Start Mortgages DAC v McNair
| Jurisdiction | Ireland |
| Judge | Mr. Justice Garrett Simons |
| Judgment Date | 23 March 2020 |
| Neutral Citation | [2020] IEHC 140 |
| Date | 23 March 2020 |
| Docket Number | 2017 No. 328 C. A. |
| Court | High Court |
(OTHERWISE KNOWN AS DEBBIE MCNAIR)
[2020] IEHC 140
Garrett Simons J.
2017 No. 328 C. A.
THE HIGH COURT
CIRCUIT APPEAL
Order for possession – Loan agreement – Mortgage – Defendant seeking to appeal against an order for possession – Whether the defendant had made out a defence to the application for an order for possession
Facts: The first defendant, Mr McNair, appealed to the High Court against an order for possession granted by the Circuit Court. The order for possession had been granted pursuant to a charge which has been registered against the defendants’ interest in lands in Co. Sligo. Mr McNair appeared as a litigant in person. Mr McNair advanced a number of technical arguments in defence of the proceedings. Mr McNair made no real attempt to dispute the substance of the claim against him, namely, that he was in significant arrears pursuant to a loan agreement and mortgage.
Held by Simons J that the plaintiff, Start Mortgages DAC, had established that it was the registered owner of a charge on the dwelling house and lands contained in Folio 10247F, Co. Sligo. He held that this charge had been given as security for a loan agreement, the last payment pursuant to the loan agreement was made on 21 July 2011, there was a balance of in excess of €470,869.75 outstanding, the repayment of the principal money secured by the instrument of charge had become due, and Start Mortgages DAC, as the registered owner of the charge, was entitled to an order that possession of the land be delivered to it. He held that Mr McNair had not made out any defence to the application for an order for possession. Moreover, he noted that Mr McNair had made no proposals whatsoever to repay the outstanding balance or any part thereof.
Simons J held that the first defendant’s appeal against the order of the Circuit Court of 13 December 2016 would be dismissed; the order for possession was, therefore, affirmed. He held that a stay would be placed on the execution of this order for a period of six months from the date of this judgment. He held that Mr McNair had liberty to apply to extend this period in the event that the emergency conditions in respect of the coronavirus disease pandemic continued to prevail in six months’ time. He held that any such application should be made on at least fourteen days’ notice to Start Mortgages’ solicitors.
Appeal refused.
This matter comes before the High Court by way of an appeal against an order for possession granted by the Circuit Court. The order for possession had been granted pursuant to a charge which has been registered against the defendants' interest in lands in Co. Sligo. The appeal is brought by the first defendant alone, Mr Keith McNair ( “Mr McNair”). (The second defendant has not brought an appeal in respect of an order for possession which had been made against her on 11 May 2016).
Mr McNair appears as a litigant in person. Mr McNair has advanced a number of technical arguments in defence of the proceedings. These are set out in detail in the written submissions which Mr McNair has very helpfully prepared. Whereas a technical argument, if made out, can, of course, be a good ground of defence to proceedings, it should be noted that Mr McNair has made no real attempt to dispute the substance of the claim against him, namely, that he is in significant arrears pursuant to a loan agreement and mortgage. The last payment was made on 21 July 2011. (See Siobhan Coen's affidavit of 25 November 2015). It is also to be noted that whereas Mr McNair refers to the mortgage as the “alleged mortgage,” it is evident from the correspondence which Mr McNair himself has exhibited that he has previously acknowledged the mortgage and had been seeking to restructure payments. See, for example, letter of 5 September 2011 wherein Mr McNair requested a “mortgage payment holiday” for the next six months.
The within proceedings were instituted by way of Civil Bill for Possession dated 2 April 2015. (The proceedings appear to have issued out of the Court Office on 29 April 2015). The proceedings were subject to the requirements of Order 5B of the Circuit Court Rules. Order 5B has been amended on a number of occasions, but as of the time these proceedings were instituted, the relevant provisions of Order 5B governing the form of proceedings were as prescribed principally under the Circuit Court Rules (Actions for Possession and Well-Charging Relief) 2009 (S.I. No. 264 of 2009) (as amended in 2012). Order 5B, rule 3 provided that the special indorsement of claim shall state specifically and with all necessary particulars the relief claimed and the grounds thereof.
