KBC Bank Ireland Ltd v Flynn & Anor

Factual and Procedural Background

This matter arises from a mortgage possession claim initiated by the Plaintiff bank against the Defendants concerning a property registered under Folio 18841F in County Cavan. The mortgage was entered into on 14 July 2006, with payments defaulting from 1 November 2011. A letter of demand was issued on 2 September 2013 for the outstanding sum of €252,307.27. The property, now the Defendants' family home, was subject to a possession order granted by the Circuit Court on 15 March 2016. The Defendants did not appear at the Circuit Court hearing. The Plaintiff sought summary judgment pursuant to Order 28, which permits such judgment unless the Defendants demonstrate a prima facie good defence. The appeal before the High Court challenges this possession order.

Legal Issues Presented

1. Whether the Circuit Court had jurisdiction to grant possession of the principal private residence under the Land and Conveyancing Law Reform Act 2013 despite the property lacking a rateable valuation.
2. Whether the Defendants have a bona fide defence to the possession claim sufficient to overturn the summary judgment.
3. Whether the Defendants' notice of motion seeking declaratory relief, case stated, and judicial review is procedurally appropriate and has merit.
4. Whether the Defendants are entitled to require assignment of the mortgage to a third party under section 93 of the Land and Conveyancing Law Reform Act 2009.

Arguments of the Parties

Appellant's Arguments

• The first Defendant contended that the Circuit Court lacked jurisdiction based on the precedent set in Permanent TSB Plc v. Langan concerning properties without rateable valuation.
• The Defendant sought various orders via a notice of motion, including declaratory relief challenging the validity of certain statutory provisions and judicial review of the Circuit Court order.
• The Defendant asserted entitlement under section 93 of the 2009 Act to have the mortgage assigned to a third party entity, referred to as "The People’s Mortgage Protection Vehicle," which was claimed to affect the Plaintiff’s claim.
• The Defendant alleged that evidence was withheld from the Circuit Court and that the Plaintiff’s claim was flawed.

Appellee's Arguments

• The Plaintiff maintained that the Circuit Court has jurisdiction under section 3 of the Land and Conveyancing Law Reform Act 2013 to hear possession claims concerning principal private residences, irrespective of rateable valuation.
• The Plaintiff argued that the Defendants failed to produce any evidence or affidavit supporting a bona fide defence to the summary judgment application.
• The Plaintiff rejected the proposed assignment of the mortgage to a third party as invalid since the Defendants are not entitled to redeem the mortgage due to outstanding sums.
• The Plaintiff cautioned against reliance on unqualified advisers and emphasized the availability of legitimate channels for mortgage arrears resolution.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed the jurisdictional issue by reference to section 3 of the Land and Conveyancing Law Reform Act 2013, which explicitly confers jurisdiction on the Circuit Court to hear possession claims relating to principal private residences, independently of any rateable valuation. This statute effectively supersedes the jurisdictional limitation identified in Langan. The court found that the Defendants did not provide any affidavit or evidence to establish a bona fide defence to the Plaintiff’s possession claim, nor did they comply with procedural requirements by attempting to litigate via a notice of motion inappropriately. The purported defence based on assignment of the mortgage to a third party was dismissed because the Defendants had not redeemed the mortgage and thus lacked the statutory right to require such assignment under section 93 of the 2009 Act. The court expressed concern about the Defendants’ reliance on unqualified advisers who provide misleading legal advice, emphasizing that such conduct worsens the Defendants’ position. The court highlighted the availability of legitimate advice and statutory frameworks designed to assist mortgagors in arrears, which the Defendants failed to engage with. Consequently, the court found no merit in the Defendants’ arguments and upheld the possession order.

Holding and Implications

The court DISMISSED THE APPEAL and affirmed the Circuit Court’s order granting possession to the Plaintiff.

The decision confirms the Circuit Court’s jurisdiction under the 2013 Act to hear possession claims involving principal private residences without regard to rateable valuation, clarifying the limited application of the Langan precedent. The ruling underscores the necessity for defendants to present bona fide defences supported by evidence and to engage with proper legal procedures. It also serves as a caution against reliance on unregulated advisers offering spurious legal remedies. No new precedent was established beyond the application of existing statutory provisions and case law to the facts.