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You are here: BAILII >> Databases >> Irish Court of Criminal Appeal >> Pepper Finance Corporation (Ireland) Dac T/A Pepper Asset Servicing v Brian Sherlock (Approved) [2025] IECC 4 (01 May 2025)
URL: http://www.bailii.org/ie/cases/IECCA/2025/2025IECC4.html
Cite as: [2025] IECC 4

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Record No: 2022/02906

Neutral Citation: [2025] IECC 4

 

AN CHÚIRT CHUARDA

THE CIRCUIT COURT

 

DUBLIN CIRCUIT CIVIL COURT                                  COUNTY OF THE CITY OF DUBLIN

 

IN THE MATTER OF

PEPPER FINANCE CORPORATION (IRELAND) DAC T/A PEPPER ASSET

SERVICING

Plaintiff

and

BRIAN SHERLOCK

Defendant

 

Judgment of Her Honour Judge Jennifer O'Brien delivered this 1st Day of May 2025

1.      This case comes before the court by way of civil bill for possession issued on the 27th of July 2022. The plaintiff is a designated activity company and has its registered office at the 4th Floor, Two Park Place, Hatch Street Upper, Dublin 2. The defendant is a male and ordinarily resides at an address in Dublin. The claim now brought by the plaintiff against the defendant is in respect of arrears that have accrued on mortgage loan facilities entered into by the plaintiff and Valerie Flood (hereinafter "the borrowers") and now held by the plaintiff under account numbers 10702375 and 10702376. The plaintiff seeks an order for possession of the defendant's premises at an address in County Dublin which said premises are within the jurisdiction of the court.  The late Valerie Flood, deceased, died on or about 5 October 2015 and the defendant as surviving joint owner of the property acquired the deceased's interest in the property by right of survivorship.

 

2.      On the 15th of February 2010, it is claimed that Ulster Bank Ireland Limited acquired inter alia all rights accruing to First Active on foot of any existing loan agreements or security instruments, pursuant to the terms of the Central Bank Act, 1971 (Approval of Scheme of First Active Plc and Ulster Bank Ireland Limited) Order 2009 [S.I. No. 481/2009].

 

3.      On or about 15 February 2016, a special resolution was made and passed by Ulster Bank Ireland Limited to change its name to Ulster Bank Ireland Designated Activity Company. The special resolution was duly filed in the Companies Registration Office and a certificate of incorporation on conversion to a designated activity company was duly issued by the CRO on the 23rd of May 2016.

 

4.      In pursuance of a loan agreement (hereinafter called "the first facility") First Active PLC ("the mortgagee") advanced €224,000 to the borrowers on or about July 2004 under account number 49374959-123292.   The first facility was duly accepted by the borrowers in writing on or about the 30th of June 2004.  As a condition of the first facility, the loan was to be secured by way of a first legal mortgage over the Property, securing the advance together with interest thereon and all present and future liabilities of the borrowers to the mortgagee, its successors and assigns.

 

5.      By deed of mortgage/charge dated 22 September 2004 (hereinafter called "the mortgage") the borrowers as persons entitled to be registered as owners, charged the premises with the payment of the secured monies and assented to the registration of the mortgage. The said indenture of mortgage/charge was duly registered in the Registry of Deeds on the 5th of November 2004.

 

6.      By way of offer of additional advance (hereinafter called "the second facility"), the mortgagee advanced €30,000 to the borrowers on or about February 2005 under account number 49374959- 123293. The second facility was duly accepted by the borrowers in writing.

 

7.      The second facility was secured by way of extension of the mortgagee's existing legal mortgage over the property. The mortgage provides that all monies remaining unpaid and secured by the mortgage become immediately payable if any payment of any monthly or periodic payment or payment of any other of the secured monies is unpaid or in arrears for a period of one month after same shall have fallen due. The plaintiff alleges that in breach of the terms of the first and second facilities and or the mortgage, the borrowers failed to pay the monthly instalments as they fell due.

 

8.      By deed of transfer dated 21 February 2020 (hereinafter the "transfer deed"), it is claimed that Ulster Bank Ireland Designated Activity Company ("Ulster Bank") transferred all its right, title, interest, estate, benefit and entitlement (past and present) in and under the underlying loans and each of the finance documents (as each of the capitalized terms in is defined in the transfer deed) which includes the facility and the mortgage in the within proceedings to the plaintiff.

 

9.      On the 21st of February 2020, it is claimed that Ulster Bank executed an Irish law deed of conveyance and assignment (unregistered property) by which it transferred all its right, title, interest, estate, benefits and entitlement (past and present) in the mortgage to the plaintiffs.

 

10.  On the 2nd of July 2020 the plaintiff became the registered owner of the mortgage in the within proceedings.

 

11.  By letters dated 5 January 2022, the plaintiff wrote to the defendant and demanded payment of all sums outstanding including arrears within seven days of the date thereof.  Despite the said letters the defendants failed to pay the said monies.

