The High Court recently considered an application by a plaintiff to dismiss proceedings brought by an individual against two companies, Celtic Residential Irish Mortgage Securitisation DAC No. 14 and Celtic Residential Irish Mortgage Securitisation DAC No. 15, the Sixth and Seventh Named Defendants, in which the plaintiff claimed his mortgage loans had been securitised.
The plaintiff had previously sought leave to issue proceedings against five other defendants, as those companies were in liquidation, however this leave was refused and so this application concerned only the Sixth and Seventh Named Defendants.
The plaintiff entered into three loan agreements with First Active plc in 2007, two of which were subsequently securitised with the one of the defendant companies in 2008. The beneficial interest in the loans was transferred back to Ulster Bank in 2015, and the loans were subsequently sold to the third party in a loan sale.
The plaintiff alleged that he had been offered 25 year interest only loans by First Active and that somehow, by virtue of the securitisation in the defendant company, these loan offers had been altered to be 5 year interest only loans, with the balance then reverting to capital and interest. The plaintiff issued proceedings claiming damages for breach of contract, negligence, negligent misrepresentation, negligent misstatement, concealment, fraud and deceit. The plaintiff then served a Statement of Claim in which he alleged that either First Active or Ulster Bank created a "manufactured false loan offer" and that were it not for the securitisation of his loans in the defendant, he would be able to demonstrate that he had a 25 year interest only loan contract in 2007, which was subsequently altered in 2012 to put him on capital and interest.
In addition to elaborating on the alleged inconsistencies in the loan offer, in affidavits filed in response to the strike out application, the plaintiff set out that these proceedings were necessary in order to allow him to obtain documentation to assist him in his defence of proceedings brought by the current owner of the loan in respect of the appointment of a receiver.
High Court Decision
Mr Justice Barr held that it had been demonstrated that none of the plaintiff's loans had been securitised in the Seventh Named Defendant and that therefore he did not have any cause of action against that defendant.
In respect of the Sixth Named Defendant, Mr Justice Barr found that the plaintiff had made vague allegations of serious wrongdoing against various parties, none of which were particularised as against the defendants, in breach of Order 19 Rule 5(2) of the Rules of the Superior Courts. The Court found that even on the most favourable interpretation of the pleadings and affidavits, there was no evidence to persuade it that the plaintiff could have a stateable cause of action against either of the defendants. The Court found that a plaintiff cannot defeat an application of this kind simply by making a bare allegation in a statement of claim, that there must be some evidential basis to allow the Court to conclude that the plaintiff had a stateable cause of action.
The Court also held that it was not permissible to bring proceedings in order to obtain documentation which might be of use in other proceedings, where the Rules of the Superior Courts provide for documentation to be obtained from third parties by way of non-party discovery. It was also held that it is not permissible to bring proceedings in order to frustrate or obstruct other proceedings, and that to do so is an abuse of process.
Mr Justice Barr held that the proceedings failed to disclose a stateable cause of action, and were frivolous and vexatious. Accordingly he made an Order dismissing the plaintiff's action pursuant to the inherent jurisdiction of the court.
For more information please contact Ciara Murphy or your usual contact in Beauchamps.