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Pepper Finance DAC v Conway & Anor [2020] IEHC 35 (31 January 2020)
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[2020] IEHC 35
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Page 1 ⇓
THE HIGH COURT
[2020] IEHC 35
[2019 No. 131 CA]
BETWEEN
PEPPER FINANCE CORPORATION (IRELAND) DESIGNATED ACTIVITY COMPANY
PLAINTIFF
AND
RICHARD CONWAY
AND
ROSE (OTHERWISE KNOWN AS ROSALINE) CONWAY
DEFENDANTS
JUDGMENT of Mr. Justice Heslin delivered on the 31st day of January 2020,
Background
1. This case comes before the court by way of a notice of appeal dated 27 March 2019,
pursuant to which the Defendants appealed against a judgment and order of the Circuit
Court. The relevant pleadings comprise the Circuit Court Civil Bill for Possession, issued
on 09 October 2015 and the Defendants’ notice of motion, issued on 13 February 2017.
The Defendants’ motion was grounded on the affidavit sworn by the first named
Defendant on 13 February 2017. A number of further affidavits were sworn during the
course of the Circuit Court proceedings which were heard before His Honour Judge
Comerford on 24 November 2017, 06 July 2018 and 09 July 2018, including an affidavit
dated 26 June 2018 which was sworn by the first named Defendant seven months after
day one of the Circuit Court hearing, but shortly before day two and three of same. In a
judgment delivered on 20 March 2019, Judge Comerford decided that the Plaintiff was
entitled to possession of the Defendants’ property and refused the reliefs sought by the
Defendants in their motion. The relevant order issued from the Circuit Court on 20 March
2019 and the Defendants appeal against this order. The Defendants represented
themselves at the hearing, which proceeded by way of an entire rehearing of the matter,
de novo, lasting 3 days.
2. On the morning of day 3 of the hearing, the Defendants made an application for an
adjournment which, for reasons detailed in an ex-tempore judgment, I refused to grant.
Shortly before 12 noon on day 3 of the hearing, the Defendants made an application to
admit material which was not before the Circuit Court, specifically a report concerning
“Windmill Funding DAC”, dated 31 December 2017, which the Defendants regarded as
evidence upon which they proposed to rely and, for reasons detailed in a second ex-
tempore judgment, I refused that application. This judgment deals with both the Plaintiff’s
application in the aforesaid Civil Bill and the Defendants’ application by way of the said
motion.
The property sought by the Plaintiff
3. On foot of the Civil Bill, the Plaintiff seeks an order for possession of property which is
described in the schedule thereto as being: -
“All that and those the premises known as 33 Highfield Downs, Swords, Co. Dublin,
more particularly described in Folio 74990 F Co. Dublin” (hereinafter “the
property”).
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The relief sought by the Defendants
4. The Defendants’ notice of motion seeks a range of reliefs, the relevant ones for the
purposes of this judgment being the following: -
“2. An Order that the Defendants in accordance with O. 17, r. 3 submit Form 8 to the
Plaintiff named herein to provide information as to the specified matters already
requested of them and recorded in the affidavits of the Defendants.
3. An Order requesting permission under O. 7 of the Circuit Court Rules to issue and
service a third party notice.
4. An Order that the Defendants in accordance with O. 17, r. 3 to request disclosure of
further information from the Plaintiff now relevant in the context of the Plaintiff’s
new claim on a late filed affidavit to be “lender of record” based on a transaction
they claim to have initiated which is disputed by the Defendants.
5. An Order that the case is dealt with in plenary proceedings”.
The Affidavits
5. During the hearing the following affidavits were opened to the court in their entirety: -
i. The affidavit of Caroline Loftus, sworn 05 October 2015.
ii. The affidavit of Richard Conway sworn 12 April 2016.
iii. The affidavit of Richard Conway sworn 11 May 2016.
iv. The affidavit of Caroline Loftus sworn 10 June 2016.
v. The affidavit of Richard Conway sworn 07 November 2016.
vi. The affidavit of Caroline Loftus sworn 02 December 2016.
vii. The affidavit of Richard Conway sworn 08 December 2016.
viii. The affidavit of Richard Conway sworn 12 December 2016.
ix. The affidavit of Caroline Loftus sworn 13 December 2016.
x. The affidavit of Richard Conway sworn 13 February 2017.
xi. The affidavit of Richard Conway sworn 19 April 2017.
xii. The affidavit of Caroline Loftus sworn 19 April 2017.
xiii. The affidavit of Richard Conway sworn 8 May 2017.
xiv. The affidavit of Grainne Naughton sworn 18 May 2017
xv. The affidavit of Richard Conway sworn 22 June 2017.
Page 3 ⇓
xvi. The affidavit of Richard Conway sworn 26 June 2018.
6. In reaching the findings detailed in this judgment, I have carefully considered the
contents of all the foregoing affidavits sworn in these proceedings, together with the
exhibits thereto. I have also carefully considered the contents of the submissions made,
both oral and written, by the parties to these proceedings, as well as the authorities relied
upon by the parties. In circumstances where this case proceeded by way of an entire re-
hearing, I did not consider it necessary or appropriate to consider the contents of the
Defendants’ legal submission, dated 9th December, 2019 entitled “Analysis of Circuit
Court Findings”. I did, however, consider the contents of all the following written
submissions made by the Defendants:
1. Legal submission entitled “Denial of Debt”, dated 9th December 2019;
2. Legal submission entitled “Deponent Credibility”, dated 9th December 2019;
3. Legal submission entitled “Statutory Declarations”, dated 9th December 2019;
4. Legal submission entitled “Mortgage Sale Deed”, dated 9th December 2019;
5. Legal submission entitled “True Sale of Mortgage Portfolio”, dated 9th December
2019;
6. Legal submission entitled “Release of Legal Rights”, dated 9th December 2019;
7. Legal submission entitled “Property Registration Authority”, dated 9th December
2019;
8. Legal submission entitled “Windmill Funding Limited”, dated 9th December 2019;
9. Legal submission entitled “Cross Examination at the Tax Appeal Commissioner”,
dated 9th December 2019;
10. Legal submission entitled “Denial of Plenary Hearing”, dated 9th December 2019;
11. Legal submission entitled “Distinguishing Precedents”, dated 9th December 2019;
12. Legal submission entitled “Motion to Dismiss”, dated 9th December 2019;
13. Legal submission entitled “Denial of Plenary Hearing”, dated 9th December 2019
14. Legal submission on behalf of the Defendants/appellants, dated 19th December
2019.
The Registration of Title Act, 1964 (“the 1964 Act”)
7. The Registration of Title Act, 1964, provides, inter alia, as follows: -
“62. — (1) A registered owner of land may, subject to the provisions of this Act, charge the
land with the payment of money either with or without interest, and either by way
Page 4 ⇓
of annuity or otherwise, and the owner of the charge shall be registered as
such. . ..
(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”.
Section 62(7) of the Registration of Title Act, 1964, is the statutory basis upon which
possession of the property is sought by the Plaintiff.
The Charge registered at Part 3 of Land Registry Folio 74990
8. A copy of Land Registry Folio 74990 F, Co. Dublin, being the property which is the subject
of these proceedings, comprises Exhibit “E” as referred to in the affidavit of Caroline
Loftus, sworn on 05 October 2015. Part 2 of the said folio records the Defendants as
owners. Part 3, which deals with “Burdens and notices of burdens”, contains the following
entry: -
“27 – JUL – 2007 D 2007 BN 038812 A Charge for present and future advances
repayable with interest. GE Woodchester Home Loans Limited is owner of this
charge” (hereinafter “the charge”).
In para. 9 of her affidavit, sworn on 05 October 2015, Caroline Loftus avers that the
charge in question was registered against the Defendants’ interest in Folio 74990 F of the
Register, Co. Dublin on 27 July 2007 and I accept that evidence, which is reflected in the
relevant entry on Folio 74990 F, Co. Dublin.
9. In light of the evidence, I am satisfied, as a matter of fact, that the property is subject to
the charge registered on 27 July 2007, the owner of the charge being the corporate entity
then known as GE Woodchester Capital Home Loans Limited, having company registration
number 34297, being the company registration number of the Plaintiff.
Change of name by a company
The Companies Act, 1963 provides, inter alia, the following: -
“23. — (1) A company may, by special resolution and with the approval of the Minister
signified in writing, change its name…
(3) Where a company changes its name under this section, the registrar shall enter
the new name in the register in place of the former name, and shall issue a
certificate of incorporation altered to meet the circumstances of the case.