 

12.  By letter dated 18 May 2022, Belgard Solicitors LLP, upon instructions from the plaintiff, wrote to the defendant and demanded that the defendant deliver up possession of the property to the plaintiff within seven days of the date thereof in default of which proceedings seeking an order for possession of the property would issue against the defendant without further notice to the defendant in writing or otherwise. Despite the said letters the defendant failed to deliver up possession of the premises.

 

13.  It is claimed that the plaintiff's power of sale, arising under the mortgage has become exercisable by reason of the defendant's default in discharging the monies due and owing to the plaintiff.  As of the 23rd of June 2022, the monies outstanding to the plaintiff by the defendant in relation to the first facility, amount to €276,190.03 including arrears of €84,136.05. The plaintiff expressly reserves the right to update the said sums to provide for further interest as it accrues. As of 23 June 2022, the monies outstanding to the plaintiff by the defendant in relation to the second facility amount to €34,838.25 including arrears of €10,734.26. The plaintiff now updates these figures as being €297,722, the balance to include arrears and the sum of €46,680 including arrears.

 

14.  The plaintiff cites the code of conduct on a mortgage arrears issued by the Central Bank of Ireland in 2013 applies to the loan agreement, and in particular with reference to the time period set out therein for the issue of proceedings, the plaintiff states that it has complied with any such relevant time periods.

 

15.  The property is situated within the jurisdiction of the court and the premises constitutes the principal private residence of the defendant, such that this court has the exclusive jurisdiction to hear and determine the within proceedings by virtue of Section 3 of the Land and Conveyancing Law Reform Act, 2013.  The plaintiff also submits that the Circuit Court has jurisdiction to hear these proceedings as the market value of the property within the meaning of the Courts (Supplemental Provisions) Act, 1961, the Civil Liability and Courts Act 2004 and or the Courts Act, 2016 does not exceed €3 million.

 

16.  The plaintiff's claim is for an order pursuant to the provisions of Order 5B of the Circuit Court rules for delivery of possession to the plaintiff of the property set out in the schedule hereto, which said property was mortgaged and charged by the defendant and the late Valerie Flood to the mortgagee under an indenture of mortgage in charge dated the 22nd of September 2004 and made between the mortgagee and the defendant and the late Valerie Flood to secure to the mortgagee, its successors and assigns, all monies due under the said indenture of mortgage and charge, subject to the proviso for redemption therein contained and which said mortgage and charge was duly registered as a burden on the property set in the schedule to the civil bill and in respect of which the principal sum thereby secured has become due. The plaintiff also seeks an order for costs.

 

17.  It is submitted that these proceedings are commenced in the Circuit Court pursuant to Section 3 of the Land and Conveyancing Law Reform Act 2013 as they are proceedings brought by a mortgagee seeking an order for possession of land which is the principal private residence of the mortgagor of the land concerned or a person without whose consent to conveyance of that land would be void by reason of the Family Home Protection Act 1976 or the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, and the mortgage concerned was created prior to the 1st of December 2009.  Further or in the alternative, the Circuit Court has jurisdiction to hear these proceedings as the market value of the property within the meaning of the Courts (Supplemental Provisions) Act, 1961, the Civil Liability and Courts Act 2004 and or the Courts Act, 2016 does not exceed €3 million.

 

18.   The property is described in the schedule to the civil bill as "all that and those the property more commonly known as an address in County Dublin as described in the indenture of conveyance dated the 22nd of September 2004."

 

19.   The plaintiff filed an affidavit in support of the civil bill for possession which sets out a number of averments as follows:  The deponent on behalf of the plaintiff confirms that he is a senior operations manager of the above-named plaintiff and following the usual averments he states that he has reviewed the books and records in preparation of the affidavit, confirming that the books and records were supplied to the plaintiff by its immediate predecessor in title.  He avers his beliefs that each entity and predecessor in title received and supplied the books and records in the ordinary course of their respective businesses. He also avers that all of the books and records perused by him and exhibited to the plaintiffs' affidavits in the within proceedings constitute business records within the meaning of the Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020. He confirms that the claim now brought by the plaintiff against the defendant is in respect of arrears that have accrued on mortgage loan facilities entered into by Brian Sherlock and Valerie Flood and now held by the plaintiff under account numbers 10702375 and 10702376.

 

20.  He details the manner in which the various transactions took place such that the plaintiff became the title holder of the mortgage and loan facilities. At paragraph ten he includes an averment as regards the restrictions imposed by the Data Protection Acts 1988 to 2018, that he's advised by his legal advisers that it would only be appropriate to disclose the names, or financial details, of borrowers where that is required. It is only necessary to disclose personal data in relation to the defendant to whom these proceedings relate; it is therefore appropriate he avers, to redact all personal information relating to other borrowers. He goes on to say the same data is redacted pursuant to the duty of confidentiality imposed on bankers. He refers to letters dated 28 February 2020, whereby Ulster Bank notified the defendant of the date of the transfer deed and that the amounts owing to it under the loan facility had been assigned and sold to the plaintiff (the "goodbye letter") which is exhibited to his affidavit. He also refers to the letter sent to the defendant on 10 March 2020, which is in essence the hello letter which is also exhibited to the affidavit.

