Tanager v Kane
| Jurisdiction | Ireland |
| Judge | Mr. Justice Noonan |
| Judgment Date | 21 November 2019 |
| Neutral Citation | [2019] IEHC 801 |
| Date | 21 November 2019 |
| Docket Number | [2017 No. 122 C.A.] |
| Court | High Court |
[2019] IEHC 801
THE HIGH COURT
Justice Noonan
[2017 No. 122 C.A.]
Order of possession – Defence – Charge – Plaintiff seeking an order of possession of the family home of the defendant – Whether the defendant had established a defence to the plaintiff’s claim
Facts: The plaintiff, Tanager DAC, appealed to the High Court from an order of the Circuit Court (Judge Linnane) dismissing the plaintiff’s claim for an order of possession of the family home of the defendant, Mr Kane, being the property comprised in Folio 91184F of the Register of Freeholders County Dublin and known as One Elmwood, Clonsilla, County Dublin. The defendant contended that because Bank of Scotland Plc (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. The defendant submitted that, insofar as the plaintiff had become registered as owner of the charge, such registration was erroneous and a mistake on the part of the Property Registration Authority (the PRA). The defendant contended that the plaintiff purported to apply an interest rate to the defendant’s borrowing which had been neither notified nor consented to by the defendant with the effect being that the court could not be satisfied as to what, if any, arrears were due to the plaintiff. The defendant contended that the effect of the assignment from BOS to the plaintiff was to transfer the defendant’s charge from a regulated to an unregulated entity; this had the effect of depriving the defendant of the benefit of significant statutory protections available to him in relation to regulated entities and gave rise to an unfairness in the contract which breached the terms of the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995, rendering it unenforceable. The defendant contended that he was not given notice in writing of the assignment as required by s. 28(6) of the Supreme Court of Judicature (Ireland) Act 1877 and it was accordingly unenforceable against him.
Held by Noonan J that the defendant had not established any defence to the plaintiff’s claim.
Noonan J held that he would allow the plaintiff’s appeal and grant the order for possession it sought.
Appeal allowed.
This appeal is brought from an order of the Circuit Court (Her Honour Judge Linnane) dismissing the plaintiff's claim for an order of possession of the defendant's family home being the property comprised in Folio 91184F of the Register of Freeholders County Dublin and known as One Elmwood, Clonsilla, County Dublin.
By letter of loan offer dated the 10th February, 2006, Bank of Scotland (Ireland) Ltd (“BOSI”) offered a mortgage loan in the sum of €266,000 to the defendant over a term of 30 years repayable in 360 monthly instalments. The defendant signed the letter of offer on the 27th February, 2006. The basis of the interest rate stipulated in the letter of offer was 1.25% over the European Central Bank main refinancing operations rate. The interest type is described as “tracker”. In the final section of the letter entitled “Borrowers Signed Acceptance of the Offer of Mortgage Loan”, paragraph (a) provided:
“I/we accept the offer of mortgage loan on the terms herein and set out in the terms and conditions leaflet dated 20th December, 2005.”
The leaflet containing the bank's home loans terms and conditions was attached. On the 6th March, 2006, the defendant executed a deed of mortgage and charge to which was attached BOSI's home loan mortgage conditions. These conditions provided inter alia that the bank should be entitled to take possession of the property after demand for repayment of the secured debt. Clause 9 of the conditions provided for events of default which included a failure on the part of the borrower to pay any sum due on the terms of the facility letter on the due date. Clause 18.1 of the conditions in relation to transfers by the bank, provided that the borrower irrevocably and unconditionally consents to the bank transferring assigning or disposing of the mortgage to any third party without any further consent from, or notice to, the borrower.
On the 20th March, 2006, BOSI became registered on the folio as owner of the charge.
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.
By letter of the 21st May, 2012, BOS wrote to the defendant demanding repayment of the then outstanding arrears on the mortgage of some €27,000. The last payment on the mortgage account was made on the 20th March, 2013.
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, 2015, the plaintiff became registered as the owner of the charge previously registered in favour of BOSI.
It would appear that by August 2014, the arrears accrued on the account amounted to more than €56,000 and by letter of the 14th August, 2014, the plaintiff's solicitors wrote to the defendant demanding repayment of the total outstanding debt being some €290,000 within ten days, failing which proceedings for possession would issue. A Civil Bill for possession was subsequently issued on the 15th January, 2015.
Having had the benefit of extensive written and oral submissions from both parties to this appeal, it seems to me that the main issues that arise for consideration are as follows:
A. The defendant contends 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, such registration was erroneous and a mistake on the part of the Property Registration Authority (“the PRA”).
B. The plaintiff purported to apply an interest rate to the defendant's borrowing which had been neither notified nor consented to by the defendant with the effect being that the court could not be satisfied as to what, if any, arrears are due to the plaintiff.
C. The effect of the assignment from BOS to the plaintiff was to transfer the defendant's charge from a regulated to an unregulated entity. This had the effect of depriving the defendant of the benefit of significant statutory protections available to him in relation to regulated entities and gave rise to an unfairness in the contract which breached the terms of the European Communities ( Unfair Terms in Consumer Contracts) Regulations 1995 as amended, rendering it unenforceable.
D. The defendant was not given notice in writing of the assignment as required by s. 28(6) of the Supreme Court of Judicature (Ireland) Act 1877 and it is accordingly unenforceable against him.
I propose to consider each of these issues in turn.
It seemed to me that the issue raised by the defendant in this respect was one which had the potential to affect a substantial number of other cases and was thus of considerable public importance. I delivered an interim ruling dealing with this issue on the 22nd November, 2017 and with the agreement of the parties, subsequently stated a case for the opinion of the Court of Appeal. The judgment of that court was delivered by Baker J. on the 31st October, 2018 at [2018] IECA 352. In brief summary, the court concluded that the defendant was not entitled to raise this issue...
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...11 S. 31(1) of the 1964 Act was considered by the Court of Appeal (per Baker J.) in the decision of Tanager DAC v Kane [2019] IR 385, [2019] IEHC 801 and has been applied in a number of subsequent decisions. The trial judge addressed that decision in his judgment as set out herein. The Defe......
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O'Reilly and Another v Promontoria (Finn) Ltd and Others
...the “ECB rate”. 67 . It is submitted that the Court should not be influenced by the obiter comments of Noonan J. in Tanager DAC v. Kane [2019] IEHC 801. There, the relevant interest rate stipulated in the letter of offer was 1.25% over the European Central Bank Main Refinancing Operations R......