(4) A change of name by a company under this section shall not affect any rights or
obligations of the company, or render defective any legal proceedings by or against
the company, and any legal proceedings which might have been continued or
Page 5 ⇓
commenced against it by its former name may be continued or commenced against
it by its new name”.
In light of the foregoing statutory provisions, it is indisputable that a company may
change its name. Doing so is not at all unusual and the ability of a company to change
its name is one of the features of corporate legal personhood. The Plaintiff company has
changed its name on a number of occasions and the series of names by which the Plaintiff
has been known since incorporation comprises one of the exhibits in these proceedings.
A designated activity company
10. The Companies Act, 2014 contains a “procedure for re-registration as designated activity
company . . .” and s. 63(12) states the following: -
“12. The re-registration of an existing private company as a designated activity company
pursuant to this Chapter shall not affect any rights or obligations of the company or
render defective any legal proceedings by or against the company, and any legal
proceedings which might have been continued or commenced against it in its
former status may be continued or commenced against it in its new status”.
11. The Plaintiff is a designated activity company and Exhibit “A” referred to in the Affidavit of
Caroline Loftus sworn on 10 June 2016 comprises a copy of a “Certificate of Incorporation
On Conversion To A Designated Activity Company”, dated 29 October 2015, given under
the hand of the Registrar of Companies in which it is certified that “Pepper Finance
Corporation (Ireland) Designated Activity Company formerly registered as a Limited
Company has this day been converted under the Companies Act 2014 to a Designated
Activity Company”.
12. In light of the evidence, it is clear that the Plaintiff company has undergone several
changes of name. Indeed, Exhibit “B” to the first named Defendant’s affidavit sworn on
8th December 2016 comprises a copy of a “Certificate of Incorporation of a Company”,
dated 15 July 2016, given under the hand of the Registrar of Companies in which it is
certified “…that company number 34927 Pepper Finance Corporation (Ireland) Designated
Activity Company was originally called “Endeavour Securities Limited”. The said certificate
then sets out, in chronological order, the various other names by which the company was
known, specifically “United Dominions Trust (Ireland) Limited”, “Woodchester Home Loans
Limited”, “GE Capital Woodchester Home Loans Limited”, “Pepper Finance Corporation
(Ireland) Limited” and, from 29 October, 2015, “Pepper Finance Corporation (Ireland)
Designated Activity Company”. I am satisfied, as a matter of fact, that the Plaintiff was
known as GE Woodchester Capital Home Loans Limited when the charge against the
Defendants’ property was registered and I am satisfied that the current name of the
Plaintiff is Pepper Finance Corporation (Ireland) Designated Activity Company. I am also
satisfied that, despite the changes of name, the Plaintiff company was and is the same
legal entity which was originally incorporated under company registration number 34927.
I am entirely satisfied that, as a matter of fact, the company with registration number
34927 is the Plaintiff in these proceedings and is pursuing these proceedings under its
current name.
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Conclusiveness of the Register under the 1964 Act
13. In the case of Tanager Designated Activity Company v. Rolf Kane [2018] IECA 352, the
Court of Appeal considered certain questions of law referred by Noonan J. The first of
these questions posed was as follows: -
“1) does the defendant have an entitlement to challenge the registration of the plaintiff
as owner of the charge at entry no. 7 on the defendant's folio in these proceedings
having regard to the conclusiveness of the Register pursuant to s. 31 of the 1964
Act?”
The Court of Appeal answered that question in the negative. The foregoing is of
considerable relevance to the present proceedings. In short, there is no doubt about the
conclusiveness of the entry, in Part 3 of Folio 74990 F, County Dublin, of a charge dated
27 July 2007 in favour of GE Capital Woodchester Home Loans Limited, being the name of
the Plaintiff herein when the charge was registered. In light of the foregoing, there is
before the court conclusive evidence that the Plaintiff is the owner of the charge
registered in the Land Registry against the Defendants’ property and I accept that
evidence.
Averments by the Defendants concerning company 34927
14. In para. 15 of his affidavit sworn on 26 June 2018, the first named Defendant makes the
following averment: -
“I say the fact that company registration No. 34927……originated and owned the
Mortgage Portfolio . . .”
At para. 79 of the same affidavit, the first named Defendant makes the following
averment: -
“I say again the original lender was legal entity 34927 . . . “
In para. 164 of the said affidavit, the first named Defendant makes the following
averment: -
“164. I say the GE Group through its wholly owned and controlled legal entity 34927, GE
Woodchester Capital Home Loans Limited, registered a charge against the Folio of
the Defendants’ family home on 27th July 2007”.
15. The company with registration number 34927 is, beyond doubt, the Plaintiff herein. As
regards the foregoing averments by Mr Conway, I am satisfied, in light of the evidence,
that the Plaintiff “originated and owned the mortgage portfolio”, the Plaintiff was “the
original lender” to the Defendants and the Plaintiff “registered a charge against the Folio
of the Defendants’ family home”.
Offer of mortgage loan 22 March 2007
16. The “letter of offer of mortgage loan” comprises Exhibit “C” as referred to in the affidavit
of Caroline Loftus sworn on 5 October 2015. The offer was made to the Defendants and is
explicitly stated to be on the following basis: -
Page 7 ⇓
“This offer is subject to the loan being secured by a first legal mortgage/charge for
present and future advances in favour of the Lender over the property described in
Part 1. It is also subject to your general acceptance of, and compliance with the
Standard, Special and General terms and conditions as detailed in parts 2, 3 and 4
respectively”.
The loan is stated to be for the sum of €540,000 at an annual percentage rate of charge
(“APR”) stated to be 7.33%. The period of agreement was stated to be twelve years,
involving 144 repayments, with each instalment stated to be €5,553.26. Clause no. 4,
under the heading “Repayment” contains, inter alia, the following: -
“(b) In the event of any repayment not being paid on the due dates or any of them, or
of any breach of the Conditions of the Loan or any of the covenants or conditions
contained in any of the security documents referred to in Clause 2(a), the Lender
may demand an early repayment of the principal and accrued interest or otherwise
alter the Conditions of the Loan”.
In other words, if there was a failure to repay, the lender was entitled to make a demand
for the entire loan, comprising principal and accrued interest. The lender, as made clear in
this 22 March 2007 offer, was the company then known as GE Capital Woodchester Home
Loans Limited, being the Plaintiff herein. On the evidence before me, I am satisfied that
the Defendants accepted the loan offer and I note that on p. 11, of the letter of offer of
mortgage loan, both of the Defendants’ signatures are witnessed by a solicitor, the date
being given as 16 April 2007.
Mortgage dated 26 April 2007
17. I also find, as a fact, that the Defendants entered into an indenture of mortgage with the
Plaintiff, dated 26 April 2007. A copy of the said mortgage comprises Exhibit “D” as
referred to in the affidavit of Caroline Loftus sworn on 5 October 2015. The second page
of the mortgage contains, inter alia, the following definition: -
“7. “event of default” means any of the events stipulated in paras. (a) to (j) inclusive of
sub-clause 9.01 hereof;”.
On internal p. 5 of the said mortgage, under the heading “Covenants for Payment” the
following is set out: -
“3.02 All moneys remaining unpaid by the Borrower to the Lender and secured by this
Mortgage shall immediately become due and payable on demand to the Lender on
the occurrence of any of the following events, that is to say: -
(a) On the happening of any event of default other than an event specified
in para. (i) of sub – clause 9.01 hereof; or . . .
…and the Borrower hereby further covenants with the Lender to pay to
the Lender forthwith the sum so demanded together with further
Page 8 ⇓
interest at the rate applicable to the relevant secured loan from time to
time and at any time until the same shall have been repaid and shall
be payable after as well as before any judgment or order of the Court”.
On internal p. 13 of the mortgage under the heading “Exercise of Mortgagee’s Powers”,
the following is set out: -
“9.01 The Lender shall not exercise any of the powers provided for in Clause 8 hereof or
conferred by statute until any of the following events shall occur: -
(a) default is made in payment of any monthly or other periodic payment or in
payment of any other of the secured moneys hereunder; or . . .”
Internal p. 21 of the mortgage makes it clear that the borrower is the Defendants,
whereas the description of the mortgage property is the property described in Folio 74990
F, Co. Dublin. It is not disputed that the Defendants signed internal p. 22 of the mortgage
in the presence of a solicitor. Internal p. 29 of the mortgage bears a Land Registry stamp
with a dealing number which is stated to be “D 2007 DN 038812 A” and, as a matter of
fact, this is the same dealing number which is recorded in Part 3 of the Land Registry
Folio 74990 F of the Register, Co. Dublin, in respect of the charge registered on 27 July
2007, owned by GE Capital Woodchester Home Loans Limited, being the Plaintiff herein.