 

21.  He goes on to refer to the Irish Law Deed of Conveyance and Assignment  (unregistered property) whereby Ulster Bank granted, conveyed, assigned, transferred, and assured to Pepper so much as the properties as are freehold tenure to hold same onto the transferee and fee simple, free from encumbrances but subject to the proviso for redemption as contained in the mortgages and so much of the properties as are leasehold tenure to hold the same onto the transferee for all the unexpired residues of the terms of years demised by the mortgages subject to the rents reserved by and the covenants on the part of the mortgagee contained in the mortgages and subject to the proviso for redemption as contained in the mortgages.  He avers that the properties and mortgages refer to therein, including the subject matter of the within proceedings, are set out in the schedule to the deeds. That document is exhibited to his affidavit.

 

22.  He also avers that an application was launched on behalf of the plaintiff with the Property Registration Authority under dealing number 2020035209 to transfer ownership of the mortgage from Ulster Bank to the plaintiff over the secured property, commonly known as an address in County Dublin. He exhibits an extract from the Registry of Deeds confirming registration in the name of the plaintiff to his affidavit. He avers that pursuant to the said deed of transfer and the Irish Law Deed of Conveyance and Assignment (unregistered property) and the facilities listed in the schedules contained therein, he confirms that the said facilities and mortgage, the subject matter of these proceedings were assigned by Ulster Bank to Pepper. He verifies the factual matters set out in the civil bill and details the address of the property and the date on which it was conveyed to the borrowers. He avers that the market value of the property does not exceed €3 million.  He also avers that the property is not a family home within the meaning of Section 2 of the Family Home Protection Act 1976 or a shared home within the meaning of section 27 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010. He avers that to the best of his knowledge the defendant is in occupation and possession of the premises sought to be recovered herein and there is no other person, other than those who have been served with these proceedings in actual possession of the property or in receipt of rents and profits therefrom.

 

23.  He sets out the details of the security documents. He sets out the details of the loan offer and other advances relied upon. He goes on to set out the details of the arrears and the significant sums that remain outstanding.

 

24.  He exhibits a letter of 5 January 2022 whereby the plaintiff wrote to the defendant and demanded payment of all sums outstanding including arrears within seven days of the date thereof. He avers that despite the said letters, the defendant failed to pay said monies.

 

25.  He further exhibits a letter dated 18 May 2022 whereby Belgard Solicitors LLP, upon instructions from the plaintiff wrote to the defendant and demanded that the defendant deliver up possession of the property to the plaintiff within seven days of the date thereof in default of which proceedings seeking an order for possession of the property would issue against the defendant without further notice to the defendant in writing or otherwise. He avers that despite the said letter, the defendant failed to deliver up possession of the property and that correspondence is exhibited.

 

26.  He deals with application of regulatory code and the provisions of the Code of Conduct on Mortgage Arrears issued by the financial regulator, the Central Bank of Ireland in July 2013 ("CCMA").  He avers that the CCMA is applicable to the within proceedings as the premises the subject of this action are the primary residence of the defendant. He says that in general terms the plaintiff has complied with the said code in its entirety in proceeding in this case and in dealing with the arrears that have arisen in this matter. He goes on to deal with the particulars of the plaintiff's compliance with the provisions of the CCMA.

 

27.   He avers that by letter dated 30 November 2021 the defendant was notified that he had been classified as not cooperating and informed the defendant that legal proceedings could commence immediately and also informed the defendant of his right to appeal the plaintiff's decisions. That correspondence is also exhibited. The defendant did not appeal the plaintiff's decision. He avers that the plaintiff has complied with provision 56 of the CCMA, namely that the plaintiff has made every reasonable effort under the CCMA to agree an alternative arrangement with the defendant and that the defendant has been classified as not cooperating and the plaintiff has issued the notification required in provision 29 of the CCMA. As such, he avers that the plaintiff was entitled to issue the within proceedings on the date that same were issued.

 

28.  He goes on to aver that the plaintiff's predecessor, Ulster Bank, conducted a comprehensive review of the interest rates applicable to the defendant's mortgage accounts from the date of drawdown. He further avers that the plaintiff and Ulster Bank are satisfied that the arrears applied since the date of drawdown were and continue to be correct and were reviewed in full as part of Ulster Bank's tracker review project. He further avers that the outstanding balance is due and owing to the plaintiff after all just credits and allowances. He avers that he is advised by his solicitors that as a result of the said default the plaintiff is entitled to enter into possession of the said property without further reference.

 

29.  On the 24th of January 2023 the County Registrar made an order with regard to the manner of service of the civil bill on the defendant.

