Contractual Waiver and Extinguishment of Mortgagee’s Title under the Statute of Limitations: Commentary on Mars Capital DAC v Walsh [2025] IESC 45

Contractual Waiver and the Extinguishment of Mortgagee’s Title under the Statute of Limitations:
Commentary on Mars Capital Finance Ireland DAC v Walsh [2025] IESC 45

1. Introduction

The Supreme Court’s judgment in Mars Capital Finance Ireland DAC v Walsh [2025] IESC 45 is a major restatement of Irish limitation and land law in the context of mortgage enforcement over registered land. Delivered by Murray J for a five-judge Court (Charleton, O’Malley, Hogan, Collins JJ concurring), the decision addresses a deceptively simple but conceptually difficult question:

Can a mortgagor, by contract or estoppel, validly preclude himself from relying on the Statute of Limitations where, on his own case, the mortgagee’s “title” and entitlement to principal and interest have been extinguished under ss. 24, 33 and 38 of the Statute of Limitations 1957?

The case sits at the intersection of:

  • the traditional rule that most limitation provisions merely bar the remedy (and must be pleaded),
  • special rules in the 1957 Act which go further and extinguish title and secured debt in the case of land and mortgages,
  • contractual freedom and the enforceability of settlement agreements, and
  • public policy in “quieting” title through adverse possession versus public policy in upholding bona fide compromises.

The Supreme Court uses the dispute between Mars Capital (“Mars”) and Mr Walsh (“the defendant”) as the vehicle to clarify how extinguishment provisions operate, whether and how they depend on a pleaded limitation defence, and to what extent parties may contract around or waive those consequences. In doing so, the Court:

  • endorses key reasoning of the High Court of Australia in Price v Spoor [2021] HCA 20,
  • approves, in substance, the controversial English decision in Colchester BC v Smith [1992] Ch 421,
  • reconciles those authorities with Irish case law such as Perry v Woodfarm Homes [1975] IR 104, and
  • draws a sharp distinction between statutory “acknowledgements” (which do not revive extinguished title) and contractual waivers or estoppels (which can prevent extinguishment arising as between the parties).

In practical terms, the Court holds that a borrower who, for value and with legal advice, signs a settlement agreement expressly waiving “all claims arising from the facilities” and confirming the lender’s enforcement rights cannot later rely on the Statute of Limitations to defeat a possession claim, even where—on the borrower’s case—the mortgagee’s title and right to the secured debt would otherwise have been extinguished.

2. Factual and Procedural Background

2.1 The loan and mortgage

  • In August 2003, EBS Building Society offered Mr Walsh a loan facility of €350,000 repayable over 25 years.
  • The loan was secured by a 2004 mortgage over his property “Ballyvadden House”, Kilmuckridge, Co Wexford.
  • The defendant averred he made no repayments after about 2007.
  • He was registered as full owner of the property in 2009, with EBS registered as charge-holder (a “mortgagee” for the purposes of the Statute of Limitations and the Registration of Title Acts: see Statute of Limitations 1957 (“the 1957 Act”), s.2(4)).

2.2 Assignment to Mars and possession proceedings

  • EBS assigned the loan and mortgage by a global transfer deed to Mars in April 2021.
  • Mars was registered as owner of the charge on 30 June 2021.
  • After demands in 2022, Mars issued possession proceedings on 3 August 2022, relying on s.62(7) of the Registration of Title Act 1964 (“the 1964 Act”), which permits the registered charge-holder to seek possession once the principal is due.

2.3 The Settlement Agreement and Acknowledgment (March 2023)

In March 2023, while the possession proceedings were pending, the parties entered into a settlement (the “Settlement Agreement”), composed of:

  • a Settlement Letter from Mars (3 March 2023), and
  • an Acknowledgment signed by Mr Walsh (10 March 2023) with the benefit of legal advice.

Key features:

  • Total “secured obligations” acknowledged at €651,519.84.
  • Mars agreed to accept a reduced sum of €250,000 in two instalments, in full and final settlement, and then to release/discharge the security.
  • Critically, the Acknowledgment provided that:
    • if Mr Walsh defaulted, Mars could enter judgment for the full outstanding secured obligations and
    • an application for an order for possession over any secured assets “will be made”.
    • Mr Walsh stated he had no actual or pending claim or grounds for a claim (actual, contingent or otherwise) against Mars or its predecessor “insofar as such claim may arise from the Facilities”.
    • He further irrevocably waived any such claim or right of action “insofar as such claim may arise from the Facilities”. The “Facilities” were expressly defined to include the 2003 facility letter and the 2004 mortgage.

Mr Walsh paid €1,000 and €4,000 in April–May 2023 but then defaulted. Mars treated the settlement as at an end and moved to pursue possession.

