Pepper Finance Corporation [Ireland] Designated Activity Company v Meredith & Anor (Approved)

Factual and Procedural Background

This judgment concerns an appeal brought by the defendants against an order for possession made by the Circuit Court in February 2024 under section 62(7) of the Registration of Title Act 1964. The defendants represented themselves in the appeal hearing. The original possession proceedings were initiated by the plaintiff through a Civil Bill for Possession filed on 9 November 2022, seeking possession of registered land identified as Folio 133167F, commonly known as 77 Ferrycarraig Road, Coolock, Dublin 5.

The plaintiff offered the defendants a loan of €200,000 in August 2007, secured by a registered charge dated 16 August 2007. The defendants defaulted on repayments, accumulating arrears exceeding €75,000 by April 2022. The plaintiff issued demands for repayment and possession, claiming a total debt of €229,047.95 as of October 2022. The plaintiff demonstrated continuity of ownership of the charge despite a company name change from GE Capital Woodchester Home Loans Limited to Pepper Finance Corporation (Ireland) Designated Activity Company.

The defendants did not dispute the core facts of the loan or default but raised issues regarding the plaintiff’s ownership of the underlying debt and the legal infrastructure of the mortgage. The appeal was heard de novo, limited to evidence presented in the Circuit Court as no application to admit further evidence was made.

Legal Issues Presented

1. Whether the plaintiff is the registered owner of the charge securing the loan.
2. Whether the right to possession has arisen and is exercisable under the terms of the charge and loan agreement.
3. Whether the defendants have established a stateable defence sufficient to refuse summary relief and require a plenary hearing, particularly concerning the ownership of the underlying debt and alleged transactions affecting that ownership.

Arguments of the Parties

Defendants' Arguments

• The plaintiff named on the folio as charge holder was GE Capital, not the plaintiff as currently styled, and the defendants believed the mortgage was sold to a different entity.
• The defendants asserted they were not put on notice of any assignment or transfer of the debt, leading to uncertainty about the true owner to whom repayment was due.
• The defendants referred to an external article suggesting the loan portfolio was sold to a special purpose vehicle, challenging the plaintiff’s ownership of the underlying debt.
• The defendants claimed that changes in the "legal infrastructure" of the mortgage altered the contractual dynamics with the plaintiff.
• They relied on a recent High Court decision to support the view that ownership of the underlying debt was unclear, warranting adjournment to a plenary hearing.

Plaintiff's Arguments

• The plaintiff maintained it is the registered owner of the charge as recorded on the folio, which is conclusive evidence of ownership under the 1964 Act.
• The plaintiff argued that the right to possession had arisen due to the defendants’ default and arrears.
• The plaintiff did not respond directly to the defendants’ assertions regarding alleged portfolio sales or transactions, relying instead on established case law principles governing summary possession applications under section 62(7).
• The plaintiff emphasized that no evidence was adduced in this appeal concerning securitisation or portfolio sales, distinguishing this case from others cited by the defendants.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Bank of Ireland Mortgage Bank v Cody [2021] IESC 26	Section 62(7) summary disposal requires proof of registered charge ownership and exercisable right to possession.	Established the framework for summary possession applications under the 1964 Act, guiding the court’s analysis.
Tanager DAC v Kane [2019] 1 IR 385	Correctness of the register cannot be challenged in summary possession defence.	Confirmed that the plaintiff’s registered ownership is conclusive evidence in possession proceedings.
Pepper Finance Corporation (Ireland) DAC v Moynihan [2024] IEHC 625	Ownership of underlying debt and impact of securitisation on entitlement to possession.	Distinguished due to evidential deficiencies and extensive redactions affecting proof of ownership of debt.
Pepper Finance Corporation (Ireland) DAC v Jenkins [2018] IEHC 485	Bare trustee may pursue possession order.	Supported the proposition that legal title holder can seek possession even if holding as bare trustee.
Pepper Finance Corporation (Ireland) DAC v Farrelly [2022] IEHC 272	Bare trustee’s entitlement to possession order.	Reinforced the principle on bare trustee’s right to enforce possession.
Pepper Finance Corporation (Ireland) DAC v Moloney [2023] IECA 161	Conclusive effect of the register; entitlement to execute possession order depends on registered ownership.	Supported plaintiff’s registered ownership but did not address entitlement to summary possession order.

Court's Reasoning and Analysis

The court began by reaffirming the legal framework established by the Supreme Court in Bank of Ireland Mortgage Bank v Cody, requiring proof of registered charge ownership and an exercisable right to possession for summary disposal under section 62(7) of the 1964 Act. The plaintiff was undisputedly the registered charge holder on the folio, a fact conclusively established by the register and supporting documentation of the company’s name change, maintaining legal personality.

The defendants raised concerns about the ownership of the underlying debt, citing speculative assertions and external sources suggesting portfolio sales or securitisation that might affect the plaintiff’s entitlement. However, the plaintiff did not tender any evidence to clarify or rebut these assertions despite having control over such information. The court noted the defendants’ evidence was sparse and speculative but nonetheless raised a relevant factual issue that the plaintiff could have addressed.

The court distinguished this case from Moynihan, where evidential redactions prevented determination of ownership, and from Moloney, which concerned execution of possession orders rather than entitlement to summary possession orders. Importantly, the court emphasized that evidence adduced in other proceedings could not be imported into this case and that the plaintiff’s failure to engage with the defendants’ concerns on ownership of the underlying debt was significant.

Given the plaintiff’s refusal or failure to provide evidence addressing the raised issues, the court concluded that it could not be satisfied that the plaintiff had discharged the burden of proof required for summary possession relief. Nonetheless, the defendants had not established a full defence warranting dismissal. Therefore, the court found it appropriate to remit the proceedings to a plenary hearing to allow full exploration of the evidential issues.

Holding and Implications

The court ALLOWED the appeal against the Circuit Court order for possession and ordered the matter to be remitted to plenary hearing pursuant to Order 5B of the Circuit Court Rules. This decision means that summary possession relief is refused at this stage due to insufficient proof by the plaintiff regarding entitlement to possession, particularly concerning ownership of the underlying debt.

The direct effect is that the possession proceedings will continue with a full evidential hearing, allowing both parties to adduce all relevant admissible evidence. The court did not set any new precedent but applied established principles emphasizing the necessity of clear proof in summary possession applications and the court’s discretion to remit where factual disputes remain unresolved.