Ireland: High Court Seeks Clarity On Rights Of Unregistered Owners Of Registered Security Over Land

Last Updated: 16 January 2018
Article by Ricky Kelly and Paula Collins

Introduction
The High Court has invited the parties in proceedings involving the repossession of a family home by Tanager Designated Activity Company to seek a reference to the Court of Appeal. In this regard the Court has identified a number of complex legal issues which may be of "considerable public importance" given that its ultimate findings may effect hundreds of repossession cases in Ireland.   

Background
Bank of Scotland (Ireland) ("BOSI") provided a loan to the Defendant in March 2006. That loan was to be secured against the Defendant's family home and accordingly the Bank's mortgage was registered on 20 March 2006 (the "2006 Mortgage").

The assets and liabilities of BOSI were transferred to the Bank of Scotland Plc ("BOS") on 31 December 2010 pursuant to the European Communities (Cross- Border Mergers) Regulations 2008 (Ireland) and the Companies (Cross-Border Mergers) Regulations 2007 (UK). This transfer included ownership of the 2006 Mortgage.  BOS never however registered its ownership of the charge with the Property Registration Authority.

BOS subsequently disposed of a portfolio of securities to Tanager Designated Activity Company (the "Plaintiff"). This portfolio included the 2006 Mortgage. The Plaintiff, unlike BOS, did register itself as the new owner of the 2006 Mortgage with the Property Registration Authority on 25 April 2014.  

As the Defendant had fallen into mortgage arrears, the Plaintiff demanded repayment of the Loan. The Defendant failed to repay the loan and accordingly, on 15 January 2015, the Plaintiff issued proceedings in the Circuit Court seeking possession of the property.

Circuit Court
When the matter came before the Circuit Court, the Defendant argued that BOS had no entitlement to transfer the 2006 Mortgage to the Plaintiff as it never registered its ownership with the Property Registration Authority. It was in turn argued that the Property Registration Authority erred in registering the Plaintiff's ownership of the 2006 Mortgage with the consequence that the Plaintiff had no entitlement to enforce it against him.

The Plaintiff submitted that the registration by the Property Registration Authority was conclusive evidence of the ownership of the 2006 Mortgage. The Circuit Court nonetheless, refused to grant an order for possession and so the Plaintiff appealed the matter to the High Court.

High Court
The core point for the High Court to consider was whether BOS, as the unregistered owner, was entitled to transfer the 2006 Mortgage to the Plaintiff without itself first being registered. BOS purported to have transferred the 2006 Mortgage to the Plaintiff by virtue of a Land Registry form which dealt with a transfer by either a registered owner or an unregistered owner under Section 90 of the Registration of Title Act 1964 (the "1964 Act"). The Court referred to the case of Kavanagh v McLaughlin [2015] 3 IR 555 for some guidance on the point.

In the McLaughlin case BOSI had granted a mortgage loan to the defendant and the registered charge had been transferred to BOS by virtue of the operation of law through a cross-border merger. BOS appointed a receiver over certain properties the subject of the mortgage loan which included registered land. The validity of the appointment of the receiver, however, was challenged on the basis that BOS had not registered its ownership of the charge. The Supreme Court in that case held that, because BOS had not registered its ownership of the charge, it was not entitled to rely on any of its statutory rights under the Registration of Title Act 1964. These rights included the statutory right to appoint a receiver. As the charge had been validly transferred to BOS by virtue of the cross-border merger, BOS was entitled to exercise its contractual rights under the charge which included its right to appoint a receiver.

In a similar manner therefore, in the given case, the Court concluded that BOS was not entitled to rely on its statutory powers under the Registration of Title Act 1964 to transfer a charge over which it had not registered its ownership.

The Court considered the argument that, under Section 31 of the 1964 Act, the registration of the Plaintiff as owner of the 2006 Mortgage was conclusive evidence of its ownership and that that would not be challenged by the Defendant.

The Court noted that while Section 31 does provide that the Register in relation to the ownership of land, now maintained by the Property Registration Authority, (the "Register"), is conclusive, it preserves the jurisdiction of the court to rectify the Register [see above] where there is evidence of actual fraud or mistake. The Court concluded that the point of whether the Property Registration Authority had erred in registering the Plaintiff's ownership of the 2006 Mortgage on foot of a mistake was worthy of argument.

However, it held that it was not within the scope of the Court to deal with that point as the proceedings had been brought in a summary manner and in the absence of the Property Registration Authority, who were not a party to the proceedings.

The Court noted that hundreds of other cases would be directly affected by the outcome of the case and so the matter was of considerable public importance. The Court adjourned the matter for a month and invited the parties to apply to the Court to refer the matter to the Court of Appeal.  In doing so that Court also suggested the following queries:-

  1. In considering the plaintiff's claim, is this court entitled to have regard to the circumstances in which the plaintiff became the registered owner of the charge on the defendant's folio?
     
  2. Is it open to the defendant to argue that those circumstances amounted to a mistake within the meaning of Section 31 of the Registration of Title Act 1964?
     
  3. If the answer to the foregoing two questions is in the affirmative, is it open to the court to join the Property Registration Authority as a notice party for the purpose of hearing further argument from it on this issue?
     
  4. If the answer to all the foregoing questions is in the affirmative, what consequences would flow from a determination by the Court that the Property Registration Authority was not entitled to register the plaintiff as owner of the registered charge on the defendant's folio?

Conclusion
This decision will have a limited impact and in particular only affects the purchasers of loan portfolios secured against property where the vendor of that portfolio was not the registered owner of 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 Mondaq.com.

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

Authors
 
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