Tanager Designated Activity Company v Kane & Ors

Factual and Procedural Background

The Plaintiff, Company A, sought an order for possession against the Defendant regarding a mortgage charge on the Defendant's principal private residence. The charge was originally registered in favor of Bank B, which merged cross-border into Bank C by operation of law. Bank C sold its interest in the charge to Company A, which subsequently registered as owner of the charge without Bank C ever being registered as owner. The Defendant fell into arrears, prompting possession proceedings initiated by Company A in the Circuit Court. The Circuit Court dismissed the claim, and the matter was appealed. The appellate court was tasked with determining legal questions regarding the validity of the registration of Company A as owner of the charge, particularly focusing on the interplay between sections 64 and 90 of the Registration of Title Act 1964. The case involved the Property Registration Authority as amicus curiae and Bank C as a notice party. The appeal arose from a case stated by a lower court judge for the Court of Appeal’s determination.

Legal Issues Presented

1. Whether the Defendant is entitled to challenge the registration of Company A as owner of the charge in possession proceedings, given the conclusiveness of the Register under section 31 of the 1964 Act.
2. If the Defendant may challenge registration, whether the court may join the Property Registration Authority as a notice party to hear further argument on this issue.
3. If the above applies, whether the court is entitled to consider the circumstances in which Company A became registered owner of the charge.
4. Whether the Defendant may argue that the registration constitutes a "mistake" within the meaning of section 31 of the 1964 Act.
5. Whether section 90 of the 1964 Act applies to the transfer of the charge by Bank C to Company A as the party entitled to be registered as owner of the charge.

Arguments of the Parties

Defendant's Arguments

• The Defendant contended that Bank C was never registered as owner of the charge and therefore was not entitled to transfer or assign the charge to Company A.
• The Defendant argued that the registration of Company A as owner was erroneous and a mistake by the Property Registration Authority.
• He relied on an obiter dictum from a prior Supreme Court judgment suggesting that statutory rights to enforce a charge require registration as owner, and that section 90 of the 1964 Act does not permit transfer before registration.
• The Defendant asserted that the Property Registration Authority was not entitled to register Company A without Bank C first being registered, and that the registration process violated statutory requirements and his constitutional rights to be heard.
• He argued that the "special formalities" required by the Cross-Border Mergers Regulations were not complied with, specifically that Bank C had to be registered before transferring to Company A.

Company A, Property Registration Authority, and Bank C's Arguments

• They contended that Bank C became entitled to the charge by defeasance under an enactment (the cross-border merger regulations) pursuant to section 60(1)(f) of the 1964 Act.
• Section 90 of the 1964 Act allows a person entitled to be registered to deal with the charge before registration is completed, permitting Bank C to transfer the charge to Company A without being registered first.
• The Property Registration Authority argued that the Irish Regulations are statutory instruments with statutory effect, thus qualifying as an "enactment" under section 60.
• They maintained that Company A properly registered as owner and that the registration is conclusive and effective against third parties including the Defendant.
• They rejected the Defendant’s claim that "special formalities" under the Irish Regulations required Bank C’s registration before transfer.
• They argued that the Defendant was not entitled to be consulted before registration because no new charge was created and the Defendant’s rights as registered owner were unaffected.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Kavanagh v. McLaughlin [2015] IESC 27	Effect of cross-border merger on title to registered charges; requirement of registration to exercise statutory powers; interplay of ss. 62, 64, and 90 of the 1964 Act.	The Court relied on obiter dicta to examine whether Bank C had to be registered before transferring the charge; confirmed Bank C had entitlement to be registered but did not answer whether transfer before registration was permitted.
Freeman v. Bank of Scotland plc [2014] IEHC 284	Interpretation of ss. 64 and 90 of the 1964 Act regarding transfers by operation of law and requirement of instrument of transfer.	The Court noted s. 90 applies only when transfer is by instrument; the Court here disagreed with this obiter comment and found s. 90 applicable to transfers by operation of law.
Tomkin Estates Ltd. v. O'Callaghan (Unreported, 1995)	Purpose of s. 31(1) of the 1964 Act regarding conclusiveness of the Register and limited jurisdiction for rectification.	Supported the principle that possession proceedings cannot challenge the correctness of the Register except on grounds of fraud or mistake in proper proceedings.
Guckian v. Brennan [1981] 1 IR 478	Conclusive evidence of title in the Register and protection of purchaser and vendor; registrar’s duty to ensure validity of registered instruments.	Confirmed that registration is conclusive in absence of fraud and that registration triggers statutory rights.
In re Patrick Leonard's Estate [1912] 1 IR 212	Equitable jurisdiction to rectify the Register on grounds of fraud or mistake.	Supported that rectification jurisdiction is inter partes and not applicable in summary possession proceedings.
In re Walsh [1916] 1 IR 40	Correction of errors originating in the Land Registry.	Clarified the limited statutory power to rectify errors in registration.
In re Skelton [1976] NI 132	Scope of court’s jurisdiction to rectify the Register and parties against whom such jurisdiction applies.	Confirmed rectification jurisdiction applies only against parties to the instrument or voluntary transferees.
Marleasing SA v. La Comercial Internacional de Alimentacion SA ECLI:EU:C:1990:395	Interpretation of national law consistent with EU law directives.	Supported purposive interpretation of "enactment" to include statutory instruments under EU law.
Eircom Ltd. v. Commission for Communications Regulation [2006] IEHC 138	Requirement of national courts to interpret national legislation in conformity with EU law.	Supported the interpretation of statutory instruments as enactments for purposes of the 1964 Act.

