Start Mortgages DAC v Clarke and Another

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice Mark Heslin
• Judgment Date: 21 May 2024
• Neutral Citation: [2024] IEHC 310
• Docket Number: Record No. 2023/ 231 HCA

Between

Start Mortgages Designated Activity Company

Plaintiff/Respondent

and

Ronan Clarke and Irene Clarke

Defendants/Appellants

[2024] IEHC 310

Record No. 2023/ 231 HCA

THE HIGH COURT

Judgment of Mr. Justice Mark Heslin, delivered on 21st May 2024

Introduction

1 . By means of a Civil Bill for possession, which issued on 28 September 2018, the Plaintiff sought an order, pursuant to section 62(7) of the Registration of Title Act 1964 (“the 1964 Act”) and section 1 of the Land and Conveyancing Law Reform Act 2013 (“the 2013 Act”) for delivery, to the Plaintiff, of possession of the property comprised in Folio 170L of the Register County Cavan (“Folio 170L”) more commonly known as number 8, Mary's Road, Kingscourt, County Cavan (“the property”).

2 . On 21 November 2023, His Honour Judge Aylmer made such an order (“the possession order”). The Defendants appealed the possession order. For reasons explained in an ex-tempore ruling, I refused the Defendants' application to adjourn the proceedings, which application was moved following the commencement of the hearing on 12 April 2024.

De Novo hearing

3 . Section 37 (2) of the Courts of Justice Act 1936 states the following, under the heading of “Appeals from the Circuit Court in civil cases heard without oral evidence” (which applies to the present case from the court below):-

“(2) Every appeal under this section to the High Court shall be heard and determined by one judge of the High Court sitting in Dublin and shall be so heard by way of rehearing of the action or matter in which the judgment or order the subject of such appeal was given or made….”

This appeal proceeded by way of a de novo hearing.

S. 62 of the 1964 Act

4 . The Registration of Title Act 1964, provides, inter alia, as follows:-

“62.—(1) A registered owner of land may, subject to the provisions of this Act, charge the land with the payment of money either with or without interest, and either by way of annuity or otherwise, and the owner of the charge shall be registered as such…

…

(7) When repayment of the principal money secured by the instrument of charge has become due, the registered owner of the charge or his personal representative may apply to the court in a summary manner for possession of the land or any part of the land, and on the application the court may, if it so thinks proper, order possession of the land or the said part thereof to be delivered to the applicant, and the applicant, upon obtaining possession of the land or the said part thereof, shall be deemed to be a mortgagee in possession”.

Conclusiveness of the Register under the 1964 Act

5 . In Tanager Designated Activity Company v. Rolf Kane [2018] IECA 352, the Court of Appeal considered certain questions of law referred by Noonan J The first of these questions posed was as follows:-

“1) Does the Defendant have an entitlement to challenge the registration of the Plaintiff as owner of the charge at entry no. 7 on the Defendant's folio in these proceedings, having regard to the conclusiveness of the Register pursuant to s. 31 of the 1964 Act?”

6 . The Court of Appeal answered that question in the negative.

7 . In the manner presently discussed, the Defendants entered into a mortgage which secured monies advanced to them by way of a charge on the property. The Plaintiff is the registered owner of that charge.

Summary manner

8 . As can be seen from the foregoing, s.62(7) explicitly permits a registered owner of a charge to seek possession in a “ summary manner”. That was the route taken by the Plaintiff when it caused the Civil Bill for possession to be issued.

The s. 67(2) jurisdiction

9 . In the Supreme Court's decision in Bank of Ireland Mortgage Bank v. Cody [2021] IESC 26 (“ Cody”), Baker J examined the s. 62(7) jurisdiction and stated the following from para. 15 onwards:-

“ 15. The jurisdiction conferred by that section applies to proceedings for possession by the registered owner of a charge once monies secured by the charge have become due. The subsection does not identify what is meant by the making of an application “in a summary manner”, but the Court is given a discretion, if it so thinks proper, to order possession of the land to be delivered up, the consequence whereof is that the owner of the charge thereupon becomes a mortgagee in possession.

