Havbell DAC v Harris & Anor [2020] IEHC 147 (21 February 2020)

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JUDGMENT of Mr. Justice Richard Humphreys delivered on the 21st day of February,

1. The plaintiff contends that on 30th November, 2004, Permanent TSB entered into a

facility with the defendants for a commercial interest-only loan in the sum of €422,000.

Those funds were drawn down. The defendants claim that in 2013 Permanent TSB

changed the facility from an interest-only loan to one requiring both repayment and

interest. The plaintiff says this was not unilateral but was by agreement.

2. On 19th June, 2015 Permanent TSB’s rights under the facility were conveyed to Havbell

Ltd. The plaintiff contends that on 23rd June, 2015, the defendants were notified of the

transfer. On 16th September, 2016 Havbell Ltd converted to a DAC. The plaintiff

contends that on 1st November, 2017, its solicitors demanded repayment of the sum of

€113,778.04, being the amount alleged to be due and owing at that time. A summary

summons was issued on 16th January, 2018 and a notice of motion for summary

judgment followed on 17th May, 2018. On 23rd November, 2018 the Master of the High

Court made an order remitting the case to plenary hearing. On 28th November, 2018 the

plaintiff issued a motion to set aside the order of the Master under O. 63 r. 9 of the Rules

of the Superior Courts. The Master’s order was set aside on 28th January, 2019 by

3. On 29th November, 2019 the Supreme Court gave judgment in Bank of Ireland Mortgage

Bank v. O'Malley [2019] IESC 84 (Unreported, Supreme Court, Clarke C.J. (Charleton and

Ní Raifeartaigh JJ. concurring), 29th November, 2019) to the effect that the summary

summons and supporting affidavit should provide “at least some straightforward account

of how the amount said to be due was calculated and whether it includes surcharges

and/or penalties as well as interest” (para. 6.7). On 13th February, 2020 the plaintiff

issued a further motion seeking to amend the summary summons in the light of that

4. I have now received helpful submissions from Mr. Keith Rooney B.L. for the plaintiff and

from Mr. Jerry Healy S.C. (with Mr. Vincent Nolan B.L.) for the defendants. The matters

addressed in the present judgment were dealt with in four short modules or tranches

when the original rulings were given, and there were further oral submissions between

each tranche; but for simplicity’s sake, all of the rulings have been consolidated into the

(ii). costs and consequential issues on the amendment application;

(iv). costs and consequential issues on the issue of summary judgment.

5. The ostensible purpose of the amendment is to particularise the debt in accordance with

the judgment in Bank of Ireland Mortgage Bank v. O’Malley. The proposed particulars are

6. This breakdown has already been provided in the sense that the statement of account is

7. The law on amendment of pleadings has not always been the most consistent area of

Irish jurisprudence. But it is important constantly to seek to refocus that area back to

first principles, which are firstly the interests of justice, and secondly ensuring that the

real issues in controversy are addressed. In that regard, Geoghegan J. in Croke v.

Waterford Crystal Ltd [2004] IESC 97, [2005] 2 IR 383 at 401, referred to the power to

amend as being a “liberal rule”, a dimension stressed in the discussion in Hilary Delany,

Declan McGrath & Emily Egan McGrath, Delany and McGrath on Civil Procedure, 4th ed,

8. In B.W. v. Refugee Appeals Tribunal [2017] IECA 296, [2018] 2 I.L.R.M. 56, at para. 78,

Peart J. for the Court of Appeal, approved the three-fold test for amendments -

arguability, explanation and lack of irremediable prejudice. While that was discussed in

the judicial review context, those three criteria are of wider relevance to amendments

9. As far as arguability, the amendment is clearly arguable. Whether the claim as so

10. In terms of explanation, the amendment was clearly prompted by the significant

refinement of the requirements of pleading introduced by the Supreme Court in O’Malley.

