KBC Bank Plc & Beltany Property Finance DAC v Beades (Motion)

• Jurisdiction: Ireland
• Judge: Ms. Justice Máire Whelan
• Judgment Date: 17 February 2021
• Neutral Citation: [2021] IECA 39
• Date: 17 February 2021
• Court: Court of Appeal (Ireland)
• Docket Number: Court of Appeal Record No. 2018/378 Court of Appeal Record No. 2019/458 High Court Record No. 2006/623 SP

BETWEEN/

PEPPER FINANCE CORPORATION (IRELAND) DAC

PLAINTIFF

- AND –

JERRY BEADES

DEFENDANT/APPELLANT

- AND –

BETWEEN/

PEPPER FINANCE CORPORATION (IRELAND) DAC

PLAINTIFF

- AND –

JERRY BEADES

DEFENDANT/APPELLANT

[2021] IECA 39

Whelan J.

Noonan J.

Haughton J.

Court of Appeal Record No. 2018/378

High Court Record No. 2006/623 SP

Court of Appeal Record No. 2019/458

High Court Record No. 2006/623 SP

THE COURT OF APPEAL

JUDGMENT of Ms. Justice Máire Whelan delivered on the 17 ^th day of February 2021

Introduction

1 On 15 September 2020, at a time when the above entitled appeals were pending before this court, Pepper Finance Corporation (Ireland) DAC brought an application before this court by way of notice of motion seeking the following orders: -

(a) an order pursuant to O. 17, r. 4 of the Rules of the Superior Courts (“RSC”) and/pursuant to the inherent jurisdiction naming Pepper as a co-respondent to both appeals.

The application was grounded on the affidavit of Todd Bowen sworn on 15 September 2020 together with his supplemental affidavit sworn on 23 September 2020.

2 The title page of this judgment reflects the most up-to-date details of the parties in the underlying High Court proceedings as recorded by the Central Office of the High Court. This should not be taken as a pre-judgment of the issues discussed herein or of any potential future appeals brought by the appellant.

Key background facts

3 The history of the proceedings is fully outlined in the judgments delivered in the appeals bearing record nos. 2018/378 and 2019/458. On 29 November 2006 IIB Homeloans Limited as mortgagee instituted proceedings against the appellant by way of special summons bearing record no. 2006/623 SP seeking an order for possession of two properties situate at Fairview and Little Mary Street respectively in Dublin.

4 An order for possession was granted on 23 June 2008 by Dunne J. in the High Court. The appellant appealed against that determination. The appeal was ultimately heard by the Supreme Court and in November 2014 the said order for possession was affirmed and the appeal was dismissed. Therefore, there is no extant issue now between the parties with regard to the validity of the order for possession.

Devolution of mortgagee's title

5 All the estate, right, title and interest of the original mortgagee came to vest in KBC Bank Ireland plc by act and operation of law pursuant to the Central Bank Act 1971 and S.I. No. 125 of 2009 in or about June 2009 in accordance with the tenor of the said statutory instrument. KBC Bank Ireland plc further automatically stepped into the shoes of IIB Homeloans Limited by virtue, inter alia, of the provisions of the Central Bank Act 1971 for the reasons outlined in the judgments in the related appeals bearing record nos. 2018/378 and 2019/458. It acquired qua mortgagee the benefit of the order for possession. Whilst a formal order was made by Costello J. in the High Court on 25 July 2018, following her written judgment of 29 June 2018, amending the title to the proceedings substituting KBC Bank Ireland plc for IIB, the said substitution order was not strictly necessary in law but formally reflects the position that had hitherto obtained by operation of law from June 2009.

6 Under and by virtue of a mortgage sale agreement of 9 August 2018 together with a deed of transfer dated 30 November 2018, Beltany Property Finance DAC took a transfer of, inter alia, all the estate, right, title and interest of the original mortgagee, IIB, in the loan facility, the facility letter and the mortgage of 12 June 2003. The order for possession together with the benefit of the order of the Supreme Court made in November 2014 affirming same and dismissing the appeal enured for the benefit of Beltany qua mortgagee in succession to IIB.

7 Thereafter pursuant to an order of Reynolds J. made in the High Court pursuant to O. 17, r. 4 on 14 October 2019 Beltany was named as sole plaintiff in the proceedings. Beltany was also granted liberty to issue execution on foot of the possession order of 23 June 2008, pursuant to O. 42, r. 24(a). Both the order and judgment of Costello J. referred to above and the order of Reynolds J. of 14 October 2019 were the subject of separate appeals to this court and separate judgments will be delivered in respect of the said appeals referred to above. Both the said judgments are intended to be read together with this judgment.