Mortgage repayments
18. In para. 10 of her affidavit sworn on 05 October 2015, Caroline Loftus avers to the fact
that the Defendants defaulted in respect of monthly mortgage repayments and refers to a
statement of account comprising Exhibit “F” to her affidavit. I accept the evidence given
by Ms. Loftus. I am satisfied, on the evidence, that an event of default occurred in respect
of the mortgage. I find, as a matter of fact, that the Defendants have not made any
mortgage repayment since April 2015, with the exception of a data access request fee of
€6.35 made on 9 December 2015. The failure to make mortgage repayments does not
appear to be disputed by the Defendants. At no stage do the Defendants claim to have
made any payments in respect of the mortgage for which they have not been given credit
in the statement of account exhibited by Ms. Loftus, which statement covers the period
from 02/08/2013 to 30/09/2015.
Formal demands for repayment
19. I accept the evidence given by Ms. Loftus of the fact that formal demands, date 01 May
2015, were served on each of the Defendants. I am satisfied, on the evidence, that the
Plaintiff was entitled to serve such demands having regard to the fact that the Defendants
defaulted in relation to their payment obligations under the mortgage. The letters of
demand, comprising Exhibit “G” as referred to in the affidavit of Caroline Loftus sworn on
5 October 2015, are similar in terms, and contain, inter alia, the following statements: -
“An event of default has occurred pursuant to the terms of your mortgage
agreement as you have failed to make a payment(s) on the due date. Your account
is now 35 payments in arrears. Your mortgage account is currently showing
outstanding arrears and charges of €148563.86. The Mortgage Arrears Resolution
Process (MARP) no longer applies to this account. . ..
Page 9 ⇓
We now formally demand full payment of the entire balance due and owing by you
on the Mortgage Account pursuant to your Mortgage Agreement. The balance as at
01 May 2015 is €623069.88 together with continuing interest which is accruing at
the daily rate . . ..”
I am satisfied, on the evidence, that letters of demand were in fact sent to the
Defendants and that this did not result in full payment of the entire balance due and
owing in respect of the relevant mortgage, as demanded, nor did the sending of said
letters result in any payment being made by the Defendants.
Demands for vacant possession
20. I am also satisfied that, by letters dated 18 May 2015, which were sent to the
Defendants, respectively, a demand was made of each Defendants that vacant possession
of the property be provided, which letters also stated that if the arrears were discharged
within ten days, proceedings for repossession would not be issued. These letters comprise
Exhibit “H” to the affidavit of Caroline Loftus sworn on 5 October 2015. Vacant possession
was not provided.
The Defendants’ opposition to the Plaintiff’s claim
21. In ten affidavits, in extensive written submissions and by way of oral submissions during
the trial, the Defendants vigorously oppose the Plaintiff’s claim. In this judgment I
address the principal arguments made by the Defendants.
The claim that there is no charge in the name of the Plaintiff
22. In para. 33 of his affidavit sworn 12 April 2016, the first named Defendant makes the
following averment: -
“I say and believe that there is no instrument of charge “sufficient to charge the
land” registered with the Land Registry in the name of the Plaintiff company Pepper
Finance Corporation (Ireland)”.
Having regard to the evidence before the court, and my findings detailed above, I am
bound to reject that assertion. The Plaintiff is, without doubt, the owner of the charge
registered in the Land Registry against the Defendants’ property.
The claim that the Defendants did not enter any agreement with the Plaintiff
23. In para. 40 of the same affidavit the first named Defendant makes the following
averment: -
“I say that the Defendants did not enter into any agreement whatsoever with the
Plaintiff company to borrow any funds and that as a consequence the amounts
mentioned above as “due and owing” are unsubstantiated allegations”.
On the evidence, I am bound to reject this assertion made on behalf of the Defendants.
Indeed, the true effect of averments by Mr Conway (at paragraphs 79 and 164 of Mr
Conway’s 26 June 2018 Affidavit) is to acknowledge the contrary.
The Defendants’ claim that the Plaintiff lacks title to the charge
Page 10 ⇓
24. It is clear from the contents of the first named Defendant’s affidavits that the opposition
to the Plaintiff’s claim relies on a central assertion, namely that the Plaintiff in these
proceedings does not have title to the charge registered against the relevant property in
Part 3 of Land Registry Folio 74990 F. This assertion is made numerous times and in a
variety of ways in the first named Defendant’s affidavits, one example of which is the
averment contained at para. 15 of the first named Defendant’s affidavit, sworn 8
December 2016, in which he states inter alia: -
“. . .while the name change from Pepper Finance Corporation (Ireland) Limited to
Pepper Finance Corporation (Ireland) Designated Activity Company is a name
change that does not entail the transfer of ownership of 34927 as a wholly owned
company in the Pepper Group, the name change from GE Capital Woodchester
Home Loans Limited to Pepper Finance Corporation (Ireland) Limited does
represent a transaction transferring ownership of 34927 from the GE Group to the
Pepper Group”.
25. I am satisfied that the distinction which the first named Defendant seeks to draw between
the effect of two name changes concerning the Plaintiff company has no basis in law.
Similar comments apply in relation to the averments made by the first named Defendant
in paras. 21 and 22 of the same affidavit, in which he asserts: -
“I say that at points 8 and 9 of the affidavit the deponent implies that by virtue of
this listing, the Plaintiff company registration 34927 as a wholly owned company in
the Pepper Group is the same company enjoying unbroken succession and decision
making capacity from 1996 to the present.
I say that any such assertion again relies on a name change only ignoring the sale
of company registration 34927 from the GE Group to the Pepper Group, and that in
all material ways that matter the company listed in 1995 is not the same company
as the Plaintiff save for the registration number”.
The foregoing assertion has no basis in law and I reject it.
Alleged lack of locus standi
26. In para. 45 of the first named Defendant’s affidavit sworn 8 December 2016, he makes
the following averment: -
“I say and believe that on foot my statements, exhibits and analysis in this and
previous affidavits that the Plaintiff company, Pepper Finance Corporation (Ireland)
Limited, has no Locus Standi whatsoever in this matter and that all their claims are
vexatious, without substance whatsoever, and are frivolous and bound to fail”.
On the evidence before this Court I reject the foregoing assertion insofar as it is made in
respect of the Plaintiff, being Pepper Finance Corporation (Ireland) Designated Activity
Company.
Claims that the Plaintiff’s deponents lack credibility and means of knowledge
Page 11 ⇓
27. The Defendants also take issue with what they describe as the credibility of the Plaintiff’s
representatives and do not accept that they have a means of knowledge in relation to
their sworn evidence. In an affidavit sworn on 05 October 2015, Ms. Caroline Loftus avers
that she is the Operations Manager of the Plaintiff, employed by the Plaintiff, and that she
is duly authorised by the Directors of the Plaintiff to make her affidavit on behalf of the
Plaintiff and that she does so from facts within her own knowledge save where otherwise
appears and where so appearing she believes the same to be true. In her affidavit sworn
on 10 June 2016, Ms Loftus avers that she is an employee of the Plaintiff and that she
makes her affidavit from facts within her own knowledge save where otherwise appears
and, where so otherwise appearing, she believes the same to be true and accurate in
every respect. In her 02 December 2016 affidavit, Ms Loftus avers to the fact that she is
the Plaintiff’s Senior Operations Manager and, as well as being duly authorised, she avers
that she make her affidavit from facts within her own knowledge and from a careful
examination of the books and records of the Plaintiff save where otherwise appearing and
where so appearing she believes the same to be true and accurate in all respects. She
makes similar averments in other affidavits, including that sworn by her on 13 December
2016, being a short affidavit pointing out that, due to an administrative oversight, the
document exhibited at “A” to her prior affidavit was the Certificate of Incorporation on
Change of Name from GE Capital Woodchester Home Loans Limited to Pepper Finance
Corporation (Ireland) Limited, rather than the Certificate of Incorporation on Change of
Name from Woodchester Home Loans Limited to GE Capital Woodchester Home Loans
Limited and she exhibits the correct document.
