Mortgagee’s Unfettered Statutory Power of Sale vs. Inviolability of the Dwelling

Introduction

The High Court’s decision in Halpin & Ors v Everyday Finance DAC & Ors; Stairway Property Company Ltd v Halpin & Ors ([2025] IEHC 201) clarifies the scope of a mortgagee’s power of sale under section 19 of the Conveyancing Act 1881, and its relationship to the constitutional protection of the family home. Two proceedings were heard together:

• A constitutional challenge by Patrick Halpin, Ann Keane and Elektron Holdings Ltd (“Constitutional Plaintiffs”) to the power of sale in section 19(1) of the Conveyancing Act 1881, and to any contractual power of sale, asserting breach of Articles 40.5 and 41.2 of the Constitution and Article 8 ECHR.
• Possession proceedings brought by Stairway Property Company Ltd (“Stairway”) following the sale of “Aberdeen Lodge” in Dublin, seeking an order for vacant possession against the Halpin family and related companies.

Aberdeen Lodge—a combined guesthouse and family residence—had been mortgaged by Elektron Holdings Ltd from 1998. Following several assignments of the mortgage security, Everyday Finance DAC sold it to Stairway on 11 September 2023 under section 19 of the 1881 Act. The Halpin family remained in occupation, prompting Stairway’s possession claim.

Summary of the Judgment

Ms Justice Cahill dismissed the constitutional challenge and granted Stairway the reliefs sought in its possession proceedings. Key findings:

1. The chain of title to the mortgage and to the sale to Stairway was validly proved. Section 19’s statutory prerequisites (a written demand and three months’ default) were satisfied by a 2012 demand upheld by the Supreme Court.
2. The power of sale in section 19 of the Conveyancing Act 1881 remains constitutionally valid. Article 40.5 (inviolability of the dwelling) and Article 8 ECHR protect against forcible entry or eviction, not the non-judicial sale of encumbered land. There is no free-standing obligation of proportionality or fair warning before sale by a private mortgagee.
3. No contractual or equitable right to a licence, life estate or other proprietary interest was established by Mr Halpin or Ms Keane. Prior inconsistent statutory declarations and absence of any enforceable agreement or conveyance defeated any such claim.
4. Stairway, as legal title holder, was entitled to possession. No impediment arose from the earlier Receiver Possession Order, which the Halpin family failed to obey.

Analysis

Precedents Cited

• Henderson v Henderson (1843) 3 Hare 100 – the abuse-of-process rule precluding re-litigation of issues or claims that could have been raised earlier.
• Grace v Ireland [2007] 2 ILRM 283 – locus standi requires an adversely affected interest; a hypothetical future claim is insufficient.
• McDonagh v Clare County Council [2022] 1 IR 122 – Article 40.5 protects against forcible entry or eviction; its application to private possession claims.
• DPP v Lynch [2010] 1 IR 543 – unlawful entry decisions clarify the focus of Article 40.5 on “entry and search.”
• McDonald v McDonald [2017] AC 273 – Article 8 ECHR does not bind private landlords in eviction; only public authorities are convention-bound.
• Re Lodge Gaven Ltd [2023] IECA 308 – demands by predecessor mortgagees remain valid for successors exercising power of sale.
• Ruby Property Co Ltd v Kilty (Unrep, HC, 2003) – mortgagee’s duty to obtain the best price reasonably obtainable judged by circumstances at time of sale.

Legal Reasoning

The Court approached the combined issues in sequence:

1. Validity of the Power of Sale:
   • Section 19(1) grants a mortgagee a power of sale as of right once a three-month default follows a written demand (s. 20(1)(i)).
   • A 15 February 2012 demand by IBRC was upheld by the Supreme Court; the three-month default criterion was met.
   • Everyday’s chain of title—from Pepper in May 2023 and sale to Stairway in September 2023—was established by admitted mortgage deeds and business-record presumption (Civil Law (Misc) Act 2020, s. 13).
2. Constitutional Challenge to Section 19:
   • Article 40.5 protects the inviolability of occupation against forcible entry or eviction by State authority; it does not prevent the non-judicial sale of encumbered land by the mortgagee. Judicial oversight of possession (separate section 19(1) vs. section 68 jurisdiction) is distinct from a sale.
   • Article 8 ECHR likewise addresses state interference with one’s “home,” not a private creditor’s sale exercise. McDonald v McDonald confirms no ECHR obligation for private mortgagees.
   • The presumption of constitutionality applied to the re-enacted sections 15–24 of the Conveyancing Act by the Land and Conveyancing Law Reform Act 2013.
   • No free-standing duty of proportionality, fair notice or first offer to occupy before sale arises under section 19 or the Constitution/ECHR.
3. Licence/Equity Claims:
   • Mr Halpin’s five statutory declarations (2003–2009) denying any licence or proprietary interest, signed to secure multi-million-euro financings, estopped any subsequent claim to a life estate or right to reside.
   • No evidence of any post-litigation agreement or estoppel could withstand scrutiny; the Court rejected a bare licence or promissory-estoppel theory.
4. Possession Order:
   • Stairway, as legal title owner, bore the onus of proof. Its title and the statutory prerequisites for sale were satisfied; no objection to its standing or need to join beneficial owners arose.
   • The prior Receiver Possession Order did not preclude Stairway’s separate possession claim.
   • The Halpin family’s refusal to deliver vacant possession for over six years underscored the validity of Stairway’s entitlement.

Impact on Irish Property Law

This judgment reinforces and clarifies several points critical for lenders, borrowers and practitioners:

• MORTGAGEE SALE VS POSSESSION: A sale under section 19(1) is legally distinct from possession proceedings. Article 40.5 inviolability protects against forced entry, not the sale of security-encumbered land.
• CONSTITUTIONAL BARRIERS TO SALE: No constitutional or ECHR obstacle delays or invalidates a section 19 sale by a private mortgagee, absent actual physical interference with occupation.
• STATUTORY DEMAND: A predecessor’s demand remains valid for successors in title; no fresh demand is required upon assignment of the mortgage security.
• LICENCE CLAIMS: Repeated statutory denials of licences create an estoppel that barred any later equitable claims to reside.
• NO DUTY OF PROPORTIONALITY: A private mortgagee is not subject to an open-ended proportionality test or required to offer the family an option to purchase; only a judicial possession process can remove occupants.

Complex Concepts Simplified

• Power of Sale (Section 19 Conveyancing Act 1881): A statutory right allowing a mortgagee to sell mortgaged land once the loan is due, without court order, if a written demand remains unpaid for three months.
• Article 40.5 (Constitution): Protects a citizen’s home against forcible entry or search by State authorities; it does not guarantee immunity from the sale of property subject to a valid mortgage.
• Article 8 (ECHR): Guarantees respect for “private and family life” and “home” against public-authority interference; it does not bind private lenders in mortgage enforcement.
• Henderson v Henderson: Prevents litigants from raising in later proceedings issues or claims they could have raised earlier; ensures finality in litigation.
• Business-Record Presumption: Under the Civil Law (Miscellaneous Provisions) Act 2020, documents kept in the ordinary course of business are presumed truthful and admissible.
• Promissory Estoppel: Stops a party from reneging on an unambiguous promise that the other party has relied on to its detriment. A bare licence to occupy—without written agreement—cannot bind a purchaser of legal title.

Conclusion

The judgment in Halpin & Ors v Everyday Finance DAC & Ors reaffirms the clear separation between a mortgagee’s power of sale and any constitutional protection of occupation. Section 19 of the Conveyancing Act 1881 remains a valid and unfettered statutory remedy for mortgage enforcement, subject only to its own formal prerequisites. Occupants’ rights under Article 40.5 of the Constitution and Article 8 ECHR guarantee protection against forcible eviction, not against the sale of encumbered property. Any equitable or contractual claims by mortgage debtors or occupiers must be grounded on clear, enforceable agreements—mere residence, untested licence or unilateral payments do not suffice. The decision provides certainty for lenders and courts, confirming that validly executed power-of-sale transactions will be upheld and cannot be resisted by invoking the inviolability of the dwelling.