 

30.  An adjournment affidavit was filed on behalf of the plaintiff in October 2023, as the defendant had recently recommenced making payments on the mortgage facilities the subject of these proceedings. The defendant filed a replying affidavit on the 9th of July 2024 in which he avers that the plaintiff's indorsement of claim constitutes improper pleadings and/or are spurious and in respect of which the defendant reserves the right to apply to the court to have the pleadings expunged. He avers that the special indorsement of claim does not particularise the purported interest or debt due or act of default in sufficient detail. He avers that payment is unpaid or in arrears for a period of one month after same has fallen due. He refers to paragraph 35 of the affidavit of Mr. Dowling in which he avers that the defendant has since in or around September 2007 defaulted on payment of monies due to the plaintiff pursuant to the provision of the mortgage. He avers the accrual of the cause of action in this matter occurred one month after a default in September 2007, namely October 2007, which is over 12 years prior to instigation of these proceedings. He says that the appropriate time limit for such an action may be twelve years, which expired in and around November 2019. He avers that the demand letter of January 2022 does not restart or alter the date upon which the accrual of the cause of action occurred. It is the case that a demand was not required for mortgage, and this is the plea and evidence of the plaintiff. He says the plaintiff is out of time and that no explanation has been provided as to the delay. He avers that the plaintiff is guilty of inordinate and inexcusable delay as a result of which the defendant has suffered severe prejudice and will be unable to get a fair trial as it's over fourteen years since the accrual of the cause of action in this matter since the instigation of the case.

 

31.  He goes on to say without prejudice to the above, he says that the purported letter of demand from the plaintiff on the 5th of January 2022 fails to particularise how the interest has been charged and accrued. He says he's unable to fully understand the case against him. He avers that the plaintiff's claim does not disclose any reasonable cause of action. He avers that much of the affidavit and supporting exhibits of Mr. Downing are hearsay and inappropriate for his affidavit. He says his counsel will address this issue in detail through legal submissions. He denies that the amount claimed in the indorsement of claim, or any amount is due and owing to the plaintiff by the defendant, as alleged or at all or that the plaintiff is entitled to possession of his family home. He further avers that his failure to address each and every averment in the affidavits of the plaintiff should not be construed as acceptance of same. He avers that due to the lack of particularisation he cannot be sure of the claim against him and the amount that is claimed to be due, both in the pleadings and also in the purported letter of demand.

 

32.  He avers that the plaintiff's claim is barred pursuant to the provisions of the Limitation of Actions legislation in force prior to the commencement of the Act of 1957 or in the alternative the Statute of Limitations Acts, 1957 to 1991 as amended. He avers that the letter of demand fails to particularise how the interest has been charged and accrued.

 

33.  He refers to the Supreme Court in Bank of Ireland Mortgage Bank v O'Malley [2019] IESC 84; [2020] 2 ILRM 423 (hereinafter "O'Malley"). He avers that the judgment in O'Malley had clarified the manner in which a claim in summary proceedings should be pleaded and particularised. Relevantly, the Supreme Court held that the special indorsement of claim should specify the manner in which the amount said to be due is calculated, and whether it includes surcharges and/or penalties as well as interest and he says that this is not being done.

 

34.  He also avers that the global deed of transfer at exhibit B relied upon by the plaintiff to establish that Ulster Bank transferred all its rights, title, interest and benefit in the loan and security to the plaintiff, is so redacted so as to prevent the document from revealing what rights or title or interest was transferred by Ulster Bank, if any, to the plaintiff. He avers that the plaintiff has not established any or any sufficient interest in the facility to prevent there being a bona fide doubt as to what that interest, if any, is.

 

35.  He avers that the deed appears to, but it is uncertain describe a series of previous transfers and novations to other companies, including Dennett Property Finance DAC, prior to the ultimate novation to the plaintiff. He avers that without sight of these original transfers it is impossible to know what the plaintiff actually owns. He further avers that only a payment from Dennett seems to have occurred therefore the defendant relies upon the defence of unjust enrichment in relation to the plaintiff herein. He further avers that the deed appears to have a spread sheet attached to the back and that this spreadsheet is so redacted and unrelated to the deed that its purpose in the deed is uncertain. He says the columns in the spreadsheet appear to change although there is reference to only one schedule in the deed, it seems impossible that the schedule exhibited could relate to the deed transfer. In conclusion he avers that his wife died suddenly in October 2015 and that he has an ongoing claim against her life assurers for payment out of her life assurance policy and that this claim is at an advanced stage. As such he asks the court to refuse the reliefs sought by the plaintiff and to dismiss the proceedings as an abuse of process.

 

36.  A further adjournment affidavit was filed together with the supplemental affidavit of Caroline Loftus in which she avers that she's a senior operations manager for the plaintiff and that she's duly authorised to make the affidavit. She avers that a number of averments made by the defendant constitute legal submissions or have already been addressed or are irrelevant to the within proceedings and accordingly she does not propose to respond to each, and every averment made. In particular she proposes limiting her reply to those matters which are relevant to the plaintiff's claim for possession. She avers that the plaintiff's claim is for possession of unregistered land, and it cannot be disputed that the plaintiff is the owner of the mortgage/charge, the subject matter of these proceedings. That being so, she's advised that the plaintiff is only obliged to establish that the total debt under the loan and/or mortgage has fallen due for repayment. She states that the defendant's assertion that the claim constitutes improper pleadings and/or are spurious has no substance and this bald averment must be rejected by the court. She avers that the civil bill for possession is compliant with Order 5B of the Circuit Court rules.  In reply to paragraph six of the replying affidavit, she avers that Donal O'Sullivan has set out his requisite means of knowledge at paragraph one and two of the grounding affidavits sworn on 5 July 2022. She says that all the books and records perused by Donal O'Sullivan and exhibited to the plaintiff's affidavits in the within proceedings constitute business records within the meaning of the Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020.

