Mars Capital Finance Ireland DAC -v-Walsh & Anor (Approved)

Factual and Procedural Background

This opinion concerns an appeal against the refusal by the Circuit Court to grant leave to issue execution of an order for possession originally granted to Company A on 5 December 2017. The Plaintiff, Company B, filed a notice of motion on 18 May 2022 seeking two orders: first, to be substituted as Plaintiff in the proceedings pursuant to court rules, and second, leave to issue execution in respect of the possession order. The County Registrar granted the substitution of the Plaintiff title on 15 September 2022, but the application for leave to issue execution was refused by the Circuit Court on 16 February 2023. There was no appearance by or on behalf of the Defendants throughout these proceedings. The appeal focuses solely on the refusal to grant leave to issue execution.

Legal Issues Presented

1. Whether the Plaintiff, Company B, is entitled to leave to issue execution of the possession order made on 5 December 2017, pursuant to Order 36 rule 10 of the Circuit Court Rules.
2. Whether the Plaintiff must establish entitlement to execute the possession order despite the substitution of the Plaintiff by the County Registrar.
3. The applicability of the principles established in Smyth v. Tunney and related case law concerning delay and entitlement to issue execution.

Arguments of the Parties

Appellant's Arguments

• The Court should not look behind the County Registrar’s order substituting Company B as Plaintiff, thus barring the Defendants from challenging the Plaintiff’s entitlement to issue execution.
• The transfer of the loan book and charge from the original Plaintiff to Company B, evidenced by a Deed of Transfer and supporting affidavits, establishes Company B’s entitlement to the benefit of the possession order.
• The Defendants have neither objected to the delay nor asserted any prejudice arising from it.

Defendants' Arguments

• The Plaintiff has not established entitlement to issue execution as the transfer of the debt underlying the mortgage has not been sufficiently proven.
• The Deed of Transfer relied upon is incomplete or insufficient to establish that Company B owns the debt and thus the right to execute the possession order.
• The Plaintiff must establish entitlement to issue execution and cannot rely solely on the substitution order by the County Registrar.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by affirming that the grant of leave to issue execution is discretionary and guided by established principles, including those in Smyth v. Tunney. It accepted that reasons for delay had been provided and that the Defendants had not objected to the delay or asserted prejudice. The Court rejected the argument that the County Registrar’s substitution order precluded it from examining whether the Plaintiff is entitled to execute the possession order, clarifying that the Registrar did not determine entitlement to execution. The Court held that requiring the Plaintiff to establish entitlement under Order 36 rule 10 does not constitute a collateral attack on the Registrar’s order.

Regarding the substantive entitlement, the Court noted that the original possession order was granted to Company A and that Company B claims to have succeeded to the relevant charge and loan facilities through a series of transfers, including a Deed of Transfer and a loan book sale. While the Defendants accepted that Company B owns the charge, they contended that ownership of the debt was not established. The Court found the evidence insufficient to demonstrate an assignment in writing of the mortgage and the right to the benefit of the possession order, particularly due to the absence of the Mortgage Sale Agreement and the incomplete linkage between the transfer documents and the property subject to possession.

The Court emphasized that no evidence was offered by the Defendants to challenge the Plaintiff’s affidavits, but nonetheless refused the application on the basis that the Plaintiff had not met the evidentiary threshold to establish entitlement to issue execution. The Court left open the possibility for a renewed application if proper evidence is provided.

Holding and Implications

REFUSED

The Court refused the application for leave to issue execution of the possession order made on 5 December 2017. The decision directly affects the Plaintiff and Defendants by preventing enforcement of the possession order at this stage due to insufficient evidence of entitlement. The Court did not establish new legal precedent but adhered to existing principles requiring clear proof of entitlement to execute possession orders following substitution of parties and transfer of underlying debts. The Plaintiff may renew the application upon providing adequate evidence of entitlement.