The proceedings were grounded on an affidavit of Ms Siobhan Coen sworn on 19 March 2015. Ms Coen describes herself as company secretary and officer of Start Mortgages Ltd ( “Start Mortgages”).
The grounding affidavit states that the defendants, i.e. Mr McNair and Ms McNair, had entered into a loan agreement with Start Mortgages on 5 February 2007. The principal sum was £350, 000. The loan was to be secured on a dwelling house in Co. Sligo which was jointly owned by the McNairs. The ownership of the lands was registered pursuant to the Registration of Title Act 1964.
It is next averred that the McNairs mortgaged and charged the property the subject-matter of these proceedings, i.e. the dwelling house, by indenture of mortgage and charge dated 12 March 2007. A copy of the mortgage and charge has been exhibited. As appears from clause 8 (Lender's Powers) thereof, Start Mortgages, as mortgagee, may exercise a power of sale without the restrictions otherwise imposed by section 20 of the Conveyancing Act 1881.
It is provided at clause 3.02 that all moneys remaining unpaid by the borrower to the lender and secured on the mortgage shall immediately become due and payable on demand on the occurrence of inter alia an event of default under clause 9.01. One of the events of default, as defined, consists of default in making a monthly repayment.
The affidavit continues to state that the charge was subsequently registered as a burden against the defendants' title to the dwelling house. A copy of the relevant folio, Folio 10247F, Co. Sligo, has been exhibited.
The affidavit then explains that the defendants defaulted on the repayment of the sums due pursuant to the loan agreement. The correspondence between the parties, consisting of the making of demands for payment and correspondence in respect of the Code of Conduct on Mortgage Arrears, has been exhibited. I will return to consider this correspondence, in context, when discussing the grounds of defence put forward by Mr McNair. It is explained that the two defendants were treated separately for the purpose of the code of conduct in circumstances where Ms McNair had notified Start Mortgages that the couple had separated. (See also letter of 7 November 2014 from Ms McNair to Start Mortgages' solicitors).
An order for possession had been made against Ms McNair, the second defendant, on 11 May 2016. No appeal has been brought against that order.
The proceedings against Mr McNair were heard before the Circuit Court on 13 December 2016. An order for possession was made against Mr McNair on that date. The order was subsequently amended on 13 February 2017 to correct a clerical error. Mr McNair has raised an objection to this amendment, and this is discussed in detail at paragraph 74 et seq. below.
The first objection raised by Mr McNair is that the Civil Bill does not make express reference to the provisions of section 62(7) of the Registration of Title Act 1964. Mr McNair seeks to characterise the absence of such a reference as a failure to “invoke” or “exercise” the statutory power under section 62(7).
In order to assist the reader in understanding this line of argument, it is necessary to explain the legislative history. Section 62(7) of the Registration of Title Act 1964 provides a summary procedure whereby the owner of a registered charge can apply for an order for possession. The section reads as follows.
(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.
The provisions of section 62(7) had been repealed as part of the reforms introduced under the Land and Conveyancing Law Reform Act 2009, and replaced by new provisions under that Act. In particular, new criteria were prescribed as to how the court should exercise its discretion in deciding whether to grant or refuse an order for possession. Insofar as “housing loans” (as defined) are concerned, it had been intended that the Circuit Court would have exclusive jurisdiction to entertain applications for possession.
In the event, however, the legislation gave rise to an unintended consequence in that, in the absence of express transitional provisions, it appeared that mortgages, which had been created prior to 1 December 2009, i.e. the commencement date of the relevant provisions of the Land and Conveyancing Law Reform Act 2009, could avail of neither (i) the previous procedure, i.e. under section 62(7) of the Registration of Title Act 1964, nor (ii) the new procedure, i.e. under section 97 of the Land and Conveyancing Law Reform Act...
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Start Mortgages DAC v John Keating
...loan agreements. As it happens, the case closest in point is one in which I delivered judgment last year, Start Mortgages v. McNair [2020] IEHC 140. The issue in McNair had been whether the relevant loan agreement was void for uncertainty. The loan agreement in that case had provided that t......