28. I am satisfied that nothing turns on the initial error which was quickly corrected. In her
affidavit sworn on 19 April 2017, Ms Loftus again avers to the fact that she is the
Plaintiff’s Senior Operations Manager and, as well as being duly authorised, she avers that
she makes her affidavit from facts within her own knowledge and from a careful
examination of the books and records of the Plaintiff save where otherwise appearing and
where so appearing she believes the same to be true and accurate in all respects. In an
affidavit sworn on 18 May 2017, Grainne Naughton avers that she is the Plaintiff’s Head of
Residential Mortgages, and that she makes her affidavit on behalf of the Plaintiff being
duly authorised by it to do so. She avers that she does so from facts within her own
knowledge and from a careful examination of the books and records of the Plaintiff, save
where otherwise appears, and where so appearing she believes the same to be true and
accurate in all respects. I am satisfied that there is no evidence before the court, as
opposed to assertion made by the Defendants and unsupported by evidence, which casts
any doubt on the foregoing averments or casts doubt on credibility and/or the means of
knowledge of Ms Loftus or Ms Naughton.
Allegations of dishonesty and fraud
29. In para. 4 of the first named Defendant’s affidavit sworn 13 February 2017, he makes the
following averment: -
“I say and believe that the Plaintiff herein has presented information to the
Honourable Court with dishonest intent, has deliberately induced reliance on their
Page 12 ⇓
untrue representations of fact and as a consequence is fraudulently and dishonestly
attempting to deprive the Defendants of their Family Home.
I also say and believe that the dishonest intent includes an agreement between two
or more parties and as a consequence the Defendants require the implementation
of a third party procedure to enable the true facts of the case to be presented to
the Honourable Court”.
In paragraph 6 of the same affidavit, the first named Defendant refers to what he
describes as “…the underlying dishonest intent contained in the complexity hiding the
transparency of the Plaintiff’s actions.” I find no evidence whatsoever to support the
foregoing claims. Having regard to the evidence before the court, I am bound to reject
these assertions made on behalf of the Defendants.
References to Securitisation in the Defendants’ loan offer and mortgage
30. The loan offer dated 22 March 2007, which the Defendants accepted, contained a number
of clauses in relation to securitisation. Clause 10 of the letter of loan offer states, inter
alia: -
“(a) The Borrower’s attention is drawn to the fact that the Loan and the Lender’s
Security and any associated rights and interest . . . will be freely transferable by
the Lender. . . whether as part of a loan transfer and securitisation scheme or
otherwise, on such terms as the Lender may think fit”.
Clauses 11.07 to 11.09 of the Deed of Mortgage, which the Defendants entered into,
state, inter alia: -
“11.07 (a) The lender may at any time and from time to time transfer or enter into contractual
arrangements concerning all or part of the legal or equitable benefit of this
Mortgage including the security hereby created on the Mortgaged Property ... on
such terms as the Lender may think fit, without notice to the Borrower or any other
person ...
(b) Without prejudice to the generality of the foregoing, where the Lender holds the
debt(s) in respect of which the security in the form of this Mortgage is given on
trust for a third party auditor where the Lender holds the debt(s) following an
equitable assignment thereof to a third party the Borrower hereby acknowledges
and agrees that the Lender may hold this Mortgage on the same terms and with
like effect as it holds the debt(s) in respect of which the security in the form of this
Mortgage is being given and this Mortgage will be in full force and effect in respect
of all such debt(s) and the benefit of the security created by this Mortgage is
intended by the Borrower and the Lender to be transferable in like manner and
with the same effect as the debt in respect of which the security is given.
11.08 Without prejudice to the generality of sub-clause JI. 07 the Lender may (a) at any
time securitise this Mortgage without any consent of the Borrower save as is
Page 13 ⇓
contained in sub-clause 11.09 hereof and without further notice to the Borrower or
any other person.
11.09 (i) Without prejudice to the generality of the foregoing, the Borrower hereby
irrevocably consents to:
(a) all or any future transfer of the legal or equitable benefit of this Mortgage
including the security hereby created on the Mortgaged Property ...
(c) the inclusion of this Mortgage including the security hereby created on the
Mortgaged Property and any secured loan in any Securitisation scheme,
(ii) The borrower hereby irrevocably consents and agrees to be bound by:
(a) the provisions of any securitisation scheme. . ..”
In light of the foregoing, the Plaintiff was entitled to enter into a securitisation transaction
which would include the Defendants’ mortgage and related security.
Securitisation and the Mortgage Sale Deed (“MSD”)
31. In an affidavit sworn on behalf of the Plaintiff on 2 December 2016, Ms Caroline Loftus
avers, inter alia, that: “On 28 September 2012, Pepper Netherlands Holding Coöperatie
UA purchased the entire share capital of the Plaintiff. Subsequent to the change of
ownership, on 28 September 2012, the Plaintiff sold the beneficial interest in its mortgage
book, including the Defendants’ loan accounts, to Windmill Funding Limited (“Windmill”).
Following that transfer, the Plaintiff, as lender of record retained the exclusive legal right
to enforce the legal rights and obligations owed to it pursuant to the mortgage deed
executed by the Defendants herein.” In the manner detailed in this judgment, I am
satisfied that no evidence has been put before this court which calls the forgoing into
question.
32. On 18 May 2017, Ms Grainne Naughton refers to a Mortgage Sale Deed dated 28
September 2012 (hereinafter “the MSD”) which was entered into between the Plaintiff
(under its former name), Windmill, Pepper Netherlands Holding Coöperatie UA and TMF
Trustee Limited. Ms Naughton states, inter alia, the following:
“4. By Mortgage Sale Deed dated 28 September 2012 the Plaintiff herein (then named
GE Capital Woodchester Home Loans Limited) entered into an
agreement with 3 other entities.
5. I say that Clause 2.3 of that agreement states:
“The seller hereby confirms and acknowledges that on and following
Completion and until perfection in accordance with Clause 5 of this Deed, it
will hold legal title to the Mortgage Loans sold hereunder, together with the
Related Security and the benefit of the Relevant Insurance Policies as bare
Trustee for the Issuer (or, following enforcement of the security created
pursuant to the Deed of Charge, for the Note Trustee)
[My emphasis]
Page 14 ⇓
Clause 5.1 states, inter alia, as follows:
“The sale and purchase of the Mortgage Loans and their Related Security
provided for hereunder shall be perfected by the Seller as soon as possible
following a demand by the Issuer or Note Trustee which may be in any
circumstances ...’
[My emphasis]
7. I say that it is clear from the foregoing that until perfection (in accordance with
clause 5.1) occurs, the loan accounts and their associated security have been the
subject of a securitisation transaction whereby the Plaintiff herein retains legal title
as bare trustee.
8. In that regard I can confirm to this Honourable Court that neither the Issuer nor
the Note Trustee have served a demand in accordance with clause 5.1 and as such
the Plaintiff herein retains legal title to the loan and its related security as bare
trustee for the Issuer pursuant to the securitisation transaction provided for in
clause 2.3.”
33. The MSD, with redactions, is exhibited by Ms Naughton. In circumstances where a page
was illegible, a legible copy was handed into court by the Plaintiff during the hearing
which I accepted de bene esse. I am satisfied that nothing turns on this, as I accept the
sworn evidence given by the Plaintiff to the effect that it transferred the beneficial, but
not the legal interest in the Defendants’ mortgage by means of the MSD, which
averments are not met with any evidence, as opposed to assertions to the contrary. The
Plaintiff’s averments are also entirely consistent with the relevant entries in the Land
Registry in respect of the Defendants’ folio. It is beyond doubt that the Plaintiff is
registered as the owner of a charge which appears as a burden on part 3 of the
Defendants’ folio and, in the manner explained earlier in this judgment the charge relates
to the mortgage granted by the Defendants in favour of the Plaintiff. Furthermore, during
the course of his submissions the first named Defendant stated that “our mortgage was
performing when it was sold” and in light of all the foregoing, there would not appear to
be any genuine dispute about the fact of sale of the Defendants’ mortgage – as opposed
to the Defendants’ claim that the Plaintiff has divested itself of the entire interest, in
same, both legal and beneficial. On the evidence, I accept, as a fact, that the beneficial
interest, but not the legal interest, in the charge over the Defendants’ property was sold
pursuant to the MSD. The MSD features very heavily in the Defendants’ opposition to the
Plaintiff’s claim and for this reason certain key assertions made by the Defendants in
respect of the MSD are summarised and analysed below.
