It is important for any plaintiff, whether an individual or a bank, to comply with all necessary time limits for commencing proceedings, as failure to observe these will usually mean your action will fail.
In an unusual case before the High Court recently, and where it seemed all parties had contributed to the delays, the court had to look at the two-year time limit under the Civil Liability Act 1961, to sue a deceased person, as well as the more generous twelve year limit set out in the Statute of Limitations, 1957 to recover possession of land from a deceased person or their estate.
This arose because the borrower took out a life loan designed for older borrowers and mortgaged her house. Unfortunately, she died a year or so later and the bank had to eventually seek recovery of both the property and mortgage debt from the executor to her estate.
The borrower, an elderly lady, drew down a special life loan from AIB in 2006, where both interest and capital were only to be repaid on her death. Unfortunately, the borrower died in 2008, and it was only in 2021, that a Grant of Probate was extracted by a special administrator appointed by the court.
The bank had issued a summons to recover the debt and property in 2019 and, clearly because of the long delay in doing so, considering the borrower had died some 11 years before, the lady’s daughter contested the bank’s court action on the grounds that it was statute barred owing to the considerable delays.
Her daughter claimed the bank was barred from proceeding with its claim because of the two-year time limit allowed under the Civil Liability Act 1961, which provides that proceedings against deceased persons must issue within two years from their date of death.
The daughter had also argued that the bank was guilty of laches (i.e. excessive delay) and as such that all interest claims were also statute barred.
The judge in the case noted that the loan signed by all parties was a lifeloan and not one for 20 or 25 years. He looked at the wording of the loan, which expressly stated that all monies became due and payable only on the deceased’s death in July 2008. He took note that the bank had only issued proceedings in 2019 some eleven years later.
So, was the bank statute barred? The Civil Liability Act 1961 concerned actions subsisting against deceased persons, so the court had to consider if the bank’s cause of action were, in fact, subsisting at the time of the deceased’s death and, if that was so, the bank claim would be statute barred.
The court considered that in this particular loan agreement, the entitlement of the bank, which is contingent on the death of the borrower, is not by definition one, which is subsisting as of their date of death. In reality, the court argued the bank’s entitlement only arises after the borrower’s death.
The provisions of the 1961, Civil Liability Act did not therefore apply, and the bank’s claim was not statute barred. They had 12 years to issue proceedings under the 1957 Act and were just within the 12-year time limit allowed by that act.
As for the daughters claim of delays (laches) on the part of the bank, the court stated that there were some inexplicable delays on the bank’s part, but the daughter had not acted to her detriment by reason of those delays. The judge did, however, criticise the bank because interest had continued to accrue on the account during the years when the bank had been less than active in progressing matters.
The judge said that his hands were tied by the established principle that “where the Statute of Limitations, 1957, provides for a relevant limitation period, there is no scope for the application of the equitable doctrine of Laches.”
The court, therefore, allowed the banks possession case to proceed but held that the bank’s claim for interest could perhaps be challenged by the defendant using the Statute of Limitations.
Bank of Ireland Mortgage Bank v Teresa Gillespie [2024] IEHC 41
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