Borrower could not re-litigate possession proceedings using Unfair Terms Directive
In Cronin v Dublin City Sheriff & anor  IEHC 685, Ní Raifeartaigh J, 17 October 2017 the High Court refused to set aside a repossession order in respect of a family home on the grounds that the courts granting the order had not assessed the mortgage contract under the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 (the Unfair Terms Regulations) and the Directive 93/13 (the Unfair Terms Directive) which deal with unfair terms in consumer contracts. The High Court held that the proceedings constituted an abuse of process in circumstances where Mr Cronin had not made those arguments in the various proceedings dealing with the repossession order.
Interestingly, the Court specifically noted that it was not deciding on the extent of any obligation placed on the Irish courts by the Directive and referred to recent comments by Barrett J in AIB v Counihan stating that the Courts were obliged by their own motion to consider the terms of the Directive as "apparently obiter".
In 2014 the Circuit Court granted an order of possession in respect of the plaintiff's property. Mr Cronin did not attend the Circuit Court hearing but appealed the possession order to the High Court which affirmed the order. No issues of European law were raised in those proceedings.
In 2016, Mr Cronin commenced proceedings in the High Court, claiming an agreement with the second named defendant, Tanager DAC (Tanager) whereby Tanager agreed not to take possession of the property provided Mr Cronin made weekly payments of €600 to Tanager. The proceedings were dismissed. Mr Cronin was represented at the hearing of that application and again, European law issues were not raised. In March 2017, Mr Cronin appealed and for the first time raised arguments relating to the Unfair Terms Regulations and Directive. That appeal has not yet been heard.
In April 2017, Mr Cronin commenced these proceedings seeking an injunction to prevent repossession of his family home. He submitted that the European Court of Justice (ECJ) case law on the Unfair Terms Directive required domestic courts, when considering whether to enforce a consumer contract, to consider whether the contract may contain unfair terms; and that a court was obliged to raise the issue on its own motion, even if the parties had not done so. Mr Cronin argued that, as no assessment as to the impact of the Unfair Terms Directive was carried out by any judge or county registrar involved in the proceedings, this was a breach of EU law and the repossession order was unenforceable.
Mr Cronin referred to Article 7 of the Charter of Fundamental Rights of the European Union (which includes respect for home and family life). He pointed out that the ECJ had noted that the European Court of Human Rights had held that the loss of a home was one of the most serious breaches of the right to respect for the home and that any person who risks being the victim of such a breach should be able to have the proportionality of such a measure reviewed.
Mr Cronin also relied on the decision of Barrett J in the High Court in AIB v Counihan  IEHC 752 which observed that the ECJ case law appeared to contemplate a court acting in an inquisitorial manner in respect of the Unfair Terms Directive.
Tanager sought to dismiss the plaintiff’s action on the grounds that the claims made were an abuse of process and bound to fail.
The Court pointed out that it is clear that if a legal argument could have been raised in the original proceedings, and was not, a Court would be entitled to strike out new proceedings, based on that argument, as an abuse of process.
The legal points, based upon EU law, which were now being argued before the Court could have been raised in the earlier proceedings. Therefore, the only question before the Court was whether the normal principles concerning finality of proceedings and abuse of process required adaptation by reason of ECJ law requirements, concerning the Unfair Terms Directive and the importance of the family home under the Charter.
The Court reviewed the case law of the ECJ and observed that the principles of finality and certainty had been emphasised repeatedly in those authorities. Indeed, the ECJ’s own interpretation of the finality principle made it clear that it was not necessary to disapply domestic rules on finality merely because there had been a misapplication of EU law.
In the present case, Mr Cronin had the opportunity to raise points of European law in the original Circuit Court proceedings but failed to participate in those proceedings; he had another opportunity on appeal to the High Court, but while he participated in those proceedings and did so with the benefit of legal representation, he did not raise the EU law arguments.
The Court also held that the jurisprudence of the ECJ concerning the Unfair Terms Directive did not require an exception to this principle of finality in the present circumstances.
In the circumstances, the Court dismissed the proceedings.
Finally, the Court commented that it was not deciding the question of the extent of any obligation placed upon the Irish courts in repossession cases that were still "live" before the courts by virtue of the Directive. The Court's decision was limited to a conclusion that it would be an abuse of process to allow Mr Cronin to maintain the proceedings where the arguments had not been raised in previous proceedings.