 

37.  With regard to the issue of statute barred and delay she avers that the defendant is entirely misguided when he deposes that the plaintiff and/or its predecessor are in breach of the Statute of Limitations Act. She avers that the plaintiff furnished the defendant with its initial letter of demand on 5 January 2022 and issued the civil bill for possession on 27 July 2022 which is well within the time frame prescribed in the Statute of Limitations.  

 

38.  She further avers that without prejudice to the foregoing the defendant made a payment towards his account within the twelve years prior to the date of issuance of these proceedings.

 

39.  With regard to the interest calculation, she avers that she's advised by counsel that the defendant's reliance on the Supreme Court judgment in Bank of Ireland v O'Malley is misconceived as that case related to a claim for a summary judgment of a liquidated sum and not a claim for possession. She says she's advised by counsel that the quantum of the defendant's liability is not in issue in these possession proceedings. She further avers that the defendant agitates throughout his affidavit that there is a lack of particularisation of the plaintiff's claim. She says the plaintiff has fully particularised it's claim for possession which is founded upon the existence of a mortgage and an event of default under the mortgage. Again, she says that the precise amount of the defendant's indebtedness is entirely irrelevant to the application.

 

40.   With regard to the transmission of debt/security and the reference to the global deed of transfer dated 21 February 2020 which is exhibited to the grounding affidavit she says same clearly demonstrates the transfer of account number 49374959-123293 from Ulster Bank Ireland DAC to the plaintiffs.  She avers that the defendant baldly avers that the plaintiff has not demonstrated a good chain of title and/or transmission of the debt despite ample evidence to the contrary being before the court. She refers to the grounding affidavits sworn on the 5th of July 2022 and in particular to paragraph seven through fifteen which clearly and coherently demonstrate a good chain of title and/or transmission of the debt from Ulster Bank DAC to the plaintiff.

 

41.   With regard to paragraph twenty-three of the replying affidavit she avers that the redacted global deed of transfer 21 February 2020 exhibited to the grounding affidavit has left unredacted the applicable clauses which gave effect to the transfer of the interest in the property to the plaintiff. She avers that there is a clear reference to the defendant's loan. As the veracity of the global deed of transfer is a matter for the court to adjudicate on however, she believes and is advised by counsel that the global deed of transfer details a legitimate transfer of the interest in the loan and security. She begs to refer to the copy of same when produced. She goes on to aver that she's aware of the obligations to both the court and the defendants when redacting documents placed before the court on affidavits. She says she has considered the redactions referenced hereunder and she believes that they are either irrelevant to the application before the court or are necessary for other lawful reasons. She says that the remainder of the defendant's affidavit is comprised of legal argument best addressed at the hearing of the proceedings. She went on to detail the amounts which remain outstanding and that the last repayment on the account number 10702375 in the sum of €800 was made on 29th September 2023. She also avers that no payments were made since the migration to Pepper on account number 10702376. She goes on to detail the matters which she believes are not in dispute between the parties.

 

42.  Legal submissions were made on behalf of both parties and the plaintiff's counsel stated that the debt due is particularised however the plaintiff is suing on foot of default on the mortgage and not summary judgment, and as such the proceedings are for the recovery of land. With regard to the statute of limitations point counsel submitted that it is from the date of the initial letter of demand that time starts to run, rather than from the date of the event of default. Reference was made to Clause 7(f) of the mortgage deed which provides that the total debt shall become immediately payable to the lender on the expiration of one month's notice given by the lender to the borrower. He said that in any event the defendant had made further payments within the said period of time.

 

43.   With regard to the interest rate calculation, he said that quantum was not relevant and what is relevant is that there is default on the mortgage.  In this regard he seeks to rely on the decision of Mr Justice Woulfe in Start Mortgages Designated Activity Company v Ryan, delivered on 18 November 2021.  He pointed out that the defendant has not contested that there is default in the within proceedings. He said the default is the issue in this case, rather than the amount of monies outstanding.

 

44.  With regard to the question of redaction, counsel for the plaintiff submits that the operative clauses are not redacted, and the defendant's property is clearly set out in the schedule to the transfer documents. He refers to the decision of the High Court in KBC Bank Ireland Plc v Wilson [2019] IEHC 870 at paragraph 35 which provides:

 "In looking at the question of whether there was evidence to the effect that the loans in question were part of the business transferred by KBC Mortgage Bank to the plaintiff in 2009, the Court has had regard to the following matters which have been established in evidence:

a.      After the transfer date, being 26th June 2009, statements and other correspondence issued from the plaintiff to the defendants in respect of these loans. This indicated that those loans had in fact been part of the banking business transferred from KBC Mortgage Bank to the plaintiff.

 

b.      The defendants made sporadic payments after 2009 to the plaintiff, up to the last payment made in July 2015. Thus, the defendants made repayments to the plaintiff for a period of six years after the date on which the business had been transferred to the plaintiff.

