AIB can repossess four houses, court rules

A Court of Appeal decision has cleared the way for Allied Irish Banks to take possession of four properties of a property developer couple after dismissing their claims of “sharp practise” by the bank in re-issuing proceedings as part of efforts to recover judgments totalling €21.1 million.

There was no "sharp practise" or "trick-acting" by the bank in relation to the proceedings taken against Thomas Darcy, an unsuccessful candidate for Direct Democracy Ireland in the 2014 European parliament elections, and his wife Antoinette, Mr Justice Peter Charleton said.

He was giving the three judge court’s judgment rejecting their claim the High Court should not have allowed the bank re-issue proceedings over a €17.4 million judgment, part of the €21.1 million total.

Judgments

AIB previously obtained two summary judgments, totalling €21.1million, over loans totalling €15.8 million made to them between 2006 and 2008 and secured on four properties in Malahide and Howth in Dublin. One of the properties, the former family home in Woodview, Howth, was destroyed by fire. The court previously heard the couple lived in another of the properties.

One of the judgments, for €17.4 million, was obtained in February 2011, arising from default after the bank applied for judgment to the High Court central office without any court hearing.

The couple sought to have that judgment set aside claiming, among other things, they were unaware they could challenge a default judgment until a July 2011 High Court decision concerning the law on repossessions.

Arising out of that decision, the government introduced rectifying legislation — the 2013 Land and Conveyancing Law Reform Act.

In April 2012, the High Court ordered repossession of the four properties.

Hearing

The Darcys appealed to the Supreme Court which ruled there should be a full hearing of the bank’s claim for judgment in the High Court.

In the interim, AIB issued new proceedings after notifying discontinuance of the old proceedings.

The Darcys argued, if the original proceedings had been prosecuted to finality, AIB would have lost its application for possession and sale of the properties.

They claimed what the bank did breached the Supreme Court decision, amounted to sharp practice and opened the floodgates to the misuse of court proceedings.

AIB denied their claims.

In the High Court in October 2014, Mr Justice Paul Gilligan ruled there was no abuse of process by the bank, there was no departure from normal procedure and the discontinuance notice in relation to the original proceedings was valid.

On Thursday, the Court of Appeal dismissed the couple’s appeal against that decision.

Repayment

Mr Justice Charleton said AIB chose a form of letter of demand for repayment of the loans which may have resulted in a failure to achieve enforcement through a court order charging their debt on the four properties.

This arose due to an inadvertent omission in the law before that was rectified by the 2013 Land and Conveyancing Reform Act, he said. It did not, he found, occur as a consequence of a desire by the bank to use litigation as “an improper weapon of terrifying the debtors into settling judgment but rather as the ordinary use of the court system in recovering a loan”.

He also dismissed arguments certain provisions of the Family Home Protection Act meant that one of the four properties which was at one stage the family home could not be repossessed under the Family Home Protection Act.

The High Court was correct in finding the relevant protection was only for a spouse who did not co-own the family home, he said.