The claim that the Plaintiff divested itself of all rights regarding the mortgage
portfolio
34. In opposing the Plaintiff’s claim the Defendants place significant reliance on Exhibit “RC 1”
to the affidavit sworn by the first named Defendant on 19 April 2017 and I have carefully
considered its contents. This exhibit comprises a document prepared by the first named
Defendant which is entitled “Forensic financial report into ‘The Windmill Transaction’”. In
the body of the report, under the heading of “The conclusions and consequences based on
Page 15 ⇓
the evidence presented are:”, the first named Defendant makes, inter alia, the following
assertions: -
“1. GE Capital Woodchester Home Loans Limited as a wholly owned legal entity in the
GE Group company registration no. 34927 sold its Mortgage Portfolio and Related
Security on 28th September 2012 to Windmill Funding Limited, company
registration no. 514093 thus divesting itself of all rights and obligations regarding
the mortgage portfolio and related security . . ..
5. The name change of legal entity 34927 from GE Capital Woodchester Home Loans
Limited to Pepper Finance Corporation (Ireland) Limited (now DAC) does not in any
way change or affect the fact that GE Capital Woodchester Home Loans Limited sold
its mortgage portfolio and related security to Windmill Funding Limited on 28th
September 2012, before legal entity 34927 was purchased by Pepper Netherlands
Holding Coöperatie UA and became a wholly owned company in the Pepper Group.
6. The legal entity 34927 when purchased by Pepper Netherlands Holding Coöperatie
UA company registration number 55309763, “did not and could not have as an
asset a GE Mortgage Portfolio and Related Security or any rights or obligations
regarding such a Mortgage Portfolio and Related Security”.
35. The foregoing are assertions made on behalf of the Defendants, in particular by the first
named Defendant, who is an accountant by profession. These assertions are based on the
first named Defendant’s analysis of certain financial records and to the conclusions he has
drawn from that analysis. Even if the Defendants genuinely believe these assertions to be
true, they are made in the face of evidence to the contrary from three sources. Firstly,
there is conclusive evidence, in the form of the entries on Land Registry, County Dublin,
that the Plaintiff was and remains the owner of the charge registered in Part 3 of Folio
74990 F. Secondly, the court also has before it sworn affidavit evidence to the effect that
the Plaintiff did not divest itself of all rights and obligations regarding the relevant
mortgage portfolio and related security, including the Defendants’ mortgage, when it
entered into the MSD on 28 September 2012. Thirdly, the contents of the Mortgage Sale
Deed itself evidence that the Plaintiff was and remains the legal owner of the mortgage
portfolio in question, pending a future transfer of the legal interest.
The “Windmill Transaction”
36. The assertions made by the Defendants in respect of what they describe as the “Windmill
Transaction” are of central importance to their opposition to the Plaintiff’s claim. These
assertions are summarised in Exhibit “A” to the first named Defendant’s affidavit sworn
on 22 June 2017. Under the heading “Description of “The Windmill Transaction”:”, the
first named Defendant makes the following assertions:
“1. On 28th September 2012 GE Capital Woodchester Rome Loans Ltd (Co Reg 34927)
a subsidiary of GE Capital Woodchester Ltd (Co Reg 9380) sold its Mortgage
Portfolio and Related Security to Windmill Funding Ltd.
Page 16 ⇓
2. Using the proceeds of this sale GE Capital Woodchester Home Loans Ltd entered
into a restricted financial procedure the giving of financial assistance by a company
for the purpose of acquisition of its shares” Companies Acts 1963 — 2012.
3. The restricted procedure was the giving of financial assistance, lain the proceeds of
the sale of its Mortgage Portfolio and Related Security to Windmill, to Pepper
Netherlands Holding Coöperatie UA (Dutch Co) to enable that company buy 100%
of the Share Capital of Co Reg 34927.
4. To validate the restricted procedure the directors of GE Capital Woodchester home
Loans Ltd made statutory declarations (5528286 and 5528288) on 2 September
2012 describing the transaction (The Windmill Transaction).
5. The Statutory Declaration 5528286 at point 6 states: (Dutch Co = Pepper
Netherlands Holding Coöperatie UA)
“The Company proposed to enter into a mortgage sale deed under which the
company would sell to the Issuer (Windmill) the Collections and Mortgage
Loans together with the benefit of their related security -"
At 6(a) “the company would direct that the issuer (Windmill) pays the
consideration due to the company under the Mortgage Sale Deed in
satisfaction of the company’s liability to make a loan to, or create
another form of receivable loan from DutchCo under the Issuer Facility
Agreement”.
At 6(b) the loan or receivable granted by the Company to DutchCo under the
Seller Loan Agreement would be . . .extinguished.
At 7(c) “the purpose for which the Company intends DutchCo to use such
financial assistance is to enable DutchCo pay the consideration in
connection with its purchase of shares in the Company”.
6. On 28 September 2012 from the proceeds of the Windmill transaction facility (i.e.
the loan granted from the sale by OB Co Reg 34927 of its Mortgage Portfolio and
Related Security to Windmill), DutchCo purchased 100% of the Share Capital of
Company reg. 34927. The name of this Company was changed to Pepper Finance
Corporation (Ireland) Limited (now DAC), and this Pepper company claims in legal
proceedings to be the company that issued mortgage loans in 2007”.
37. A key aspect of the Defendants’ opposition to the Plaintiff’s claim is the assertion that,
prior to entering into the MSD, the Plaintiff divested itself of the entirety of its rights in
respect of a mortgage portfolio which included the Defendant’s mortgage and that, as a
consequence, the Plaintiff has no entitlement to bring the present proceedings. It was
clear from the submissions made by the first named Defendant throughout day 3 of the
trial that the Defendants are genuinely convinced that the “true facts” are being hidden
from the court, including that the MSD which gave effect to a securitisation transaction in
2012 was a “sham”, that the Plaintiff in these proceedings does not have any title to the
Defendant’s mortgage, and that the Defendants were entitled to deny the debt due to the
Page 17 ⇓
Plaintiff because of conclusions the Defendants have come to following an analysis by the
first named Defendant of certain financial records.
The Defendants’ denial of the debt
38. Among the submissions made by the first named Defendant is that the Defendants are
entitled to “deny the debt” on the basis that, according to the Defendants, it is “not on
the Plaintiff’s balance sheet”. It was made clear by the first named Defendant during his
submissions on behalf of the Defendants that their denial of the debt was based on the
first named Defendant’s view of the financial records. I am satisfied that what the
Defendants can or cannot identify on the Plaintiff’s balance sheet is not dispositive of any
issue in these proceedings, but it seems clear that the Defendants are convinced that
their analysis of financial records reveals what the first named Defendant described in his
submissions as “an absolute sale” in respect of the relevant mortgage portfolio, including
the Defendant’s mortgage, such that the Plaintiff has no title to the relevant charge and
has no entitlement to bring the present proceedings and, in the foregoing context, the
MSD is, according to the Defendants, a “sham document”, which claim I now turn to.
The claim that the MSD is a “sham document”
In making a variety of assertions to the effect that the Plaintiff has no legal interest in the
charge which appears at Part 3 of the Defendant’s Folio, the Defendants describe as a
“sham document”, the MSD dated 28th September 2012 made between GE Capital
Woodchester Home Loans Limited (therein described as Seller and Portfolio Manager),
Windmill Funding Limited (therein described as “Issuer”), Pepper Netherlands Holding
Coöperatie UA, and TMF Trustee Limited (therein described as “Note Trustee”). The
Defendants assert that the MSD is a “sham” because, according to the Defendants, it
hides what they refer to as the “true facts” in relation to what they describe as the
“Windmill Transaction”. The Defendants assert that the “true facts” of the “Windmill
Transaction” demonstrate that the Plaintiff had and has no rights in respect of the charge
registered against the Defendants’ home on the relevant Folio and that the securitisation
transaction evidenced by the MSD is a “sham” designed to “obfuscate”. Among other
things, the Defendants argue that a loan was necessary to facilitate the MSD and, based
on the first named Defendant’s analysis of certain accounts, the Defendants claim that the
loan does not exist. The Defendants argue that the MSD “has no evidential value”. At
para. 4 of his affidavit sworn on 22 June 2017, the first named Defendant makes, inter
alia, the following averment: -
“. . . the proven facts being that the Plaintiff could not have initiated the
securitisation as the securitised GE mortgage portfolio is proven never to have been
owned by the Plaintiff”.
