Mars Capital Finance Ireland DAC v Temple (Approved)

Factual and Procedural Background

This matter arises from an appeal to the High Court against a Circuit Court order dated 11 December 2019, which directed the defendant to deliver possession of specified lands to the original plaintiff. The underlying dispute concerns a loan agreement entered into in February 2007 between the defendant and an entity within the EBS Group. The principal money under this loan was claimed to be due due to arrears exceeding three months.

Subsequent to the Circuit Court order, ownership of the charge over the lands was transferred to a new plaintiff, who applied ex parte to substitute itself as the plaintiff before the appeal hearing. The appeal proceeded as a complete rehearing, with the plaintiff bearing the burden of proof to establish entitlement to possession under Section 62(7) of the Registration of Title Act 1964.

The defendant resists the possession order on the basis that the affidavit evidence does not sufficiently demonstrate that the underlying debt has been transferred to the substituted plaintiff. Two additional lines of defence were filed by the defendant but were not pressed at the hearing, and the court deemed it unnecessary to address them in the context of an adjournment to plenary hearing.

Legal Issues Presented

1. Whether the substituted plaintiff is the lawful owner of the debt secured by the registered charge on the lands.
2. Whether the principal money secured by the charge has become due and owing to the substituted plaintiff.
3. Whether the court should grant summary possession or remit the matter to plenary hearing given the evidential uncertainties.
4. Whether new issues regarding the substitution of the plaintiff and chain of debt transfers can be raised on appeal.

Arguments of the Parties

Appellant's Arguments (Defendant)

• The affidavit evidence does not establish that the underlying debt has been transferred to the substituted plaintiff.
• There is ambiguity and insufficiency in the documentation regarding the chain of transfers within the EBS Group entities.
• Two additional lines of defence were raised but not pursued at the hearing.

Appellee's Arguments (Substituted Plaintiff)

• The substituted plaintiff is the registered owner of the charge and thus entitled to seek possession.
• The deed of charge identifies the debt secured, and the court can rely on this to grant possession.
• Procedural objections were raised against the defendant’s raising of new issues without a replying affidavit and on appeal, but these were rejected by the court.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by identifying the two key elements required for an order for possession under Section 62(7) of the Registration of Title Act 1964: ownership of the registered charge and that the principal money secured by the charge has become due. It accepted that the substituted plaintiff is the registered owner of the charge, which the register conclusively evidences, and that this ownership cannot be challenged in the possession proceedings.

However, the court found the affidavit evidence insufficient to establish, even prima facie, that the debt secured by the charge had been transferred to the substituted plaintiff. The deed of transfer exhibited was heavily redacted and did not clearly demonstrate the legal effect or the chain of transfers within the EBS Group, including the apparent confusion between EBS Building Society and EBS Mortgage Finance as original creditors.

The court rejected the submission that the deed of charge alone, including an administrative annotation referencing an account number, could substitute for clear evidence of ownership of the debt. It emphasized that the court should not speculate about the secured debt’s identity or transfer without proper evidential foundation.

Given the evidential deficiencies and the defendant’s credible challenge, the court invoked the principles from Bank of Ireland Mortgage Bank v. Cody to exercise its discretion to remit the matter to plenary hearing. This would allow the parties to adduce fuller evidence and arguments regarding ownership and enforceability of the debt.

Regarding procedural objections, the court held that the defendant was entitled to rely on deficiencies in the plaintiff’s evidence without prior notice by replying affidavit. It also found that the strict rule against raising new issues on appeal from the Circuit Court to the High Court was inapplicable due to the appeal being a complete rehearing and the interests of justice requiring consideration of the new issue of substitution and chain of debt transfer.

Holding and Implications

The court ADJOURNED THE APPEAL TO PLENARY HEARING pursuant to Order 5B of the Circuit Court Rules to allow the parties to present further evidence and submissions.

The direct effect is that the substituted plaintiff’s application for an order for possession is not granted at this stage due to insufficient proof of debt ownership. The matter will be relisted for further directions including potential amendment of pleadings, procedural motions regarding substitution, discovery, and other issues.

No new legal precedent was established; rather, the court applied established principles to ensure a fair and thorough adjudication on a full evidential record.