8 The sole issue for determination now is whether Pepper is entitled to an order pursuant to O. 17, r. 4. naming it as a co-respondent to the appeals. That calls for a consideration of the basis on which it frames its entitlement and the claims of the appellant in opposition.

Consumer Protection (Regulation of Credit Servicing Firms) Act 2018

9 The above entitled Act came into operation on 21 January 2019. It effected, inter alia, an amendment to s. 28 of the Central Bank Act 1997 by amending the definition of “credit servicing” to provide:-

“‘credit servicing’ in relation to a credit agreement, means, subject to subsection (2)-(a) holding the legal title to credit granted under the credit agreement…”

The essential thrust of the legislation was to ensure that firms or entities providing credit servicing were to hold the legal estate under the mortgage. The Act in effect amended Part 5 of the Central Bank Act 1997 to expand the activity of credit servicing as defined in that Act, to include holding the legal title to credit granted under a credit agreement and associated ownership activities. The net impact of the legislative amendment is consumer driven and ensures that the borrower whose loan or loans are sold maintain the regulatory protections that they enjoyed prior to the sale including the protections provided by the Central Bank's statutory code of conduct. It was the case advanced on behalf of Pepper that it managed the loans in question and that, as such, the instruments executed on 7 August 2020 were necessitated for the purposes of ensuring compliance with the provisions of the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018.

Assignment from Beltany to Pepper

10 In its affidavit of 15 September 2020 Todd Bowen, Head of Portfolio Management for Pepper, deposes that pursuant to a mortgage sale and purchase deed of 7 August 2020 made between Beltany as assignor and Pepper as assignee, Beltany agreed to sell and Pepper agreed to buy the legal interest of Beltany in mortgages securing a portfolio of loan facilities “for the consideration therein mentioned”.

11 A global deed of assignment dated 7 August 2020 made between Beltany and Pepper is exhibited with the said affidavit. Mr. Bowen deposes at para. 21 of his first affidavit: -

“I believe and am advised that the effect of the global deed of assignment was that the legal interest in the loan facility, the facility letter and the mortgage has been assigned absolutely from Beltany to Pepper.”

A true copy of the global deed of assignment, partially redacted, is exhibited. The reason for the redaction is explained as being –

“…due to the fact that Schedule 1 identifies all of the facilities covered by the assignment (including information relating to persons other than the appellant). However, the exhibited copy of the deed contains the relevant extract from Schedule 1 relating to the appellant.”

It is not in contention and was not disputed during the course of the hearing that the extract from Schedule 1 to the global deed of assignment which refers to loan ID 582311 pertained to the appellant and the loan and properties the subject of the within proceedings and possession order of 23 June 2008.

12 Redactions are further explained in the deeds as being necessitated by: -

(a) commercial sensitivity (such as disclosure of the confidential terms on which the loan sale was completed):

(b) client confidentiality, such as restrictions imposed by Regulation (EU) 2016/679 which requires the redaction of all personal information relating to other borrowers; and/or

(c) matters which are not relevant to the subject matter of the within proceedings (para. 23 of the first affidavit of Mr. Bowen).

13 In addition to the global deed of assignment the affidavit exhibits a deed of conveyance and assignment dated 7 August 2020 between Beltany and Pepper whereby Beltany granted, conveyed, assigned, transferred and assured to Pepper all its right, title, estate, interest, benefit and obligation (both present and future) in relation to the properties.

14 It is clear that “hello” and “goodbye” letters as they are colloquially described affording notice of the intended assignment to the appellant and notice of its conclusion compliant with the provisions of the Supreme Court of Judicature Act (Ireland) 1877 were served on the appellant on 5 June 2020 and 14 August 2020 respectively. The content of same clearly informed the appellant that Beltany had agreed to transfer its legal ownership of, inter alia, his loan together with any related facility letters, mortgages, guarantees, security documents and rights pertaining to his indebtedness to Pepper. The later letter confirms that the transaction had taken effect. There was also a further confirmatory letter notifying the appellant of the transfer of the legal ownership in his loan which letter was dated 31 August 2020. Pepper contends that the appellant received the necessary express written notice of the assignment. Pepper contends that it is necessary and/or desirable that as the current legal owner and assignee of the loan facility, the facility letter and the mortgage it should be made a party to the within proceedings contending that it has an interest in the appeal. It seeks no more than to be named as a co-respondent to the two pending appeals in the above-entitled proceedings.

Position of the appellant

15 The appellant, in opposing the application that...