2.4 Circuit Court and High Court

  • On 12 June 2024 the Circuit Court (Judge Morrissey) refused an adjournment and granted Mars possession pursuant to s.62(7) of the 1964 Act. No replying affidavit had been filed and the Statute of Limitations was not raised.
  • On appeal to the High Court, Mr Walsh—for the first time—alleged the claim was statute-barred. He averred the last payment before proceedings was “in or about 2007” and argued that, after 12 years, the mortgage and loan were extinguished (relying on ss. 13(2)(a), 32(2)(a), 33, 38 of the 1957 Act).
  • Barr J accepted that, as a matter of statutory construction, the mortgagee’s title is extinguished after the relevant period. But he held that, by virtue of the Settlement Agreement and Acknowledgment, Mr Walsh was estopped from relying on the Statute. He relied heavily on Colchester BC v Smith and other English authority, and dismissed the High Court appeal: Mars Capital v Walsh [2024] IEHC 648.

2.5 Leave to appeal and the issue before the Supreme Court

The Supreme Court granted leave on a single question of general public importance:

Whether the Settlement Agreement gives rise to an estoppel or contractual bar capable of precluding the defendant from invoking the extinguishment provisions of the 1957 Act.

Notably:

  • There has never been a determination on the facts that Mars’ claim is actually statute-barred.
  • The Supreme Court proceeded on a “worst case” assumption in Mr Walsh’s favour: i.e. that the limitation period had expired and, if he were free to rely on it, Mars’ title and right to the secured debt would be extinguished.
  • The core legal question was: could a settlement agreement nonetheless bar him from so relying?

3. Summary of the Supreme Court’s Decision

3.1 Outcome

The Supreme Court dismissed the appeal and upheld the High Court order granting possession to Mars. It held that:

  1. As a matter of construction, the Settlement Agreement and Acknowledgment constitute a binding contractual waiver by Mr Walsh of any claims “arising from the facilities”, including his asserted limitation-based claim that Mars’ mortgage title and rights to principal and interest had been extinguished.
  2. The extinguishment provisions in the 1957 Act—ss. 24 (title to land), 33 (mortgagee’s title on sale), and 38 (secured principal and interest)—operate only where the relevant limitation period (e.g. s.13 for recovery of land) has run and is available to be pleaded by the defendant in that particular relationship.
  3. Where a mortgagor has validly agreed not to raise or has otherwise disabled himself from raising the limitation defence, the statutory “extinguishment” cannot be said to have occurred between those parties.
  4. Enforcing such an agreement does not contravene the Statute of Limitations or public policy; rather, it promotes the strong policy in favour of upholding bona fide settlements of genuine disputes.
  5. There is therefore no unlawful “revival” of an already extinguished title. Instead, the agreement prevents the preconditions for extinguishment ever being met as between this mortgagee and this mortgagor.

3.2 Core legal principles established

Murray J’s judgment implicitly and explicitly lays down several important propositions:
  • Extinguishment is relational, not automatic or global.
    Sections 24, 33 and 38 extinguish the “title of that person” against the dispossessor only where the underlying limitation defence is available and invoked. Extinguishment is not a free-standing, automatic event operating erga omnes.
  • Limitation must be capable of being pleaded.
    The 1957 Act’s extinguishment provisions are parasitic on time bars such as s.13 (“no action shall be brought…”). If a defendant has bound himself by contract not to plead limitation, the precondition for extinguishment fails.
  • Contractual waiver and estoppel can validly preclude reliance on extinguishment provisions.
    A borrower, for good consideration and with advice, may lawfully waive his right to rely on statutory extinguishment as a defence, and may be held to that waiver.
  • Statutory “acknowledgement” rules remain intact.
    The Court confirms the orthodox view that statutory acknowledgements or part payments under ss. 52 and 62 cannot revive extinguished titles or debts. But that is a matter of statutory construction of those sections and does not preclude contract or estoppel from operating independently.
  • Perry v Woodfarm Homes remains good law.
    The Court refuses to overrule Perry, but confines its effect to the complex leasehold/freehold/squatter triangle in unregistered land. Perry does not preclude the Court from adopting the relational reading of extinguishment endorsed in Price v Spoor.

4. The Statutory Framework and the Court’s Reasoning

4.1 The relevant statutory provisions

(a) Actions to recover land and possession by mortgagees

Section 13(2)(a) of the 1957 Act provides that:

“No action shall be brought to recover land after the expiration of twelve years from the date on which the right of action accrued to the person bringing it...”

“Action to recover land” is defined (s.2(1)) to include:

  • proceedings by a mortgagee for delivery of possession by a mortgagor, and
  • applications under s.62(7) of the 1964 Act (the statutory summary possession procedure for registered charges).

Crucially, time only runs while the land is in “ordinary possession” of someone in whose favour the limitation period can run (s.18; see Ashe v National Westminster Bank [2008] 1 WLR 710 at [87]).

(b) Limitation for sale and for recovery of principal and interest

  • Section 32(2) – 12-year limitation for an action for sale of mortgaged land by a private (non-State) mortgagee.
  • Section 36(1)(a) – 12-year limitation for recovery of the principal sum secured by mortgage or charge.
  • Section 37(1) – 6-year limitation for recovery of arrears of interest or damages for such arrears.

