Interim Ruling Made Regarding Repossession Order


By McDowell Purcell \ In All Posts, Banking, Litigation & Dispute Resolution

In an interim ruling in Tanager DAC v Rolf Kane [2017] last week, Mr Justice Noonan questioned the validity of a loan sale by an entity which was entitled to be the registered charge holder, however not in fact registered, on the date of the loan sale to the plaintiff.

Background

Bank of Scotland Ireland (“BOSI”) was the registered owner of a charge over the defendant’s family home. By cross-border merger pursuant to the European Communities (Cross-Border Mergers) Regulations 2008 of Ireland and the Companies (Cross-Border Mergers) Regulations 2007 of the United Kingdom, the assets and liabilities of BOSI transferred to Bank of Scotland Plc (“BOS plc”). Thereafter BOS plc sold a portfolio of securities to the plaintiff which included the defendant’s mortgage. The plaintiff then became the new owner of the charge.

This case concerns an appeal brought by the plaintiff from an Order of the Circuit Court dismissing the plaintiff’s claim for an Order for possession. The ruling was made in advance of the pronouncement of final judgment, where Judge Noonan stated his view was that a case should be stated to the Court of Appeal.

Primary Issues

Although a number of issues arose in the appeal, the primary issue is a contention by the defendant that because BOS plc never became registered as owner of the charge in issue, it was not entitled to transfer or assign the charge to the plaintiff. The plaintiff was therefore not entitled to enforce it against the defendant.

The defendant argued that the plaintiff is not entitled to rely on the “conclusiveness” of the registration of title system, which provides a State guaranteed title to property. He claims that the Land Registry registered the plaintiff’s ownership on foot of a mistake of fact or law.  All of this begs the question whether BOS plc was entitled to transfer the charge to the plaintiff without first itself becoming registered.

In response the plaintiff claims that it is now the registered owner of the charge and as S31 of the Registration of Title Act 1964 provides that the ‘Register’ is conclusive evidence of title, the defendant is not entitled to challenge its title. Judge Noonan however suggests that a mistake in fact or in law could permit the court to rectify the Register, therefore undermining the conclusiveness of the Folio as provided for in section 31.

In the course of their arguments both parties referred extensively to the judgment of the Supreme Court in Kavanagh v McLaughlin [2015] 3 I.R. 555 in which Bank of Scotland was entitled to exercise all of its contractual rights under the charge, not only statutory rights, “unless and until it became registered as owner of the charge”.

Outcome

Judge Noonan stated that as there may be hundreds of other cases which will be directly affected by the outcome of this case, he was inclined to state a case to the Court of Appeal. He invited the parties to apply to him for a referral to the Court of Appeal to decide significant legal issues “clearly of considerable public importance”.

Authors: Susie Higgins and Nicole Harney