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Irish Life & Permament Plc -v- Duff & Anor
Factual and Procedural Background
The Plaintiff, Company A, initiated proceedings to recover possession of the Defendant's family home located in The State. Initially, the Circuit Court granted an order for possession in favor of Company A but stayed execution of that order for twelve months, expiring on 28th February 2013. The Defendants appealed this decision. The Defendants had fallen into significant arrears on their mortgage repayments. The mortgage secured both registered and unregistered land, with the dwelling situated on unregistered land and the curtilage on registered land. The mortgage was obtained in October 2003 for €258,000 with monthly repayments of approximately €1,300. The Defendants faced financial difficulties following a downturn in the building trade affecting the Defendant's self-employed business. Company A corresponded frequently with the Defendants regarding arrears, which escalated from approximately €9,800 in April 2009 to over €63,000 by February 2012. The Circuit Court Judge granted possession but stayed the order for one year, prompting the Defendants to appeal.
Legal Issues Presented
- Whether the proceedings were properly commenced by an Ejectment Civil Bill.
- Whether the Court has jurisdiction to grant possession of (i) the registered portion of the lands and (ii) the unregistered portion of the lands.
- Assuming jurisdiction exists, whether the Court should exercise it if the lender did not comply with the Financial Regulator’s Code of Conduct.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Northern Bank Ltd. v. Devlin [1924] 1 IR 90 | Mortgagee of registered land was a mere chargeant; possession required legal estate. | Confirmed that mortgagee holds an estate in registered land post-1942, entitling ejectment action. |
| EBS Ltd. v. Gillespie [2012] IEHC 243 | Interpretation of repealed statutory provision s. 62(7) and rights accrued before repeal. | Applied to determine if Plaintiff had right to possession before repeal of s. 62(7). |
| Start Mortgages Ltd. v. Gunn [2011] IEHC 275 | Clarification on acquisition of right to possession under s. 62(7). | Supported analysis of whether principal monies had become due prior to repeal. |
| Bank of Ireland v. Smyth [1993] 2 IR 102 | Requirement that possession order be bona fide and power of sale exercisable. | Informed the Court’s assessment of bona fide application for possession. |
| Bank of Ireland v. Waldron [1944] IR 303 | Mortgagee’s right to seek well-charging order and power of sale. | Referenced to clarify that possession may be sought via well-charging order. |
| First National Building Society v. Gale [1985] IR 609 | Mortgagee entitled to peaceable possession without court order. | Discussed and reconsidered in light of constitutional protections of dwelling. |
| Damache v. Director of Public Prosecutions [2012] IESC 11 | Constitutional protection of dwelling inviolability under Article 40.5. | Used to emphasize constitutional importance of court process before possession. |
| The People (DPP) v. Cunningham [2012] IECCA 64 | Intrinsic importance of Article 40.5 inviolability of dwelling. | Supported constitutional analysis regarding possession without court order. |
| The People (DPP) v. O'Brien [2012] IECCA 68 | Article 40.5 protects privacy, security, and dignity of dwelling occupants. | Reinforced constitutional protections relevant to possession proceedings. |
| Sullivan v. Boylan [2012] IEHC 385 | Interpretation of Irish text of Article 40.5 emphasizing safety and security. | Supported constitutional interpretation of dwelling inviolability. |
| Wicklow County Council v. Fortune [2012] IEHC 406 | Limits on invoking Article 40.5 to avoid lawful court orders. | Clarified that constitutional protections do not excuse unlawful occupation. |
| Fleming v. Ireland [2013] IEHC 1 | Limits of administrative officers’ power to alter substantive law. | Used to analyze the legal status of the Financial Regulator’s Code of Conduct. |
| Crawford v. Centime Ltd. [2005] IEHC 325 | Revenue Commissioners cannot waive or alter law by guidelines. | Supported reasoning on non-binding nature of regulatory codes. |
| Curley v. Governor of Arbour Hill Prison [2005] IESC 49 | Secondary legislation not superseded by industrial relations agreements. | Referenced in context of legal hierarchy and regulatory codes. |
| Zurich Bank v. McConnon [2011] IEHC 75 | Code of Conduct does not create justiciable rights exempting borrowers from repayment. | Adopted to reject argument that breach of Code voids mortgage obligations. |
| Stepstone Mortgage Funding Ltd. v. Fitzell [2012] IEHC 142 | Compliance with Code of Conduct required before possession order in mortgage enforcement. | Followed as most recent authoritative precedent requiring demonstration of Code compliance. |
| AG v. Residential Institutions Redress Board [2012] IEHC 492 | Importance of stare decisis and following recent High Court decisions. | Supported adherence to Fitzell decision. |
| Kadri v. Governor of Cloverhill Prison [2012] IESC 27 | Importance of maintaining stare decisis at High Court level. | Reinforced judicial consistency in following Fitzell. |
| Heaney v. Ireland [1994] 3 I.R. 593 | Proportionality test in constitutional law. | Referenced regarding possible constitutional issues with legislative changes. |
Court's Reasoning and Analysis
The Court first addressed the procedural propriety of commencing the proceedings by Ejectment Civil Bill, concluding that this was a historically accepted and appropriate method for seeking possession, especially as the mortgagee holds an estate in both registered and unregistered land. The Court rejected the Defendants’ objection that an Equity Civil Bill was required, finding no prejudice from the chosen procedure.
Regarding jurisdiction over possession of the registered land, the Court examined the statutory framework under the Registration of Title Acts and the Land and Conveyancing Law Reform Act 2009. Although the mortgagee previously had statutory power under s. 62(7) of the 1964 Act to seek possession, this provision was repealed effective 1st December 2009. The Court concluded that Company A had not acquired the right to seek possession under that provision before repeal, as it had not unequivocally demanded repayment of the entire mortgage debt prior to that date. Consequently, the Court found no jurisdiction to grant possession of the registered land based on the repealed statute or by contractual entitlement, as no independent statutory or common law power exists outside the statute for pre-2009 mortgages.
In relation to the unregistered land, the Court recognized the legal fiction that the mortgagee held legal title subject to the equity of redemption. While theoretically entitled to peaceable possession without court order, the Court emphasized constitutional protections under Article 40.5 guaranteeing the inviolability of the dwelling. The Court held that possession must be obtained by court order, ensuring notice, foreseeability, and independent judicial determination. This approach aligns with modern constitutional jurisprudence and statutory reforms prohibiting possession without court order.
Finally, the Court examined the Defendants’ claim that Company A failed to comply with the Financial Regulator’s Code of Conduct on Mortgage Arrears. The Court analyzed the legal status of the Code, concluding it does not create justiciable rights or void contractual obligations, but noted recent High Court authority requires lenders to demonstrate compliance with the Code before possession orders are granted. Applying this reasoning, the Court found Company A did not make every reasonable effort to agree an alternative repayment schedule, as alleged by the Defendants, and therefore did not comply fully with the Code’s requirements. Consequently, the Court exercised its discretion to withhold granting possession.
Holding and Implications
The appeal is allowed, and the order for possession is declined.
The Court held that it lacks jurisdiction to grant possession of the registered land due to the repeal of the relevant statutory provision and absence of accrued rights before repeal. It retains jurisdiction over the unregistered land but, due to non-compliance with the Financial Regulator’s Code of Conduct, declines to exercise that jurisdiction to grant possession. The decision does not preclude the lender from pursuing other lawful means to enforce its security. No new precedent altering the law was established; rather, the Court followed recent authoritative decisions, particularly on the necessity of Code compliance before possession orders.
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