Factual and Procedural Background
Company A (ACC Bank plc) seeks possession pursuant to s. 62(7) of the Registration of Title Act 1964 of the property recorded in Folio 7758 County Westmeath. The Defendants, Mr. and Mrs. Fagan, are registered owners of this property but occupy only part of it, including their private dwelling house known as Temple House and approximately 14.5 acres of adjoining land.
Mr. and Mrs. Fagan were directors and shareholders of Company B (Temple Spa Limited). They granted a 21-year lease to Company B over part of the property in 2003. In 2004, Company A provided loan facilities to Company B for construction and fit-out of an extension to Temple House Spa, secured by a deed of charge dated 19th November 2004, registered in 2006, which included Temple House and surrounding lands.
Additional loans and guarantees were provided in 2007, secured by the existing charge over the private dwelling house and 14.5 acres. The loan facilities fell into arrears by September 2009, though no demand for repayment was made before 1st December 2009.
Demand letters were issued in late 2010, and a receiver was appointed over the charged properties, taking possession of the spa and adjoining lands but not the private dwelling house or 14.5 acres. The Defendants refused to surrender possession of their home.
Summary proceedings were commenced by Company A against the Defendants, resulting in a judgment for a substantial sum in May 2011, which was not discharged. Bankruptcy petitions followed, with adjudication orders made in May 2012. The Defendants’ application to cancel the charge was refused.
Possession proceedings were issued in February 2013 against the Defendants, who were permitted to oppose the claim and appeared representing themselves. The Official Assignee did not oppose the possession claim.
Legal Issues Presented
- Whether the Defendants, as bankrupts, are entitled to oppose the possession claim given that the property is vested in the Official Assignee.
- Whether Company A, as registered owner of the charge, is entitled to possession of Temple House and adjoining lands under s. 62(7) of the Registration of Title Act 1964, despite the repeal of that provision.
- Whether the principal monies secured by the charge had become due and payable prior to 1st December 2009, thereby entitling Company A to seek possession under the statutory regime.
- Whether the power of sale had arisen and was exercisable by Company A prior to 1st December 2009.
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 |
| Quinn v Irish Bank Resolution Corporation limited and Ors [2012] IEHC 261 |
Property vests in Official Assignee upon adjudication of bankruptcy; bankrupts have no standing to challenge property claims. |
Held that Defendants, as bankrupts, could not challenge validity of the charge registered in favour of Company A. |
| Start Mortgages v. Gunn [2011] IEHC 275 |
Interpretation of s. 62(7) of the Registration of Title Act 1964 and implications of its repeal. |
Used to analyse the applicability of possession claims under s. 62(7) for charges created before repeal. |
| EBS v. Gillespie [2012] IEHC 243 |
Clarification of entitlement to possession under s. 62(7) for charges predating 1st December 2009. |
Court concurred with conclusions regarding requirements for possession claims under the repealed section. |
| G.E. Capital Woodchester v. Reade [2012] IEHC 363 |
Consideration of possession claims post repeal of s. 62(7). |
Referred to in context of statutory interpretation and possession rights. |
| Bank of Ireland v. Smyth [1993] 2 I.R. 102 |
Equitable principles guide court’s discretion under s. 62(7); possession orders must be bona fide to realise security. |
Supported the court’s interpretation of the discretion to grant possession orders under s. 62(7). |
| Northern Banking Company Ltd. v. Devlin [1924] 1 I.R. 90 |
Distinction between rights of legal mortgagees and registered owners of charges regarding possession. |
Historical context used to interpret s. 62(7) and the scope of possession rights. |
Court's Reasoning and Analysis
The court first addressed the Defendants' entitlement to oppose the possession claim, ruling that as bankrupts their property interests vested in the Official Assignee and they could not challenge the validity of the charge. However, since possession proceedings were directed against them personally and they remained in possession of their home, they were permitted to make submissions limited to whether Company A was entitled to possession under s. 62(7).
The court then examined the statutory framework, noting that s. 62(7) was repealed effective 1st December 2009, and that the new statutory regime applied only to charges created after that date. The critical question was whether Company A had acquired a right to seek possession under s. 62(7) before the repeal.
To succeed, Company A had to establish (a) that repayment of the principal monies secured by the charge had become due prior to 1st December 2009, and (b) that it was registered owner of the charge. The court accepted that Company A was registered owner of the charge.
Regarding repayment, the court analysed the terms of the charge, which included a covenant by the Company and the Guarantors (Defendants) to pay on demand. Clause 6(c) defined an event of default as a missed payment, which would render the full balance due immediately upon demand by Company A under clause 8. Evidence showed arrears existed before 1st December 2009, but no demand for repayment was made prior to that date.
The court concluded that without a demand, the principal monies had not become due and payable before 1st December 2009. Therefore, Company A did not have the requisite right under s. 62(7) to seek possession before the repeal.
On the issue of power of sale, the charge granted an express contractual power of sale exercisable only after demand. Company A did not rely on this contractual power as no demand was made before the cutoff date. Company A also argued the statutory power of sale under s. 19 of the Conveyancing and Law of Property Act 1881 had arisen, but the court found that the charge expressed a contrary intention limiting the power of sale to circumstances involving a demand, thus excluding reliance on the statutory power.
Consequently, the court held that Company A was not entitled to possession of the Defendants’ home and adjoining lands under s. 62(7) of the Registration of Title Act 1964.
The court did not consider the Defendants’ arguments regarding breach of the Central Bank’s code of conduct on mortgage arrears, as the primary legal conclusion resolved the matter.
The court emphasized that this decision was strictly based on the statutory repeal and interpretation of the charge terms and did not affect Company A’s status as registered charge owner.
Holding and Implications
DISMISSED: The court dismissed Company A’s application for possession of Temple House and adjoining 14.5 acres under s. 62(7) of the Registration of Title Act 1964.
The direct effect is that Company A is not entitled to possession on the basis of the charge and arrears prior to 1st December 2009 due to absence of a demand making the principal monies due. No new precedent altering existing law was established; rather, the decision applies established principles concerning the effect of statutory repeal and contractual terms in charge agreements.