Start Mortgages Designated Activity Company v Larkin and Anor (Approved)

Factual and Procedural Background

Company A commenced summary possession proceedings concerning the Defendants’ property in County X, relying on a mortgage loan, charge, alleged assignment of the loan and security, default, and demands for repayment and possession. [1][2][3][4][5]

Company B applied, with Company A’s consent, to be substituted as plaintiff after the alleged transfer of the loans, securities, and registered charge. The Circuit Court granted that application. [6][7][8][9][10][11][12]

The First Defendant appealed on behalf of both Defendants against the substitution order and separately appealed refusals of relief sought in several motions. The appeals were heard de novo in the High Court. [13][14][15]

Legal Issues Presented

1. Whether there was sufficient prima facie evidence of a transmission of the loans, securities, and charge to justify substituting Company B as plaintiff. [16][17][18][19]
2. Whether the First Defendant’s objections concerning the transfers, particulars, discovery, document redactions, and cross-examination justified refusing substitution or granting the relief sought in his motions. [20][21][22][23][24][25][26][27]

Arguments of the Parties

Company B’s Arguments

• The applicable test, identified in IBRC v Comer, required only prima facie evidence of a transmission of interest. [16]
• The exhibited transfer documents showed that the loans and underlying securities had been transferred, and Company B was registered as owner of the relevant charge. [28]
• The Registration of Title Act 1964 gave the transferee of a registered charge the same enforcement rights and powers as if the charge had originally been created in its favour. [29][30][31]
• Any challenge to the transfers could be raised in the substantive possession proceedings. [32][33]
• Discovery was unavailable at this stage in summary proceedings, and a notice for particulars could not be served in relation to an affidavit used for an interlocutory application. [34][35]

First Defendant’s Arguments

• The First Defendant expressed serious concerns about the successive changes in title from the original lender to Company A and then to Company B. [20]
• He argued that substitution should await responses to his notice for particulars and discovery requests, and he sought orders compelling those responses and disclosure. [21][36]
• He objected to redactions in the exhibited documents and sought permission to cross-examine the deponent of the grounding affidavit. [25][26][27]

Table of Precedents Cited

Court's Reasoning and Analysis

The Court applied the prima facie test in IBRC v Comer. It did not need finally to determine the validity of every transfer at the interlocutory substitution stage; those issues could be addressed in the substantive possession proceedings. [17][37][38][22]

The affidavit evidence and exhibited documents established prima facie that Company A had transferred to Company B the Defendants’ loans and underlying securities. [18][19]

The registered folio showed Company B as owner of the charge. Under sections 62(7), 64(1), and 64(4) of the Registration of Title Act 1964, the registered transferee could seek possession and possessed the same enforcement rights and powers as an original charge-holder. Rule 52 of the Land Registry Rules was also identified as relevant to the prescribed transfer forms. [38][44][45][46][39]

The Court rejected the First Defendant’s reliance on his notice for particulars and discovery as a reason to prevent substitution. It held that a notice for particulars could arise only from pleadings, not from an affidavit, and that the notice was effectively an inappropriate attempt to cross-examine on paper. [23][24][47][48]

Discovery was also refused because the proceedings remained summary possession proceedings. The Court stated that discovery might become appropriate if the matter were remitted to plenary hearing after pleadings had closed. [40][42][41][43][25]

The Court found the redactions justified by commercial sensitivity and the privacy of other borrowers, and considered the redacted information irrelevant to the issues for determination in the substantive proceedings. [49][26]

Cross-examination of the deponent was held unnecessary for the substitution application. The First Defendant could seek cross-examination in the substantive possession proceedings or, if the matter were remitted to plenary hearing, at that hearing. [27][50]

Holding and Implications

Appeals dismissed. The Court dismissed the First Defendant’s appeal against substitution, ordered that Company B be substituted as plaintiff, and dismissed the appeals against refusal of relief in the various motions. [43][51][52][53][54][55][56]

The substantive possession proceedings will continue in the Circuit Court. The First Defendant may raise objections to the transfers and may seek discovery or cross-examination at a later procedural stage if the proceedings are remitted to plenary hearing. [22][41][43][50]

The opinion discusses no broader implication beyond these procedural consequences, and no new precedent was set.