(c) Extinguishment provisions: ss. 24, 33, 38

These are the key provisions in play:

  • Section 24 – “Extinction of title to land”:
    “At the expiration of the period fixed by this Act for any person to bring an action to recover land, the title of that person to the land shall be extinguished.”
  • Section 33 – “Extinction of mortgagee’s title on expiration of time for action for sale”:
    “At the expiration of the period fixed by this Act for a mortgagee to bring an action claiming the sale of the mortgaged land, the title of the mortgagee to the land shall be extinguished.”
  • Section 38 – extinction of the right to the principal and interest:
    “At the expiration of the period fixed by this Act for a mortgagee of land to bring an action to recover the land or for a person claiming as mortgagee or chargeant to bring an action claiming sale of the land, the right of the mortgagee or such person to the principal sum and interest secured by the mortgage or charge shall be extinguished.”

(d) Acknowledgements and part-payments: ss. 52, 62

Sections 52 and 62 provide that—where the right of a mortgagee to bring an action to recover land has accrued—an acknowledgement of title or debt, or part-payment of principal/interest, re-starts the running of time from the date of acknowledgement/payment. But, as the case law has long held, these provisions do not allow an already extinguished title to be revived.

4.2 The classic view of limitation: bar on remedy, not right

Murray J begins by restating a foundational limitation principle: provisions framed as “no action shall be brought” generally bar only the remedy, not the underlying right, unless the statute expressly says otherwise. This is settled law in Ireland:

  • O’Reilly v Granville [1971] IR 90
  • O’Domhnaill v Merrick [1984] IR 151

Henchy J’s formulation in O’Domhnaill v Merrick is central (quoted at para. 30 of the judgment):

“Although the Statute states that an action ‘shall not be brought’… such a statutory embargo has always been interpreted… as doing no more than barring a claim… if, and only if, a defendant pleads the statute in defence… It is only when a defendant elects to rely on the statute as a defence that the statutory bar operates.”

From that, several consequences follow:

  • A claim that is plainly out of time may still succeed unless the defendant pleads the Statute.
  • A defendant can, by conduct or contract, be estopped or otherwise disabled from pleading the statute.
  • Agreement not to plead limitation, or conduct making it inequitable to rely on limitation, is effective.

Murray J notes a line of Irish authorities recognising estoppel and waiver in this context:

  • Doran v Thompson [1978] IR 223 – representation leading plaintiff to delay suing;
  • Ryan v Connolly [2001] 1 IR 627 – unambiguous representation that limitation would not be pleaded;
  • Murphy v Grealish [2009] 3 IR 366 – implied representation via conduct;
  • Kammins Ballrooms v Zenith Investments [1971] AC 850 – classic English articulation of waiver cited with approval.

This background is crucial: the Court’s task is to decide whether this settled doctrine— that one can waive or be estopped from invoking remedy-barring limitation defences— extends to those special provisions that seemingly extinguish substantive title and debt.

4.3 What makes ss. 24, 33 and 38 different?

Unlike the ordinary limitation sections, ss. 24, 33 and 38 do not simply say “no action shall be brought”. They say that title and the very right to principal and interest shall be extinguished at the end of the period. This appears, at first glance, to create:

  • a substantive extinguishment of how the law recognises ownership, rather than merely a procedural bar, and
  • a consequence that might be thought automatic and beyond the control of the parties once time expires.

The core dispute in Mars v Walsh is whether that appearance is correct. Mr Walsh argued that:

  • Once the statutory period has expired, the mortgagee’s title and right to the secured debt are simply gone.
  • No estoppel or contract can “breathe new life into” an extinguished title: to allow that would contradict the statute.
  • Therefore, any settlement that assumes the existence of a mortgagee’s title post-extinguishment is void or meaningless, or contrary to public policy.

Mars, conversely, contended that:

  • Extinguishment under ss. 24, 33, 38 is parasitic on the underlying limitation defences in ss. 13, 32, 36, 37.
  • Those defences must be available and pleaded by the defendant; if the defendant has waived or bargained away his right to plead them, extinguishment does not occur between the parties.
  • The Settlement Agreement thus lawfully prevents Mr Walsh from invoking extinguishment and allows Mars to enforce possession.

4.4 Construction of the Settlement Agreement

Before turning to the deeper statutory and policy arguments, the Court first construes the Settlement Agreement on orthodox contractual principles (paras. 49–55).

Murray J rejects Mr Walsh’s attempt to downplay the effect of the Acknowledgment as merely an acceptance that Mars would apply for possession. Read together with the Settlement Letter, the agreement is much more:

  • Mr Walsh expressly:
    • acknowledges indebtedness for the full secured obligations,
    • agrees that on default Mars is “entitled to pursue” him for the entire amount and that he “will not dispute same”, and
    • accepts that an application for possession will be made in that event.
  • Most significantly, he confirms that he has “no actual or pending claim or grounds for a claim” against Mars or EBS “insofar as such claim may arise from the Facilities” and irrevocably waives any such claim or right of action.

