EBS Mortgage Finance & Anor v Bedford & Anor (Approved)

Factual and Procedural Background

This opinion concerns a summary application for an order for possession of a principal private residence ("the Property"). The Plaintiffs claim ownership of loans secured by registered charges on the Property, with the current Plaintiff having acquired the loans through successive transfers from EBS Building Society, which converted to EBS Limited, then to EBS DAC, and subsequently assigned the loans to Mars Capital Finance DAC (the Plaintiff). The Defendants, a married couple who purchased the Property in 2004, appeal an order for possession made by the Circuit Court in May 2019, challenging the Plaintiff's entitlement to possession on grounds including insufficient information regarding the transfer of loans and disputing dealings with the Plaintiff entities.

The Defendants acknowledge the original loan from EBS Building Society secured by the Property but dispute the Plaintiff's chain of title and the validity of transfers between entities. The Plaintiff relies on documents including deeds of mortgage, transfer agreements, and notices to establish ownership of the loans and the right to possession due to default. The matter is before the High Court on a full rehearing following the appeal.

Legal Issues Presented

1. Whether the Plaintiff has established ownership of the registered charges on the Property as required under section 62(7) of the Registration of Title Act 1964.
2. Whether the Plaintiff has shown that a default event has occurred, entitling it to seek possession of the Property.
3. Whether the Plaintiff has proven the valid transfer and assignment of the loans through the chain of title from EBS Building Society to the Plaintiff.
4. Whether the Defendants have raised a defence or issue requiring a plenary hearing, including challenges to signatures and authenticity of documents.
5. The admissibility and sufficiency of hearsay evidence and business records under the Civil and Criminal Law (Miscellaneous Provisions) Act 2020.
6. The appropriateness of redactions in exhibited documents and their impact on the Plaintiff's proof of title.
7. The procedural correctness of adding the new Plaintiff as a co-plaintiff rather than substituting parties in possession proceedings.

Arguments of the Parties

Plaintiff's Arguments

• The Plaintiff claims ownership of two registered charges on the Property, supported by land register entries and mortgage deeds.
• The Plaintiff asserts that the loans were originally made by EBS Building Society, which converted to EBS Limited and subsequently transferred loans to EBS Mortgage Finance (EBS MF) and then to EBS DAC, before assignment to Mars Capital Finance DAC.
• The Plaintiff relies on exhibited deeds of transfer, mortgage sale agreements, and letters ("Goodbye" and "Hello" letters) to prove valid assignment and notification to the Defendants.
• The Plaintiff contends that a default event has occurred due to non-payment for three consecutive months, triggering the right to possession under the mortgage deed.
• The Plaintiff submits that redactions in transfer documents are justified by commercial sensitivity and GDPR considerations and do not conceal relevant material that would assist the Defendants.
• The Plaintiff relies on the Civil and Criminal Law (Miscellaneous Provisions) Act 2020 and related caselaw to support the admissibility of hearsay evidence from deponents familiar with the relevant records.
• The Plaintiff argues that the addition of Mars Capital Finance DAC as co-plaintiff is procedurally appropriate following the transfer of loans after the Circuit Court order.

Defendants' Arguments

• The Defendants challenge the Plaintiff's right to possession on the basis that they never contracted with the Plaintiff entities but only with EBS Building Society.
• They argue the Plaintiff has not established a full and clear chain of title showing valid transfer of the loans through the various entities, particularly lacking evidence regarding EBS Mortgage Finance's role.
• The Defendants contend that the Plaintiff has not proven the exact sums outstanding on the loans and that proofs of repayment and outstanding amounts are inconsistent.
• The Defendants raise issues about the authenticity of signatures on certain documents, including allegations that a signature may be forged, and question the absence of seals on documents described as "signed, sealed and delivered."
• They argue that the extent of redactions in the transfer documents prevents meaningful examination of the terms and validity of the transfers.
• The Defendants assert that hearsay evidence from deponents not having personal knowledge of the original transactions is unreliable and inadmissible without proper authentication.
• They claim that amendments to pleadings concerning sums owed should not be allowed without formal application and that discrepancies in loan amounts require clarification.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court conducted a detailed examination of the evidence relating to ownership of the charges, the chain of title for the loans, and the occurrence of a default event. It acknowledged that the land register entries conclusively prove ownership of the registered charges by the Plaintiff. However, the Court found the evidence insufficiently clear to establish the full chain of title linking the loans originally made by EBS Building Society to the Plaintiff, particularly regarding the role and status of EBS Mortgage Finance (EBS MF) and the transfers involving EBS Limited and EBS DAC.

The Court emphasized the statutory and common law requirements for valid assignment of debts, including the necessity of express written notice to borrowers identifying the assignee, supported by "Goodbye" and "Hello" letters. It found that while the Plaintiff had provided such notifications for the transfer from EBS DAC to Mars Capital, there was a lack of clear documentary proof for earlier transfers, creating uncertainty.

Regarding the alleged default, the Court accepted that the Defendants had failed to make full payments for over three months, triggering the right to possession under the mortgage deed. The Court noted discrepancies in loan amounts and the absence of pleadings for some sums but held that proving a default event on any one loan suffices.

The Court addressed challenges to the authenticity of signatures and the absence of seals, concluding that these factual matters require further evidence and should be addressed at a plenary hearing. It also considered the admissibility of hearsay evidence under the Civil and Criminal Law (Miscellaneous Provisions) Act 2020, recognizing the need for careful scrutiny but allowing for evidence from deponents familiar with the records.

The Court analyzed issues of redactions in the exhibited transfer documents, applying the Peruvian Guano test and recent appellate authority. It found that redactions were justified to protect commercial sensitivity and GDPR concerns and did not conceal information relevant to the Defendants' defence.

Procedurally, the Court held that the proper approach was to add Mars Capital Finance DAC as a co-plaintiff rather than substituting parties, consistent with established case law.

In balancing the evidence and legal principles, the Court determined that the Plaintiff's proofs were insufficient for a summary order for possession and that the Defendants had not demonstrated a full defence but had raised issues warranting a plenary hearing.

Holding and Implications

The Court DIRECTED that the appeal be remitted to a plenary hearing before the High Court for full examination of the issues raised by both parties. The Circuit Court is declared functus officio.

The Defendants are permitted to pursue all grounds of defence, including allegations of forgery, subject to the requirement that any such allegations of fraud be pleaded with detailed particulars in advance of trial. The Court ordered a full exchange of pleadings and case management directions.

This decision means that no summary possession order is granted at this stage, and the parties will have the opportunity to present evidence and arguments in a full hearing. The ruling does not set new precedent but applies established principles ensuring fairness and due process in possession proceedings involving complex chains of loan assignments.