Irish Life and Permanent Plc v Dunne

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 15 May 2015
• Neutral Citation: [2015] IESC 46
• Court: Supreme Court
• Docket Number: [S.C. Nos. 259 & 293 of 2013],[Record No: 259/2013]
• Date: 15 May 2015

[2015] IESC 46

THE SUPREME COURT

Denham C.J.

O'Donnell J.

Clarke J.

Laffoy J.

Charleton J.

[Record No: 259/2013]

[Record No: 293/2013]

Between

Irish Life and Permanent plc

Plaintiffs/Respondents

and

Gemma Dunne and Kevin Dunne

Defendants/Appellants

Between

Irish Life and Permanent plc

Plaintiffs/Respondents

and

Dylan Dunphy

Defendant/Appellant

Banking and finance – Possession – Mortgaged property – High Court seeking Supreme Court opinion – Whether it was open to the High Court to state a case for the opinion of the Supreme Court

Facts: Two cases came before the Supreme Court as cases stated from the High Court (Hogan J), on appeal from the Circuit Court. An issue which arose in both cases was whether, for technical reasons, it was open to Hogan J to state a case for the opinion of the Supreme Court in the particular circumstances of the respective cases. The first question posed by Hogan J in each case concerned jurisdiction and relates to whether the Supreme Court could hear the cases at all. On the assumption that a jurisdiction exists, different substantive issues arose 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, Mr and Mrs Dunne, arising out of the effect of the Code of Conduct on Mortgage Arrears (the Code) promulgated under s.117 of the Central Bank Act 1989. The second issue raised in the case stated in that case was 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. In case no. 293/2013 (the Dunphy case) the first additional issue, beyond the question of whether a power to state a case arose at all, which arose on the case stated was as to whether the plaintiffs/respondents, Irish Life and Permanent plc, had a sufficient vested right prior to the coming into force of the Land and Conveyancing Law Reform Act 2009 so as to permit reliance to continue to be placed on section 62(7) of the Registration of Title Act 1964 despite that provision having been repealed on the coming into force of the 2009 Act.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.

Clarke J considered the questions posed to the Supreme Court. In the Dunnes” case, Hogan J asked: 1) 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?; 2) In the absence of any statutory indication that failure to comply with the applicable 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; and 3) 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 to conditions or otherwise) or any order for possession. In the Dunphy case, Hogan J asked: 1) same as the Dunnes” case; 2) If the answer to question 1) is in the affirmative, whether the plaintiff had a vested right to possession prior to 1st December 2009 for the purposes of s.27 of the Interpretation Act 2005 which was unaffected by the subsequent repeal of s.62(7) of the Registration of Title Act 1964?; 3) Irrespective of the answer to question 2) can the Court grant possession to a mortgagee pursuant to a contractual agreement which is independent of statute?

Clarke J held that the Supreme Court would answer question 1) in both cases stated in the affirmative and to the effect that the trial judge in the High Court had a jurisdiction to state a case in both proceedings. Answering questions 2) and 3) in the Dunnes” case, Clarke J indicated that, where a breach of the Code involves a failure by a lender to abide by the moratorium referred to in the Code, but in no other circumstances, non-compliance with the Code affects, as a matter of law, a relevant lender”s entitlement to obtain an order for possession. He further clarified that it is a matter for the relevant lender to establish by appropriate evidence in any application before the Court that compliance with that aspect of the Code has occurred. Clarke J answered question 2) in the Dunphy case in the affirmative on the basis that he was satisfied that the entire principal sum was due on the 1st December, 2009, and that, on any view of the meaning of the terms ‘acquired’ or ‘accrued’, a right to bring an application under s.62(7) of the 1964 Act was clearly vested as of that date. He did not consider it necessary to answer question 3) in the Dunphy case.

Answered questions in both cases stated.

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...