Irish Life and Permanent plc -v- Dunne and Irish Life and Permanent plc -v- Dunphy, [2015] IESC 46 (2015)

Docket Number:259/2013 and 293/2013
Party Name:Irish Life and Permanent plc, Dunne and Irish Life and Permanent plc -v- Dunphy

THE SUPREME COURT[Record No: 259/2013]

Denham C.J.

O'Donnell J.

Clarke J.

Laffoy J.

Charleton J.


Irish Life and Permanent plcPlaintiffs/Respondentsand

Gemma Dunne and Kevin DunneDefendants/Appellantsand[Record No: 293/2013]


Irish Life and Permanent plcPlaintiffs/Respondentsand

Dylan DunphyDefendant/Appellant

Judgment of Mr. Justice Clarke delivered the 15th May, 2015.

1. Introduction

1.1 It is hardly surprising that important legal questions relating to the entitlement or otherwise of financial institutions to obtain possession of mortgaged property have arisen in recent times. It must, of course, be emphasised that it is only the legal aspects of such questions with which the courts are concerned. Other policy issues raising both economic and social questions do, of course, arise. But any such issues require to be considered at a political and regulatory level, and to find their way into changes in the law, if that is to happen at all, through legislation or regulatory measures which have binding legal effect. To say that the courts have no role in such issues is not to imply that judges are unmindful of the great personal difficulties which have arisen from both the collapse in property prices and the general financial crisis. Whether, and if so to what extent, those difficulties should lead to a change in the law and a shift in the balance of legal rights between, on the one hand, those who have lent money on the security of premises and, on the other hand, borrowers in financial difficulty, is a matter for legislators and regulators. The courts must interpret the law as it is and apply it to the facts and circumstances of each individual case.

1.2 These two cases come before this Court as cases stated from the High Court (Hogan J.). In both cases, Hogan J. was sitting as a judge of the High Court hearing an appeal from the Circuit Court. In circumstances which it will be necessary to address in a little more detail, an issue which arose in both cases was whether, for what I think can fairly be described as technical reasons, it was open to Hogan J. to state a case for the opinion of this Court in the particular circumstances of the respective cases. The first question posed by Hogan J. in each case, therefore, concerns jurisdiction and relates to whether this Court can hear the cases at all. On the assumption that a jurisdiction exists, different substantive issues arise respectively in the two cases. In case no 259/2013 ("the Dunnes’ case"), questions were raised by the High Court itself as to whether possession could properly be ordered against the defendants/appellants ("the Dunnes") arising out of the effect of the Code of Conduct on Mortgage Arrears ("the Code" which term applies to the version in place at the time of the events under consideration in the Dunnes’ case being the version adopted in 2010 which came into force on the 1st January, 2011) promulgated under s.117 of the Central Bank Act 1989, as amended, ("the 1989 Act"). The second issue raised in the case stated in that case is, therefore, as to whether the Code can, either generally or in certain specified circumstances, affect the legal entitlement of a lender to secure possession of mortgaged property in the event of default in repayment.

1.3 In case no. 293/2013 ("the Dunphy case") the first additional issue, beyond the question of whether a power to state a case arises at all, which arose on the case stated was as to whether the plaintiffs/respondents ("Irish Life and Permanent") had a sufficient vested right prior to the coming into force of the Land and Conveyancing Law Reform Act 2009 ("the 2009 Act") so as to permit reliance to continue to be placed on section 62(7) of the Registration of Title Act 1964 ("the 1964 Act") despite that provision having been repealed on the coming into force of the 2009 Act. A second issue concerning the extent to which Irish Life and Permanent might be able, in the alternative, to rely on a contractual right to possession was also raised.

1.4 As will appear from this judgment, the Dunnes never participated in the proceedings concerning them. Hogan J. was, nonetheless, quite properly concerned as to whether he was entitled, as a matter of law, to make the order sought by Irish Life and Permanent in the Dunnes' case. However, as the Dunnes had not participated in the proceedings up to that point in time, and given that it was, therefore, likely that they would not participate in the hearing of the case stated, this Court had previously invited the counsel who had been instructed on behalf of the Dunphys to also make submissions in the Dunnes’ case. I should say that the availability of leading counsel to present argument in favour of the Dunnes made, in my view, the task of the Court in determining the legal issues which arise in the case stated in respect of the Dunnes much easier than might otherwise have been the case. The availability of well formulated argument on both sides of any proposition can only enhance the likelihood of a decision maker reaching an appropriate determination.

