The Court of Appeal has held that the Circuit Court does not have jurisdiction to hear possession proceedings in relation to non-rateable residential properties which are neither principal private residences (PPRs) nor housing loan mortgages. This decision has significant implications for the timing and cost of possession proceedings, in particular with respect to buy-to-let properties, and casts doubt on the Circuit Court's jurisdiction in respect of other disputes concerning such properties.
In Resolving the Mortgage Arrears Crisis: Vol 2/2016, we highlighted two conflicting High Court decisions from 2015 relating to the jurisdiction of the Circuit Court in respect of possession proceedings, which had led to delays in those proceedings where:
- the dwelling was built after 2 May 2002 (when the Valuation Act 2001 came into operation);
- the mortgage was entered into before 1 December 2009 (when the Land and Conveyancing Law Reform Act 2009 came into operation); and
- the possession proceedings were initiated before 31 July 2013 (when the Land and Conveyancing Law Reform Act 2013 came into operation).
2015 HIGH COURT DECISIONS
In Bank of Ireland Mortgage Bank v Finnegan, Murphy J held (in May 2015) that the Circuit Court did not have jurisdiction to hear such possession proceedings.
In Bank of Ireland Mortgage Bank v Hanley, Noonan J held (in November 2015) that the Circuit Court did have jurisdiction. As both decisions were on appeal from the Circuit Court, neither could be further appealed from the High Court.
RECENT COURT OF APPEAL DECISION
When a case involving permanent tsb plc (PTSB) and David Langan relating to six properties that he had mortgaged in favour of PTSB in February 2008 came before the High Court in February 2016, Baker J stated a case to the Court of Appeal, seeking resolution of this particular issue.
Hogan J delivered the Court of Appeal's judgment (Permanent TSB Plc v Langan) on 28 July 2016.
The Court of Appeal noted that each of the six properties was built after May 2002 and, while none of those properties was the PPR of Mr Langan, each was a "domestic premises" for the purposes of the Valuation Act. As a result, none of those properties were rateable.
The Court of Appeal noted that the Circuit Court's current jurisdiction to deal with land-related matters is limited to cases where the rateable valuation of the relevant property does not exceed €253.95 (meaning that the property must actually be rateable for the Circuit Court to have jurisdiction). As a result, the Circuit Court did not have jurisdiction as the six properties in this case were not rateable.
While the judgment in this case related to possession orders in respect of domestic premises, Hogan J noted that his conclusions would lead to "unfortunate and unintended" results and that his judgment "has even the more serious consequence that the general jurisdiction of the Circuit Court to deal with property disputes (i.e. other than those concerning applications for possession) concerning domestic dwellings is, at least, now open to question".
IN WHICH COURT SHOULD POSSESSION PROCEEDINGS BE COMMENCED FROM NOW ON?
Below is a table setting out whether, based on this decision, possession proceedings should now be taken in the Circuit Court or the High Court in relation to residential properties:
The following explains some of the terminology used in the above table:
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.