16. In Bank of Ireland v. Smyth [1993] 2 IR 102, [1993] ILRM 790, Geoghegan J rejected the notion that s. 62(7) confers a wide discretion which enables a court to refuse an application for possession on grounds of sympathy. He thought the words “may, if it so thinks proper” simply mean that the court should apply equitable principles in considering the application for possession, but not “sympathetic factors” and thus ensure that the application is made bona fide with a view to realising the security…”

10 . Baker J then quoted as follows from the decision of Geoghegan J in Smyth:

“ The words ‘may, if it so thinks proper’ in s. 62, sub-s. 7 mean no more, in my view than, that the court is to apply equitable principles in considering the application for possession. This means that the court must be satisfied that the application is made bona fide with a view to realising the security.” (p. 111)

Para. 17 of Baker J's decision in Cody continued as follows:

“ 17. The procedure was explained in the decision of this Court in Irish Life and Permanent v. Dunne [2015] IESC 46, [2016] 1 IR 92, in which it held that any court seeking to make an order for possession under s. 62(7) must first ask itself whether, as a matter of law, it can properly be said that the monies are secured and are due.” (emphasis added)

Order 5B

11 . Circuit Court applications for summary possession of property are governed by Order 5B of the Circuit Court Rules [S.I. No. 264 of 2009] as amended. Order 5B applies to any proceedings in which the Plaintiff claims, inter alia: “recovery of possession of any land on foot of a legal mortgage or charge” ( per O. 5B, r. 1). Order 5B, rule 3 provides:-

“3. (1) Proceedings to which this Order applies shall be commenced by a Civil Bill in Form 2R of the Schedule of Forms. The special indorsement of claim in such Civil Bill shall state specifically and with all necessary particulars the relief claimed and the grounds thereof.

(2) In proceedings to which this Order applies, the Civil Bill shall include a statement immediately following the Special Indorsement of Claim as to whether:

(a) the proceedings are commenced in the Court under the jurisdiction conferred by section 101(5) of the Land and Conveyancing Law Reform Act 2009, and in such case, whether section 2 of the Act of 2013 applies to the proceedings, or

(b) the proceedings are commenced in the Court under the jurisdiction conferred by section 3 of the Land and Conveyancing Law Reform Act 2013.

(3) A Civil Bill to which this Order applies shall be served, together with a copy of the affidavit mentioned in rule 5, on each Defendant not later than 21 days before the return date mentioned in rule 4.”

12 . Rule 4 provides that, upon being issued, the relevant Civil Bill shall be assigned a return date before the County Registrar, whereas rule 5 requires that the Civil Bill be accompanied by an affidavit in conformity with the requirements of Form 54 in the Schedule of Forms, sworn by or on behalf of the Plaintiff, verifying and supporting the claim indorsed on the Civil Bill. The relevant procedure was analysed in considerable detail by the Supreme Court in Cody (see paras. 20 to 35, inclusive). At this juncture, it is appropriate to say that the Plaintiff has complied in full with the relevant procedure.

What the Plaintiff must prove

13 . In Start Mortgages DAC v. Ryan [2021] IEHC 719 (“ Ryan”), Woulfe J made the following clear (from para. 21) in relation to the burden of proof resting on a Plaintiff in an application of the present type:-

“ 21. At para. 49 of her judgment in Cody, Baker J stated that the owner of a charge who seeks to obtain possession pursuant to s.62(7) of the 1964 Act has to prove two facts: (a) that the Plaintiff is the owner of the charge; and (b) that the right to seek possession has arisen and is exercisable on the facts. The summary process is facilitated by the conclusiveness of the Register as proof that the Plaintiff is the registered owner of the charge and this is a matter of the production of the Folio, and, as the Register is by reason of s.31 of the 1964 Act conclusive of ownership, sufficient evidence is shown by that means: see the discussion in the Court of Appeal judgment in Tanager DAC v. Kane [2018] IECA 352. That judgment held that the correctness of the Register cannot be challenged by way of defence in summary possession proceedings, and that a Court hearing an application for possession pursuant to s.62(7) of the 1964 Act is entitled to grant an order at the suit of the registered owner of the charge, or his or her personal representative, provided it is satisfied that the Plaintiff is the registered owner of the charge and the right to possession has arisen and become exercisable.

22. Order 5B requires a Plaintiff to establish a prima facie case on the affidavit evidence for an order for possession, and it is then necessary for the Defendant to proffer evidence or argument sufficient to establish a credible defence…” (emphasis added)

Questions for this court

14 . The foregoing dicta makes clear that this Court must answer several important questions in order to determine the present claim, namely:

(i) Are the relevant monies secured on the property?

(ii) Is the Plaintiff the owner the relevant charge?

(iii) Has there been default resulting in the monies becoming due? and

(iv) Has the Defendant put forward a credible defence?

The Civil Bill

15 . The Civil Bill pleads the claim in very clear terms. The special endorsement of claim inter alia: (i)...