Summary possession must be precisely grounded: credible mis‑selling set‑off and arguable CCMA coverage require remittal to plenary

Introduction

In Allied Irish Banks plc v The Dragon’s Head Ltd [2025] IEHC 610, the High Court (Cahill J.) refused to grant a summary order for possession over a mixed‑use property comprising a family home and a licensed premises in Birdhill, Co. Tipperary. Although the Court did not find that any single defence was likely to succeed outright, it held that the defendant company had raised credible and arguable defences that could not justly be determined on affidavit. In particular, (i) an equitable set‑off defence anchored to alleged mis‑selling by AIB of the Belfry 5 investment; (ii) a material failure by AIB to properly and precisely invoke the statutory jurisdiction for summary possession; and (iii) a credible argument that the Central Bank’s Code of Conduct on Mortgage Arrears (CCMA) could apply in the unusual circumstances of a company‑owned, family‑occupied, mixed‑use property. The matter was remitted to plenary hearing and costs of the application were provisionally awarded to the defendant company.

The case sits at the intersection of summary possession procedure, consumer protection codes, and equitable defences such as set‑off. It underscores: (a) the low threshold for remittal to plenary where affidavit evidence raises more than an implausible or vague denial; (b) the need for rigorous precision in pleading the statutory basis of the court’s summary jurisdiction; and (c) the real prospect that conduct‑based and code‑based defences, if credibly raised, may require a full trial even in commercial lending contexts involving company borrowers.

Summary of the Judgment

The plaintiff bank sought a summary order for possession of a mixed‑use property (pub and residence) under a mortgage executed on 29 July 2009 and registered on 21 June 2011 (paras 1, 4).
The defendant company opposed the application on several grounds: (i) an equitable set‑off tied to alleged mis‑selling of the Belfry 5 investment (the “Belfry Defence”); (ii) failure to state and properly invoke the legal basis for summary possession (the “Jurisdiction Defence”); and (iii) non‑compliance with the CCMA, among others (paras 2, 27).
Applying Supreme Court guidance (Ulster Bank v Beades; Bank of Ireland Mortgage Bank v Cody; Aer Rianta v Ryanair), the Court emphasised the low threshold for remittal to plenary where credible defences are raised (paras 13–25).
The Court found the Belfry Defence credible: AIB did not challenge or seek to cross‑examine Mr Ryan’s specific averments regarding advice to restructure debt to fund the Belfry investment rather than discharge it, and alleged non‑disclosure of risk (paras 28–35). This warranted a plenary trial.
On jurisdiction, the Court treated AIB’s failure to plead the correct statutory basis—and its initial reliance on inapplicable provisions of the 2009 Act—as more than a mere pleading defect, particularly given the repeal and later revival (for pre‑December 2009 mortgages) of section 62(7) of the Registration of Title Act 1964 (paras 36–44). While not a standalone ground to refuse relief, it supported remittal; an adjournment to amend was rejected.
The Court held that it could not summarily conclude the CCMA was inapplicable: the definition of “primary residence” turns on occupation, not ownership, and unchallenged evidence showed Mr Ryan and family lived at the property before and since the mortgage (paras 49–56). Whether a guarantor can be treated as a “borrower” for CCMA purposes remains an open question for plenary determination, as do any breaches and their consequences (Irish Life & Permanent v Dunne noted).
Other defences (SME Code, lack of particularisation under O’Malley, missing general terms and conditions, and a director resolution point) were either not persuasive alone or insufficiently developed on affidavit, but do not prevent exploration at plenary (paras 57–74).
Outcome: Application for summary possession refused; proceedings remitted to plenary trial; provisional costs to the defendant company (paras 75–76).

