Bank Misconduct as a Bar to Restitution –
Extending Consumer-Credit Protection to Victims of Forged Mortgages

1. Introduction

Bank of Ireland Mortgage Bank v Murray & anor, [2025] IESC 24, is destined to become a touch-stone in Irish unjust-enrichment and consumer-credit jurisprudence. At its heart lies a forged mortgage, a bank official’s false attestation, and a lender’s attempt to recover €185,000 on a restitutionary basis from a borrower who never consented to the loan.

While Dunne J. (for the majority) would have upheld the Court of Appeal and granted the bank restitution, a powerful joint judgment of Woulfe J. and Hogan J. identifies three interlocking objections – illegality, statutory policy and change of position – that bar recovery. Those objections form the new precedent: where a lender’s own wrongdoing facilitates a forged loan, the bank is disentitled to restitution and the victim is treated as a “consumer” under the Consumer Credit Act 1995 (“CCA 1995”) notwithstanding lack of signature.

The decision reshapes (i) the boundary between restitution and the defence of illegality, (ii) the interpretation of “consumer” in the CCA 1995, and (iii) the scope of the change-of-position defence. Practically, it cautions lenders that procedural shortcuts – especially false witnessing – may permanently bar recovery.

2. Summary of the Judgment

• Forged Documents: A bank manager falsely attested Mr. Murray’s signature on the 2007 “Confirmation of Marital Status”.
• Loan Draw-downs: Approx. €200,000 was advanced between 2007-2009 and used for taxes, pensions and a land purchase. No investment property was ever built.
• Discovery: Mr. Murray first learned of the loan in late 2011 and of the mortgage over his home in July 2012.
• Bank’s Claim: When default occurred, the Bank sued Mr. Murray for unjust enrichment (principal €185,315 plus interest).
• High Court & Court of Appeal: Both courts held Mr. Murray liable. They reasoned that (a) he was enriched and (b) he was not a “consumer” because he never signed the agreement, so CCA 1995 protections did not arise.
• Supreme Court – Joint Minority Judgment: Woulfe & Hogan JJ. would allow Mr. Murray’s appeal and dismiss the bank’s restitution claim for three reasons:
  1. Illegality / Bank wrongdoing: the bank’s own false representation bars equitable relief.
  2. Statutory Policy: a teleological reading of “consumer” in s.2 CCA 1995 extends protections to forged-loan victims; restitution would undermine that policy.
  3. Change of Position: Mr. Murray spent the funds years before discovering the loan; therefore he cannot restore the benefit.

Although technically a dissent (the majority reasons are not reproduced in full), the joint judgment articulates doctrine likely to influence future courts, regulators and lenders because it synthesises illegality, restitution and consumer law in a novel way.

3. Detailed Analysis

3.1 Precedents Cited

• Dublin Corporation v Building and Allied Trade Union [1996] 1 IR 468 – Four elements of unjust enrichment: enrichment, at plaintiff’s expense, in unjust circumstances, and absence of defences. The Court accepts elements one–three but focuses on defences.
• Carey v Independent Newspapers (Ireland) Ltd [1982] IR 179 – Henchy J.’s “fruit of the poisoned tree” rationale. Distinguished: unlike the innocent underwriters in Carey, the bank here actively contributed to the wrongdoing.
• Murphy v Attorney General [1982] IR 241 – Supreme Court confirms change of position as a defence to unjust enrichment.
• Nestor v Murphy [1979] IR 325 – Teleological statutory interpretation to avoid “pointless absurdity”. Applied to broaden “consumer” in the CCA 1995.
• East Cork Foods Ltd v O’Dwyer Steel Ltd [1978] IR 103 – Court refused restitutionary interest where it would conflict with Debtors Act 1840. Authority that statutory policy trumps restitution.
• Goff & Jones, The Law of Unjust Enrichment (10th ed, 2022) – Textual support for disqualifying circumstances and illegality in restitution.