The Court then asks: does Mr Walsh’s asserted right to say that Mars’ title and secured debt were extinguished under the Statute count as a “claim arising from the facilities”? Murray J answers emphatically: yes (paras. 53–54).

  • That claim depends entirely on:
    • the existence of the loan and mortgage,
    • their contractual terms (which stipulate when the right to possession accrues), and
    • the borrower’s alleged failure to perform those terms over the relevant period.
  • The very operation of the statute—on which Mr Walsh relies—is triggered only because of those facilities and their breach. It is therefore, in substance, a claim “arising from the facilities”.
  • Moreover, this is not merely a “defence” but a positive claim that he could have asserted in his own proceedings (cf. Bula v Crowley (No.3) [2003] 1 IR 396).

Having thus characterised the limitation-based argument as a waived “claim arising from the facilities”, the Court frames the issue as follows (para. 55):

“The defendant agreed for good consideration that he had no claim against Mars arising from the facilities, and waived any claim he did have. The question is why, exactly, he should be released from the obligation to comply with that agreement.”

The rest of the judgment answers that question by reference to statute, case law and public policy.

4.5 Extinguishment as dependent on a pleaded limitation defence

The Court’s central move is to treat the extinguishment provisions as inextricably linked to, and conditional upon, the existence and plea of the underlying limitation defence. Here Murray J substantially adopts the reasoning of the High Court of Australia in Price v Spoor [2021] HCA 20.

(a) The reasoning in Price v Spoor

In Price v Spoor, the High Court of Australia construed provisions substantially identical to s.24 of the 1957 Act. Kiefel CJ and Edelman J (with Gageler and Gordon JJ) held that:

  • The extinguishment section operates “by reference to the plea” of the limitation period: it “proceeds on the same footing” as the underlying limitation provision.
  • If the limitation defence under s.13 is unavailable (for instance, because the defendant has contracted not to plead it), then the period has not “expired” in the relevant sense for s.24, and title is not extinguished.
  • Thus, a clause in the mortgage whereby the mortgagor agreed not to rely on limitation was effective, and the mortgagor could not claim that title had been extinguished.

Steward J explained (para. 118 of his judgment, quoted by Murray J) that:

“If no defence of limitation is pleaded for whatever reason, the period within which to bring an action… will have never expired. And that is so for the purposes of both ss 13 and 24… Where, however, the defence is successfully pleaded… the effect of s 13 is that the remedy… is barred, and the further effect of s 24 is that the ‘title’… is ‘extinguished’.”

(b) Applying that logic to the 1957 Act

Murray J holds that the same analysis applies under the Irish 1957 Act (paras. 68–71, 93–94):

  • Section 24 expressly ties extinguishment to the “period fixed by this Act for any person to bring an action to recover land”.
  • The “period fixed” is that in s.13, which—by settled law—bars the remedy only if and when pleaded.
  • Extinguishment therefore:
    • is individualised (“the title of that person”), and
    • depends on the expiry of the limitation period in relation to that particular person in that particular relationship, which implicitly requires that the defendant is free to and actually does rely on limitation.

As Murray J puts it (para. 69):

“It must follow… that it is only if the claim of the mortgagee against the mortgagor is barred that extinguishment occurs, and the claim is only barred if the range of conditions are met and if the mortgagor is in a position to invoke the limitation period under s.13… Without all of these, the claim is not statute-barred under s.13, and if it is not statute- barred under s.13, the mortgagee’s title is not extinguished vis-à-vis the mortgagor under s.24.”

This analysis achieves two critical results:

  1. Conceptual coherence: It aligns the extinguishment provisions with the general structure of the limitation regime (defence must be pleaded) and avoids the “absurdity” of title being extinguished before the limitation period for suing has “expired” in any meaningful sense.
  2. Space for contract and estoppel: If a mortgagor has contractually disabled himself from invoking the limitation defence, the precondition for extinguishment is absent; there is nothing for ss. 24, 33, 38 to extinguish as between those parties.

4.6 Acknowledgements vs contracts: why Colchester was controversial and why this case is different

A central plank of the defendant’s argument was that longstanding authority holds that acknowledgements and part-payments cannot revive an extinguished title to land, and that Colchester BC v Smith, which seemed to achieve such a revival by estoppel, had been widely condemned.

The Court traces this debate carefully (paras. 37–63):

  • Nineteenth and early twentieth century cases (notably Sanders v Sanders (1881) 19 Ch D 373; Nicholson v England [1926] 2 KB 93) held that statutory acknowledgements or rent payments, after the period for recovery had expired, cannot revive extinguished title. The logic is simple: “there is then nothing left to acknowledge”.
  • These decisions turn on the construction of the acknowledgement provisions themselves—then s.34 of the Real Property Limitation Act 1833, now reflected in ss. 52 and 62 of the 1957 Act—interpreting “acknowledgement of title” as referring to an existing title.

