Ireland: Bank of Ireland Mortgage Bank v. Finnegan & Ward - A New Challenge To Possession Proceedings In The Circuit Court

Introduction

The decision of Murphy J. in the High Court in Bank of Ireland Mortgage Bank v. Finnegan & Ward delivered on the 20th May 2015 represents a challenge to the current Circuit Court regime in respect of the enforcement of security against residential property.

Background

The case concerned a Circuit Court appeal to the High Court following an order for possession of the defendants' residential dwelling in Kingscourt, Co. Cavan. The key issue on appeal was the jurisdiction of the Circuit Court to make the order sought by the plaintiff in circumstances where the evidence before the Circuit Court as to the rateable valuation of the subject property was a letter of provisional assessment of valuation (as opposed to a certificate of valuation) issued pursuant to the provisions of the Valuation Act 2001. The reason why a letter of provisional valuation was used was that the subject property had not been given a rateable valuation, having been constructed1 subsequent to the commencement of the Valuation Act 2001. The Valuation Act 2001 came into effect in 2002 whereupon any new domestic premises was not rateable.

The High Court decision

The evidence before the High Court from the head of Valuation Services in the Valuation Office was that the Valuation Office would not be legally empowered to issue a valuation in respect of a 2006 domestic property because section 67 of the Valuation Act 2001 provides that such properties are not rateable. As such, the High Court held that as of the date of the initiation and hearing of the plaintiff's claim by the Circuit Court, by reason of the operation of the Valuation Act 2001, the subject property "were neither rated nor rateable and accordingly that the Circuit Court lacked the necessary jurisdiction to hear the plaintiff's claim".2

A lacuna in the law

The High Court did note3 that this lacuna could have been avoided by the commencement of Section 45 of the Civil Liability and Courts Act 2004 (the "2004 Act") (which provided for an alternative jurisdictional limit for the Circuit Court based on market valuation of property):

"It appears to the Court that the State adverted to the lacuna in Circuit Court jurisdiction created by the enactment of the Valuation Act 2001, because in the Civil Liability and Courts Act 2004, the Oireachtas enacted the following at s. 45:

(1) Section 2 of the Courts(Supplemental provisions) Act 1961 is amended by the insertion, in subsection(1), of the following definition: 'market value' means in relation to land, the price that would have been obtained in respect of the unencumbranced fee simple were the land to have been sold on the open market, in the year immediately preceding the bringing of the proceedings concerned, in such manner and subject to such conditions as might reasonably be calculated to have resulted in the vendor obtaining the best price for the land".

(2) The Third Schedule to the Courts (Supplemental Provisions) Act 1961 is amended in Column (3), by the substitution of-

(a) "market value" for "rateable valuation" in each place that it occurs, and

(b) "€3,000,000" for "£200" (inserted by section 2(1)(d) of the Act of 1981) in each place that it occurs.

The clear intention of this legislation was to base Circuit Court jurisdiction on "market value" instead of rateable valuation. By virtue of s. 1(2) of the 2004 Act, an order of the Minister was required to bring this provision into operation. Section 45 has not been commenced and so the position remained that the Circuit Court did not have jurisdiction to hear claims for possession of "domestic premises" which were not rated or rateable."

Judgment in favour of the borrowers

Describing the defendants' victory as "pyrrhic", the High Court declined to state a case on the point to the Supreme Court as Murphy J. had no doubt as to the current state of the law. The seriousness of the judgment and the implications for practitioners were made clear at paragraph 35 of her judgment:

"It appears to the Court on the evidence, that the plaintiff and others have devised and used an ad hoc non-statutory process which is devoid of legal effect, for the purpose of persuading the Circuit Court that it has a jurisdiction which it does not in fact enjoy. This is a matter of serious concern to the Court. The standard letter issued by the Valuation Office in this and other cases may be derived from the type of letter issued by them in respect of rateable properties such as off licences which are in the process of being valued, but the fact is that the content of these letters, however unintentional, is misleading when applied to domestic premises. The letter states "I refer to your application for a certificate showing the rateable valuation for the above property. I regret that I am unable to issue such a certificate as the property is not as yet valued for rating purposes". The clear import of the terminology used is that the property is rateable but not yet rated, when as the Valuation Office well knows, the property is by virtue of the Act not rateable at all. In so far as this practice may be ongoing it should cease forthwith."

Effect of the judgment

The scope of this judgment has been limited to a significant degree by the enactment of the Land and Conveyancing Law Reform Act 2009 ("2009 Act") and the Land and Conveyancing Law Reform Act 2013 (the "2013 Act") which acts give new jurisdiction to the Circuit Court which is not dependent on rateable valuation.

This case is however authority for the proposition that the lacuna identified by the Court in this case can be successfully relied upon by debtors to have possession proceedings struck out for lack of jurisdiction where the following situations apply:

  • Possession proceedings of any domestic premises;
  • Where the domestic premises was constructed post 2nd May, 20024 (and so not rateable);
  • The mortgage / charge is dated pre – 1 December 2009; and
  • The possession proceedings were commenced in the Circuit Court before 31 July 20135.

In cases where the above criteria do apply and this lacuna is raised as a defence by a debtor financial institutions can simply re-issue fresh possession proceedings which will have the benefit of the 2013 Act.

Footnotes

1 The subject property was constructed in 2006

2 At para 26

3 At para 31

4 Houses built in the 1980s and 1990s have a rateable valuation, albeit that rates haven't been levied on domestic premises since 1978.

5 Proceedings issued before then do not have the benefit of the 2013 Act which extended the jurisdiction of the Circuit Court to mortgages created before 1st December, 2009.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions