Tanager DAC v Kane

• Jurisdiction: Ireland
• Judge: Mr. Justice Noonan
• Judgment Date: 22 November 2017
• Neutral Citation: [2017] IEHC 697
• Docket Number: [2017 No. 122 C.A.]
• Court: High Court
• Date: 22 November 2017

[2017] IEHC 697

THE HIGH COURT

Noonan J.

[2017 No. 122 C.A.]

BETWEEN

TANAGER DAC

PLAINTIFF

AND

ROLF KANE

DEFENDANT

Banking and Finance – Arrear on mortgage loan – Cross border merger – Transfer of title – S. 31 of the Registration of Title Act, 1964 – Registration of charge – Stated case – S. 38(3) of the Courts of Justice Act, 1936

Facts: The plaintiff brought an appeal from the order of the Circuit Court which dismissed the plaintiff's claim for an order for possession of the defendant's family home. The defendant contended that the second predecessor in title never became the registered owner of the charge and thus, it was not entitled to transfer or assign the charge to the plaintiff i.e. final successor in title. The plaintiff contended that it was the registered owner of the charge pursuant to s. 31 of the Registration of Title Act, 1964 which provided that the register was the conclusive proof of ownership.

Mr. Justice Noonan held that the present case raised an important issue of public importance and any decision on the present case would affect the rights of persons similarly situated as the defendant. The Court referred the present case for the opinion of the Court of Appeal pursuant to s. 38(3) of the Courts of Justice Act, 1936. The Court framed four questions for the Court of Appeal. The first two questions pertained to the power of the Court to consider the circumstances in which the plaintiff became the registered owner of the charge on the defendant's folio and entitlement of the defendant to argue that those circumstances amounted to a mistake under s. 31 of the 1964 Act. The other two questions were in relation to the power of the Court to join the PRA as a notice party for the purpose of resolution of the issue.

INTERIM RULING of Mr. Justice Noonan delivered on the 22nd day of November, 2017

1 This is an appeal brought by the plaintiff from an order of the Circuit Court (Her Honour Judge Linnane) dismissing the plaintiff's claim for an order for possession of the defendant's family home being the property comprised in Folio 91184F of the Registrar of Freeholders, County Dublin and known as No. 1 Elmwood, Clonsilla, County Dublin. This is an interim ruling in advance of the pronouncement of final judgment in this appeal.

2 By a letter of loan offer dated the 10th February, 2006, Bank of Scotland (Ireland) Ltd (‘BOSI’) offered a mortgage loan to the defendant which he accepted by signing the letter of offer on the 27th February, 2006. On the 6th March, 2006, the defendant executed a deed of mortgage and charge. On the 20th March, 2006, BOSI became registered on the folio as owner of the charge.

3 By cross-border merger pursuant to the European Communities (Cross-Border Mergers) Regulations 2008 of Ireland and the Companies (Cross-Border Mergers) Regulations 2007 of the United Kingdom, all of the assets and liabilities of BOSI including the mortgage and charge the subject matter of these proceedings transferred to Bank of Scotland Plc (‘BOS’) by operation of law at 23.59 hours on the 31st December, 2010, and BOSI was then dissolved without going into liquidation.

4 On the 5th December, 2013, BOS entered into a purchase deed with the plaintiff whereby BOS sold a portfolio of securities to the plaintiff which included the defendant's mortgage. The transaction closed on the 14th April, 2014. On the 25th April, 2014, the plaintiff became registered as the owner of the charge previously registered in favour of BOSI. The defendant is alleged to have fallen into arrears on his mortgage repayments resulting in a demand for repayment and ultimately possession of the family home. A Civil Bill for possession was subsequently issued on the 15th January, 2015.

5 Although a number of issues arise in this appeal, the primary issue is a contention on the part of the defendant that because BOS never became registered as owner of the charge in issue, it was not entitled to transfer or assign the charge to the plaintiff. The plaintiff accordingly never acquired title to the charge and was thus not entitled to enforce it against the defendant. Insofar as the plaintiff has become registered as owner of the charge, the defendant contends that such registration was erroneous and a mistake on the part of the Property Registration Authority (‘the PRA’).

6 In response, the plaintiff's essential contention is that it is the registered owner of the charge and as s. 31 of the Registration of Title Act, 1964 provides that the register is conclusive, it is not open to the defendant to challenge its title in the way he has sought to do. Section 31 provides as follows:

‘31 (1) The register shall be conclusive evidence of the title of the owner to the land as appearing on the register and of any right, privilege, appurtenance or burden as appearing thereon; and such title shall not, in the absence of actual fraud, be in any way affected in consequence of such owner having notice of any deed, document, or matter relating to the land; but nothing in this Act shall interfere with the jurisdiction of any court of competent jurisdiction based on the ground of actual fraud or mistake, and the court may upon such ground make an order directing the register to be rectified in such manner and on such terms as it thinks just….’

7 In the course of argument, both parties referred extensively to the judgment of the Supreme Court in Kavanagh v. McLaughlin [2015] 3 I.R. 555 ( McLaughlin). In McLaughlin, the defendants borrowed money from BOSI on foot of a loan mortgage which BOS claimed transferred to it under the terms of the cross-border merger. BOS appointed the first plaintiff as receiver over certain properties that were the subject of the loan which included registered land.

8 The defendants challenged the validity of the receiver's appointment on the basis that the cross-border merger did not transfer the benefit of their security from BOSI to BOS. The receiver sought a declaration that his appointment was valid and he...