Murray J accepts that this orthodoxy stands. But he draws an important distinction:

  • An acknowledgement that is effective only because the statute deems it to have that effect (i.e. to restart a limitation period) cannot revive a title after the period has fully run, because the statute does not say it can.
  • A contractual agreement or an estoppel grounded in broader principles (mutuality, consideration, reliance, unconscionability) is different; it operates outside and in addition to the specific statutory machinery for acknowledgements.

As Darby & Bosanquet had noted as early as 1893 (and as Murray J quotes at para. 63), an acknowledgement “if made by deed, might operate as an estoppel” (citing Hemming v Blanton (1873) 42 LJPC 158).

Thus:

  • This case does not rest on any statutory “acknowledgement” reviving a dead title.
  • It rests on a freely negotiated settlement contract, supported by consideration, in which Mr Walsh abandons a limitation-based claim.
  • Properly understood, Colchester is about enforcing such a bona fide compromise, not about rewriting the statutory rules on acknowledgement.

4.7 Public policy: quieting title vs enforcing settlements

The defendant also invoked public policy: limitation rules for land, he argued, exist to “quieten title” for the benefit of the world at large (not just the immediate parties), so any attempt by mortgagor and mortgagee to reverse, after the fact, an extinguishment should not be recognised.

Murray J addresses this on two levels.

(a) The “quieten title” policy

The Court accepts the historical rationale: s.24’s predecessor (s.34 of the 1833 Act) was introduced to bring certainty to ownership after long possession, simplifying conveyancing and eliminating the burden of litigating ancient claims. But he emphasises (paras. 65–75):

  • Extinguishment is always triggered by the expiry of a limitation period in a specific relationship—here, between mortgagor and mortgagee—subject to complex factual questions (possession, payments, acknowledgements, disabilities).
  • There is nothing in the legislative history or text that suggests the Oireachtas intended to deprive parties of the ability to settle genuine disputes as to whether in fact the necessary conditions for extinguishment have been met.
  • Refusing to enforce such settlements would actually undermine certainty, because:
    • any person in possession could later repudiate his earlier compromise and claim the other party’s title had already been extinguished;
    • settlements would become fragile and unreliable, fostering more, not fewer, disputes.

(b) Third parties’ rights

Murray J also considers whether extinguishment operates “against the world”, such that agreements between mortgagor and mortgagee might prejudice third parties (paras. 76–91).

  • He acknowledges that the House of Lords in Fairweather v St Marylebone Property [1963] AC 510 had described extinguishment as extinguishing no more than “the title of the dispossessed against the dispossessor”.
  • In Perry v Woodfarm Homes this Court declined to follow the majority in Fairweather on a specific leasehold/freehold scenario, but the analysis there is context-specific and driven by the peculiar difficulties of leasehold adverse possession and merger/surrender.
  • Those leasehold cases do not stand for a general rule that extinguishment under s.24 operates automatically and erga omnes, regardless of whether the squatter is entitled or able to plead limitation.
  • On the contrary, Perry and Fairweather both accept that the title as against the squatter is what is lost; they debate what that means for the leaseholder’s residual relationship with the landlord.

In the context of a registered charge (as here), the Court reasons:

  • The “title” of a mortgagee over registered land is primarily the right to seek possession and sale under s.62(7) of the 1964 Act and associated statutory machinery.
  • Any “extinguishment” of that title under ss. 24, 33, 38 operates vis-à-vis the mortgagor, not in some abstract way in favour of the world at large.
  • Third parties (like subsequent charge holders) are generally volunteers or at least not purchasers for value of the extinguishment itself. Any priority or windfall they might assert based on extinguishment is parasitic on the statutory scheme, which in turn assumes that the mortgagor can invoke (and has not contractually waived) the limitation defence.
  • There is no persuasive public policy reason to prevent the mortgagor and mortgagee from agreeing to avoid such a windfall by compromising their dispute.

Thus, enforcing the Settlement Agreement is not seen as an impermissible attempt “to set up an estoppel in the teeth of a statute” (cf. Kok Hoong v Leong Cheong Kweng Mines [1964] AC 993; Re Green Dale Building Co [1977] IR 256). Rather, as Keane J put it in Re Greenore Trading [1980] ILRM 94, contractual arrangements are invalid on this ground only where they are prohibited by law or defeat a statutory purpose. That is not the case here.

5. Precedents and Authorities Discussed

5.1 Irish limitation and estoppel authorities

  • O’Domhnaill v Merrick [1984] IR 151 – foundational statement that “no action shall be brought” bars the remedy only upon a limitation plea.
  • O’Reilly v Granville [1971] IR 90 – distinguished between “bar of remedy” and “extinguishment of title”, relying on Lightwood; but Murray J emphasises that even extinguishment must be understood in its relational context and in light of procedural rules.
  • Doran v Thompson [1978] IR 223; Ryan v Connolly [2001] 1 IR 627; Murphy v Grealish [2009] 3 IR 366 – examples where estoppel or representation prevents a defendant from relying on limitation.
  • Clarke v O’Gorman [2014] 3 IR 340 – O’Donnell J’s remarks that even jurisdictional bars can sometimes be affected by estoppel help undermine the idea that extinguishment is unassailable.
  • Ulster Investment Bank v Rockrohan Estate [2015] IESC 17 – referred to on the nature of mortgagee’s title over registered land and the significance of what appears on the register.