That was a tangible modification to the previous law. The concept of some breakdown in

the sum sought in a summary summons was envisaged in Allied Irish Banks Ltd v. The

George Ltd (Unreported, High Court, Butler J., 21st July, 1975), but that obligation was

read quite restrictively by Hogan J. in A.I.B. v. Pierce [2015] IECA 87 (Unreported, Court

of Appeal, 22nd April, 2015), an approach that has been superseded now by the Supreme

Court decision in O’Malley (I noted the tension between The George and Pierce previously

at para. 29 of Crowley v Allied Irish Banks Plc T/A AIB Credit Card Services [2016] IEHC 154

(Unreported, High Court, 18th March, 2016)). In such circumstances, I think it is fair

to say that there has been a certain element of inconsistency or at least development in

the caselaw; and it seems unfair to visit the inconsistencies of the legal system on

11. Mr. Healy stresses that in Porterridge Trading Ltd v. First Active Plc [2007] IEHC 313

(Unreported, High Court, 7th September, 2007), Clarke J., as he then was, noted the

need for an explanation for not having pleaded the point raised in an amendment at an

earlier stage. But that was in the context of the overall exercise of “assessing the

competing interests of justice involved.” The interests of justice and the determination of

12. In particular, Mr. Healy complains about the time lapse between the Supreme Court

judgment on 29th November, 2019 and the motion seeking the amendment on 13th

February, 2020. That is hardly a delay worthy of significant legal attention, but even if

there had been a long delay due to oversight, human error or even insouciant inactivity,

13. Mr. Healy suggests that there needs to be an explanation for the full period of delay in

seeking the amendment, but there has to be some reality to that process. A lapse of time

in moving to seek an amendment of two-and-a-half months including the Christmas

vacation is hardly much to write home about in the private law context. As Mr. Rooney

eloquently puts it “before I have to explain a delay there has to be a delay to explain”.

That is a legitimate comment here. Delay is very much in the de minimis ballpark in this

14. Furthermore, the objection raised involves a failure to look at the situation in the round.

What is to be explained is why the party did not plead the point the first time around.

The fact of the Supreme Court decision explains the delay between the summary

summons on 16th January, 2018 up to 29th November, 2019. Admittedly, there is not an

express explanation on affidavit as to the delay (if you want to call it delay) between 29th

November, 2019 and 13th February, 2020, but firstly, that is minor both in absolute

terms and in context, and secondly, practical considerations including the vacation make

such a lapse of time well within what is reasonable in the context. In any event, even if

there had been a long delay of months or even years due to oversight, such human error

can nonetheless amount to an explanation. After all, that is basically what happened in

Keegan v. Garda Síochána Ombudsman Commission [2012] IESC 29, [2012] 2 IR 570,

where the Supreme Court allowed an amendment after a long gap due to human error.

15. As regards the third leg of the test, namely lack of irremediable prejudice, that has to be

distinguished from the question of mere prejudice, which can normally be compensated

for in costs. Mr. Healy suggests there is prejudice because there is no case without the

amendment (although he also makes the separate argument that there is no case even

with the amendment). However, requiring a party to answer a potentially winning

argument (and I say “potentially” only on the basis of the test of arguability and not to

prejudge the merits) is not legally cognisable prejudice in this context (see comments of

Posner J. in Reed v. Illinois (Case 14-1749, U.S. Court of Appeals for the 7th Circuit, 30th

October, 2015) at p. 9). Prejudice for these purposes could, for example, involve a party

having embarked on a particular course of action in reliance on a posture set out in the

other parties’ pleadings, such that it would be unjust to allow that other party to resile

from such a posture; or perhaps derailing a date fixed for hearing. Such factors do not

arise here, and any prejudice to the defendants can be addressed in terms of costs.

16. My view that an amendment should be allowed here is reinforced by the fact that this is

what happened in O’Malley itself. The court remitted the matter back to the High Court to

allow the bank to apply to amend the summary summons there (see para. 7.1). In the

light of all of these matters, the amendment should be allowed in the interests of justice

17. As sought in para. 2 of the notice of motion of 13th February, 2020, I will, by consent,

dispense with the requirement to re-serve the amended summary summons.

