Start Mortgages Designed Activity Company v Connaughton & Anor (Approved)

Factual and Procedural Background

The Plaintiff, a designated activity company, initiated possession proceedings against the Defendants concerning a property registered under Folio 35554 F in County Limerick. The proceedings stemmed from a mortgage loan advanced by the Plaintiff's predecessor, Bank of Scotland Ireland Limited, to the Defendants in 2005, secured by a registered charge on the property. The Plaintiff sought possession pursuant to section 62(7) of the Registration of Title Act 1964 and related legislation, asserting that the Defendants had defaulted on their repayment obligations, with no payments made since April 2015.

The Circuit Court granted an order for possession on 12 January 2023 but stayed execution for six months. The First-Named Defendant, representing himself, appealed this order to the High Court, which heard the matter de novo. The Defendants also applied for discovery, which was refused by the Circuit Court. The High Court considered the appeal and the discovery application, with extensive affidavit evidence and submissions presented by both parties.

Legal Issues Presented

1. Whether the Plaintiff is the registered owner of the charge securing the mortgage on the property and thus entitled to seek possession under section 62(7) of the Registration of Title Act 1964.
2. Whether there has been default by the Defendants, resulting in the secured monies becoming due and payable.
3. Whether the Plaintiff’s application for possession is made bona fide with a view to realising the security.
4. Whether the Circuit Court had jurisdiction to hear the possession claim pursuant to the Land and Conveyancing Law Reform Act 2013 and related statutes.
5. Whether the Defendants are entitled to discovery in the context of summary possession proceedings.
6. Whether the Defendants’ challenge to the validity of the mortgage, assignment, and related documents is credible and sufficient to defeat the possession claim.
7. Whether fresh evidence should be admitted on appeal given the procedural requirements and timing of submissions.

Arguments of the Parties

Appellant's Arguments

• Denial of the debt and Plaintiff’s claim in bald terms, including denial of jurisdiction.
• Assertion that judicial and quasi-judicial functions of the State are not recognized.
• Request for discovery of original “wet ink” signed documents related to the loan, mortgage, and assignment, alleging the Plaintiff’s claims are unverified and documents may be fabricated or “sham devices.”
• Contention that the summary possession procedure was wrongly chosen and that the matter should proceed to a plenary hearing.
• Submission that the Plaintiff is not the true mortgagee, citing dealings with the original lender concerning a tracker mortgage issue.
• Allegation of breach of Central Bank principles and a miscarriage of justice.
• Claim of being “hoodwinked” and unprepared for the Circuit Court hearing, asserting denial of due process and reliance on constitutional and human rights principles.
• Challenge to the validity and dates of the mortgage and assignment documents, alleging fabrication and suspicious conduct without evidential support.
• Request for admission of fresh evidence on appeal, which was not submitted to the Circuit Court, without providing reasons for the delay.

Appellee's Arguments

• Established that the Plaintiff is the registered owner of the charge by virtue of a registered assignment from the original lender, supported by conclusive entries in the Land Registry folio and statutory provisions.
• Demonstrated default by the Defendants through affidavit evidence, correspondence demanding repayment, and loan account statements showing no payments since April 2015.
• Asserted that the application for possession is bona fide and made to realize the security, supported by mortgage conditions and statutory powers.
• Opposed the discovery application on the basis that summary possession proceedings do not warrant discovery, and that all relevant documents had been provided as true copies compared with originals.
• Contended that the Defendants’ allegations of fabrication and wrongdoing are bare assertions unsupported by evidence and contrary to the conclusive nature of the Land Registry entries.
• Maintained that the procedural requirements for submitting fresh evidence on appeal were not met by the Defendants, justifying refusal of admission of such evidence.
• Emphasized that the tracker mortgage issue is irrelevant to the possession claim and does not constitute a defence.
• Relied on established case law to show that the Plaintiff had made out a prima facie case for possession and that the Defendants failed to establish a credible defence.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by confirming jurisdiction under the Land and Conveyancing Law Reform Act 2013 and the Courts (Supplemental Provisions) Act 1961, noting the mandatory nature of bringing possession proceedings in the Circuit Court for mortgages created before December 2009 and for properties under €3 million in value.

The court analyzed section 62(7) of the Registration of Title Act 1964, which permits a registered charge owner to apply summarily for possession once the secured monies are due. It identified three fundamental questions: whether the monies are secured by mortgage, whether default has occurred making the monies due, and whether the application is bona fide to realize security.

Evidence, including affidavits and documentary exhibits, established that the Defendants executed a mortgage in 2005 securing a €450,000 loan, which was assigned to the Plaintiff in 2015. The Land Registry folio conclusively recorded the Plaintiff as the registered charge owner. The Defendants had defaulted on repayments, with no payments since April 2015, and arrears had accumulated despite demands.

The court rejected the Defendants’ challenges to the validity of the mortgage, assignment, and related documents as unsupported bare assertions lacking evidential basis. It emphasized the conclusiveness of the Land Registry and the absence of any fraud or mistake proceedings challenging the register.

The court found the Plaintiff’s application to be bona fide, seeking to realize its security, and noted compliance with the Central Bank’s Code of Conduct on Mortgage Arrears. The Defendants’ discovery application was refused as inappropriate in summary possession proceedings, where all relevant documents had been furnished and the Defendants had not filed a formal defence.

The court declined to admit fresh evidence submitted on appeal, as the Defendants failed to comply with procedural rules requiring explanation for the failure to present such evidence in the Circuit Court. Admitting such evidence at this stage would prejudice the Plaintiff and undermine procedural fairness.

Finally, the court held that the Defendants had not established any credible defence to the possession claim, and that the summary possession procedure was appropriate. It distinguished the Defendants’ reliance on case law concerning debt claims and plenary hearings, affirming that possession proceedings require only proof of default and ownership of the charge.

Holding and Implications

The court’s final decision was to REFUSE DISCOVERY and to grant the Plaintiff an order for possession of the property.

The direct effect of this ruling is that the Plaintiff is entitled to recover possession of the mortgaged property from the Defendants. The decision affirms the application of section 62(7) of the Registration of Title Act 1964 and related statutory provisions in summary possession proceedings and underscores the conclusiveness of Land Registry entries in such claims. No new precedent was established beyond the application of existing law to the facts of this case.