5.2 Colchester BC v Smith

In Colchester BC v Smith [1992] Ch 421, a squatter who arguably had acquired title by adverse possession entered into an agreement with the council acknowledging that he had not acquired any title and taking a purported lease. The Court of Appeal held that he was estopped—by contract or convention—from asserting adverse possession or relying on limitation, thereby enabling possession to be granted to the council.

That decision attracted fierce academic criticism (Dixon, Brierley, McGee) on the basis that it seemed to allow estoppel to “revive” a title which the statute had said was extinguished. Murray J acknowledges those criticisms, but aligns with texts that defend Colchester (Jourdan & Radley-Gardner; Canny; Megarry & Wade) as a legitimate application of compromise and estoppel in the context of disputed adverse possession.

In Mars v Walsh, the Supreme Court does not wholly adopt Colchester’s logic of “revival”; instead, it places the emphasis on prevention of extinguishment via contractual disability to plead limitation, following Price v Spoor. However, the practical effect is similar: a party who signs an agreement acknowledging the other’s title and waiving claims may be prevented from later asserting adverse possession or extinguishment.

5.3 Price v Spoor and contractual exclusion of limitation defences

The High Court of Australia’s decision in Price v Spoor is the most influential foreign authority engaged with in the judgment. There:

  • The mortgage instrument itself contained a clause by which the mortgagor agreed not to plead limitation.
  • The applicable statute (Limitation of Actions Act 1974 (Qld)) had an extinguishment provision very similar to s.24 of the 1957 Act.
  • The High Court held that:
    • Parties could contract out of the limitation period;
    • Section 24’s extinguishment did not apply where the limitation defence was not available;
    • The mortgagor remained liable and the mortgagee’s rights were enforceable.

Murray J follows that reasoning, adapting it to the Irish context and noting that any differences in statutory wording are immaterial (fn 4 of the judgment).

5.4 Perry v Woodfarm Homes and Fairweather: leaseholds and extinguishment

The most technically intricate part of the judgment is the discussion of Perry v Woodfarm Homes [1975] IR 104 and Fairweather v St Marylebone Property Co [1963] AC 510 (paras. 77–89).

Both cases concerned:

  • unregistered leasehold land,
  • a squatter who had extinguished the leaseholder’s title by adverse possession, and
  • subsequent dealings between the leaseholder and the freeholder (surrender, merger or assignment).

They raised the question: can a leaseholder, whose title as against the squatter has been extinguished, still surrender or merge the lease with the freehold, enabling the freeholder to eject the squatter?

  • In Fairweather, a majority of the House of Lords said yes: extinguishment was only as against the squatter; the leaseholder’s title vis-à-vis the landlord persisted, so he could surrender it, improving the landlord’s position.
  • In Perry, a majority of this Court said no: the leaseholder, having lost his right to possession, had nothing to assign or surrender so far as that possession was concerned. However, the leasehold “estate” survived in some way vis-à-vis the freeholder (mainly for covenants).

Murray J concludes that:

  • These authorities reflect the deep conceptual difficulty of reconciling adverse possession with landlord–tenant doctrine; they are not straightforward guides to general questions of extinguishment.
  • Nonetheless, they do not contradict the relational understanding of extinguishment: all judges in both cases accepted that the leaseholder’s title was extinguished as against the squatter. The debate was over the knock-on effects for the leaseholder–landlord relationship.
  • Perry is not an obstacle to concluding that, in a mortgage context, extinguishment only arises where the mortgagor can plead limitation, and that a mortgagor may contractually disable himself from doing so.

For that reason, the Supreme Court declines to overrule Perry and treats it as dealing with a very specific set of leasehold facts, not laying down a universal rule that extinguishment under s.24 applies irrespective of the mortgagor’s ability to plead limitation.

6. Complex Concepts Simplified

6.1 “Bar of remedy” vs “extinguishment of right”

Most limitation rules do one of two things:

  1. Bar the remedy only – e.g. most contractual and tort claims. After the period passes:
    • The right (for example, to be paid a debt) still “exists” in a conceptual sense.
    • But if the defendant pleads the statute, the court will refuse to grant a remedy (judgment).
    • Parties can waive the defence; if the defendant doesn’t plead it, the plaintiff may still win.
  2. Extinguish the right or title – special rules for land and mortgages. Here the law says that after the period:
    • The paper owner’s “title” and/or the mortgagee’s right to the secured debt are treated as if they no longer exist vis-à-vis the squatter or mortgagor.
    • This was introduced to give strong security to long-possession and simplify conveyancing.