1.5 Be that as it may, in order to more fully understand the precise issues which arise, it is next necessary to set out a brief account of the procedural history of both cases on the basis of the facts and determinations specified by Hogan J. in the respective cases stated.

2. The Dunnes’ Case

2.1 The case stated by Hogan J. was made under s.38(3) of the Courts of Justice Act 1936 (“the 1936 Act”). From the facts set out by Hogan J. in the case stated, it appears that Irish Life and Permanent advanced a loan to the Dunnes on the 16th January, 2007, which was secured by a registered charge over lands owned by the Dunnes at Silverhill, Kilcoursey, Co. Offaly, which lands were comprised in Folio OY23220F. The Dunnes defaulted on the repayments due under the relevant loan and, therefore, under the terms and conditions of the loan, it appears that such default resulted in the total principal sum under the relevant loan agreement becoming immediately payable. On that basis, Irish Life and Permanent was prima facie entitled to seek to recover possession of the lands in question. Proceedings were issued in the Circuit Court in May 2011 for the purpose of seeking an order for possession of the lands. No appearance was entered by or on behalf of the Dunnes, who have, in fact, been living outside of the jurisdiction since October 2010. As a result, Irish Life and Permanent was required to obtain an order for substituted service and for service of the proceedings outside of the jurisdiction. In the case stated, Hogan J. noted that, as a consequence of the lack of any appearance by the Dunnes to the Circuit Court Proceedings, no issue was raised at any stage as to Irish Life and Permanent’s compliance with the Code prior to the matter coming on for hearing before the Circuit Court sitting at Tullamore.

2.2 In addressing the decision of Dunne J. in Start Mortgages v. Gunn and Others [2011] I.E.H.C. 275 at the Circuit Court hearing, Irish Life and Permanent made submissions arguing for the persistence of their lawful entitlement to seek possession on foot of the terms and conditions of the mortgage notwithstanding the repeal of s.62(7) of the 1964 Act by the 2009 Act.

2.3 On 13th February, 2012, Her Honour Judge Murphy refused Irish Life and Permanent’s application for possession due to their failure to issue a demand for repayment of the mortgage on or before 1st December, 2009, being the date of repeal of s.62(7) of the 1964 Act. On that basis, and in the light of Start Mortgages, Her Honour Judge Murphy was not satisfied that Irish Life and Permanent had, as of the date of repeal of s.62(7) of the 1964 Act, an existing right which would subsist notwithstanding the repeal of the section. Irish Life and Permanent appealed that decision to the High Court. Further orders in relation to service on the Dunnes were made and complied with.

2.4 Hogan J. referred in the case stated to a number of High Court judgments, commencing with Start Mortgages & Ors. v. Gunn & Ors. and including EBS Building Society v. Gillespie [2012] I.E.H.C. 243, Irish Life and Permanent Plc v. Duff [2013] I.E.H.C. 43, Stepstone Mortgage Funding Limited v. Fitzell [2012] I.E.H.C. 142, and Zurich Bank v. McConnon [2011] I.E.H.C. 75. Hogan J. stated that, as a consequence of the “varied and differing views” taken by the various High Court judges in this line of case law regarding, amongst other things, the issue of the legal status of and the consequence of compliance with the Code insofar as such questions might affect possession proceedings, it was necessary to state a case to this Court to “seek to determine the jurisprudence on this matter.” Thus, Hogan J. presented the following questions to this Court:

i. Does the High Court have jurisdiction to state a case for the consideration of the Supreme Court pursuant to s. 38(3) of the Courts of Justice Act 1936 in the course of an appeal from the Circuit Court where no oral evidence was given before that Court?

ii. In the absence of any statutory indication that failure to comply with the applicable Code of Conduct on Mortgage Arrears as promulgated under Section 117 of the Central Bank Act 1989 as amended (“the Code”) affects the ability of the lender to secure an order for possession of premises covered by the Code, does non-compliance of the Code affect, as a matter of law, the lender’s entitlement to obtain an order for possession.

iii. If non-compliance with the Code affects the entitlement of the lender to secure an order for possession, must the Court refuse to make such an order in the event of any breach with the Code, or does the lender’s entitlement to an order depend on the nature or the circumstances of the breach or on the possibility of addressing any prejudice resulting from such breach by an order for adjournment of the proceedings or the granting of a stay (subject...

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