18. As regards costs, Mr. Rooney seeks his costs or alternatively suggests it may be more

practical to order the costs to be in the cause, or to adjourn them to after the motion for

summary judgment. Mr. Healy suggests that I should either grant the defendants their

19. In line with the approach taken by Clarke J., as he then was, in Porterridge Trading Ltd v.

First Active [2008] IEHC 42 (Unreported, High Court, 21st February, 2008) at para. 4.5

(see Delany and McGrath on Civil Procedure at p. 307), it seems appropriate to award the

costs of the application to amend to the defendants, being the respondent to the

application to amend. Such an approach has more resonance in commercial litigation

where the court can take the view that an unsuccessful objection may often be

distinguished from an unreasonable objection. By contrast, in the context of public law

litigation, where case management issues require a more vigorous husbandry of the

courts resources to avoid unnecessary multiplication of preliminary and procedural issues,

the court might well be required to have a wider view as to what amounts to an

unreasonable objection to an amendment, so as to provide for possible costs orders

against the unsuccessful objector. In the present circumstances, however, the order will

be that the defendants be granted the costs of the application to amend.

20. There is a voluminous body of caselaw on the issue of the test for, and the procedure

involved in, applications for summary judgment, which is summarised in the ever-

indispensable Delaney and McGrath on Civil Procedure 4th ed. at pp. 1156 to 1176; but in

a (perhaps optimistic) attempt to cut through the complexity I would suggest that the

(i). the plaintiff’s claim must be sufficiently pleaded and particularised;

(ii). the plaintiff must adduce evidence establishing a prima facie case;

(iii). if so, the court must inquire whether there is a fair and reasonable probability of

(iv). if so, the defendant must show that this goes beyond mere assertion and is

21. The need for the claim to be sufficiently particularised is stressed in Bank of Ireland v.

O’Malley (see paras. 5.5 to 5.9 in particular). The particularisation may be done indirectly

by referring to another identified document which provides the necessary information (see

para. 5.6). Three issues were raised by the defendants as to a lack of particulars.

22. The first issue was a lack of details as to how the interest was calculated. All that the

amended summary summons says is that it specifies the interest rate on 26th October,

2017. It also refers to statements of account although they aren’t expressly identified in

the summons. Clarke C.J. in O’Malley refers (at para. 5.6), to the possibility of giving

particulars via an “identified” document. A general plea as set out in the amended

summary summons at para. 10, which states that “the defendants have been regularly

supplied with statements of account …” does not constitute reference to an “identified”

document. Clarke C.J. in O’Malley states that there must be specification as to how the

interest was calculated from time-to-time. That is implicit in paras. 6.4 to 6. 7. That is

not just a matter of evidence: he states that the pleadings must specify how the sum due

was calculated, even if that is done by reference to another document (see para. 6.11).

Thus, the pleadings have to indicate either directly or indirectly how the interest is

calculated if the plaintiff is to be entitled to seek summary judgment.

23. Some modest guidance is provided in the subsequent Supreme Court decision in Bank of

Scotland v. Fergus [2019] IESC 91 (Unreported, Supreme Court, Charleton J. (McKechnie

and McGovern JJ. concurring), 18th December, 2019) which refers to O’Malley (see paras.

19 and 20), stating that “the nature of these requirements is to put a debtor in a position

where on an individualised basis he or she may see where perhaps a mistake has been

made or where interest may have been overcharged or penalties may have been

misapplied”. A reference to putting a debtor in a position to know whether interest may

have been overcharged implies that the interest rate as it varies from time to time has to

24. Charleton J. goes on to say that “it is also required of a plaintiff financial institution to

make it clear as to the precise basis that a sum of money is owed”. Again, this reference

to the “precise basis” is an illuminating gloss on the O’Malley decision. Under these

circumstances the somewhat meagre particulars of interest pleaded in the special

summons are inadequate to support an application for summary judgment.

