Repossession law in Northern Ireland and the Republic of Ireland is understandably different.

however this difference was never more apparent than in the situation following the case of Start Mortgages Ltd and Ors -v- Gunn and Ors [2011] IEHC 275 which was heard in the Republic of Ireland in July 2011.

Legal Framework

In Northern Ireland the statutory basis for mortgagees’ powers is contained within the Conveyancing and Law of Property Act 1881, but in the Republic it was contained within the Registration of Title Act 1964.

In 2009 a piece of legislation was passed called the Land and Conveyancing Law Reform Act 2009, this act repealed a number of sections in various pieces of legislation but most notably it repealed s62 (7) of the Registration of Title Act. This stated:

(7) When repayment of the principal money secured by the instrument of charge has become due, the registered owner of the charge or his personal representative may apply to the court in a summary manner for possession of the land or any part of the land, and on the application the court may, if it so thinks proper, order possession of the land or the said part thereof to be delivered to the applicant, and the applicant, upon obtaining possession of the land or the said part thereof, shall be deemed to be a mortgagee in possession.

S 96-s111  of  The Land and Conveyancing Law Reform Act 2009 sets out the  powers and rights of a mortgagee. S96(1)(a) states that these powers are to apply to any mortgage created by deed after the commencement of this part of the legislation which came into effect 1st December 2009.  In other words, the legislation did not have retrospective effect and only applied to a mortgage created after this date.

The Start Case

This odd set of circumstances gave rise to the case of Start Mortgages Ltd and Ors -v- Gunn and Ors. In this case Start Mortgage Limited had mortgages secured by a charge over premises owned by the Defendants. Start Mortgages Ltd brought an application for repossession of the charged properties when the defendants defaulted on payments due.

These charges related to mortgages created between 2006 and 2008 which contained standard mortgage provisions namely:

  1. that the borrowers agreed to make payments and  in the absence of such payments the unpaid amounts were due and payable on demand;
  2. that the lenders may enter into possession of the properties and have statutory powers conferred on them, but that such powers would not be exercised until default occurs;

The defendants contended that the mortgages were created prior to commencement of the 2009 Act and therefore the lenders were not conferred with powers under s96 of the Land and Conveyancing Law Reform Act 2009. Further, it was argued that the powers under s62(7) of the Registration of Title Act 1964 had been repealed and that if the Lender could not rely upon the powers contained under s62(7) of the Registration of Title Act then there was no basis for an order for possession to be made.

Following consideration Judge {insert name} relied on the Interpretation Act 2005 and held that  the right to apply for an order for possession under s62(7) of the Registration of Title Act can survive the repeal of this section if it was vested before the date of the repeal. The court further held that this right only vested when monies were due and a demand for repayment was made prior to repeal of this section.

Following this judgement, an argument was forwarded that lenders had no power to apply for an order for possession unless they complied with the “Start Mortgages” criteria, namely that:

  1. Lender had issued a demand for moneys owing before 1st December 2009, or
  2. Lender seeking possession of a mortgage created after 1st December 2009

Land and Conveyancing Law Reform Act 2013

It was in the light of this legal vacuum that the Land and Conveyancing Law Reform Act 2013 was passed, this act was signed into law on 24th July 2013. This piece of legislation sought to plug the gap created by the previous legislation as highlighted by the Start Mortgages case.

Section 1 of this piece of legislation applies to mortgages created prior to 1st December 2009 and allows the Statutory Provisions to be relied upon as if those provisions had not been amended or repealed by the Land and Conveyancing Law Reform Act 2009.

This legislation also provides that where a mortgage possession application is made against the owner of a  principal private residence the court may adjourn for a period of up to 2 months to allow the Defendants to speak to an insolvency practitioner to discuss a proposal for a Personal Insolvency Arrangement. This section functions in practice to allow Defendants to review their financial position and to put lenders on notice of insolvency proceedings which may be pursued by the borrowers

If you have any further queries regarding the issues raised in this article in either Northern Ireland or the Republic of Ireland please do not hesitate to contact our Lender Services team.

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