The High Court has ruled that Bank of Ireland Mortgage Bank is entitled to possession of the home of a Co Sligo woman who borrowed some €60,000 against the property shortly before her death in 2008.
However, Mr Justice David Nolan said that a dispute between the bank and the estate of the late Bridget Cunningham over some €90,000 interest alleged to be due on the loan should be determined by a full, plenary hearing before the High Court.
The property at the centre of the action is at Mount Edwards Heights, Ballinfull, Co Sligo and for many years was Mrs Cunningham’s home.
In 2006/07, when she was 86 years of age, the deceased borrowed €60,000, via a ‘Life Loan’ mortgage from the bank to carry out improvements on the property, which consists of a rural detached cottage and six acres of farmland.
The bank, which claims that it is owed approximately €150,000 including interest in respect of the loan from the estate, commenced proceedings against Mrs Cunningham’s estate seeking possession of the property, in 2019.
The property has been valued at €180,000.
The estate opposed the possession order claiming the bank had waited too long to bring an action in respect of the property.
Mrs Cunningham’s daughter Teresa Gillespie, acting in her capacity as executrix of the estate, claimed the bank’s action should be dismissed as it is statute barred, and out of time under the 1961 Civil Liability Act.
She claimed that the bank should have brought its claim for possession within two years of Mr Cunnigham’s death.
She also claimed that the interest rates charged on the loan are also statute barred.
BOI rejected the estate’s arguments, said the claim was within time, and argued that Mrs Gillespie had no defence to its application.
It argued that under the terms of the ‘Life loan’ no repayments were expected during Mrs Cunningham’s lifetime, and that it only became due and payable on her death.
No repayments have been made on the loan, which was secured by way of a charge over the deceased’s property.
In 2015 the bank called on the estate to make a full repayment on the loan and four years later sought possession of the property.
Mrs Gillespie extracted a grant of probate over the estate in April 2021.
In his decision the judge said that the proceedings had been brought by the bank over 11 years after Mrs Cunningham’s death.
The reason why the bank is entitled to possession is because the life loan has not been repaid, the judge said.
He said that seeing as the proceedings were seeking an order for possession, the bank’s action was not statute barred.
It would be a different argument if the application before the court was an attempt to reclaim a debt, the judge added.
The court held that there was at least “an arguable case” that the defences of the statute of limitations and that there had been a delay by the bank arises in regard to the interest claimed which should go to plenary hearing.
The judge said that there had been a significant increase in the sums due by virtue of the interest that has accrued since Mrs. Cunningham’s death, or shortly thereafter, and the present day.
The amount of interest substantially exceeds the original life loan.
The estate, he said, says that the opportunity to raise finances is now lost compared to the position had the proceedings been instituted at an earlier time.
There has been no explanation for the “enormous delay” in this case, he added.
It was open to the bank to explain the delay, but they have chosen not to, the judge said.
What the bank had done was to try to blame the defendant, for not acting sooner.
The judge said it did not accept that argument.
The matter will return before the judge when final orders will be made in the case.
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