Mars v Walsh holds that even in the second category, extinguishment only arises once the preconditions for barring the remedy (s.13, etc.) are satisfied as between the parties. If a party has contracted not to rely on that bar, the extinguishment does not take effect in that relationship.

6.2 Adverse possession and “ordinary possession”

“Adverse possession” is the process by which a person (“squatter”, “possessor”) who occupies land without the owner’s consent for the statutory period can effectively acquire title as against the former owner.

  • Time starts to run when:
    • the owner’s right to sue for possession accrues (e.g., on expiry of a licence, on default under a mortgage), and
    • the possessor is in “ordinary” (i.e. factual and exclusive) possession.
  • If no action is brought within the 12-year period, and if the possessor can plead limitation, the owner’s title is extinguished as against that possessor, and the possessor acquires a possessory title.

In mortgage cases, “adverse possession” can arise where the mortgagor remains in possession for 12 years after the mortgagee’s right to possession has accrued, without acknowledgement or payment.

6.3 Mortgages, charges and registered land

Over registered land in Ireland, the common law notion of “mortgagee’s estate” is largely replaced by a charge:

  • The borrower (mortgagor) remains the registered owner of the land.
  • The lender (mortgagee) becomes the registered owner of a charge (an encumbrance) over that land.
  • Section 62(7) of the 1964 Act gives the registered owner of the charge the right to apply to court for possession; upon obtaining it, the mortgagee is deemed to be “mortgagee in possession”.

For the 1957 Act:

  • References to “mortgagee” include the registered owner of a charge (s.2(4)).
  • Thus, a possession application under s.62(7) is an “action to recover land” within s.13.
  • Extinguishment provisions (ss. 24, 33, 38) therefore apply to the charge-holder’s rights, but only in the relational, conditional manner discussed above.

6.4 Estoppel and “contractual estoppel”

Estoppel is a family of doctrines preventing a person from going back on a representation or assumed state of affairs, where it would be unjust or unconscionable to allow them to do so.

  • Estoppel by representation – where A makes a representation of fact, B relies on it to his detriment; A may be stopped from denying that fact.
  • Estoppel by convention – where both parties act on a shared assumption; neither can later deny that assumption when it would be unjust.
  • Contractual estoppel – sometimes used to describe clauses where the parties agree that certain facts or states of affairs are to be treated as true for the purposes of their contract. Enforcing such clauses prevents a party later asserting the contrary.

Murray J notes that the term “contractual estoppel” is debated, but the underlying idea is plain: parties may agree that their relationship is based on a particular “state of affairs” and may be prevented—by enforcing the contract—from denying that state of affairs (Peekay Intermark; Raiffeisen v RBS).

In Mars v Walsh, the Court does not need to delve deeply into the taxonomy of estoppel. It suffices that:

  • there was a binding contract; and
  • under that contract, Mr Walsh:
    • accepted Mars’ rights to enforce the secured obligations in default, and
    • waived any claims arising from the facilities (including his limitation-based claim).

Enforcing that contract makes it unnecessary to analyse whether a separate equitable estoppel arises.

7. Impact and Significance

7.1 For lenders and mortgage enforcement

The judgment is highly significant for banks, funds, and other charge-holders:

  • Security of settlements. Lenders can safely enter into settlements on long-dormant or disputed loans—especially where limitation is arguably in play—on the basis that a properly drafted waiver of “all claims arising from the facilities” will prevent the borrower later reviving limitation-based challenges.
  • Encouragement of compromise. The decision strongly affirms the public policy in favour of settlement. Lenders may be more willing to offer substantial write-downs in return for robust waivers, knowing that those waivers will be upheld.
  • Drafting practice. Expect greater use of:
    • express non-reliance clauses (e.g. “the Borrower agrees not to rely on any defence based on the Statute of Limitations 1957 or any alleged extinguishment of the Lender’s security”), and
    • broad waivers covering “all claims arising from the facilities”, phrased so as clearly to include limitation-based arguments.

The decision also warns lenders about the evidential importance of properly putting all settlement documents before the court—even if, in this instance, the omission of the Settlement Letter in the High Court was cured without difficulty.

7.2 For borrowers

From the borrower’s perspective, the case is a stark reminder that:

  • Settlement agreements matter. If you sign a settlement with a waiver of “all claims arising from the facilities”, you will likely be barred from later arguing that the mortgage was statute-barred or extinguished—even where you believe the lender’s title had in fact lapsed.
  • Legal advice is crucial. The Court places weight on the fact that Mr Walsh entered into the Acknowledgment with the benefit of legal advice. Borrowers who sign such agreements without advice run substantial risks.
  • Limitation defences should be raised early. Attempting to withhold a potential limitation defence until after a settlement is entered and defaulted upon is unlikely to succeed.