3.2 Legal Reasoning

(a) Illegality and “Disqualifying Circumstances”

The cornerstone is the bank’s deliberate false witnessing. By certifying a signature it never saw, the bank made a false representation that was a proximate cause of the loan. Under equitable maxims (“he who comes to equity must come with clean hands”), such conduct is a bar to discretionary relief. The joint judgment elevates this maxim into a structured filter within unjust-enrichment analysis: wrongful conduct by the claimant that is causative of the enrichment disentitles restitution.

(b) Statutory Policy – Re-Defining “Consumer”

Section 2 CCA 1995 defines “consumer” as a natural person who, “acting outside his trade or profession, avails of a credit agreement”. Binchy J. and the majority held that because Mr. Murray never signed the agreement, he did not “avail” of it.

Woulfe & Hogan JJ. deploy a Nestor-style teleological interpretation:

• The Oireachtas intended to protect private borrowers, especially in family-home contexts.
• Allowing a bank’s wrongdoing to remove those protections would invert the statute’s purpose – a “pointless absurdity”.
• Therefore “consumer” must include a private individual whose supposed consent is forged.

Result: A lender who circumvents the Act cannot rely on the absence of formal signature to escape the Act’s consumer safeguards. This is a striking re-alignment of restitution with regulatory policy.

(c) Change of Position

Mr. Murray used the funds for ordinary expenses between 2007 and 2011. He was unaware of the loan, had no notice of fraud, and could not possibly ring-fence the money. The joint judgment treats this spending as an irreversible detriment, satisfying the Murphy test. By contrast, in Carey the money was still intact in court. The factual difference is decisive.

(d) Interplay of the Three Grounds

Any one ground could potentially defeat the bank, but together they create a layered defence:

1. Illegality prevents recovery ex turpi causa.
2. Statutory policy reinforces that prevention and gives it a legislative anchor.
3. Change of position provides a practical alternative defence in case the first two falter.

3.3 Likely Impact

The judgment’s ripple effects will be felt in at least four domains:

1. Banking Practice: Managers must witness signatures rigorously; otherwise the bank risks total loss.
2. Consumer Credit Litigation: Borrowers who are victims of forgery may now invoke the CCA 1995 even without formal execution.
3. Restitution Doctrine: Irish courts have explicit authority to deny restitution where claimant wrongdoing conflicts with statutory policy, moving beyond traditional “clean hands”.
4. Legislative Interpretation: Reaffirms a purposive (teleological) approach when literal wording undermines protective legislation.

4. Complex Concepts Simplified

• Unjust Enrichment: A legal principle requiring someone who has been unfairly benefited (enriched) at another’s expense to return the benefit, unless a defence applies.
• Change of Position Defence: If the recipient spent the money in good faith such that repayment would be inequitable, restitution can be denied.
• Illegality / “Ex turpi causa”: A party cannot rely on a wrongful act to obtain judicial relief.
• Teleological Interpretation: Reading a statute according to its purpose rather than its literal words, especially to avoid absurd or unjust results.
• Confirmation of Marital Status: A banking form requiring both spouses to confirm joint ownership and borrowing, often used to comply with family-home protections.

5. Conclusion

Bank of Ireland Mortgage Bank v Murray establishes that a lender’s own wrongful attestation of a forged signature bars restitution and triggers consumer-credit protections even in the absence of a borrower’s signature. The joint judgment of Woulfe and Hogan JJ. deftly marries illegality, unjust-enrichment doctrine and statutory policy, offering a layered defence for victims of forged mortgages.

Future lenders must treat formalities not as box-ticking but as essential safeguards; failure to do so may preclude any recovery. Equally, the decision arms borrowers with a potent shield: when banks bypass statutory consumer protections, courts will not assist them in undoing the consequences. The case thus recalibrates the equilibrium between consumer protection and restitutionary fairness in Irish law.