Analysis

Precedents Cited and Their Influence

Ulster Bank Ireland Ltd v Beades [2019] IESC 83 (paras 14–15):
The Supreme Court characterised summary procedures as “truncated” and emphasised that such procedures are constitutionally sound only when “appropriately utilised” and “properly invoked and applied.” Cahill J. relied on this to frame the need for precision and fairness when using summary processes—setting the stage for treating pleading defects about jurisdiction as substantive, not technical.
Bank of Ireland Mortgage Bank v Cody [2021] 2 I.R. 381 (paras 16–19, 24–25):
Cody provides a spectrum for summary outcomes and identifies remittal as the “default” where affidavits are evenly balanced or credibility requires testing. Importantly, Cody recognises that unchallenged, specific averments—especially where the bank does not cross‑examine—can make summary disposal unsatisfactory. Cahill J. applied this directly in treating the unchallenged Belfry averments as credible and remitting.
Aer Rianta cpt v Ryanair [2001] 4 IR 607 (paras 20–23):
The classic low threshold: is it “very clear” the defendant has no case? Do the affidavits disclose “even an arguable defence”? This underpins the Court’s approach that a credible set‑off allegation tied to bank conduct in inducing restructuring is enough to cross the remittal threshold.
Bank of Ireland Mortgage Bank v O’Malley [2022] 2 IR 487 (paras 41, 65–73):
While O’Malley concerned debt particulars in summary judgment for liquidated sums, Cahill J. drew on its principle that plaintiffs must provide sufficient particulars in initiating summonses to enable defendants to assess whether to pay or resist. The Court adapted this rationale to jurisdictional clarity for summary possession and treated the absence of a pleaded statutory basis as a serious shortcoming. However, O’Malley was not treated as a freestanding defence to require plenary remittal on debt particularisation alone.
Fennell v Creedon [2015] IEHC 711; Tyrrell v Wright [2018] IECA 295 (paras 48, 53):
These authorities, often cited to limit CCMA arguments in commercial cases, were distinguished on critical facts: in those cases, residential occupation post‑dated the lending/mortgage. Here, unchallenged evidence showed long‑standing occupation pre‑dating the mortgage. Moreover, the Court highlighted that ownership is not determinative of “primary residence” under the CCMA; occupation is.
Irish Life and Permanent plc v Dunne [2015] IESC 46 (para 55):
Cited as a key authority for any eventual analysis of CCMA breach and consequences; its detailed application awaits plenary hearing.
Mars Capital Finance Ireland DAC v Temple [2023] IEHC 24; Seniors Money Mortgages Ireland DAC v Fingleton [2024] IEHC 423 (paras 63, 68):
Temple distinguished: the absence here of standard terms and conditions does not equate to a failure of a core proof of title (as in a redacted transfer deed). Fingleton noted to show that minor inaccuracies in demand letters may not be fatal where the debtor can understand the obligations—undercutting a defence based purely on fluctuating demand figures.

Legal Reasoning

The Court’s reasoning can be grouped into three pillars.

Credible equitable set‑off grounded in alleged mis‑selling (the Belfry Defence):
- Mr Ryan averred that in 2005, when intending to clear the company’s indebtedness and vacate the mortgage, AIB advised restructuring to fund the high‑risk Belfry 5 investment instead, touting it as highly attractive while failing to warn of its illiquidity and leverage risks (paras 28–29).
- AIB’s rebuttal was minimal, asserting separateness of the Belfry claim from possession proceedings and disputing any right of set‑off by the company (paras 31–32).
- Applying Cody’s logic, the Court attached weight to AIB’s choice not to contradict or cross‑examine Mr Ryan: unchallenged, specific averments can render summary disposal unfair (paras 33–35). The Court stopped short of deciding whether set‑off will ultimately apply in law but held the issue is sufficiently credible and fact‑sensitive to require plenary determination.
Precision and propriety in invoking the summary jurisdiction (the Jurisdiction Defence):
- The special summons did not plead the statutory basis; AIB’s written submissions initially invoked sections 97(2) and 100(3) of the Land and Conveyancing Law Reform Act 2009, which AIB later conceded were inapplicable to a 2009 mortgage; counsel then shifted at the hearing to section 62(7) of the Registration of Title Act 1964 (paras 36–38).
- Relying on Beades and Cody, the Court treated this as more than a mere pleading glitch. Summary procedures are constitutionally acceptable only when “properly invoked and applied.” The defendant is entitled to know the precise legal basis to assess whether to accept the truncated process (paras 39–41).
- Given the repeal of section 62(7) in 2009 and its later revival for pre‑1 December 2009 mortgages in the 2013 Act—and the added complexity that this mortgage was executed in July 2009 but registered as a burden only in June 2011—the Court stressed “the importance of precision and clarity” as to the jurisdiction invoked (para 42). This deficiency supported remittal rather than an adjournment to amend, which the Court rejected due to the age and history of the proceedings (paras 43–44).
The CCMA in atypical configurations (company borrower, guarantor occupant, mixed use):
- The CCMA applies to a “mortgage loan of a borrower which is secured by his/her primary residence.” “Primary residence” turns on occupation, not ownership (paras 49–51). Here, unchallenged evidence established Mr Ryan and his family resided in the property as their home since before the mortgage, and AIB knew this (paras 52–54).
- The open legal question is whether and how a guarantor can be treated as a “borrower” for CCMA purposes. The Court held this is not suitable for summary resolution given the limited record and the parallel guarantee proceedings (para 54).
- Even if the CCMA applies, further submissions are needed on alleged breaches and consequences, having regard to Irish Life & Permanent v Dunne (para 55). On the present record, the Court could not fairly dismiss the CCMA argument as lacking credibility (para 56).