 

c.       There is no evidence that any other entity, in particular KBC Mortgage Bank, or anyone else, made any demand of the defendants for repayment of the loan after the transfer date; nor did any other entity seek to enforce the charge against the defendants. If the loans had in fact been part of the "excluded business" and therefore retained by KBC Mortgage Bank, one would have expected to have found correspondence from them to the defendants when payments made after the transfer date were not made to them, but were in fact made to the plaintiff. However, there is no such correspondence.

 

d.       When letters of demand for repayment of the loan were sent by the plaintiff to the defendants, they did not respond to such correspondence by stating that no such repayments were due by them to the plaintiff. Nor, when the plaintiff's solicitor wrote to the defendants seeking possession of the property on foot of the charge, did the defendants write back to the plaintiff stating that it did not have any right to seek to enforce its security against them. Such silence was significant. The Court has had regard to the decision of Charleton J. in Ulster Bank Ireland Limited v. O'Brien [2015] IESC 96 where it was stated as follows:

"As a matter of law, where circumstances indicate that a reasonable person would have responded to an allegation in the context of an appropriate commercial relationship where money is due, but does not so respond, an admission may be set up. The court may act in that situation."

e.        The defendants did more than just stay silent, they actually engaged with the plaintiff in relation to a possible restructuring of their debt repayments. This is clear from the letter of variation dated 11th August 2014, and the follow up letter from the Arrears Support Unit of the plaintiff dated 20th January 2015, as exhibited at exhibits I and J to the affidavit sworn by Ms. O'Callaghan. Thus, it is clear that the defendants had some engagement with the plaintiff in relation to the matter.

 

f.        The Court can have regard to the fact that if these loans had not in fact been transferred to the plaintiff, but were part of the "excluded business" retained by KBC Mortgage Bank, this would mean that the plaintiff has engaged in a fraudulent action to recover possession on foot of loans and a charge that were not in fact transferred to it, when there was no reason for it to do so, because if that were the true state of affairs, the debt and the charge remained at all times the property of the plaintiff's sister company, KBC Mortgage Bank. The Court is entitled to have regard to the absurdity of that state of affairs in finding them to be improbable."

 

45.  It was submitted that having regard to all of these matters the court in that case was satisfied on the balance of probabilities that the original loan and the two top up loans made by IIB Homeloans Limited to the defendants, were part of the business of KBC Mortgage Bank and was transferred to the plaintiffs.

 

46.  Counsel went on to say that there are many parallels with the instant case in that the defendant never raised this issue before and indeed the defendant had also taken steps to settle the matter with the plaintiff.

 

47.   Counsel on behalf of the defendant raises three points, firstly with regard to the Statute of Limitations, secondly with regard to the transfer of the mortgage and security and thirdly with regard to the calculation of the interest rate and the question of whether the property comprises a family home.  The court was referred to paragraph seven of the mortgage deed which states that the total debt shall become immediately payable to the lender if the borrower defaults in making one periodic payment.  It is submitted that the wording in the affidavit grounding the proceedings is similar and as such it is put forward that the event of default occurred in 2007 and that's based on the evidence of the plaintiff and as such the cause of action accrued in and around October 2007. Therefore, it was submitted that same was statute barred after the expiration of twelve years in 2019.  In the instant case, proceedings were not issued until 2023 and this proposition is put forward on the basis of the evidence of the plaintiff.  It was further submitted that the payment made by his client after the right has extinguished revives the plaintiff's ability to bring an action for debt however, he submits that it does not revive the position with regard to possession proceedings. He admitted that the security documents do not revive after a lapse of twelve years and reliance is placed on the decision of the High Court in Dooley v Flaherty [2014] IEHC 528. That case turned on the defendant's claim that he had twelve years uninterrupted possession of the property, which he says he occupied without ever paying rent to the plaintiff's immediate predecessor in title.

 

48.  In that case the court found that time began to run as the weekly tenancy was artificially determined once Mr. Flaherty ceased to pay rent.

 

49.  Counsel went on to submit that Pepper simply don't have title in the instant case and referred the court to the transfer document dated 21 February 2020. It submitted that the recitals to the transfer deed set out a number of prior transfers and novations, none of which were notified to the defendant. Counsel referred the court to the Supreme Court of Judicature Act (Ireland) 1877, and in particular to Section 28 (6) which provides:

"Any absolute assignment, by writing under the hand of the assignor (not purporting to be by way of charge only), of any debt or other legal chose in action, of which express notice in writing shall have been given to the debtor trustee or other person from whom the assignor would have been entitled to receive or claim such debt or chose in action, shall be and be deemed to have been effectual in law (subject to all equities which would have been entitled to priority over the right of the assignee if this Act had not passed,) to pass and transfer the legal right to such debt or chose in action from the date of such notice, and all legal and other remedies for the same, and the power to give a good discharge for the same, without the concurrence of the assignor: Provided always, that if the debtor, trustee, or other person liable in respect of such debt or chose in action shall have had notice that such assignment is disputed by the assignor or any one claiming under him, or of any other opposing or conflicting claims to such debt or chose in action, lie shall be entitled, if he think fit, to call upon the several persons making claim thereto to interplead concerning the same, or he may, if he think fit, pay the same into the High Court of Justice under and in conformity with the provisions of the Acts for the relief of trustees."