25. The second question is how the initial loan of €422,000 turned into the “opening balance”

of €302,308.20. The first named defendant admits the original loan of €422,000, but not

the so-called opening balance of €302,308.20, which is the amount alleged to be the debt

at the time of transfer from Permanent TSB to Havbell. The endorsement of claim does

not explain how that amount is calculated and, therefore, does not comply with O’Malley

or Fergus. Mr. Rooney submits that this is a matter for evidence rather than

particularisation, but I don’t accept that. The jurisprudence is clear that the amount

claimed must be explained and indeed explained precisely. He also majors on the first

named defendant’s alleged admission of the residual debt, but the admission does not

specify the amount of the residual debt he is admitting to, nor does it waive any

26. The third complaint about the pleadings is that they are inconsistent with the case as now

advanced. The pleadings expressly state that the facility offered was “a commercial

interest only loan” (see para. 3), whereas it is now argued that the loan was restructured

to involve repayment of principal as well. It is not appropriate to seek summary judgment

on foot of pleadings that positively assert a basis for the debt that has since been

changed with no reference in the pleadings to the change of basis of the liability. Given

the jurisprudence as to clarity as to how the sum due is made up, it would not be

appropriate to allow summary judgment in the present case on foot of pleadings that

assert an interest-only loan and make no reference to the restructuring of the facility.

27. It is clear from O’Malley (paras. 5.2 and 6.8) that the plaintiff must not merely assert a

prima facie case, but must support that with evidence. The issues raised under this

heading generally do not add much to the issues to the points addressed under the first

issue above, although there is one additional matter, which is that as far as the second

named defendant is concerned, while it is pleaded that a letter of demand was sent to

her, there is no actual evidence of that. If that were the only problem for the plaintiff I

would have considered allowing further evidence to be adduced on that point, but given

that it is not, there is no point doing so. So the matter would have to be adjourned to a

28. This test originates with Ackner L.J. in Banque de Paris v. de Naray CA [1984] 1 Lloyd’s

Rep. 21, at 23, where he said that the question was, “is there a fair or reasonable

probability of the defendants having a real or bona fide defence”. Lloyd L.J. in Standard

Chartered Bank v. Yaacoub [1990] CA Transcript 699, said that this involved the question

of asking “is what the defendant says credible”. Glidewell L.J. in National Westminster

Bank Plc v. Daniel [1993] 1 WLR 1453 followed the Banque de Paris approach, as did

Murphy J. for the Supreme Court in First National Commercial Bank Plc v. Anglin

[1996] IESC 1, [1996] 1 IR 75. As noted above, there has been a very large body of caselaw

since then, much of which is set out in Delaney and McGrath on Civil Procedure. Mr.

Rooney placed particular reliance on Governor and Company of the Bank of Ireland v.

White [2018] IEHC 415 (Unreported, High Court, Faherty J., 29th June, 2018) to which I

29. The defence here is that the agreement entered into was for an interest-only loan. That,

it is said, was changed unilaterally by Permanent TSB. At the time the first named

defendant believed that the financial institution was entitled to do that, but he now

considers that not to be the case. Separately, proceedings for damages for breach of

contract have been issued in relation to this matter [2019 No. 2501 P]. It is true that the

first named defendant accepts in his second affidavit at para. 5(l) that he entered into an

agreement for repayment of principal monies accompanied by a repayment holiday, but

the affidavit makes clear that the context for that was what he saw as the prior imposition

of a unilateral change by the financial institution. In such a context, a positive agreement

which included a holiday is not automatically or even probably to be taken as a waiver of

his rights. The context for the agreement was a positive unilateral assertion by the bank

that the terms and conditions of the loan approval provided that the loan was due to

convert to principal and interest (see letter of 1st October 2020). The defendants now

30. Much is made of the first named defendant’s incorrect original statement that the alleged

unilateral change was in February 2012 (because if it occurred at all, it must have

occurred earlier), but the timing is secondary to whether a unilateral change happened.

