alia the purchase of Ulster’s alleged loans to the defendants

by the plaintiff and the review in 2008 by Ulster of its loans to the first named

(iv) The second replying affidavit of the first named defendant sworn on 18th October,

(v) The replying affidavit of the second named defendant sworn on 19th October,

(vi) The second affidavit of Mr. Prendville sworn on 9th March, 2018, in reply to the

second affidavit of the first named defendant and in which he acknowledged that

the plaintiff was only incorporated on 19th December, 2014. He clarified that the

debt due by the defendants was ascertained by him from records available to him

in his capacity as a director of the plaintiff;

(vii) The third affidavit of Mr. Prendville sworn on 15th May, 2018, which sought to

highlight an alleged inconsistent approach taken by the second named defendant

when denying her ownership of the apartment or debt with her non-cooperation

with the plaintiff’s offer to realise proceeds from a disposal of the apartment;

(viii) The affidavit of a solicitor for the second named defendant sworn on 9th July, 2018,

concerning potential capital gains tax and legal costs for the second named

defendant in disposing of her alleged interest in the apartment;

(ix) The affidavit of a solicitor for the plaintiff sworn on 13th July, 2018, which exhibited

open correspondence between solicitors for the parties seeking to overcome the

allegations of forged ownership and mortgage documents in respect of the

apartment made on behalf of the second named defendant;

(x) The affidavit of a Mr. O’Sullivan, a director of the plaintiff sworn on 15th February,

2019, averring to the outstanding balance due pursuant to the facility letter in the

sum of €1,523,218.46 as of 13th February, 2019;

(xi) The third affidavit of the first named defendant sworn on 26th February, 2019,

which explained and exhibited letters from two consultant physicians dated 24th

May, 2018, and 29th July, 2018, respectively, about the risk of further stroke and a

vascular cognitive impairment on the part of the first named defendant;

(xii) The fourth affidavit of the first named defendant sworn on 8th November, 2019,

which explained his struggle to recall matters that had occurred many years ago.

He also mentioned and exhibited a letter from Ulster dated 24th August, 2012,

confirming that Ulster does not hold a charge over the apartment and Ulster’s

agreement to release its rights to the apartment upon receipt of the proceeds from

the sale of the apartment;

(xiii) The second affidavit of the solicitor for the second named defendant sworn on 11th

November, 2019, which exhibited, following receipt of a reply to his request to the

Property Registration Authority, instruments and an affidavit of discovery sworn by

an attorney purportedly on behalf of the second named defendant in 1996.

Undisputed facts for this application

8. The second named defendant was born in the United States of America and left Ireland

permanently in 1994. The first named defendant is the father of the second named

defendant and separated from her mother some 20 years ago. The second named

defendant avers that she never applied for a mortgage in Ireland, never “banked” with

Ulster and never instructed the solicitor who purportedly gave an undertaking with her

authorisation. She did not know that she was a registered owner of the apartment until

these proceedings were served in July 2017.

9. The first named defendant does not deny:-

(i) His ownership of the apartment;

(ii) The terms of the facility letter;

(iii) His authorisation to the solicitors to give an undertaking in respect of the

10. The advanced years and cognitive impairment of the first named defendant are not

disputed by the plaintiff at this stage.

Issues between the parties

Affidavit evidence debate

11. The first named defendant “baldly” asserts at para. 23 of his first replying affidavit that he

repaid all debt due to Ulster without exhibiting documents in support of his averments,

according to counsel for the plaintiff. It is submitted on behalf of the plaintiff that the

first named defendant should not be allowed to defend on the basis of a mere assertion.

12. Counsel on behalf of the first named defendant submitted that the plaintiff fails to comply

with Order 40 of the RSC because the plaintiff was not in existence at the relevant times.

In reply, counsel for the plaintiff cited paras. 46, 56, 57 and 58 of the judgment delivered

by Barniville J. in Promontoria (Arrow) Limited v. Burke [2018] IEHC 773 (unreported,

High Court, 19th December, 2018) to support the submission that the affidavits of the

two directors of the plaintiff can be taken by the Court as evidence.

Is the claim statute barred?

13. The Court appreciates the candour of counsel for the first named defendant in regard to

this potential defence. The absence of a challenge to the terms of the facility letter and to

the date of the letter of demand in 2016 means that this is not the strongest point of

defence for a plenary hearing. Nevertheless, the sum sought to be charged is disputed

including the calculation of principal and interest.

14. The delay on the part of the plaintiff, Ulster’s successor, to recover the alleged debt by

way of only seeking repayment in 2016 may be explicable. If this was a plenary hearing,

pleadings would have been exchanged in which particulars of delay and the effects

thereof would have been delivered and answered by now. The cognition deficit and

medical status of the plaintiff leave factual issues to be determined with the benefit of

oral evidence if delay is pursued as a defence.