The consequences of the Defendants’ assertions
39. The Defendants’ make a plethora of arguments in opposition to the Plaintiff’s claim and it
is impractical to rehearse each and every one of them, or the numerous variations of
these arguments, in this judgment. I have, however, carefully considered all the
arguments made by the Defendants and the documentation upon which they are based,
which include but are not limited to the contents of statutory declarations, statutory
Page 18 ⇓
accounts and extracts from accounts and notes to financial statements. I have also
carefully considered, in particular, all the Defendants’ assertions in relation to the
“Windmill Transaction” and the MSD. Regardless of how they are put, the inescapable
logic of what the Defendants assert includes, at least, the following:
a. that the Plaintiff entered into the MSD despite the fact that it had no interest
whatsoever in the relevant mortgage portfolio, the subject of the MSD;
b. that it did so consciously and fraudulently;
c. that each of Windmill and Netherlands Holding Coöperatie UA and TMF Trustee
Limited and all those who control those entities decided to enter into the MSD,
despite the fact that that the Plaintiff had no interest whatsoever in the relevant
mortgage portfolio, the subject of the MSD;
d. that all legal and/or financial and/or other professional advisors to all four parties to
the MSD either failed to notice that the Plaintiff had no interest in the relevant
mortgage portfolio as a result of such due diligence as was carried out, or were
prepared to advise that the MSD be entered into, notwithstanding the fact that a
third party, not named in the MSD, was the true owner;
e. that, over seven years after the MSD was entered into, no objection has been made
by any of the parties to the MSD to the fact that the true ownership of the relevant
mortgage portfolio, including the Defendants’ mortgage, is with a third party;
f. that, for a period of over seven years, a third party, being the “true owner” of the
relevant mortgage portfolio, has had an entitlement to be registered as the owner
of the Defendants’ mortgage but has failed to register their ownership and has,
instead, allowed the official public record of ownership to remain uncorrected and
false;
g. that an entry in the Land Registry, in particular the entry on part 3 of the
Defendants’ Folio of a charge in favour of the Plaintiff, is not conclusive, is incorrect
and cannot be relied upon by this court.
Conclusions in relation to the Defendants’ assertions concerning the MSD and
“Windmill Transaction”
40. I have given very careful consideration to all statements deposed to by the Defendants,
to all documentation exhibited by the Defendants and to all submissions made by the
Defendants, including, in particular, the Defendants’ assertions in relation to the MSD and
the “Windmill Transaction”. In my view, the Defendants’ assertions and the consequences
which inevitably flow from those assertions are simply not credible. On the evidence
before me I am bound to reject the assertions made by the Defendants to the effect that
the Plaintiff has divested itself of all rights in the relevant mortgage portfolio, including
rights in respect of the Defendants’ mortgage. Regardless of how genuinely the
Defendants may believe that there is evidence in support of the various claims made by
them, I am satisfied that such claims are no more than bare assertions which are not
Page 19 ⇓
supported by fact and which are entirely undermined by evidence to the contrary and I
accept what the Plaintiff says, in sworn affidavit evidence, with regard to the MSD. Having
carefully considered all the evidence before the court, I reject the Defendants’ assertion
that there is proof that the Defendants’ mortgage is not owned by the Plaintiff in these
proceedings. I am entirely satisfied that none of the assertions made by the Defendants
amounts to evidence, much less evidence sufficient to cast any doubt concerning the
definitiveness of the relevant Land Registry Folio entries, in particular, the charge
registered at Entry 8 of Part 3 of Folio 74990 F of the Land Registry, Co. Dublin, in favour
of the Plaintiff. Nor does any statement, assertion, exhibit or submission made by the
Defendants constitute, in my view, evidence that the MSD amounts to a “sham” or that
the court can or should look behind it or treat its contents with suspicion.
41. The first named Defendant submitted that, as well as being a “sham document”, the MSD
is one of critical importance to the Plaintiff’s claim. I do not share the Defendant’s view in
relation to the significance of the MSD, in circumstances where the Plaintiff is, without
doubt, the registered owner of a mortgage and charge in respect of the Defendants’
property and seeks possession of same, having regard to the provisions of s. 62(7) of the
Registration of Title Act, 1964, having served formal demands, which were not satisfied,
for the repayment of monies due on foot of the mortgage which the Defendants granted
in favour of the Plaintiff and against the background of the Defendants’ default in relation
to making the required mortgage payments. Based on the evidence before me, I am
entirely satisfied that the Plaintiff is the registered owner of the charge, at Entry 8 of Part
3 of the Land Registry Folio 74990 F, Co. Dublin. I am equally satisfied, having considered
all the evidence, that the effect of the MSD was to securitise the Defendants’ loan and
related security upon the terms set out in the MSD. I am also satisfied, on the evidence,
that perfection, in accordance with Clause 5.1 of the MSD, has not occurred, and that the
Plaintiff continues to hold legal title to the Defendants’ loan and the related security and is
entitled to seek possession of the property. I reject, on the evidence before me, the
assertion by the Defendants that the Plaintiff does not have title to the charge in respect
of the Defendants’ property of which it is the registered owner. I reject the Defendants’
assertions, having carefully considered the entirety of the affidavits, exhibits and
submissions put forward by the Defendants including, but not limited to, the Defendants’
assertions concerning what it regards as the “true facts” flowing from what it describes as
the “Windmill Transaction” as well as the Defendants’ assertions that the MSD is a “sham”
document.
The MSD judicially considered
42. It is also of significance to note the contents of the specific MSD at issue in the within
proceedings have been the subject of judicial consideration by Ní Raifeartaigh J. in Pepper
Finance Corporation (Ireland) Designated Activity Company v. Hanlon (Unreported, High
Court, 11 January 2018) and by Binchy J. in Pepper Finance Corporation (Ireland)
Designated Activity Company v. Jenkins [2018] IEHC 485. In both cases, it was held that
the legal effect of the Deed was that the Plaintiff held legal title to the loans and
mortgages. Ni Raifeartaigh J. stated the following: -
Page 20 ⇓
“On the 28th September 2012, Pepper Netherlands took over the entire share
capital of Woodchester, then that name changes to Pepper Finance Corporation
(Ireland) on the 11th October 2012 in accordance with the Companies Act 1963,
and there is an exhibit which is a certificate of incorporation during the name
change from Woodchester to Pepper Finance Corporation (Ireland) Ltd.
Separately, if you like, what happened is that the Plaintiff sold the beneficial
interest in its mortgage book which included the Defendants’ mortgage, to Windmill
Funding Ltd. and I note that again to a layperson it may seem as if something is
sold it is a simple matter, as if you have a book and you give it to someone else
and you sell it. It all goes. But in fact the legal complexities are much more than
that, parts of it can be sold and parts of it are retained and there can be a split
between the legal and the beneficial ownership. it is not simply as straightforward
as the thing, a mortgage, being like a tangible thing that simply transfers in its
entirety and what is clear here from the affidavit, and I have studied the documents
again carefully, because I am conscious of the seriousness of the matter for the
Defendants, the final affidavit of Caroline Loftus set out the actual mortgage deed
dated the 28th September 2012.
Unfortunately, one really does have to be a lawyer to understand what he is exactly
saying, but this mortgage sale deed on 28th September 2012 is between GE Capital
Woodchester Home Loans, a seller and portfolio manager, then there is Windmill
Funding Ltd. who are the issuer. There is Pepper Netherlands who we know
subsequently and GE Woodchester becomes Pepper Finance DAC, the Plaintiff in the
present case".
The views expressed in the judgment of Ní Raifeartaigh J. in Pepper Finance Corporation
(Ireland) Designated Activity Company v. Hanlon were adopted by Eagar J. in Pepper
Finance Corporation (Ireland) Designated Activity Company v. Rooney [2019] IEHC 541.
The nature of a securitisation transaction
43. The MSD evidences a securitisation transaction. In considering the nature of a
securitisation transaction, McGovern J. in Anthony Freeman and Another v. Bank of
“It is an important principle in securitisation transactions that the originating bank
that sells the mortgages to the SPV, under an equitable assignment, continues to
service the mortgages and the legal title remains with the originating bank. Where
customers have provided their consent as part of the standard mortgage terms and
conditions, they are not specifically notified that their mortgage has been
securitised.”
McGovern J. went on to state, at para. 11, that:
“At all times, legal title to the loans and related security remained with BOSI until
the completion of the transfers to the Issuer and notification of the transfers being
Page 21 ⇓
given to the borrower. Such transfers would only be completed and notifications
given in the circumstances set out in Clause 7.1 of the Mortgage Sale Agreement
between BOSI and the Issuer. No event specified in Clause 7.1 occurred and the
assignment of each of the Plaintiffs’ loans and related security was effected in
equity only.”