The fact that not all the documentation is said to be available to the defendants may be

relevant here. As noted above, it is true that the first named defendant did send an email

stating that he accepted that he was bound to pay the remaining residual debt, but there

is no acknowledgment of the amount of that nor was there any waiver of any set-off or

counterclaim. On that point Mr. Rooney submits that the defence under this heading is

only really a counterclaim and that this should not preclude grant of summary judgment,

relying on Bank of Ireland v. White, but the law in that regard even as appears from

White is considerably more nuanced. The court has what Clarke J., as he then was, in

Moohan v. SNR Motors Donegal Ltd [2007] IEHC 435, [2008] 3 IR 650, at para. 4.2

(cited in White by Faherty J. at para. 58) called a “wider discretion” depending on

whether or not the counterclaim arises from an independent set of circumstances. Here

there is no question of an independent set of circumstances. The counterclaim is very

much tied into the whole agreement under which the plaintiff now proceeds. So I would

adjourn the matter for plenary hearing under this heading as well in any event, subject to

31. What constitutes mere assertion as opposed to evidence is not always immediately

obvious, but it seems to me in all the circumstances of the present case that the first

named defendant’s affidavits do constitute adequate evidence in the circumstances for

32. Accordingly, I will dismiss the motion seeking summary judgment and adjourn the

proceedings to plenary hearing. I do not see any obvious benefit in two separate sets of

plenary proceedings dealing with the same issue, so consideration needs to be given as to

whether the matter should be consolidated with the separate proceedings [2019 No. 2501

Costs and consequential matters arising from the summary judgment application

33. As regards possible consolidation, I will adjourn the matter for six weeks with a view to

consolidating the proceedings on the basis that the defendants will communicate with

Permanent TSB. The fact that there is an additional party in the action for damages is

not an automatic bar to consolidating the proceedings and given the fairly massive

overlap of issues, much could be said in favour of consolidation, but the final decision will

34. The intention would be that in the event of consolidation, the defendants’ existing

proceedings would only stand as against Permanent TSB rather than as against Havbell

and would as against them be replaced by a defence and counterclaim in the present

35. As regards the question of a stay on the costs of the amendment application which was

ordered in favour of the defendants, it is accepted by Mr. Rooney that the costs can be

sent to adjudication, but it seems to me that there is a benefit in staying the execution of

the costs until the determination of the proceedings, because that may save costs and be

more convenient overall given the number of moving parts and the potential for further

orders. Consequently, any execution should be in the context of a final state of play,

where, in the event of there being anything hypothetically to set-off or to be taken into

account in terms of any such costs order, such execution will be in the context of the

36. As regards the costs of the unsuccessful application for a summary judgment, the normal

rule is that such costs be costs in the cause: ACC Bank Plc v. Hanrahan [2014] IESC 40,

[2014] 1 I.R. 1 at para. 3.5 per Clarke J. as he then was. In all the circumstances I do

not see sufficient reason to depart from that here, so the costs of the application for a

(ii). dispense with the requirement to re-serve the amended summary summons;

(iii). grant the defendants the costs of the application to amend;

(iv). dismiss the motion seeking summary judgment and adjourn the proceedings to

(v). adjourn the matter for six weeks with a view to consolidating the proceedings with

the plenary action, on the basis that the defendants will communicate with

(vi). stay the execution of the costs until the determination of the proceedings; and

(vii). order that the costs of the application for a summary judgment will be costs in the

cause.

Result: Allow amendment, dismiss motion seeking summary judgment and adjourn to plenary hearing

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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Havbell DAC v Harris & Anor [2020] IEHC 147 (21 February 2020) URL: http://www.bailii.org/ie/cases/IEHC/2020/2020IEHC147.html Cite as: [2020] IEHC 147

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