Ireland: Insolvency Update: Review 2016

Enforcement of loans continues to be a challenge, particularly, enforcement by the purchasers of debt. Equally, there have been helpful developments for secured and unsecured lenders and receivers appointed by them.

Key developments during 2016 include:

  • Increased judicial restraint on repeat litigation and the narrowing of issues in appeals
  • Greater clarity in relation to jurisdiction in possession proceedings
  • Procedural changes in relation to substitution applications
  • The introduction of rent control in certain areas

Restraint on repeat litigation and limitation of issues in appeals

The trend for vexatious litigation continued during the course of the year. The courts' increased willingness to appropriately address litigants in these types of cases is a positive development.

In that regard, to limit repeated litigation of the same issues and to limit the issues in appeals, parties typically rely on the rule in Henderson v Henderson1 and the principles set out in Hay v O'Grady2, respectively.

It is illustrative to note that the past two years have seen a steep rise in the number of judgments which reference those cases.3

Repeat litigation - the rule in Henderson v Henderson

This rule, with limited exceptions, prevents:

  • the same parties (or slight variations in parties - for instance by adding a company controlled by the original parties4 or adding a defendant5);
  • from re-litigating issues in new proceedings;
  • where the grounds on which they propose to contest the issues could have been pleaded in earlier proceedings;
  • even where the issues were not pleaded in error.

Appeals - the principles in Hay v O'Grady

These principles may be summarised as follows:

  • were the findings of fact made by the trial judge supported by credible evidence? If so, the appellate court is bound by the findings, however voluminous and apparently weighty the testimony against them?
  • did the inferences of fact depend on oral evidence of recollection of fact? If so, the appeal court should be slow to substitute its own different inference?
  • in regard to inferences from circumstantial evidence, an appellate court is in as good a position as the trial judge in that regard. Did the judge draw erroneous inferences?
  • was the conclusion of law drawn by the trial judge from a combination of primary fact and proper inference erroneous? If so, the appeal should be allowed.

Helpfully, during 2016, the Court of Appeal made it clear that these principles also apply to findings made by the Financial Services Ombudsman.6

Comment

Awards of costs normally act as a deterrent to litigants issuing proceedings that are bound to fail, especially repeat proceedings. Unfortunately, such awards have no effect as regards litigants with no assets. The increased citation, in particular of Henderson v Henderson, indicates that the courts are becoming more willing to respond to repeated litigation by these parties.

Where can repossession proceedings be issued?

Over the past few years, mortgagees seeking possession of secured properties have encountered well-publicised difficulties due to various judgments which created uncertainty as to whether the Circuit Court or the High Court are the appropriate venues for such proceedings.

Many of these difficulties stemmed from the fact that the jurisdiction of the Circuit Court is limited by statute. For example, the Circuit Court has jurisdiction in relation to property where the rateable valuation did not exceed a set maximum. Rating of residential properties ended in 2001.

In Permanent TSB v Langan7,  the Court of Appeal decided between two conflicting High Court judgments and held that the Circuit Court did not have jurisdiction based on rateable value where the property is not rated. This decision is being appealed to the Supreme Court.

Following the end of domestic rating, the Courts Act 2004 provided jurisdiction to the Circuit Court based on market values. That legislation languished for over a decade as it was not commenced. However, it was amended slightly by the Courts Act 2016 and finally commenced on 11 January 2017 thereby bringing clarity to the situation.8

The Circuit Court now enjoys jurisdiction in relation to property the value of which does not exceed €3,000,000.

It is now relatively clear when new possession proceedings may be commenced. However, as the legislature cannot interfere in existing proceedings9, these proceedings need to be considered on a case-by-case basis.  

Omnibus substitution applications

Where loans are sold and the interest in the loan and/or the security is vested in the purchaser, it is necessary for an application to be made to substitute that purchaser for the original lender in any on-going proceedings where the original lender is the plaintiff.

Given the volume of cases that are involved, particularly in the very large loan sale transactions, an established practice had developed whereby omnibus substitution applications were brought to substitute the purchaser as plaintiff in all proceedings brought by the vendor against borrowers. This was in ease of the applicant and the courts to avoid a multiplicity of almost identical applications.

However, in IBRC v Kennedy,  the Court held that there was no basis on which omnibus applications could be brought in respect of proceedings in the Circuit Court. For further information, please see this  article.

Following this judgment, the High Court has become resistant to these applications being issued in the High Court.

While this approach increases the amount of paperwork and costs for the acquirers of loans, it has no substantive effect on substitution applications.

Rent control

The Planning and Development (Housing) and Residential Tenancies Act 2016, introduced in December 2016, introduced effective caps on increases in rent in private rented accommodation in 'rent pressure zones'  at 4 % per annum.  The Dublin and Cork regions were designated as rent pressure zones and additional zones have been added.

The Act also introduces restrictions on terminating multiple tenancies in the same development to facilitate sale. This provision has now been commenced and it clearly has the potential to materially affect a secured lender's ability to dispose of a portfolio of assets with vacant possession.

We note that a previous statutory rent control regime was subject to a successful challenge as being unconstitutional. Accordingly, we anticipate that a challenge may be mounted in relation to the new regime.

Footnotes

1. [1843] 3 Hare 100.

2. [1992] 1 IR 210.

3. Based on written judgments available on Westlaw.IE, across cases of all types, not discounting for judgments available as unreported and also listed in law reports.

4. O'Donnell & Ors v Bank of Ireland & Ors  [2016] IECA 273

5. Kearney v Allsop Ireland & Ors [2016] IEHC 166

6. Derek O'Regan v Financial Services Ombudsman [2016] IECA 165.

7. [2016] IECA 229.

8. S.I. No. 2 of 2017.

9. Buckley v Attorney General  [1950] IR 67 at 84.

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
Events from this Firm
14 Nov 2018, Seminar, Dublin, Ireland

We will host our commercial litigation seminar on Investigations and White Collar Crime on Wednesday 14 November in our offices on Barrow Street, Dublin 4.

 
In association with
Related Topics
 
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