Governor And Company Of The Bank Of Ireland v Wales (Approved)

Factual and Procedural Background

The proceedings were initiated by way of summary summons on 16 August 2013 by Company A, originally ICS Building Society, later substituted by Company B, the Governor and Company of the Bank of Ireland, following a statutory transfer approved by the Minister for Finance under the Central Bank Act 1971. The case concerns recovery of monies alleged to be owed by the Defendant pursuant to two loans entered into with Company A in August 2006, secured by legal charges over two mortgaged properties located in The City.

The mortgaged properties were subsequently sold, and the sale proceeds credited against the debt. A significant dispute exists regarding the treatment of these sale proceeds and the Defendant’s alleged liability for any shortfalls. The special indorsement of claim seeks judgment for a sum significantly higher than the amount for which final judgment is presently sought, reflecting controversy over the accounting of credits and allowances.

The Defendant has also filed a motion to dismiss the proceedings for want of prosecution and/or delay, which remains unheard. The hearing before the court on 1 March 2021 was confined to the Plaintiff’s application for leave to amend the pleadings, prompted by the Supreme Court’s judgment in Bank of Ireland Mortgage Bank v. O’Malley [2019] IESC 84, which clarified the requirements for pleading and particularising claims in summary summons proceedings.

Legal Issues Presented

1. Whether the Plaintiff should be granted leave to amend the special indorsement of claim in summary summons proceedings to comply with the Supreme Court’s ruling in O’Malley regarding the specification and particularisation of the claim amount, including calculation details and inclusion of surcharges, penalties, and interest.
2. Whether the proposed amendments are necessary for determining the real questions of controversy between the parties.
3. Whether any prejudice to the Defendant arising from the amendments or delay in seeking them justifies refusal of leave to amend.

Arguments of the Parties

Plaintiff's Arguments

• The amendments are necessary to comply with the Supreme Court’s decision in O’Malley, which represents a tangible modification to the law governing summary summons pleadings.
• The amendments provide proper particulars of the debt calculation, including interest and surcharges, thus protecting the Defendant’s right to understand the claim.
• The amendments are limited in scope, do not introduce new claims, and do not prejudice the Defendant.
• Delay in seeking the amendments is excusable, particularly given court restrictions due to the public health measures during the coronavirus pandemic.
• The Plaintiff should not be penalised for initially inadequate pleadings, and the amendments serve the interests of justice by clarifying the real issues in controversy.

Defendant's Arguments

• The Defendant contends the claim as currently pleaded is fundamentally different from that sought in the notice of motion to enter judgment, lacking adequate explanation of the sums claimed.
• The Defendant argues the summary summons proceedings are irregular and misconceived, particularly since the mortgaged properties have been sold and the securities are said to be extinguished.
• The Defendant asserts that by allowing the sales to proceed, the Plaintiff tacitly agreed that the Defendant would have no liability for any shortfall.
• The Defendant criticises the Plaintiff’s affidavits as inadequate, particularly for failing to address the sale of the mortgaged properties and the allocation of sale proceeds.
• The Defendant claims prejudice from the amendments, including the insertion of terms from the mortgage deed and changes to interest calculation dates, and alleges potential statute-bar issues.
• The Defendant has also raised issues regarding delay and the propriety of the proceedings generally, including motions to dismiss for want of prosecution.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by outlining the governing legal principles for applications to amend pleadings, referencing Order 28, rule 1 of the Rules of the Superior Courts and key authorities such as Croke v. Waterford Crystal Ltd. The primary consideration is whether the amendments are necessary to determine the real questions in controversy. The court noted that delay and prejudice are relevant but do not automatically bar amendments, especially where prejudice can be addressed by adjournment or costs orders.

The court distinguished the requirement for "arguability" in judicial review proceedings from private law proceedings, concluding that such a threshold is not appropriate in the latter context. The court agreed with the approach in Havbell DAC v. Harris, except for the arguability requirement.

The court found that the amendments sought were limited, aimed at providing proper particulars of the debt calculation as required by the Supreme Court’s judgment in O’Malley. This judgment represented a significant change in the law, mandating clearer specification of how amounts claimed are calculated, including interest and penalties.

The court rejected the Defendant’s argument that allowing the amendment would be unfair or prejudicial, noting that the Defendant’s complaints largely related to the merits of the case or issues to be addressed at the stage of entering final judgment, not at the amendment stage. The court also found that the changes to interest calculation dates and the inclusion of terms from the letters of loan offer were minor and caused no prejudice.

Regarding delay, the court acknowledged the time elapsed since O’Malley but accepted that the COVID-19 pandemic and resultant court restrictions mitigated the delay. The court further noted that the Defendant had sought particulars since 2018, but the proposed amendments related to details predating the sale of the properties and thus did not overlap significantly with prior complaints.

In conclusion, the court held the amendments were necessary to ensure the real issues were before the court and that no irremediable prejudice arose from granting leave to amend.

Holding and Implications

The court granted the Plaintiff leave to amend the pleadings in accordance with the draft amended special indorsement of claim exhibited in the Plaintiff’s affidavit.

Holding: The application for leave to amend the pleadings was GRANTED.

The decision directly impacts the parties by allowing the Plaintiff to provide proper particulars of the claim in compliance with the Supreme Court’s ruling in O’Malley, thereby clarifying the claim and protecting the Defendant’s right to understand and respond to the case against him. No new precedent was established beyond applying existing principles to the facts. The court indicated that issues relating to delay in the overall proceedings and the Defendant’s motion to dismiss remain to be determined separately. The Defendant is provisionally entitled to costs of the amendment motion, reflecting that the need for amendment arose from deficiencies in the Plaintiff’s original pleadings.