Promontoria (Oyster) DAC v. Hannon

15. The Chief Justice in Promontoria (Oyster) DAC v. Hannon [2019] IESC 49 (unreported,

Supreme Court, 4th June, 2019), at para. 8.2 expressed “the view that the proper

construction of [s. 73 of the Registration of Deeds and Title Act 2006 (“2006 Act”)] is

such that it must be taken to have been the statutory intention to bring, by the expiry of

the relevant three year period, a complete end to the system of lien by deposit of a land

certificate in respect of registered land.” In that case the defendants were successful in

their appeal from the High Court decision that the plaintiff had the benefit of a lien by

16. This Court has had detailed submissions about the effect of the facility letter combined

with the undertaking from the solicitors and the retention of title documents to the order

of Ulster. The Court recognises that s. 73(2) of the 2006 Act provides for the cessation of

the effect of deposits of land certificates and certificates of charge. The plaintiff contends

that the facility letter coupled with the undertaking from a long since retired solicitor is

not captured by s. 73(2) of the 2006 Act. The defendants, and particularly the first

named defendant, submit that the 2006 Act was designed to ensure that mortgages were

The law – summary process

17. Counsel for the plaintiff cited the judgment of Laffoy J. in ACC Bank Plc v. Malocco

[2000] IEHC 13; [2000] 3 IR 191 at p. 204 in supporting the claim that the facility letter with

the undertakings created an equitable mortgage. However, it is worth quoting the

following remarks from that judgment:-

“… the court has to look at the whole situation … looking at the whole situation

must involve an assessment of the cogency of the evidence adduced by the plaintiff

in relation to the given situation which is to be the basis of the defence.” (p. 201).

“The existence of an equitable mortgage is in no way contingent upon the court

making a “well-charging” declaration.” (p. 204).

“... but the claim for any interest in respect of any period more than six years prior

to [specified date] is statute barred.” (p. 204).

“… I do not think it would be proper to give summary judgment to the plaintiff … I

will adjourn both matters to plenary hearing ….” (p. 205).

18. The synthesis of twelve principles to be applied when deciding upon a summary judgment

application as undertaken by McKechnie J. in Harrisgrange Ltd v. Duncan [2002] IEHC 14;

[2003] 4 IR 1 at pp. 7-8 is further appropriate to the determination of this application

under the various headings of defence.

Second named defendant

19. This Court on the affidavit evidence adduced is not satisfied that the second named

defendant does not have an arguable defence based on her averment that she does not

have an interest in the apartment or alleged equitable mortgage. The second named

defendant maintains that she has no obligation to the plaintiff or its predecessor (Ulster).

The plaintiff’s appeal to the second named defendant and this Court to use some form of

pragmatism does not enable this Court to act in the way proposed belatedly on behalf of

the plaintiff and more particularly offered in the open letter from the plaintiff’s solicitors to

her solicitors on the eve of the resumed hearing of this application on 14th November,

First named defendant

20. This Court exercises its summary judgment powers with “discernible caution”. Counsel

for the first named defendant limited the issues of potential defence when resisting this

application. I am persuaded by the complexity and antiquity of those limited issues

summarised above, together with the apparently genuine beliefs expressed by the first

named defendant in the autumn of his life to determine that his constitutional right to

respond to the plaintiff’s claims should be accommodated. The allegations of the second

named defendant relating to the authority of the long since retired solicitor to give the

undertakings now relied upon by the plaintiff complicate matters further for the claim

which is the subject of these proceedings.

21. I have not been satisfied that the first named defendant does not have an arguable

defence. In making this determination the Court does no more than accept that both

defendants have alleged facts which could undermine what the plaintiff may have thought

to have been a simple matter when issuing these proceedings nearly three years ago

22. The above list of relevant affidavits discloses a certain resolve on the part of the plaintiff

to avoid a plenary hearing. There comes a stage when the summary process ought to be

recognised as not appropriate in view of the established law.

23. Pleadings and other interlocutory applications prior to a plenary trial are merited. I will

hear counsel about giving directions and potential case management to minimise the time

and effort to be expended by the parties and the Court in resolving the live issues of

dispute between the parties. The Court also notes that these proceedings were

commenced before the introduction of SI No. 13/2018 Rules of the Superior Courts

(Mediation) 2018 and will therefore give the parties liberty to apply to this Court, upon

notice to the solicitors for the other parties, pursuant to those rules.

24. The application for summary relief is refused.

Result: Summary application for declaration of equitable mortgage refused

	[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Promontoria (ARAN) Ltd v O Reilly & anor [2019] IEHC 815 (29 November 2019) URL: http://www.bailii.org/ie/cases/IEHC/2019/2019IEHC815.html Cite as: [2019] IEHC 815

High Court of Ireland Decisions