Start Mortgages Designed Activity Company v Connaughton and Another

• Jurisdiction: Ireland
• Judge: Mr. Justice Heslin
• Judgment Date: 09 June 2023
• Neutral Citation: [2023] IEHC 364
• Court: High Court
• Docket Number: RECORD NO. 2023/2 CA

Between

Start Mortgages DAC

Plaintiff

and

Denis Connaughton and Brid Connaughton

Defendants

[2023] IEHC 364

RECORD NO. 2023/2 CA

THE HIGH COURT

Order for possession – Discovery – Registration of Title Act 1964 s. 62(7) – Plaintiff seeking an order for possession – Whether the relevant monies were secured by way of mortgage

Facts: The plaintiff, Start Mortgages DAC, claimed, in the Civil Bill for possession, which issued on 1 August 2018: (a) an order for possession of the property comprised in Folio 35554F of the Register of Freeholders Co. Limerick, described as property situated at Slugaire, Dooradoyle Road, Limerick (the property) pursuant to s. 62(7) of the Registration of Title Act 1964, s. 1(2) of the Land and Conveyancing Law Reform Act 2013 and Order 5B of the Rules of the Circuit Court; (b) such further or other relief as may be necessary or appropriate; and (c) the costs of the proceedings. On 12 January 2023, the Circuit Court ordered that the plaintiff recover from the defendants, Mr and Ms Connaughton, possession of the property. The 12 January 2023 order also placed a ‘stay’ on execution, for a period of 6 months from that date. In addition, a second order was made on 12 January by the Circuit Court Judge refusing the first defendant’s application for discovery. The first defendant, representing himself, issued a notice of appeal to the High Court, which was dated 17 January 2023. The appeal proceeded by way of a de novo hearing. Guided by the dicta in Bank of Ireland Mortgage Bank v Cody [2021] IESC 26 in relation to the significance and effect of s. 62(7) of the 1964 Act, Heslin J found that there were three fundamentally important questions for the court to answer in the case, comprising the following: (i) Are the relevant monies secured by way of mortgage? (ii) Has there been default, resulting in the secured monies having become due? (iii) Is the application made bona fide with a view to realising the security?

Held by Heslin J that: (i) it had been established, without doubt, on the evidence that the relevant monies were secured in the case by way of mortgage; (ii) it had been established, without doubt, by the plaintiff that there had been default, resulting in the secured monies having become due – there had been no payment since April 2015; and (iii) the application was made bona fide with a view to realising the security. As to the court’s own motion assessment in respect of the Unfair Terms in Consumer Contracts Directive No. 93/13/EEC, Heslin J turned to the decision by Woulfe J in Start Mortgages DAC v Ryan [2021] IEHC 719. Heslin J held that no term was identified by the first defendant which was said to be unfair. Furthermore, Heslin J was entirely satisfied that nothing outside of the core terms of the lending and security arrangement was at issue in the claim. Heslin J was entirely satisfied that it would not be disproportionate to refuse the relief sought by the plaintiff. Heslin J held that the defendant had not advanced any stateable or bona fide defence in law or in fact in respect of the plaintiff’s claim. On the evidence, Heslin J held that the plaintiff had established its entitlement to an order for possession of the mortgaged property and, having considered all the evidence as well as all the submissions, Heslin J held that the appropriate finding was for the court to refuse discovery.

Heslin J held that, for those reasons, he would refuse discovery and the plaintiff was entitled to an order for possession.

Appeal dismissed.

Ex tempore judgment of Mr. Justice Heslin delivered on the 9th day of June 2023

1 . I propose to give a ruling now in relation to the case which proceeded today. Doing so will take a considerable amount of time, which is just as it should be, in order that the parties can understand the reasons for the court's decision.

2 . On 12 January 2023, the Circuit Court ordered that the Plaintiff recover from the Defendants possession of the property comprised in Folio 35554 F of the Register of Freeholders Co. Limerick, described as property situated at Slugaire, Dooradoyle Road, Limerick (and I will refer to the foregoing as “the property” in this ruling).

