The High Court has cleared the way for a couple to challenge the validity of the appointment of a receiver by Bank of Scotland over several properties they owned.
The action was brought by Anthony and Miriam Freeman.
They were customers of Bank of Scotland Ireland, which in 2010 was the subject of a cross-border merger with Bank of Scotland plc (BOS).
Last year the bank appointed a receiver - Simon Davidson - over six properties owned by the couple after they failed to pay amounts due on loans advanced by them by the bank in 2006.
The couple challenged to the validity of the receiver's appointment, which they say is null and void.
As part of their action they claimed some of the loans they obtained from the bank were securities to a third party meaning that BOS had no entitlement any claim over the loans.
They also claim BOS has breached two Central Bank Codes of Practice in completing the securitisation scheme.
They further alleged the bank was insolvent at the time of the cross border merger.
The couple also claimed that senior members of BOS fraudulently conspired to obtain a cross border merger, that BOS did not advance them a loan of money but misled and deceived them by "creating money", that BOS committed offences under the 2001 Criminal Justice Fraud Act, and defamed them.
All the allegations were denied by BOS, which brought a preliminary action seeking to have the couple's action dismissed on the basis that their action was frivolous, vexatious, displayed no cause of action and were bound to fail.
In his ruling on the preliminary issue, Mr Justice Paul Gilligan said he was allowing the couple's claim to proceed to full hearing.
However, the judge dismissed several parts of the couple's action.
He said that after careful consideration he was satisfied that the couple's action in relation to securitisation and alleged non compliance with Central Bank Codes could be litigated.
He directed that the couple now prepare an amended statement of claim.
The court noted the couple owned properties at Huntstown Drive, Huntstown Wood, and Willowwood Lawn all in Blanchardstown, Drumcliffe Drive and Ventry Drive both in Cabra and Dunsink Green, Finglas.
In 2006, the couple applied and were granted loans by BOS, which were used to refurbish and upkeep the properties.
The six properties were put up as security for the loans.
However, the couple got into financial difficulties and were unable to repay instalments.
The mortgage accounts were in arrears amounting to €51,000. BOS made a demand for repayment in February 2012.
Following a failure to pay they appointed Mr Davidson as receiver over the properties.
He then instructed Lloyd Daley and Associates Ltd to sell a number of the properties, and the net proceeds were remitted to the bank.
However, the judge said that he was striking out all other grounds of the couples claim, such as the allegation they had been defamed, that the bank was engaged in fraudulent activity, and that it had created money.
Mr Justice Gilligan said he accepted BOS’ arguments that those sections of the claims were bound to fail. Claims such as the "creation of money" argument are coming before the courts in numerous jurisdictions with increasing frequency since the economic and property market collapse.
These arguments, he said, often advanced in court cases by a particular type of vexatious litigant which have been described by the US courts as Organised Pseudo legal Commercial Arguments (OPCA).
The Judge added that he further endorsed the US courts findings that these type of claims are fanciful and devoid of merit.
They are often made by litigants who find themselves in financial pressure, acting under pressure and acting on the instruction of organised groups or individuals who have a vested interest in disrupting court operations and frustrating the legal rights of governments, corporations and individuals.