7.3 For litigation and procedural practice

The judgment has several broader procedural implications:

  • Summary proceedings and late-raised limitation. The Supreme Court acknowledges the difficulty of addressing complex limitation issues in summary proceedings where evidence is sparse. But it nevertheless intervened to resolve the legal question of contractual waiver, leaving factual limitation questions (if any) for another day.
  • No automatic jurisdictional bar. Extinguishment is not treated as a hard jurisdictional defect that the court must notice of its own motion; it still depends on the defendant’s ability to and decision to rely on the statute. That aligns with Clarke v O’Gorman.

7.4 For land law and adverse possession doctrine

While decided in a mortgage context, the reasoning has wider implications for adverse possession and land law:

  • Relational nature of extinguishment. The Court’s adoption of the relational reading of s.24—extinguishing the “title of that person” only in so far as they are barred under s.13—may influence how courts approach other adverse possession disputes.
  • Squatters and post-limitation agreements. A person in long adverse possession who executes a later deed acknowledging the former owner’s title or waiving claims may, in future cases, be held bound by that agreement in a similar way, provided the compromise is genuine and not a sham.
  • Registered land. The emphasis on the charge-holder’s “title” as a form of title for s.24 purposes will inform future analyses of extinguishment in the context of the Land Registry and priority between charges.
  • Stability vs flexibility. By refusing to disturb Perry while refining the understanding of extinguishment elsewhere, the Court preserves doctrinal stability in a notoriously tricky area, but signals that legislative clarification of “extinguishment” would be welcome.

7.5 Comparative law and statutory interpretation

Finally, the judgment showcases:

  • Comparative engagement. The Court draws extensively and critically on English and Australian authority, illustrating a willingness to adopt persuasive reasoning from other common law jurisdictions where the statutory frameworks are similar.
  • Textual yet purposive interpretation. The judge pays close attention to the wording of ss. 24, 33, 38 (“any person”, “that person”, “period fixed by this Act”) while situating them in the broader structure and purpose of the 1957 Act, and in the realities of litigation and settlement.
  • Balanced public policy analysis. The Court weighs the “quieten title” policy against the equally important policy of facilitating and protecting compromise, ultimately holding that the latter justifies enforcing settlement-based waivers in this context.

8. Conclusion: Key Takeaways

Mars Capital DAC v Walsh is a landmark in Irish limitation and land law for several reasons.

  1. Extinguishment provisions are not absolute and automatic.
    Sections 24, 33 and 38 of the Statute of Limitations 1957 extinguish title and the right to the secured principal and interest only when and because the underlying limitation defence (e.g. under s.13 or s.32) is available and invoked by the person in whose favour time runs. Extinguishment is relational: it is the “title of that person” that is extinguished as against the dispossessor, not a metaphysical annihilation of the right in all possible contexts.
  2. Contractual waiver and estoppel can preclude reliance on extinguishment.
    A mortgagor may, for value and with appropriate advice, validly agree not to assert any claims “arising from the facilities”, including limitation-based claims that the mortgagee’s title and secured debt have been extinguished. Enforcing such an agreement does not unlawfully “revive” a dead title; instead, it prevents the statutory preconditions for extinguishment from arising between the parties.
  3. Acknowledgements are different from contracts.
    The case explicitly preserves the orthodox rule that statutory acknowledgements or part-payments under ss. 52 and 62 cannot revive an extinguished title. But that is a matter of statutory construction of those specific provisions. It does not preclude contract or equitable estoppel from operating independently to bar reliance on extinguishment.
  4. Settlements of limitation and adverse possession disputes are strongly protected.
    The Court affirms a robust public policy in favour of upholding bona fide compromises of disputes about limitation and adverse possession. Parties can safely settle such disputes by agreement, including by way of waivers of claims arising from the relevant facilities or titles, without fear that one side can later litigate on the basis that extinguishment had already occurred.
  5. Perry v Woodfarm Homes remains but is confined.
    The Court refuses to overrule Perry, acknowledging the complexities of leasehold adverse possession. It treats Perry as concerned with the specific consequences of extinguishment in the leaseholder–freeholder–squatter triangle for unregistered land, not as a general statement that extinguishment under s.24 applies irrespective of parties’ ability to plead limitation.

Ultimately, Mars v Walsh strikes a pragmatic and principled balance between certainty in land titles and the autonomy of parties to arrange their affairs by contract. It clarifies that:

  • limitation defences—even when linked to extinguishment—are not untouchable statutory weapons, but defences a party may bargain away; and
  • courts will be slow to allow a litigant to escape the consequences of a clear, considered and beneficial settlement by invoking extinguishment provisions that he has expressly (or by necessary implication) agreed not to rely upon.

For practitioners, the message is clear: limitation and extinguishment issues must now be analysed not only through the lens of statutory periods and factual possession, but also through the terms of any settlements or acknowledgements that the parties have entered. In the wake of Mars v Walsh, carefully drafted settlement agreements—which explicitly address limitation, extinguishment, and waiver—will play an even more central role in resolving long-running mortgage and land disputes.

Case Details

Year: 2025
Court: Supreme Court of Ireland

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