Permanent TSB formerly Irish Life and Permanent PLC & Anor v Donohoe (Approved)

Factual and Procedural Background

This judgment concerns consequential orders arising from a prior judgment delivered on 26 July 2024 relating to the plaintiffs' application for possession of two properties pursuant to section 62(7) of the Registration of Title Act 1964, as amended. The plaintiffs commenced proceedings by special summons and relied on affidavits. The defendant filed numerous affidavits identifying various purported defences. The court found some defences not arguable and others requiring adjournment to plenary hearing for proper resolution. The parties disagreed on the appropriate form of order following that judgment. The defendant also had two motions before the court seeking to strike out the plaintiffs' claim, which mirrored his defences and thus did not require separate consideration. A further motion by the defendant, returnable after this judgment, overlaps with issues addressed in finalising the court's order but is not subject to this judgment. The plaintiffs seek a stay of proceedings pending appeal.

Legal Issues Presented

1. The appropriate form of order following the adjournment to plenary hearing, specifically whether the defendant's leave to defend should be confined to certain issues.
2. The status and effect of the defendant's motion dated 3 May 2018 in light of the prior judgment.
3. The determination of costs arising from the summary application for possession.
4. Whether to grant a stay on the proceedings pending any appeal.

Arguments of the Parties

Plaintiffs' Arguments

• The court is required to specify the grounds on which leave to defend is granted when adjourning a summary application to plenary hearing, confining the defendant to those grounds.
• Rely on the Court of Appeal decision in ACC Loan Management Ltd v Sheehan, which held that leave to defend should be confined to the defence found to be arguable.
• The rules governing summary summons and special summons are similar, so the discretion under special summons should be similarly constrained.
• The costs of the summary hearing should be costs in the cause or reserved, referencing the Supreme Court decision in ACC Bank plc v Hanrahan.
• Seek a stay on the timetable for pleadings pending appeal.

Defendant's Arguments

• Proposes a form of order that specifies matters on which he has not been granted leave to defend but also grants leave on all other pleaded matters, including those not yet considered by the court.
• Alternatively, seeks leave to defend on a broad list of 46 specified grounds, some requiring further consideration or discovery.
• Contends some reliefs sought in the 3 May 2018 motion should be adjourned to plenary hearing rather than refused.
• Argues the plaintiffs were "particularly unreasonable" in not agreeing to adjourn to plenary hearing, seeking costs accordingly.
• Seeks a stay on any step in the proceedings pending determination of appeal.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
ACC Loan Management Ltd v Sheehan [2016] IECA 343	Leave to defend in summary summons should be confined to the defence found to be arguable.	The court considered the dicta but found it over-interpreted for special summons proceedings and not strictly binding in all cases.
National Asset Management Limited v Kelleher [2016] IECA 118	The court may impose conditions confining leave to defend to specific arguable defences in summary summons proceedings.	The court relied on this to hold it has discretion in special summons proceedings and may frame the defence issues broadly but restrict new defences without leave.
Bussolino Ltd v Kelly [2011] IEHC 220	Supports limiting defences to those passing the arguable threshold in summary summons.	Referenced to support the principle of limiting defences to those found arguable.
ACC Bank plc v Hanrahan [2014] IESC 40	Costs of summary judgment motions adjourned to plenary hearing should generally be costs in the cause or reserved.	The court applied this principle to order costs in the cause, considering fairness and efficiency.
Cabot Financial (Ireland) Limited v Kearney [2022] IEHC 247	Principles on costs in summary proceedings remain applicable post-Legal Services Regulation Act 2015.	Referenced by the defendant to argue plaintiffs acted unreasonably; court found plaintiffs’ conduct not unreasonable.

Court's Reasoning and Analysis

The court analysed the differences between proceedings commenced by summary summons and special summons, noting that the rules governing them (Order 37 and Order 38) differ, particularly regarding the defendant's obligations and the court's discretion. The court found that while the Sheehan decision constrained discretion in summary summons cases, it does not impose a strict rule applicable to special summons proceedings.

The court emphasised the importance of fairness, efficiency, and cost-effectiveness in managing the proceedings that have been ongoing since 2015, involving extensive affidavits and submissions. The defendant has had ample opportunity to present defences and will not be permitted to raise new defences at plenary hearing without leave.

The court agreed it was appropriate to specify in the order the broad issues on which the defendant may rely, encompassing all issues adjourned to plenary hearing but excluding those expressly rejected. The court identified six broad issues for defence, including the necessity to prove service of a valid demand letter, enforceability of a special condition under consumer protection regulations, admissibility of documentary evidence, purchase of loan rights by the second plaintiff, compliance with contract terms on interest rate notifications, and compliance with statutory provisions on credit servicing.

Regarding the defendant's motions dated 3 May 2018 and 8 March 2024, the court held they mirror defences already raised and struck them out, without restricting defences available in plenary hearing as specified.

On costs, the court applied the principles from Hanrahan, concluding that costs should be costs in the cause, given the absence of unreasonable conduct by the plaintiffs and the complexity of the proceedings. The defendant’s claim for costs was rejected as unjustified.

Finally, the court granted a stay of the timetable for pleadings for 28 days and pending any appeal but declined a broader stay, noting that other motions seeking security for costs and declarations remain to be addressed separately.

Holding and Implications

The court made the following orders:

• Proceedings are adjourned to plenary hearing as if commenced by plenary summons.
• Plaintiffs must deliver a Statement of Claim within four weeks.
• Defendant must deliver a Defence within four weeks of the Statement of Claim.
• The Defence is confined to six broad issues:
  • Necessity to prove service of a valid demand letter;
  • Enforceability of Special Condition No. 6 under the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995;
  • Admissibility of documentary evidence relied on by the plaintiffs;
  • Purchase by the second plaintiff of the first plaintiff’s rights and entitlements in relation to the defendant;
  • Compliance by the plaintiffs with contract terms on notification of interest rate changes and fixed rate period termination;
  • Compliance by the second plaintiff with section 28 of the Central Bank Act 1997, as amended by the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015.
• Defendant’s motions dated 3 May 2018 and 8 March 2024 are struck out.
• Costs of the proceedings to date (except those subject to separate order) are costs in the cause.
• The timetable for delivery of pleadings is stayed for 28 days and, if there is an appeal, pending its determination.

The decision directly affects the parties by clarifying the scope of the defendant’s defence and procedural timetable but does not establish new legal precedent beyond applying existing principles to the special summons context.