Allied Irish Plc v Buckley

Factual and Procedural Background

The proceedings concern an application for an order of possession relating to registered land in The City, County Tipperary. The Plaintiff, Company A, initiated the proceedings by way of Special Summons on 8 December 2017 against the Defendant, who holds possessory title to the lands under Folio 37564. Two charges were registered on the folio in favour of Company A and another financial entity, with Company A having acquired full interest prior to the proceedings. The Defendant contends that the lands include his primary private residence and alleges non-compliance by the Plaintiff with the Central Bank's Code of Conduct on Mortgage Arrears ("the Code of Conduct"). The Plaintiff, however, argues that it is not seeking possession of the Defendant's primary residence but rather other parts of the lands, asserting that compliance with the Code of Conduct is not required in this context. The Special Summons itself does not distinguish between the primary residence and other lands, though the Plaintiff's letter of demand and affidavits attempt to do so. A separate notice of motion for inspection was also issued by the Plaintiff but was held in abeyance pending resolution of the Code of Conduct compliance issue.

Legal Issues Presented

1. Whether the Plaintiff was required to comply with the Central Bank's Code of Conduct on Mortgage Arrears prior to instituting possession proceedings when not seeking possession of the Defendant's primary residence.
2. Whether the proceedings, as framed in the Special Summons, actually seek possession of the Defendant's primary residence.

Arguments of the Parties

Plaintiff's Arguments

• The loan was provided for the Defendant's business purposes (farming) and did not finance the purchase of the primary residence.
• Although the mortgage is secured by the primary residence, the Plaintiff is not seeking possession of the primary residence.
• This position was communicated in the Plaintiff's letter of demand dated 21 November 2017.

Defendant's Arguments

• The Code of Conduct applies where the mortgage loan is secured by the borrower's primary residence, regardless of the nature of the loan.
• The proceedings as pleaded seek possession of the Defendant's primary residence.
• The Plaintiff failed to comply with the moratorium period prescribed by the Code of Conduct before initiating possession proceedings.
• The Plaintiff is obliged to demonstrate compliance with the Code of Conduct, which it cannot do, rendering the possession application invalid.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court examined the applicability of the Central Bank's Code of Conduct on Mortgage Arrears, focusing on the moratorium provisions that restrict commencement of possession proceedings against a borrower's primary residence without compliance. The Court distinguished between the introductory chapter of the Code—which applies broadly to mortgage loans secured by a primary residence—and Provision 56, which specifically restricts legal proceedings for repossession targeting the primary residence.

The Court found that while the Code may apply in some respects to loans secured by primary residences, the moratorium on repossession applies only where the possession proceedings are directed against the primary residence itself. The critical question was whether the Special Summons sought possession of the Defendant's primary residence. Since the Special Summons did not distinguish the primary residence from other lands and sought possession of all lands under the folio, the Court concluded that the proceedings did seek possession of the primary residence.

The Plaintiff did not provide evidence demonstrating compliance with the moratorium period. Based on the precedent set in Irish Life and Permanent plc v. Dunne, the Court held that possession proceedings initiated in breach of the moratorium must be refused. The Court emphasized that it is the Special Summons that defines the scope of the proceedings, not ancillary documents or affidavits.

Holding and Implications

The Court's final decision was to REFUSE the Plaintiff's application for possession and to dismiss the proceedings.

The direct effect of this ruling is that possession cannot be granted absent compliance with the moratorium provisions of the Code of Conduct when the primary residence is the subject of possession proceedings. No broader precedent beyond the immediate application of the Code of Conduct's moratorium provisions was established.