Impact and Practical Significance

This decision has several immediate and longer‑term implications for possession litigation and banking practice:

Pleading discipline in summary possession: Plaintiffs must state the precise statutory source of jurisdiction in the special summons. Vague references to contractual powers (e.g., a “power of sale”) are inadequate. Misidentifying the statutory regime (e.g., relying on LCLRA 2009 where inapplicable) risks remittal due to the fairness demands of truncated procedures.
Strategic weight of unchallenged affidavits: Banks that choose not to contradict or test specific, serious averments—especially those alleging inducement, mis‑selling, or wrongful restructuring—risk remittal under Cody’s “default” approach where credibility must be tested at trial.
Equitable set‑off in possession claims: While not finally decided, the Court recognised that a mis‑selling/set‑off defence tied to how and why the borrower came to restructure debt can be sufficiently connected and credible to forestall summary possession. Expect further litigation on the scope of equitable set‑off against proprietary remedies.
CCMA reach in mixed‑use/company ownership scenarios: The judgment leaves open, but treats as credible, that CCMA protections might be engaged where a guarantor/director actually occupies the secured property as a primary residence and the lender knows this—even if the borrower is a company and the loan is “commercial.” This invites careful consideration of borrower definitions, occupier status, and lender knowledge.
Demand letters and particulars: O’Malley remains a potent reminder on particulars in summary claims for debt. In possession proceedings, the decision suggests that while particulars matter, deficiencies in demand figures alone will rarely supply an independent defence warranting plenary; the focus remains on title, default, jurisdiction properly invoked, and credible defences.
Procedural economy vs fairness: The case reinforces that remittal is not punitive; it is the mechanism to balance procedural economy with fair process where defences cross the low Aer Rianta threshold.