44. In Thomas Kearney v K.B.C. Bank Ireland Plc and Another [2014] IEHC 260, Birmingham
J, as he then was, observed: -
“In relation to the emphasis that the Plaintiff places on the issue of securitisation,
observations made by Peart J. in Wellstead v. Judge Michael White and Anor.
‘But there is another obstacle which faces the applicant, and which he has
not addressed, and it is that there is nothing unusual or mysterious about a
securitisation scheme. It happens all the time so that a bank can give itself
added liquidity. It is typical of such securitisation schemes that the original
lender will retain under the scheme, by agreement with the transferee, the
obligation to enforce the security and account to the transferee in due course
upon recovery from the mortgagors’.
“The views expressed by Peart J. with which I find myself in complete and
respectful agreement, also, accords with the approach of the English Court of
The Court of Appeal was of the view that all that the special purpose vehicle
acquired, under an uncompleted agreement to transfer the legal charge, was an
equity in the mortgage. Paragon remained the legal owner, and as registered
proprietor of the charge, retained all the powers of a legal charge, including the
right to possession, nor was it necessary to join the special purpose vehicle.”
45. This position was recently re-affirmed by Noonan J. in Governor and Company of the Bank
of Ireland v. McMahon [2017] IEHC 600, where the learned Judge, having considered the
authorities on the issue concluded, at para. 13, that:
“It is therefore clear beyond doubt that the McMahons are not entitled to make any
complaint based on any alleged securitisation of their loan as they expressly
consented to it. Further, even if that were not the case, the authorities to which I
have referred make clear that securitisation, if it occurred, does not affect the
lender's right to recover the debt.”
46. I am satisfied, on the evidence, that in the present case, the Plaintiff retained the right to
enforce the security, consistent with the retention by the Plaintiff of the legal interest as
provided for in the MSD. I am also satisfied that the Defendants’ consented to the
securitisation transaction which took place. The views expressed in the judgment of Ní
Raifeartaigh J. in Pepper Finance Corporation (Ireland) Designated Activity Company v.
Hanlon are relevant in the present case, insofar as they concern the very same MSD and I
Page 22 ⇓
adopt the learned Judge’s decision. The description of the securitisation process set forth
by McGovern J. in Anthony Freeman and Another v. Bank of Scotland Plc and Others
mirrors that in the present proceedings, as evidenced by the contents of the MSD and the
sworn evidence on behalf of the Plaintiff, which I accept.
A third party entitled to be registered as owner of the charge
47. In the course of his submissions, the first named Defendant also asserted that,
notwithstanding the information recorded in the Land Registry, the real or true owner of
the relevant mortgage portfolio, including the Defendant’s mortgage, is a party other than
the Plaintiff and the first named Defendant suggests that it is this third party which should
register itself as owner of the Defendant’s mortgage. It is clear that this assertion by the
Defendants is based on their contention that the Plaintiff is not the owner of any interest
in the charge registered against their folio. Having carefully considered the evidence, I
reject the Defendants’ assertion that there is a third party, other than the Plaintiff, who is
the “real” or “true” owner of the charge over the Defendants’ property and is entitled to
be registered as such. That assertion is made without evidence and I am satisfied that
there is overwhelming evidence to the contrary.
The Defendants’ arguments based on a decision of a Tax Appeal Commissioner
48. The first named Defendant also makes assertions based on a decision of a Tax Appeal
Commissioner in Corporation Y Limited (Appellant) v. Revenue Commissioners 24 TACD
2017. I am satisfied that the decision of the Tax Appeal Commissioner in Corporation Y
Ltd. v. The Revenue Commissioners concerned whether the Plaintiff was entitled, or not,
to carry forward losses in respect of the Plaintiff’s pre – 28 September 2012 business, in
order to set such losses against profits from the Plaintiff’s post – 28 September 2012
business. The question which arose during the course of the Tax Appeal Commissioner’s
determination concerned whether the Plaintiff was engaged in the same trade, both
before and after the securitisation transaction which is evidenced by the MSD. The Tax
Appeal Commissioner decided that, on 28 September 2012, the essential characteristics
of the Plaintiff’s business changed, such that, thereafter, the Plaintiff was in the business
of administration and collection not for its own benefit, but for the benefit of others, such
that the set-off of losses against profits should be refused. The first Defendant argues
that the findings of the Tax Appeal Commissioner mean that a Plaintiff does not have title
to the relevant mortgage portfolio including the mortgage and charge registered against
the Defendants’ home. This submission by the Defendants is wrong both in fact and in
law. In the manner set out above, this court has found that the Plaintiff clearly does have
title to the charge over the Defendants’ property. Furthermore, the decision of Ní
Raifeartaigh J. in Pepper v. Hanlon handed down on Thursday 11 January 2018 makes it
clear that a determination of a Tax Appeal Commissioner could never bind this Court. I
am satisfied that, even if the Tax Appeal Commissioner had made the findings contended
for by the Defendants, that would not determine the issues which this Court is required to
determine with regard to the Plaintiff’s title to the charge registered in the Land Registry
on the Defendants’ folio. The following is a verbatim extract from the transcript approved
by Ní Raifeartaigh J. in relation to her decision in Pepper v. Hanlon: -
“Ms. Justice Ní Raifeartaigh:
Page 23 ⇓
“So the position is that what is sought to be relied on is a determination of the Tax
Appeals Commission and what I am sure the Defendants don’t understand is that
even if it were favourable to them on an issue that this Court would have to
determine, this Court would not be bound by it, that is the central point. No matter
what the Tax Appeals Commission had determined would not bind this Court. This
Court is not bound by determinations of the Tax Appeals Commission. The court is
bound by the law as set down in the legislation, in the authorities have been
handed down by the High Court, the Court of Appeal and the Supreme Court, that
is what this Court is bound by. It also is relevant that the information or a
determination of a Tax Appeals Commission is relating to an issue of taxation,
whereas the issue before the court is a different one, it is the entitlement of a party
to recover a property which was the subject of mortgage agreement so it is a
different issue”.
The foregoing comments by the learned judge apply equally to the facts in this case. In
short, the Defendants’ attempt to construct an argument that the Plaintiff is not the
registered owner of the relevant mortgage, with reference to what the Defendants believe
was decided by the Tax Appeal Commissioner, is without merit, regardless of how
genuinely held the Defendants’ views may be.
Section 28(6) of the Supreme Court of Judicature Act 1877
49. Another difficulty for the Defendants in seeking to argue that the Plaintiff lacks title to the
charge in respect of which it is the registered owner, arises by virtue of s. 28(6) of the
Supreme Court of Judicature Act 1877. In AIB Mortgage Bank v. Thompson [2018] 3 IR
172, Baker J. provided the following guidance in relation to the nature and effect of s.
28(6), at [27-28] as follows: -
“That a debtor be given notice of the assignment of a debt or chose in action is
important for practical and legal reasons. A debtor must know to whom the debt is
due, and from what date a debtor may with certainty pay a debt to an assignee.
Section 28(6) identifies the date at which the assignment of a debt or chose in
action becomes effectual in law to transfer or pass the legal right to such debt or
chose in action and all legal remedies for enforcement. Thereafter, and following
upon notice, the power to give a good discharge for the debt thereby vests in the
assignee without concurrence of the assignor”.
50. The Defendants argue that, notwithstanding the explicit terms of the MSD, both the legal
and equitable interests in their loan and mortgage were transferred to Windmill Funding
Limited. In the manner explained earlier in this judgment I have found that there is no
evidence to support this assertion by the Defendants and I am entirely satisfied that there
is overwhelming evidence which proves that the Plaintiff is the legal owner, properly
registered, of the mortgage and charge affecting the Defendants’ property. Even if that
were not so, and even if, contrary to the explicit averments on behalf of the Plaintiff and
contrary to the contents of the MSD, both the legal and equitable estates in the relevant
mortgage portfolio, including the Defendants’ loan and security, had been transferred by
Page 24 ⇓
the Plaintiff to Windmill Funding Limited, any such alleged “absolute” transfer of rights by
the Plaintiff would be ineffectual against the Defendants, in the absence of the written
notice of such absolute transfer as required under s. 28(6) of the Supreme Court of
Judicature of Ireland Act, 1877. The consequences of a failure to give the notice required
by the 1877 Act would be that the vendor, in this case the Plaintiff, retains the interest,
the subject of the assignment. In my view the notice requirements of the 1877 Act create
another insurmountable problem for the Defendants’ in seeking to oppose the Plaintiff’s
claim, even on the Defendants’ own case.