3 . The 12 January 2023 Order also placed a ‘stay’ on execution, for a period of 6 months from that date. In addition, a second order was made on 12 January by the learned Circuit Court Judge refusing the First-Named Defendant's application for discovery; and during the course of this ruling I will refer to the discovery application.

4 . The First-Named Defendant, representing himself, issued a Notice of Appeal to this Court, which is dated 17 January 2023. The appeal proceeded today by way of a de novo hearing.

5 . I am grateful to counsel for the Plaintiff and to Mr. Connaughton, who represented himself, for the clarity with which both Mr. Newman and Mr. Connaughton made their respective submissions.

6 . On 30 May 2023, Ms. Ruth Tobin swore an affidavit in which she averred that, on 9 February 2023, the Plaintiff's solicitors wrote to the First-Named Defendant confirming that his appeal was listed for hearing on 9 June, i.e., today. She also exhibited a copy of the relevant letter, which is dated 9 February. In addition, she exhibited the relevant certificate of postage.

7 . Having regard to this evidence, I am satisfied that the appellant was put ‘on notice’ of today's hearing date in respect of his appeal.

8 . The Civil Bill for possession pleads inter alia, the following with regard to jurisdiction. The proceedings are brought in the Circuit Court pursuant to s. 3 of Land and Conveyancing Law Reform Act 2013; they are proceedings brought by a mortgagee seeking an order for possession of land, which is the principal private residence of the mortgagors of the land, or a person without whose consent a conveyance of that land would be void; and the mortgage in question was created prior to 01 December 2009.

9 . It is also pleaded that the court enjoyed jurisdiction, pursuant to s. 22(1) of the Courts (Supplemental Provisions) Act of 1961, and the property does not have a market value over €3 million.

10 . These pleas mirror the contents of s. 3(1) of the aforesaid Act of 2013, and whereas s. 3(2) of the 2013 Act goes on to provide that such proceedings shall (and the mandatory term is used) be brought in the Circuit Court. In the manner more fully explained in this ruling, I am satisfied that jurisdiction has been established in light of s. 3 of the 2013 Act.

11 . As to the Plaintiff's claim in the Civil Bill for possession, which issued on the 1 ^st of August 2018, it is articulated in the following terms (and I quote):-

“AND THE PLAINTIFF CLAIMS:-

• A. An order for possession of the property more particularly described in the schedule hereto pursuant to section 62(7) of the Registration of Title Act 1964; Section 1(2) of the Land and Conveyancing Law Reform Act 2013; and Order 5B of the Rules of the Circuit Court;

• B. Such further or other relief as may be necessary or appropriate;

• C. The costs of the proceedings”.

12 . Before proceeding further, it is appropriate to quote, verbatim, s. 62(7) of the Registration of Title Act 1964 (which I will refer to as “the 1964 Act”) upon which section the Plaintiff relies.

13 . S.62 of the 1964 Act concerns the “Creation and effect of charges on registered land” and it is not in doubt that the property in question in these proceedings comprises registered land over which a charge has been registered. Section 62(7) states the following:-

“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”.

14 . In this way, s. 62(7) explicitly permits a registered owner of a charge to seek possession in a “ summary manner”. That is, of course, the route taken by the Plaintiff, by means of the Civil Bill for possession which gave rise to an application to the Circuit Court, resulting in the order appealed against today.

15 . This Court has considerable guidance in relation to the significance and effect of s. 62 (7) as a result of Superior Court authorities. For example, in the Supreme Court's decision of 14 ^th of April 2021 in Bank of Ireland Mortgage Bank v. Cody [2021] IESC 26, Ms Justice Baker examined the s. 62(7) jurisdiction, and it is appropriate, for the purposes of this ruling, to quote from para. 15, onwards, of the learned judge's decision in the Cody case:-

“ 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…”

16 . Baker J then quoted as follows from...