Ireland: Irish High Court Clarifies Standard of Proof for Loan Purchasers

Purchasers of distressed debt have inevitably found themselves involved in legal disputes with borrowers seeking to undermine the loan purchaser's position as secured lender or at least put it on full proof of its entitlements.

In English v Promontoria (Aran) Limited the High Court (Murphy J) placed a stay on the appointment of a receiver, on the basis that the secured creditor had not put forward sufficient evidence to establish clearly its legal entitlement to appoint a receiver over the asset in question[1]. It was not in dispute that Ulster Bank had been entitled to assign the debt.  Having noted that position, Murphy J stated:

"If, as in this case, it purports to exercise that right of transfer, then a complete stranger with whom the plaintiff [i.e. the borrower] has no connection can come knocking on his door claiming an entitlement to possession of his property. It appears to the Court that before ceding possession of his property, the plaintiff is entitled to insist that the stranger prove its entitlement to possession by showing that it duly acquired the interest of the bank in his loans and the security underpinning those loans, in particular, the mortgage on the property."

Stay on Receiver Appointment Lifted

In English v Promontoria (Aran) Limited (No.2), Promontoria succeeded in having the stay on the receiver's appointment lifted[2] . After the first decision, Murphy J had given Promontoria an opportunity to produce further documentation to the plaintiff's lawyers, in order to persuade them of its entitlements. 

Failing that, the court allowed Promontoria to bring an application to have the stay vacated. The plaintiff, Mr English, did not put forward affidavit evidence to challenge the central contentions being made by Promontoria.  Rather, the plaintiff put forward a number of legal arguments as to why the evidence given as to the debt purchase was insufficient or, it was argued, revealed legal flaws in the intended loan sale.

For example, it was argued that proper notice of assignment (from Promontoria to the plaintiff) had not been proved, as required by section 28(6) of the Supreme Court of Judicature (Ireland) Act 1887.  The court held that proper notice had been given. 

The plaintiff also argued that a director who executed the instrument of appointment of the receiver was in breach of section 142 of the Companies Act 2014 which limits the number of directorships which a person may hold to 25. However evidence was produced that the director in question enjoyed an exemption in this regard which had been certified and was available in the Companies Registration Office.

Murphy J made the following observation on the plaintiff's technical arguments:

"All of the issues raised by counsel for the plaintiff would be properly and validly raised if the plaintiff were a party to the deeds with an entitlement to challenge their efficacy, but he is not a party to the deeds. He is a third party whose only entitlement is to be shown that the stranger knocking on his door claiming possession has in fact acquired the interests of Ulster Bank Ireland Limited."

Later in the judgment, Murphy J stated:

"There may well be frailties, defects or deficiencies in the arrangements between Promontoria in its various guises and the various Ulster Bank entities but that is not a matter of concern to the plaintiff. If any such issues exist, they lie between the parties to the deeds. The Court wishes to make it clear that it is not suggesting that such frailties exist."

 Murphy J took the view that Promontoria had:

"... underpinned its uncontroverted evidence by exhibiting the relevant portions of each deed and the entirety of the deed of conveyance and assignment of the plaintiff's mortgage. It has revealed the identities of all of those who executed the deeds or where relevant, affixed the seal of the company thereto. In addition, it has exhibited all relevant deeds of powers of attorney."

Murphy J noted that the plaintiff had been furnished with prima facie proof of the transfer and held that the plaintiff's failure to challenge deeds which are valid on their face amounted, in the court's view, to an acceptance of their validity, if only by inference.  Murphy J also stated:

"Deeds are not hearsay. They constitute real evidence of transactions between parties. On their face, all of the deeds exhibited are valid and show the transfer of the plaintiff's loan facilities and security [...]".

In relation to an argument that redaction of the loan sale documents prejudiced the borrower, Murphy J held:

"Counsel for Mr. English repeatedly suggested that the failure to reveal the redacted portions of the mortgage sale deed and the deed of novation could be prejudicial to Mr. English. The Court can see no prejudice. After all, Mr. English has accepted throughout that he was granted the loan facilities; that they remain unpaid; that he mortgaged his Knocklofty property to Ulster Bank Ireland Limited; and that Ulster Bank Ireland Limited had the right to transfer or assign his loans and security. That has now been shown to have occurred. The Court fails to see how he can be prejudiced in those circumstances, by ceding possession of his mortgaged property to a lawfully appointed receiver."


The overall tenor and outcome of the decision in this case should give some general comfort to the purchasers of loan portfolios that the court will, upon satisfactory proofs being furnished, take a pragmatic approach to unfounded and overly technical challenges to the underlying assignment and security.


[1] [2016] IEHC 662

[2] [2017] IEHC 322

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.

In association with
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.