Ireland: The Practical Implications For Receivers Arising Out Of Kavanagh v McLaughlin

Last Updated: 27 July 2015
Article by Keith Hogan and Fergal Mcnamara

The recent Supreme Court decision given by Ms. Justice Laffoy in the case of Tom Kavanagh and Bank of Scotland Plc v Patrick McLaughlin and Roseann McLaughlin (the "McLaughlins") delivered on the 19th of March 2015 again casts into doubt the enforceability of certain mortgages.  This paper deals with the practical  consequences of this decision having particular regard to charges over land registry lands granted in favour of Bank of Scotland (Ireland) Limited ("BOSI"), prior to its merger by absorption by Bank of Scotland Plc. ("BOS"). 

At this stage it is worth reminding the reader that pursuant to European Communities (Cross-Border Mergers) Regulations 2008 (S.I. No. 157 of 2008) in Ireland and the Companies (Cross-Border Mergers) Regulations 2007 in the United Kingdom approved by the High Court (Kelly J.) of Ireland on the 22nd October, 2010 and approved by the Court of Sessions on 10th December, 2010, all assets and liabilities of BOSI were transferred to BOS at 23.59 hours on the 31st December, 2010 and BOS was then dissolved and ceased to exist.

In the McLaughlin case a number of issues were considered by the Supreme Court arising out of the appeal by the McLaughlins of the unreported decision of Mr. Justice Bermingham given on the 30th of September 2013.  The case centred around the enforceability of loans issued by BOSI to the McLaughlins and the enforceability of the security granted by the McLaughlins for these loans. 

The McLaughlins argued, inter alia, that the failure by BOS to register the transfer of the mortgage and charge granted by the McLaughlins in favour of BOSI with the Property Registration Authority (the "PRA") precluded BOS from enforcing that charge, including the appointment of a receiver.  In the High Court case Mr. Justice Bermingham did not accept this argument and in his decision he put particular emphasis on the interpretation by the PRA of the European Communities (Cross-Border Mergers) Regulations 2008 which implemented the relevant EU directives on cross border mergers.

After an exhaustive consideration of a number of legislative provisions including the European Communities (Cross-Border Mergers) Regulations 2008, the United Kingdom, Companies (Cross-Border Mergers) Regulations 2007, the Registration of Title Act 1964, the Central Bank Act, 1971, the Trustee Savings Banks Act, 1989 and the National Asset Management Agency Act, 2009, Ms Justice Laffoy came to a different conclusion. 

While she did accept that the appointment of the receiver was a valid appointment; she did so on the basis of the contractual power to appoint a receiver contained in the charge.  She went on however to determine that if BOS wished to avail of the statutory rights conferred by Section 62 of the Registration of Title Act, 1964 to enforce the charge, it must firstly comply with the requirement that it be registered as the owner of the charge.  In other words, in the absence of registration, it may not rely on the statutory right to appoint a receiver or to sell the charged property as mortgagee in possession. 

Since this judgement was delivered the PRA has changed its legal notice number 2 of 2014.  This notice relates to how the PRA will deal with charges over land registry titles created in favour of BOSI and The Governor and Company of the Bank of Scotland ('GCBS') and any enforcement steps taken pursuant to these charges.

Paragraph 5 of this notice now states that:

"In any case where BOS intend to realise their security, in respect of a charge registered in the name of BOSI or GCBS, either by receiver's sale or by exercising the power of sale of a mortgagee in possession, it should apply for registration as owner of such charge prior to lodgement of the transfer of the transfer on sale of the property in realisation of the security.  BOS must be registered owner of a charge to exercise the powers of enforcing such a charge".

We are of the view that the amended notice issued by the PRA does not properly take account of the judgement of Laffoy in the present case.  We will return to this issue at a later date.  As it stands however it would seem that the PRA will not register a deed of assurance executed by a receiver appointed pursuant to a BOSI or GCBS charge or a deed of assurance executed by BOS (as the owner of a BOSI or GCBS charge) as mortgagee in possession unless BOS has registered the transfer of the charge with the PRA in advance. 

Having regard to the foregoing we are of the view that where a receiver is appointed pursuant to a BOSI charge over land registry title which charge has transferred to BOS, it would be prudent for any such receiver to ensure that BOS take steps to register their ownership of the charge with the PRA in advance of completing the sale of the charged property either by BOS as mortgagee in possession or, given the PRA's interpretation of Ms Justice Laffoy's decision, by the receiver as agent and attorney of the chargor.  In the absence of registration the PRA are likely to refuse to register the deed and to reject the dealing.  Notwithstanding the terms of the contract it is likely that, in the absence of registration, a purchaser's solicitor will refuse to complete the purchase of a property from a receiver appointed pursuant to a BOSI charge and this will lead to inevitable delays in completing sales. 

Of greater concern is the liability a receiver may be exposed to in the event that he/she completed the sale of a charged property in circumstances where it is subsequently determined that the receiver did not have a valid power of sale.  While we are of the view that Laffoy's judgement does not impugn the contractual power of sale contained in most charges and that the position adopted by the PRA in the amendment it has made to its legal notice goes beyond what the learned judge determined, the PRA's revised legal notice now provides that it will require prior registration before it recognises the power of a receiver or BOS to enforce the security.

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

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

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
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 (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

To Use 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.


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.


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