Judge refuses AIB application to revisit findings in mortgage case

A High Court judge has refused an application by AIB Mortgage Bank (AIBMB) to "revisit" findings by her which it fears could raise doubt about some €17.8 billion interbank debt transfers made under a 2001 Act.

The findings, made last July by Ms Justice Marie Baker in a case by AIBMB against Nadine Thompson, were that under an 1887Act, Ms Thompson must be served sufficient notice of the transfer of her loan from AIB to AIBMB but that was not done.

Based on other findings that there was an equitable assignment of the debt and it was actionable in equity, the judge held AIBMB was entitled to judgment against Ms Thompson, Rathdown Park, Terenure, Dublin, for €244,591.

The transfer was among some €17.8 billion in loan transfers made under a scheme provided for under Section 58 of the Asset Covered Securities Act 2001 and AIBMB later voiced concerns the judgment could raise doubt about transfers under the scheme.

Final orders have yet to be made in Ms Thompson’s case because the bank applied to the judge to “revisit” or “amplify” her finding that the failure to provide express notice of the loan transfer amounted to breach of the Superior Court of Judicature (Ireland) Act 1887.

It argued its application was in the public interest as the substantive judgment was liable to cast doubt on the legal effect of interbank transfers made under the scheme provided for under the 2001 Act.

Its counsel Paul Gallagher SC submitted the judgment had potential to have a wider impact on the market in assets covered securities “in an adverse way” and may be relied on in other cases, leading to a degree of litigation “chaos” and legal uncertainty.

AIBMB agreed to indemnify Ms Thompson for the costs of opposing its application.

In her reserved judgment on Wednesday, Ms Justice Baker said the bank, for understandable reasons, was not appealing her decision that it was entitled to judgment against Ms Thompson.

‘Real concern’

Neither the bank nor Ms Thompson argued the principal judgment was incorrect in law and the bank’s “real concern” was whether Section 58 of the ACS Act offers a “complete and separate statutory means by which a debt is assigned”, she said.

That argument could have been but was not litigated before her in this case and thus not addressed by her in her 2017 judgment. That judgment, she stressed, was therefore not a useful authority in relation to the Section 58 point.

It was impermissible to re-open this case so the bank could advance its Section 58 argument now but such an argument could be made in another suitable case, she ruled.

The bank’s “true concern” was her 2017 judgment may be relied on by borrowers in other cases where a loan book transfers under the 2001 Act.

She considered, in a suitable case, if the provisions of the 2001 Act are opened and fully argued, the matter may be “appropriately determined”.

Because there was nothing preventing any bank making that argument in another case, there was no public interest to be gained in revisiting her judgment, she ruled.

It would be wrong to permit her judgment be revisited so as to ensure clarification for the purposes of later cases when she was not persuaded a suitable case could not arise in the future, she added.

Were she to deliver a fresh judgment in this case, that could lead to legal uncertainty concerning the operation of Section 28 of the 1887 Act, she said.

If she granted the bank’s application, there would effectively be two judgments from her in the same case with the same result but with different reasoning, she added.