50.  In essence the defendant submits that each new lender acquiring the defendant's mortgage was required to issue a hello letter notifying the defendant of the change of title. Counsel submits that the first time the defendant knew of this activity on his mortgage was when he received the pleadings in the instant case. As such it is submitted that the transfer to Pepper is of no legal effect as the prior transfers to purported predecessors on title are not valid as they did not serve notice in accordance with the provisions of the Supreme Court of Judicature Act (Ireland) 1877. The court was referred to the decision of the Supreme Court by Woulfe J in Eugene McCool v Honeywell Control Systems Ltd [2024] IESC 5 and in particular to paragraph 48 which provides:

"(a) Validity of an assignment:

In assessing the validity of an assignment of any legal chose in action, which would include the Company's cause of action in these proceedings, the starting point would appear to be s. 28(6) of the, 1877 Act, which provides as follows:

"Any absolute assignment, by writing under the hand of the assignor (not purporting to be by way of charge only), of any debt or other legal chose in action, of which express notice in writing shall have been given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive or claim such debt or chose in action, shall be and be deemed to have been effectual in law (subject to all equities which would have been entitled to priority over the right of the assignee if this Act had not passed), to pass and transfer the legal right to such debt or chose in action from the date of such notice, and all legal and other remedies for the same, and the power to give a good discharge of the same, without the concurrence of the assignor..."

 

51.  The Supreme Court also referred to the decision in Waldron v. Herring [2013] 3 IR 323 in which Edwards J stated that four main conditions required to be satisfied for the purposes of section 28(6):

"First, the assignment must be for a debt or other legal chose in action;

Second, there must be "absolute assignment" meaning that the assignor must not retain an interest in the subject matter of the assignment. Thus, assignment of part of a debt, assignment by way of charge, and conditional assignments are not covered by section 28(6) of the 1877 Judicature Act.

Third, the assignment must be in writing by the assignor.

Fourth, the debtor must be given express notice in writing of the assignment. A statutory assignment does not need valuable consideration (i.e., any form of payment) to be valid. The assignee can then sue the debtor in their own name, without joining the assignor as a party to the action."

 

52.  As such it is submitted in the instant case that a full beneficial interest in the debt could not be transferred without notice to the defendant. It is submitted that the transfer is not valid until the defendant is given notice of it.

 

53.  Counsel went on to submit that the question of whether the beneficial interest is with another party is difficult to discern on account of the redaction of the documentation. It was further submitted that a full explanation of the reasons for each redaction had not been given. It was submitted the Registry of Deeds is not conclusive evidence of anything but rather just proves the date on which documents were lodged with it. It was submitted that this is really a timing issue and is not conclusive evidence with regard to the validity of each transfer.

 

54.   It was further submitted on behalf of the defendant that the defendant needs the figures and the breakdown of interest calculations in order to understand and meet the case that they are facing.  It was submitted that the demand letter is deficient in this respect as it does not specify the manner in which the figures are calculated.

 

55.  It was further submitted on behalf of the defendant that the property does comprise his family home, he resides there with his two children.

 

56.  With regard to delay the defendant seeks to rely on the fact that there is a delay in excess of twelve years in bringing the proceedings. In any event while the plaintiffs are barred by the Statute of Limitations, they also caused an inordinate delay which is inexcusable, and no reason was put forward.  It was submitted that the plaintiffs have put no evidence before the court of a legally enforceable interest. It was further submitted that the redaction of the names of parties to the prior transfer documents is not commercially sensitive and there's no good reason put forward for taking these names out of the documents.

 

57.  By way of response on the issue of the family home, counsel for the plaintiff submitted that the property had been a family home at the time of the purchase, however as the defendant's wife passed away it was no longer a family home at the time of issue of the within proceedings.

 

58.  It is again submitted that the date from which time runs is the expiration of one month's notice in writing.

 

59.  With regard to the issue of securitisation, it was submitted that the defendants consented to each of these transactions and that no notice was needed to perform these transactions. It is submitted that Pepper are the lawful owners of the loan. Reference is made to the goodbye and hello letters which are included in the exhibits to the grounding affidavit. Emphasis is also placed on the decision of the High Court in KBC Bank Ireland PLC v Wilson [2019] IEHC 870, in which Mr. Justice Barr delivering his decision on 19 December 2019 goes through, on a point-by-point basis the circumstances that arise in the case of transfer of security and mortgages in the context of securitisation. It is submitted that the question turns on whether there is unequivocal default on the part of the defendant, rather than on whether notice was served of each re-securitisation of the mortgage and security documents.

 

Decision:

60.  The court has heard what has been offered on behalf of the plaintiff and the defendant in this matter and I've considered the case law put forward on behalf of each party.

