McKeever, Michelle and John McKeever and Bank of Ireland (UK) PLC

Factual and Procedural Background

The appellants obtained a loan of £450,000 from the Bank in June 2007 to redevelop property located at 48/49 The Square, Crossmaglen, Co Armagh ("the property"). The appellants granted the Bank a charge over the property as security for the loan. Following default on repayment obligations, the Bank initiated proceedings in May 2013 seeking payment of approximately £570,000 plus interest, declarations validating the appointment of receivers over the property, injunctions restraining the appellants from trespassing, possession orders, and damages for trespass.

Receivers were appointed by the Bank in February 2013, and the Bank obtained an interlocutory injunction restraining the appellants from interfering with the property. The appellants disputed the validity of the Bank's actions and jurisdiction, but the High Court ruled in favour of the Bank on these preliminary matters. The proceedings then experienced a prolonged period of dormancy for nearly six years, with intermittent affidavits and case management orders but no substantive trial. In 2019, the appellants served a Defence and Counterclaim raising various challenges to the validity of the loan, charge, and receivership, as well as alleging mismanagement by the Bank as mortgagee in possession.

The first instance hearing was eventually held on 8 September 2021, at which the appellants did not attend. The trial judge heard evidence from the Bank's witnesses, found in favour of the Bank, and granted judgment against the first appellant only, along with declarations and injunctions. The appellants appealed this decision.

Legal Issues Presented

1. Whether the trial judge's decision and order were adequately reasoned.
2. Whether the trial judge failed to consider adequately or at all certain factual and legal issues raised by the appellants, including the terms of the loan agreement and mortgage deed, the validity of the transfer of the loan and security to the Bank, and the status of witnesses.
3. Whether the trial judge failed to conduct a proper enquiry into the appellants' non-attendance at the trial.
4. Whether there was a breach of the appellants' rights under Article 6 of the European Convention on Human Rights (ECHR), specifically the right to a fair trial, due to alleged inadequate notice of the hearing.

Arguments of the Parties

Appellants' Arguments

• The decision of the trial judge was inadequately reasoned.
• The judge failed to properly consider multiple factual and legal issues, including the terms and validity of the loan and mortgage documents, the validity of the transfer of the loan to the Bank, and the employment status of witnesses.
• The trial judge did not properly investigate the reasons for the appellants' non-attendance at the hearing.
• The appellants' rights under Article 6 ECHR were breached due to inadequate notice of the hearing.

Respondent's Arguments

• The grounds of appeal relating to inadequate reasons and substantive issues lacked merit.
• The Bank contended that notice of the hearing had been properly given and that the appellants' non-attendance was unexplained.
• The Bank maintained entitlement to judgment based on proven debt and valid security.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court identified two principal issues arising from the appeal: first, whether the appellants had received adequate notice of the first instance hearing; second, whether the trial judge properly adjudicated the issues raised in the Defence and Counterclaim.

Regarding notice, the court emphasized the fundamental common law right of every litigant to receive notice of hearing, which is non-waivable and entails a corresponding duty on the opposing party to provide adequate notice. The court found no evidence before the trial judge that the appellants had received notice. The Bank’s counsel’s statement of attempts to notify the appellants was insufficient without sworn evidence. The appellants also failed to provide evidence supporting their claims of inability to attend due to COVID-19 isolation. The court concluded that the appeal must succeed on this ground, acknowledging the Bank’s counsel’s realistic acceptance of this issue.

On the second issue, the court observed that the trial judge did not adjudicate the multiple substantive issues raised by the appellants’ pleadings. The interlocutory judgment of Deeny J, which addressed certain preliminary matters, was not intended to be finally dispositive of the substantive legal issues. The court refrained from determining the applicability of issue estoppel or res judicata, leaving these matters for the first instance court upon retrial.

The court also addressed the duty of candour regarding litigants receiving legal advice or assistance from undisclosed advisors, warning of the legal consequences of misleading the court, including potential criminal liability.

Holding and Implications

The appeal is ALLOWED and the order of the trial judge is reversed.

The case is remitted to the Chancery Court for a full trial of all issues arising from the pleadings. The retrial is to be conducted in accordance with the Court of Appeal's judgment, with liberty to apply as necessary. No order as to costs between the parties is made.

The decision directly affects the parties by vacating the previous judgment and requiring a substantive trial to resolve all contested issues. No new legal precedent is established beyond the reaffirmation of the fundamental right to notice of hearing and procedural fairness.