Court's Reasoning and Analysis

The Court began by affirming the statutory principle that the Register is conclusive evidence of title under section 31 of the 1964 Act, subject only to rectification on grounds of actual fraud or mistake in proper inter partes proceedings. It held that possession proceedings, which are summary and based on affidavit evidence, do not permit a party to "look behind" the Register or challenge the correctness of registration. The Defendant therefore had no entitlement to challenge Company A's registered title in possession proceedings.

The Court further held that the Property Registration Authority may not be joined as a party in possession proceedings for the purpose of addressing registration challenges, as such matters are properly dealt with in separate rectification proceedings.

Turning to the substantive issue of whether Company A's registration was valid despite Bank C never being registered as owner, the Court analyzed the interplay of sections 64 and 90 of the 1964 Act. Section 64 requires registration of the transferee to confer interest in the charge, while section 90 allows a person entitled to be registered by reason of defeasance or transfer under the Act to deal with the charge before registration is completed.

The Court found that Bank C became entitled to the charge by defeasance under an enactment, specifically the cross-border merger regulations, which have statutory effect as statutory instruments under the European Communities Act 1972. Consequently, Bank C was entitled under section 90 to transfer the charge to Company A without being registered first.

The Court rejected the Defendant's argument that the "special formalities" in the cross-border merger regulations required Bank C to be registered before transferring the charge. It held that Company A properly registered as owner and that the Property Registration Authority was entitled to accept the registration.

The Court emphasized that the Defendant's rights as registered owner of the folio and mortgagor remained unchanged, and no new charge or burden was created by the registration of Company A.

Holding and Implications

The Court's answers to the questions posed were as follows:

• Question 1: The Defendant does not have an entitlement to challenge the registration of Company A as owner of the charge in possession proceedings. NO
• Question 2: The court may not join the Property Registration Authority as a notice party in possession proceedings for this purpose. NO
• Question 3: The court is not entitled to consider the circumstances in which Company A became registered owner of the charge. DOES NOT ARISE
• Question 4: The Defendant may not argue that the registration constitutes a "mistake" within the meaning of section 31 of the 1964 Act in possession proceedings. NO
• Question 5: Section 90 of the 1964 Act applies to the transfer of the charge by Bank C to Company A as the party entitled to be registered. YES

DISPOSED OF: The Defendant's challenge to the registration was rejected in the possession proceedings. The registration of Company A was upheld as valid. The Court confirmed that the statutory framework permits a person entitled to be registered by defeasance to deal with a registered charge prior to registration, and that possession proceedings based on registered title cannot entertain challenges to the Register's correctness.

The decision clarifies the operation of sections 64 and 90 of the Registration of Title Act 1964 in the context of cross-border mergers and subsequent transfers of charges. It affirms the conclusiveness of the Register in possession proceedings and delineates the proper procedural avenues for challenging registration. No new precedent was set beyond the clarification of these statutory provisions in the context of the facts.