Start Mortgages DAC v Ramseyer & Anor [2024] IEHC 329 was an appeal to the High Court against a Circuit Court order for possession under section 62(7) of the Registration of Title Act 1964 (1964 Act), as applied by section 1 of the Land and Conveyancing Law Reform Act 2013.

The facts

The application for the order for possession was advanced on the grounds that Start Mortgages was the current owner of a debt owed by the defendants. Start Mortgages asserted that the defendants entered a loan agreement with Bank of Scotland in May 2004, which was secured by charges over two parcels of land (Lands) owned by the defendants in Kildare. It argued that the debt was later transferred to it and that the debt was due and owing in accordance with section 62(7) of the 1964 Act. On these grounds, it applied to the Circuit Court for an order for possession of the Lands.

The Circuit Court directed the defendants to deliver up possession of the Lands. The second named defendant appealed to the High Court. Appeals from the Circuit Court to the High Court are de novo appeals, meaning they take the form of a complete rehearing. Therefore, Start Mortgages bore the onus of establishing the “proofs” necessary to ground an application for an order for possession pursuant to section 62(7) of the 1964 Act.

The proofs required in applications under section 62(7) of the 1964 Act

In applications for possession under section 62(7) of the 1964 Act, the moving party, in this case, Start Mortgages, must establish that:

(i) it is the registered owner of the charge in question, and

(ii) the principal money in respect of a debt secured by a charge is due and owing.

After reviewing the Land Registry folios of the Lands, Simons J noted errors in the wording such that they could not be regarded as conclusive as to the ownership of the charges on the Lands. Simons J referred to section 31 of the 1964 Act, which provides for the conclusiveness of the Land Register (Register) and that the charge holder is entitled to rely on the express terms of the folio when seeking an order for possession. He found that as the folios did not establish Start Mortgages as the “unequivocal” registered owner of the charges, it would have to apply to have the Register corrected to pursue its claim for possession.

Regarding the second proof, Simons J found that Start Mortgages had failed to establish that the debt secured by the charges was transferred to it. Start Mortgages had exhibited heavily redacted deeds of assignment, with many of the operative clauses redacted. Considering the extent of the redactions, Simons J held that it was not possible to determine whether Start Mortgages had taken a valid transfer of the debt outstanding on the original loan advanced by Bank of Scotland.

In the circumstances, and in light of the evidence produced, Simons J held that Start Mortgages could not succeed in its application for an order for possession. However, he also found that the second named defendant had not made out a defence that the charge and underlying debt had not transferred to Start Mortgages. Therefore, the interests of justice required the matter to be remitted to plenary hearing before the High Court, where the parties can put forward any additional evidence they wish.

In addition to the evidential points on the proofs required, Simons J found that the second named defendant had established a stateable case that Bank of Scotland was on inquiry of alleged undue influence of her by her spouse, the first named defendant. Where credible grounds for this defence were established by the second named defendant, Simons J found that the matter should be remitted to plenary hearing on this basis.

Conclusion

The decision reminds us of the importance of having clear and sufficient evidence of the underlying proofs required to succeed in applications for summary possession under section 62(7) of the 1964 Act. The extensive nature of the redactions made to the deeds of assignment, without any justification or explanation, meant that Start Mortgages could not establish, even on a prima facie basis, that the defendants’ debt was transferred to it.

Separately, the future of credit servicers like Start Mortgages must be viewed in light of the recently enacted European Union (Credit Servicers and Credit Purchasers) Regulations 2023 (Regulations). The Regulations give effect to the EU Directive 2021/2167 on Credit Servicers and Credit Purchasers, which provides for a new EU-wide authorisation and regulatory framework for credit servicers and allows such authorised entities to passport credit servicing activities across the EU. The regime under the Regulations will operate alongside Ireland’s existing “credit servicing” framework. The Directive and Regulations emphasise the importance of supporting the development of secondary markets for non-performing loans in the European Union, including Ireland.

To discuss redactions or any aspect of this decision in more detail, please contact Gerard James, Padraic Kinsella or your usual William Fry contact.

Contributed by Heather Taylor, Gail Nohilly and Aisling Doran.