51. That is not, of course, the end of the matter, because the court has before it evidence, in
the form of sworn averments on behalf of the Plaintiff, that there was no transfer by the
Plaintiff of the legal, as opposed to the beneficial, interest in the relevant mortgage
portfolio, including the Defendants’ mortgage and those averments are entirely consistent
with the contents of the MSD and I accept that evidence. Furthermore, having considered
all the evidence in this case, I find as a fact that no notice, of the type required by s.
28(6) of the Supreme Court of Judicature (Ireland) Act, 1877 has been provided to the
Defendants. As a consequence, I am absolutely satisfied on the evidence before this Court
that the entity entitled to pursue possession of the property pursuant to s. 62(7) of the
Registration of Title Act, 1964 is the Plaintiff, being the legal owner of the relevant
charge, and I reject the Defendants’ assertions to the contrary which, in my view, can
properly be characterised as bare assertions. That is not to say that the assertions are not
made in a most lengthy, complex and repetitious manner, but in my view, the claims
never go beyond mere or bare assertions, unsupported by evidence.
Claims based on the Defendants’ regulatory status
52. Insofar as the Defendants question the Plaintiff’s regulatory status, I am satisfied on the
evidence before this Court that the Plaintiff has been a “credit institution” within the
meaning of the Consumer Credit Act, 1995 (as amended) since 3 December 1996. On
that date, the Minister for Enterprise and Employment certified the Plaintiff as such a
credit institution, in the context of S.I. 369 of 1996 - Consumer Credit Act, 1995 (Section
2) (No. 2) Regulations, 1996. Indeed, in para. 19 of the first named Defendant’s affidavit
sworn on 8 December 2016, Mr. Conway makes the following averment: -
“I say that the Company Woodchester Home Loans Ltd., registration number 34927
as a wholly owned subsidiary of the GE Group was listed as a credit institution
under S.I. 369 of 1996 – Consumer Credit Act 1995”.
53. The first named Defendant goes on to exhibit a copy of the relevant regulations, the
second page of which confirms that “Woodchester Home Loans Ltd.” is a credit institution”
provided that the APR charged by such person in respect of any credit granted to a
consumer is less than 23%”. Company Number 34927 is, of course, the Plaintiff in these
proceedings, employing its current name. There is no evidence before the court that
credit has been granted in excess or 23%. Furthermore, the letter of offer of mortgage
loan dated 22 March 2007, which was signed by both the first and second named
Defendants on 16 April 2007, and witnessed by a solicitor, clearly states, on page 1 of 11:
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“APR 7.33%”. The said mortgage also contains the following, on internal page 9 of 11, at
Clause 12(ii): -
“The Lender is a prescribed Credit Institution within the meaning of the Consumer
Credit Act 1995. GE Capital Woodchester Limited trading as GE Money is a multi-
agency intermediary regulated by the Irish Financial Services Regulatory Authority”.
In light of the evidence, I am satisfied that, insofar as the Defendants assert that the
Plaintiff was not entitled to advance a loan to them, or did not advance such a loan, I
entirely reject such claims.
Summary of conclusions and decision regarding Plaintiff’s claim for possession
54. I am entirely satisfied that the Plaintiff is the registered owner of a charge affecting the
Defendants’ property, namely the charge which appears at entry number 8 on Part 3 of
Land Registry Folio 74990 F, Co. Dublin. I am satisfied that this “charge for present and
future advances repayable with interest” as described in Part 3 of the aforesaid Folio, with
dealing number “D 2 007 DN 038812 A”, is one and the same as the 26 April 2007
mortgage and charge which was granted by the Defendants in favour of the Plaintiff. I am
satisfied than an “event of default” occurred as defined in the mortgage and charge,
entitling the Plaintiff to make a demand for the repayment in full of the mortgage. I am
satisfied that a valid demand was served on each of the Defendants, in accordance with
the provisions of the relevant mortgage and charge. I am satisfied that the Defendants,
having been served with valid demands, made no payment whatsoever in respect of the
monies due to the Plaintiff under the mortgage, whether principal or interest. I am
satisfied that, for the purposes of s. 62(7) of the Registration of Title Act, 1964,
repayment of the principal money secured by the instrument of charge has become due.
Having carefully considered all the evidence, I am satisfied that it is appropriate to order
possession of the property to be delivered to the Plaintiff and I will so order. Superior
Court authorities make it clear that the scope of the discretion conferred on the court in
the context of a s. 62(7) application for possession is very limited, but, in view of the
overwhelming evidence in favour of the Plaintiff in these proceedings, I am entirely
satisfied that it is proper, in the present case, to grant possession of the property in
favour of the Plaintiff on foot of the proceedings which have been brought by the Plaintiff
in a summary manner as provided for in s. 62(7).
Decision regarding the Defendants’ claim to be entitled to a plenary hearing
55. In a notice of motion dated 13 February 2017, issued by the Defendants in the Circuit
Court, Item 5 comprises a request for an order that the case be dealt with in plenary
proceedings. During the course of submissions, the first named Defendant repeatedly
argued for a plenary hearing but for the reasons set out in this judgment, there is no
basis upon which the court could properly direct a plenary trial. That would be entirely
wasteful of resources and would have the effect of delaying further the Plaintiff’s
entitlement to possession. On affidavit, in written submissions and during oral
submissions at the hearing of this matter, the Defendants repeatedly referred, inter alia,
to the decision of Mr Justice McKechnie in Harrisrange Ltd. v. Duncan [2002] IEHC 14,
[2003] 4 IR 1 and argued that they should be entitled to a plenary hearing. The
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Harrisrange decision concerned a claim, instituted by way of a summary summons, in
which the Plaintiff sought summary judgment in respect of a specific sum of money for
mesne rates. It was not a statutory claim for possession of property, pursuant to s. 62(7)
of the Registration of Title Act, 1964, by the registered owner of a charge. For the
avoidance of doubt, however, even if it was appropriate to apply the test in Harrisrange in
the present case, I would be entirely satisfied that the Defendants had failed to meet the
threshold required for the court to direct a plenary trial. I say this because of my findings
of fact as detailed in this decision and the evidence in support of the Plaintiff’s case. Put
simply, I am entirely satisfied that, even when taken at its height, what the Defendants
say as a basis for opposing the Plaintiff’s claim can be properly characterised as no more
than bare assertions, unsupported by evidence. In other words, despite the number and
length of the Defendants’ affidavits and exhibits, and the apparent sincerity with which
they make a wide range of assertions, I have concluded that what they say by way of a
supposed defence to the Plaintiff’s claim is unsupported by fact and is simply not credible,
having regard to the overwhelming evidence in support of the Plaintiff’s case. In relation
to the legal issues which arose in this case I am also entirely satisfied that they were
capable of being resolved without any need for a plenary hearing. The Defendants have
clearly devoted an enormous amount of effort to the defence of the present claim and
may well be very sincere in their beliefs but, having regard to the evidence, they are
sincerely wrong.
Decision regarding the balance of the relief sought in the Defendants’ motion
56. For the reasons set out in this judgment, I refuse all of the reliefs sought by the
Defendants in their motion dated 13 February 2017. Insofar as the reliefs sought at para.
no. 2 of the notice of motion is concerned, I am entirely satisfied that the Defendants had
sufficient particulars of the Plaintiff’s claim. Furthermore, despite the fact that the
Defendants’ sought relief pursuant to O. 17, r. 3 of the Circuit Court Rules (which
specifies that “any party to a proceeding may also, at the time specified in the last
preceding Rule, by notice in writing, require the other party to furnish such further
information as is reasonably necessary as to any specified matter arising upon the claim
in a civil bill . . .”), I am satisfied that the substance of the request is not truly to seek
particulars in respect of the Plaintiff’s claim. Similar comments apply in relation to the
reliefs sought at para. 4 of the Defendants’ notice of motion. In substance, these are not,
in my view, requests for particulars, but, rather, in the nature of interrogatories and an
attempt by the Defendants to have the Plaintiff provide information on a wide range of
issues, none of which could properly be said to be reasonably necessary in the context of
understanding the Plaintiff’s claim or preparing a defence to same. I am also entirely
satisfied that the reliefs sought at para. no. 3 of the Defendants’ notice of motion is
entirely inappropriate. Nowhere in any of the ten affidavits sworn on behalf of the
Defendants is any claim against a third party made out. It was neither necessary nor
appropriate that any third party be joined in order for the court to determine the issues
properly before it.
In light of the foregoing, the Plaintiff is entitled to an order for possession of the
mortgaged property.
Result: Appeal dismissed, decision of the Circuit Court granting possession to the Plaintiff upheld.