Complex Concepts Simplified

Summary possession: A fast‑track, affidavit‑based process to obtain an order for possession without a full trial. Because it truncates normal trial rights, courts insist that the governing statute be clearly invoked and that any credible defence triggers remittal to a full trial.
Plenary hearing: A full trial with oral evidence, cross‑examination, and complete procedural safeguards. Used where facts are contested or complex legal issues arise.
Section 62(7) of the Registration of Title Act 1964: Historically provided a statutory route for registered mortgagees to seek possession. It was repealed by the LCLRA 2009 but later re‑introduced for mortgages created before 1 December 2009 by the Land and Conveyancing Law Reform Act 2013. Precision about whether and how it applies is critical.
Equitable set‑off: A defence allowing a debtor to withhold payment or resist enforcement where their cross‑claim against the creditor is so closely connected with the creditor’s claim that it would be unjust to enforce one without considering the other. It can include unliquidated damages claims (e.g., mis‑selling), but its availability turns on the closeness of the connection and the facts.
CCMA and MARP: The Central Bank’s Code of Conduct on Mortgage Arrears and the Mortgage Arrears Resolution Process prescribe how lenders must deal with borrowers in difficulty where the loan is secured on a primary residence. “Primary residence” is based on occupation, not ownership. Whether guarantors fall within “borrower” for CCMA purposes is unsettled and fact‑dependent.
SME Code: The Central Bank’s Code of Conduct for Business Lending to SMEs prescribes standards for lending to small and medium enterprises. Its applicability depends on timing and loan purpose. Its interaction with possession claims is under‑litigated; breaches might inform equitable relief or defences depending on facts.
Particularisation (O’Malley): In summary debt claims, plaintiffs must provide sufficient particulars of the debt in the initiating documents to let defendants decide whether to pay or resist. In possession proceedings, while the principle of clarity remains relevant, lack of particularisation typically goes to entitlement to summary relief rather than creating a standalone defence for plenary remittal.

Key Points from the Record

Mortgage executed: 29 July 2009; registered as a burden: 21 June 2011 (para 4).
Facility letter: 24 December 2010 for €199,618, payable on demand, replacing earlier facilities (paras 5–6).
Demands: 2015, 2016, 2021 with differing sums; account statements exhibited later (para 7, 66, 69).
Separate debt proceedings against the company and Mr Ryan on a guarantee (para 8).
Occupation: Mr Ryan and family have resided in the residential portion since 1994; residence since 1985; AIB on notice (paras 10–11, 52).
Belfry 5: Alleged advice by AIB to restructure existing debt to invest; failure to warn of high risks; investment failed; compensation sought (paras 28–31).
Pleading defect: Special summons omitted statutory basis; AIB initially relied on LCLRA 2009, conceded inapplicability, then invoked RTA 1964 s.62(7) at hearing (paras 36–38).
Outcome: Remittal to plenary; provisional costs to the defendant company, with short submissions timetable (paras 75–76).

Practical Takeaways

Always plead the precise statutory basis in the special summons for summary possession (e.g., section 62(7) RTA 1964 for pre‑December 2009 mortgages). Avoid shifting statutory footing mid‑hearing.
If the defendant advances specific averments suggesting mis‑selling, inducement, or bank‑led restructuring, consider replying evidence and, where appropriate, seek cross‑examination. Silence may tip the Cody balance toward remittal.
In mixed‑use/company borrower cases, assess CCMA and SME Code applicability early. Record and exhibit evidence of engagement with the relevant code(s) and compliance with timelines and moratoria.
Ensure clarity on the debt figure and exhibit full statements. While imperfect demand figures may not be fatal, clarity strengthens the prima facie case and avoids O’Malley‑type objections.
Expect courts to weigh fairness over speed where family homes are at stake, especially where long‑standing occupation and lender knowledge are uncontradicted on affidavit.

Conclusion

Allied Irish Banks v The Dragon’s Head Ltd is a careful reaffirmation—and extension in a mixed‑use, company‑borrower setting—of the Supreme Court’s insistence that summary possession is exceptional, must be precisely grounded in statute, and cannot be used to sidestep credible defences requiring factual testing. The Court:

Recognised that a mis‑selling‑based set‑off, when supported by unchallenged, specific averments, is sufficiently credible to resist summary possession and requires plenary examination.
Held that failing to plead the correct statutory basis for possession is more than a technical pleading issue; it goes to whether the truncated process has been “properly invoked and applied.”
Treated as credible the proposition that CCMA protections may be engaged by the occupation of a family home even where the mortgagor is a company and the occupant is a guarantor/director, leaving the borrower‑status question open for trial.

The judgment’s central message is both procedural and substantive: precision and propriety are indispensable in summary proceedings, and where a defendant puts forward a defence that is more than implausible or vague—especially one rooted in the lender’s own conduct—the fair forum is a plenary hearing. As possession litigation increasingly encounters hybrid commercial/consumer realities, this decision will guide courts and practitioners in calibrating the balance between efficiency and fairness.