 

61.   In regards to the question of whether the plaintiff has the appropriate title to the mortgage held over the defendants property, the court is satisfied that the decision of the High Court in KBC Bank Ireland PLC v Wilson [2019] IEHC 870 is most closely aligned to the facts of the within case and having regard to the factors set out in the decision of Barr J the court notes that a number of similarities arise as follows:

a)      After the transfer date, statements and other correspondence issued from the plaintiff to the defendants in respect of these loans. This indicates that the loans had in fact been part of the banking business transferred to the plaintiff.

 

b)     The defendant made a payment to the plaintiff after the date on which the business had been transferred to the plaintiff.

 

c)      There's no evidence that any other party made any demand of the defendants for repayment of the loans after the transfer date, nor did any other entities seek to enforce the charge against the defendants.

 

d)     When letters of demand for repayment of the loan were sent by the plaintiff to the defendant, they did not respond to such correspondence stating that no such repayments were due by them to the plaintiff.  Nor, when the plaintiff's solicitors wrote to the defendants seeking possession of the property on foot of the charge, did the defendants write back to the plaintiff stating that it did not have any right to seek to enforce its security against them.

 

e)      In the instant case the defendant engaged with the plaintiff in relation to negotiations surrounding the repayment of debt.

 

f)       There's no evidence of any fraudulent activity on the part of the plaintiff in this case.

 

62.   Having regard to all of these matters, the court is satisfied on the balance of probabilities that the original loan and the top up loan made to the defendants were part of the business transferred to the plaintiff.

 

63.  Reference is also made to the terms of the mortgage deed which provide at clause 9 for the lender's power to transfer.  That clause provides as follows:

"The lender may at any time and from time to time transfer, assign, mortgage and/or charge the benefit of all or any part of the mortgage, the total debt or any part thereof and the security created by the mortgage on the mortgage property and all of the rights and interests of the lender in and to the life policy and any other life assurance and all other contracts and policies of insurance relating to the mortgage property to any person or persons (hereinafter called the "transferee") on such terms as the lender may think fit, with or without notice to the borrower or any other person, whereupon all the powers, rights, remedies and discretions of the lender in relation thereto shall be exercisable by the transferee, to the extent that they are so transferred, signed, mortgaged or charged and they shall become vested in the transferee the right to demand, sue for, recover, exercise all the powers and remedies conferred by the mortgage on the lender and give receipts for that part of the total debt so transferred, assigned, mortgaged or charged or the unpaid part thereof and the interest then due, if any, or assigned etcetera"

64.  As such, the defendant was aware from the outset of the possibility of transfer of the mortgage to a third party and they entered into a mortgage deed which facilitated such an occurrence, without any further notice to the defendants.

 

65.  It was not outlined to this court whether the plaintiff took any steps to act on the life assurance policy that was assigned to it for the purpose of securing the mortgage debt. The defendant indicated that he was taking such steps, but this court heard no evidence in relation to that point.

 

66.  As such the court is satisfied that the plaintiff has the requisite title to enforce the terms of the mortgage and the loan facility.  The defendant did not dispute the question of default but rather sought a particularisation as to how interest accrued and was charged. It is abundantly clear to this court that the events of default are significant and are at a level that cannot be explained by any errors in calculation of interest. Given the plaintiff is not seeking a judgment for a particular liquidated sum but rather seeks an order for possession, the only question that the court needs to determine is whether there has been an event of default.  The court is satisfied that this issue is not in question given the evidence heard in the matter.

 

67.  With regard to the defendant's claim that the proceedings are statute barred the court notes that the provisions of the mortgage deed provide for both eventualities, that is in the first instance that the total debt shall become immediately payable to the lender if the borrower defaults in making of one periodic payment, however at paragraph 7(f) the deed also provides that the total debt shall become immediately payable to the lender on the expiration of one month's notice given by the lender to the borrower. Each of the options regarding when the debt becomes repayable are set out at the relevant paragraph as alternate options and as such the lender can pursue the debt under either of these headings and it is not excluded from doing so based on any ordinary interpretation of the language in the deed.

 

68.  As such, the court is satisfied in this particular instance that time did not start to run until the expiration of one month's notice given by the lender to the borrower and that is one month after the initial demand letter.

 

69.  The Court is satisfied that the property retained its status as a family home following the passing of the defendant's wife.   The Court notes that the plaintiff has complied with the Code of Conduct on Mortgage Arrears issued by the Central Bank of Ireland in 2013.  It is clear that the defendant was afforded ample time and opportunity to address the matter in all the circumstances.

 

70.  While the court has sympathy for the defendant, in the circumstances I am satisfied that the plaintiff has established its entitlement to possession of the property and the defendant has not made out any credible grounds of defence.  As such the court grants an order for possession pursuant to the provisions of Order 5B of the Circuit Court Rules for delivery to the plaintiff of all that and those of the property more commonly known as an address in County Dublin, as described in the indenture of conveyance dated 22 September 2004.  Further, the Court grants a stay on the said order for a period of six months.

 

71.  An order for costs in favour of the plaintiff to include reserved and discovery costs, to be taxed in default of agreement.

 

72.  Liberty to apply.

 

 

Appearances:

Mason Napier BL instructed by Beauchamps Solicitors for the plaintiff.

Rory Kennedy BL instructed by Mannion Solicitors for the defendant.

 

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